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MIDDLE MARKET HIGHLIGHT, SEPTEMBER 2005
ANN ARBOR
Karen Stone, CCIM
Two huge engines drive the economy of Ann Arbor: education and the automotive industry. The University of Michigan – Ann Arbor and Eastern Michigan University bring more than 50,000 students to the market. Toyota, GM, Ford and Hyundai are among the area’s largest employers, and have drawn a number of automotive suppliers to the Ann Arbor area .
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The Michigan Information Technology Center in Ann Arbor, Michigan.
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Because of its heavy reliance on the automotive industry, Ann Arbor took a dip in the recent recession. Now the economy is beginning to show a slow growth pattern. Although job creation has not yet picked up, Ann Arbor has been seeing some capital investment in the last 6 months. Most of the investment dollars are being spent on industrial projects.
Toyota will be expanding its Ann Arbor presence and is negotiating with the state to buy 700 acres in nearby York Township. Phase 1 of the multi-phase project is a proposed 250,000-square-foot, $100 million R&D facility that will add 400 jobs to the area. Toyota currently employs 600 in its Ann Arbor facility.
In July, General Dynamics completed a new R & D facility in Ypsilanti Township, a suburb to the east of Ann Arbor. The $35 million, 250,000-square-foot facility will be used to do research for satellite and optics technologies.
In August, Hyundai opened a $40 million, 250,000-square-foot R & D headquarters in Superior Township to the east of Ann Arbor.
Another major project is on the drawing boards. Bosal, one of the world's leading manufacturers of car exhaust systems, is looking at sites in Ypsilanti Township for an approximately 400,000-square-foot facility.
Also, new office projects are popping up throughout the metropolitan area. Last January, Ann Arbor-based MAV Development completed The Michigan Information Technology Center. Located in close proximity to the University of Michigan Ann Arbor campus, the 100,000-square-foot, $20 million center is designed to be a unique location where both young, educationally-oriented and established, industry supported IT companies can come together and facilitate the growth of new IT-related ventures.
And late last year, ABN AMRO, one of the world’s top international banks, opened a new headquarters and call center in Pittsfield Township, just south of Ann Arbor. The 250,000-square-foot, $20 million project was developed by Ann Arbor-based Avis Farms.
Residential growth has been booming in all geographic quadrants of the market. Just 40 miles west of Detroit, Ann Arbor is an easy commute via Interstate 94. It is attracting new residents who want a better quality of life — one that offers big-city amenities without the headaches. “One of our strong selling points is that 40 percent of the available work force has a bachelor’s degree,” says Tim Robinson, vice president and chief operating officer of the Washtenaw Development Council. (Ann Arbor is located in Washtenaw County)“On the other side of the coin, one of the constraints we have in attracting new businesses is that we have one of the lowest unemployment rates in the state. Because of this, we generally focus our attention on smaller firms. We encourage them to come here and then over the years we help them grow.”
The city’s current focus is on building momentum in a number of expanding, forward-looking industries, such as alternative energy, MEMS, R&D and the life sciences. “We are being proactive about shaping our economic future,” Robinson says. ”The outlook for Ann Arbor is very good.”
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