Village co-op owners voting on condo conversion

Owners in The Village co-operative in east Ann Arbor are voting on whether to convert the community to condominiums.

The voting will end Jan. 28. Results tallied on a Web site operated by ROA Hutton - a New Jersey company handling the conversion for management company Associa - showed that as of last week, more than 50 percent of owners had voted in favor of the conversion.

About 1 percent had voted against it, and a two-thirds majority is needed for the conversion to go through.

Associa officials declined comment until after the voting is complete, and the president of the board of directors could not be reached.

Martin Bouma, a Realtor at Keller Williams who was involved with the conversion of the Geddes Lake development last year, said the fact that cooperatives involve unconventional financing scares off some potential buyers. Co-ops also generally can't be purchased as investments, because owners must live in them, another factor that hurts demand.

"I can't see at all why they wouldn't do it,'' he said. "Anything you can do to increase demand is good.''

As a market-rate cooperative, part of the purchase price of each of the 422 one- or two-bedroom town homes at The Village includes a "blanket mortgage.'' In the case of The Village, that means about $30,000 of the purchase price, according to its Web site. It means if a unit cost $76,000, only $46,000 would have to be financed by the buyer.

The buyer then pays on that mortgage each month and also pays a monthly co-op fee that includes their share of the blanket mortgage, taxes and maintenance costs. Owners also buy shares of a nonprofit corporation that holds the land when they purchase a unit.

If the co-op becomes a condo community, current owners would have to refinance into conventional mortgages and, in the future, new buyers would finance the entire purchase price. Such a move is likely to raise the value of the individual units and make them easier to sell.

Appraisals on the ROA Hutton Web site show the difference in market value calculated by appraiser Lawrence Merte on three units. One two-bedroom unit was appraised at $66,000 as a coop, or $85,000 as a condo.

The Village, originally called Pittsfield Village, was built in the 1940s to house workers at Ford Motor Co.'s nearby plants that produced World War II bombers. It's managed by Kramer-Triad.