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Positioning for profit

The old Masonic building on the Plaza is in the process of going condo.

The six units inside the building will still be rented to the same six small-business occupants and the building will still have to comply with the same land-use regulations that it currently does. The only thing that will change is owner Allan Sandler&

s options with regard to the property.

&

It makes it more versatile,&

he said. &

This way, I could sell just one unit rather than the whole building.&

In February, six apartments in the Ashland Drugstore building on East Main Street were converted to one 4,500-square-foot condominium.

Around Ashland property owners are doing likewise; modifying the designation of property in an attempt to further maximize the return on investment.

Like in a game of Monopoly, local real estate investors are cashing in their figurative green houses for a red hotel.

Recently, more examples have been heard at planning commission hearings board meetings.

In June, Hal Dresner was given permission to turn a condo unit in the Jasmine Building into one hotel/motel room so that he could rent it to Ashland visitors for short periods of time. At the last hearings board meeting, Doug Neuman was granted permission to convert a six-unit apartment complex at 928 Glenwood into a six-unit condominium complex.

Neuman, Dresner and Sandler all said the change was motivated by their bottom line, saying the change would give them greater flexibility in regard to their property.

However, others in Ashland see some of these land-use alterations as bad for the social fabric of Ashland. The developers have been accused of diluting the amount of rental housing in the name of their personal finances and, in some cases, of staggering their ultimate idea through the planning process in order to more easily attain the desired use.

— — —

The Masonic building on the plaza is one of the — many buildings in Ashland where the owner is changing the way the property — is divided in order to increase its value.

Daily Tidings file photo

— — —

Planning limits

The planning commission, at its last study session, discussed the need to preserve rental stock for those who work in Ashland and can&

t afford to own property here.

Some on the commission, like Michael Dawkins, feel that the booming real estate market is swallowing up all of the decent affordable rental housing.

&

The market is such that real estate no longer implies a home; it&

s an investment,&

Dawkins said.

The planning process does not have a way to preserve real estate for affordable rental housing against the pressures to maximize the value of a piece of land, he said.

&

There are a bunch of other apartments around town that the same thing could happen to,&

Dawkins said. &

And there is nothing we can do about it. The criteria says we have to approve it.&

Mark Knox, a private planner working for Neuman, said that although his client has no &

immediate&

intention to sell the units, making them buyable gives more options regarding the financing of improvements. He said a bank would offer a better refinance rate on condos than it would on an apartment complex.

Knox said the size and location of these units would keep them affordable, either as condos or apartments. They are on the south end of town and are about 750 square feet each.

&

The market will probably look at these as more affordable than anything else being built in Ashland today,&

he said.

But Philip Lang feels this philosophy ignores a segment of the population that either doesn&

t want to own the land or can&

t afford to.

&

Coming up with a down payment for a house is a little different than being able to pay rent every month,&

he said. &

People who can&

t afford to buy houses need to be able to rent them. There are less and less places in Ashland all the time for our teachers, police officers and reporters.&

Stealth plans?

On Lithia Way, a similar event, albeit with different circumstances, is playing out. Dresner has changed a 1,600-square-foot residential unit in his brand new Jasmine Building into a rental unit.

In this instance, though, it would be rented for visits rather than living accommodations. He said the idea occurred to him when he was approached by a group of doctors interested in locating an integrated cancer center across the street and thought they may need a high-end rental unit to accommodate the patients.

Colin Swales thinks an upscale vacation rental unit might have been Dresner&

s end game all the while, though.

&

If he wants to build a vacation luxury condominium, do it up front,&

he said. &

This is planning by stealth.&

In January, Dresner was given approval by the planning commission to build a 6,166-square-foot residential and commercial building at 180 Lithia Way.

Six months later he came back and asked the commission to change the use on one of the units to that of a traveler&

s accommodations so that it could legally be rented for less than 30 days at a time.

&

It was always an idea that it might be available for the cancer center,&

said Dresner, who is also one of the developers for the proposed Northlight project across the street, which could contain the cancer center. &

If someone would have asked me at the time, I guess I would have said it was a possibility.&

However, Dresner said his actions were in full compliance with the rules of the system.

&

I don&

t see anything wrong with changing the use,&

he said. &

It&

s taking nothing away and adding a tourist facility. I don&

t see this as creating any sort of precedent.&

He added, &

it isn&

t a policy issue because the parking is provided.&

A downtown hotel/motel unit is required to have one parking spot for each room rented and one additional spot for the owner/manager.

Swales agreed that the project seems to comply with city codes. However, he said it is a kind of &

greasing the planning system&

to propose one kind of development and then change the use when the community turns its attention elsewhere.

&

He probably would have gotten a little more scrutiny from the commission if he had to jump through that extra hoop the first time around,&

he said.

&

Obviously, this goes with the changing demographic of Ashland,&

Swales said. &

It&

s about the bubble market and maximizing the value of real estate. Everyone should know what the market forces are and what the game is that is being played.&

As the still-bubbling real estate market entices developers to alter the land-use designation of property in order to make it more profitable, the game looks more and more like Monopoly with each planning decision.

Staff writer can be reached at 482-3456 x 3040 or bplain@dailytidings.com.