The Next Generation Of Development

For better or worse, Ann Arbor’s character and community are shaped by real estate developers. Their influence lasts for decades. If you don’t believe it, take a second look at Tally Hall, University Towers or Kerrytown. The three developments, all pacesetting when they were built, have left a lasting stamp on the city.

Developers often enjoy long careers, the better to stamp their vision on Ann Arbor streets. Peter Allen, Fred Beal and Bill Kinley, among others, are major players in the city’s development. Each will leave a lasting legacy in human resources, as well as projects, as they open the path for the next generation of developers.

Douglas Allen, Stewart Beal, Tyler Kinley: three young developers with three different approaches to development, have one big thing in common – all are part of a strong family history in the real estate industry. 

All three got an early start – and appear to be in the industry for the long haul, despite a discouraging real estate market at the moment. And all three say they treasure the guidance they've received from their fathers, a contention that's supported by their continuing work together.
 
Their projects cover a wide range of development. Many are even heroic acts of stewardship, such at Beal's Thompson Building project in Ypsilanti's Depot Town. 

Stewart Beal 

Beal is president of Beal Properties LLC, a real estates development firm. He also owns Beal Inc., a demolition and asbestos abatement contractor. His father, Fred Beal, is himself a legacy in the real estate business. His father – Stewart's grandfather – founded J C Beal Construction Inc. Development, in one form or another, is clearly in the Beal blood. Stewart decided to join in his father at the tender age of 19, while completing his business degree at Eastern Michigan University.
 
His current focus is on the Thompson Building, a dilapidated Civil War-era structure on River Street at East Cross Street. Beal intends to turn the long-neglected building into 16 luxury lofts with 10,000 square feet of commercial space holding The Barracks bar, a music company and other tenants. Theoretically, the $6 million project will be finished by April 1, 2009, Stewart Beal says. Construction halted when the building's former owner, discredited landlord David Kircher, filed a series of liens on the property, in an attempt to cloud the title. Beal expects the title claims to be resolved soon, so he can meet the April 1 target.

Meanwhile, he continues to buy student rental properties out of foreclosure in Ypsi, and manages his existing portfolio, which includes his first project, West Michigan Lofts, a renovated former adult book store and an adjacent property, launched when he was 19. His companies employ 48 people, many of whom worked on school renovation projects this summer.
 
Beal is also rehabbing the Beal Building, a $3 million historic property in downtown Detroit. He looks for properties that are eligible for both historic tax credits and inclusion in obsolete property redevelopment tax districts.

"We like to do historic redevelopment. It's hard to make tax credits work on small projects and I don't have the resources to do big projects, so I'm a mid-range developer – around 30,000 square feet is ideal," he said.

If all goes as planned, he wants to own a $100 million company by the time he's 30 – five short years from now. 

So, what does his father think of the enterprise?

"I think he's proud of me – he says he's impressed. He works for me now on some projects and I work for him. We work together a lot," Beal said.

Douglas Allen

Hurry-up-and-wait syndrome is also affecting projects for Douglas Allen. The cause is market forces, not disgruntled former owners. Allen started working with his father at Peter Allen & Associates four years ago, after studying sustainability and community development at Washington State's Evergreen State College.

"Peter is my mentor and also my teacher. I've taken the classes he teaches for the UM real estate certificate," the younger Allen said. He researches new projects and manages and leases the firm's 60,000 square feet of commercial space in downtown Ann Arbor. With an 85% occupancy rate, it's bucking any talk of real estate recession.

Not so for the development portfolio, where current market conditions have put all of the projects on hold, Allen said. An optimist, he anticipates a market turn-around in 18 months or less. When that happens, the company hopes to resume work Kingsley Lane, a 50-unit affordable housing development on North Ashley Street in Ann Arbor, and Broadway Village at Lower Town, a $140 million mixed-used project proposed for Broadway and Maiden Lane

With other projects on hold, he's most excited about the prospect of securing rights to redevelop the former city garage on West Washington Street across from the new Y.

"I think we're going to win," he said. "We're grouping with (Ann Arbor architect) Marc Reuter and Storrow Kinsella Associates of Indianapolis. We've got a great idea."

The group's Old Westside Square proposal includes an arts village in the former garage, 24-36 residential lofts, office, commercial, recreation and entertainment uses as well as a possible light-rail station. Three developers submitted proposals for the site to the city on August 14. A decision among the proposals seems to be a long way off as the process raised more questions than it answered.
 
While he's waiting, Allen plays music and grows food plants – interests he might pursue if he ever leaves the real estate world.

Tyler Kinley

Leaving the real estate world isn't an option for Tyler Kinley. Although he plans to leave the Ann Arbor area within a month to try his wings in Seattle, he isn't leaving real estate behind.

Starting in high school, he's worked for his father, Bill, at Phoenix Construction and its sibling, the Phoenix Company, most recently in leasing and marketing. After majoring in geology and communications at Tulane University, he returned to work for Phoenix. At the same time, he received a master's degree in urban planning and the new real estate management certificate from the University of Michigan.

"I came back to Ann Arbor to work with Bill – I realized there were a lot of things I could pick up by doing and a lot of other questions that were more difficult. I needed more education," he said. "It was perfect for me – I got to learn from great professors and then apply it in a real-world setting."

The senior Kinley made his reputation rehabbing the Phoenix West property on North First Street in Ann Arbor. Once an unprepossessing structure, it was transformed and reinvigorated by his efforts. Since then, Phoenix has cemented its good reputation with work on Murphy's Crossing in Saline, the Flour Mill in Ypsilanti, and more.

"It isn't every developer who leaves behind a good legacy – that's their choice. Bill has dedicated himself to making the community better. To me, that's wonderful," Tyler Kinley said.

Working for his father has been the perfect place to leant, grow and gain experience, he said.
His most recent development project, like those of his peers, is on hold.

"North Sky was the embodiment of what I had learned: mixed use, New Urbanism, many kinds of housing – condo, duplex, cottages. It would have been the only community of its type in Ann Arbor within the highway ring," he said.

Even if the market recovers quickly, North Sky may be gone with the wind, a victim of land-carrying costs and competing potential uses.

"My next step is to learn and grow in a different setting, without my father. Bill and I agree it's a great step for me personally. My goal is to do real estate development. How? I'm not completely sure," Kinley said.

What's ahead? All three developers are optimistic for Ann Arbor long-term.

Kinley sees the University of Michigan providing stability for the local economy and Michigan's natural resources another boon for long-term stability and sustainability.

To Allen, high energy and food costs can only work to strengthen Ann Arbor's downtown, forcing us to live closer to work, school and cultural activities.

For Beal, things can only get better for local real estate – "They couldn't possibly get any worse," he says, only half-kidding.