University Bancorp Inc. in Ann Arbor, Mich., will move next month to a new headquarters building that is more than double the size of its current one - and the upgrade is costing it only $700,000.
Better yet, while the old headquarters is in an office building adjacent to a strip mall, the new one is in a historic mansion on 2.5 well-manicured acres.
The wheels for the move were actually set in motion in the late 1990s.
Stephen Lange Ranzini, the president and chief executive officer of the $53 million-asset company, heard that business owners in the shopping center and the owners of a nearby junkyard were interested in selling their properties. He used his contacts to get word out to real estate developers - figuring, too, that any developer would also want to buy University's headquarters to make room for an even larger project.
That is exactly what happened. Lower Town Development Group LLC, which had already bought up the neighboring properties, bought University's headquarters in June 2003. It plans to level it and adjacent properties to clear the way for a mixed-use development.
University was given an option to buy space in the new development and stay in its old location during construction. That was the plan until April, when University was offered $1 million to move out by Aug. 1 so the developer could get started on the bigger project.
Mr. Ranzini agreed, and he quickly started searching for new digs. He set his sights on the Hoover Mansion, which was built as a private residence in 1919 (for Leander J. Hoover, the founder of Hoover Steel Ball Co.) but had been converted into office space.
In June, University bought the mansion's owner, Hoover LLC, for $1.7 million.
Problem: Hoover LLC had already agreed to sell the mansion for $1.76 million to Solden Development Co., which planned to develop it as condominiums. But Mr. Ranzini figured that the bank had nothing to lose. If Solden went through with the deal, the bank stood to make $60,000. If the deal fell through, the bank would still own the building.
In fact, Mr. Ranzini said he was quietly confident that Solden would back out because of the cost of conversion to condominiums.
By Aug. 1, nothing had been resolved. University got permission to remain in its headquarters until it found space.
Finally, in late October, Solden decided - after some legal wrangling - to cancel its contract for the mansion, paving the way for University's move.
Given that it had received $1 million to move out of its headquarters, University effectively paid $700,000 for the mansion, which will also house its lone retail office.
The new space has 13,000 square feet, plus 4,000 in an adjacent carriage house. With that kind of space, University could easily double its staff of 26, Mr. Ranzini said. Doing so would enable it to expand its operations without having to worry about where it would put its people.
"There is only so much parking and so much building" at University's old location, Mr. Ranzini said. "It is a good place to start a bank, but not a good building for 20 years."
