Ann Arbor’s once-funky South U is now high-rise central with University of Michigan booming

This story is part of a series exploring how the University of Michigan’s expansion impacts Ann Arbor, from its economy to its businesses to its history. This is the final story in that series.

ANN ARBOR, MI – At Pinball Pete’s arcade on South University Avenue, gamers have to walk down and down a flight of stairs. But the only direction the area known as “South U” is going is up and up.

A walk along South U, the center of University of Michigan student life, brings your eyes upward to the student high-rises jutting into the skyline. The sound of construction serves as a reminder more are coming.

Read more: Ann Arbor high-rise roundup: Over a dozen new towers in the works

The Ann Arbor street once known for funky mom-and-pop shops has transformed over the years to accommodate the University of Michigan’s enrollment boom.

Twenty years ago, the university’s enrollment was 39,533. It’s now near 53,000 this fall, and the last two decades have brought a handful of student high-rise developments standing more than a dozen stories tall.

While these have displaced businesses, some local business owners and real estate professionals think this growth is a good thing.

“I always refer to the University of Michigan as the 800-pound gorilla in the room,” said Ed Shaffran, an Ann Arbor real estate developer for more than 40 years. “I mean their economic impact is unbelievable. Ann Arbor in many respects wouldn’t be the town that it is if it wasn’t for the University of Michigan.”

Landmark, Z Place, ArborBLU, Six11, Vic Village North and Vic Village South all stand high above South U. While developers bring their visions to life, decades-old businesses like Pinball Pete’s pay the price.

The underground arcade has been part of South U since the 1990s, sitting in the Galleria building at 1214 S. University Ave. The building is set to be demolished for a 17-story apartment high-rise.

“That’s just the reality of Ann Arbor,” co-owner Ted Arnold said.

‘South U is growing up and going up’

There’s no escaping the developments around South U.

The first on the street dates to 1965 with the addition of University Towers, the 18-story student apartment tower at South U and Forest Avenue that became the city’s tallest building for a few years.

Add to that six student-focused apartment high-rises built in the South U area since 2009. More are planned for the future.

Read more: 1960s building boom introduced Ann Arbor to high-rise controversy

Each has rippling effects.

The 17-story high-rise taking over Pinball Pete’s will also displace a Starbucks coffee shop, Pancheros Mexican Grill, a U.S. Post Office, the University of Michigan’s Program on Intergroup Relations, an Amazon hub and Vape City.

Arnold said he was lucky to find a new spot for Pinball Pete’s at 500 E. Liberty St. in the Carver-Gunn Building. He didn’t want to leave South U, but change is inevitable, he said, as demand increases for student housing.

“South U is growing up and going up,” he said.

Read more: ‘It was meant to be:’ Pinball Pete’s will live on at new Ann Arbor location

Jim Chaconas of Colliers International Ann Arbor said he’s concerned the University of Michigan is not growing fast enough to fill all these high rises.

Shaffran agrees developers are building quickly. He wouldn’t be surprised if the university purchased some of them if they do not work out.

Replacing South U’s funkiness

Before high-rises, the buildings on South U were closer to the ground and a bit quirkier.

The building that housed The Village Apothecary drug store for nine decades is now a construction zone for a high-rise.

Down the street, Middle Earth sold eclectic gifts for 47 years until it closed. For nearly two decades, S3 Safe Sex Store provided contraceptives, free HIV testing, counseling and sex education.

The sex store’s owner Beth Karmeisool said a change in the building’s ownership and the inability to afford another spot in Ann Arbor pushed her out of South U. The shop’s building was demolished and now is vacant property.

A developer originally proposed building a 13-story high-rise in the space, but decided not to pursue the project. Now, it’s set for yet another high-rise as tall as 19 stories.

The development site at 1201-1213 South University Ave. includes that vacant property and a row of existing businesses, including Oasis Mediterranean Grill, Motivation clothing shop, Sweeting boba tea cafe and a Jimmy John’s sandwich shop.

Read more: 19-story high-rise proposed on Ann Arbor’s South University Avenue

“S3 was my entire existence and my life,” Karmeisool said. “I built around that retail store to give back to the community, to give back to the university and to be able to make a living and it’s been very difficult since then.”

She operated online for two years after closing before S3 Safe Sex Stores’s time ended.

It was emotional for her to visit the area, Karmeisool said, and she stayed away for a couple years. She was shocked to recently return to South U and see the buildings that once gave the area its flair had been stripped away.

“It was difficult to even process all that had changed,” she said. “Change is not a bad thing, but it has to be done in moderation. It has to be done with thought, instead of coming in and just wiping out everything, because there is history in these stores.”

Chaconas recalls South U being a vibrant area full of jewelry stores, men’s clothing shops and other businesses before the 1973 opening of Briarwood Mall. After that, it became “pretty desolate,” he said.

Related: Restaurant known for chicken fingers opening new Michigan location in Ann Arbor

The high-rises and national chains brought back some vibrancy, Chaconas said, which has trickled down to other areas like State and Liberty streets.

Losing the mom-and-pop shops, however, is “a shame of the growth,” he said.

“I miss the old Ann Arbor,” Chaconas said. “But Michigan’s got a lot of people leaving the state. At least we have Ann Arbor growing.”

Who has survived?

Restaurants like Pizza House are embracing the change.

Dennis Tice has been behind the pizzeria since 1986, seeing thousands of students come during the decades. He’s all for the high-rises and said he thinks they help “clean up the streets,” and make the area safer.

“Density cures a lot of ills when you’re trying to run a business, whether it’s a T-shirt shop, a restaurant or a bar,” he said.

Adding density to South U, Tice said, will continue to transform the area and bring success to local businesses there. So far, he said he’s seen an increase in both student and non-student traffic since high-rises began to go up.

“It’s been nothing but positive in my mind,” he said.

Tice admits there’s a loss of quirky businesses, but this is happening across Ann Arbor. With more responsible development, he thinks there’s a chance these businesses could return to South U.

“More people living down here can’t be a bad thing,” he said.

Underground Printing has been on South U since the first store opened in 2006, co-founder Rishi Narayan said. The custom apparel company recently moved to the ground floor of Vic Village North.

Narayan’s experience has been positive, he said, but he realizes balancing the changing landscape with South U’s history is difficult and “there’s no perfect way to do it.”

“You think back a long time ago and you’re very nostalgic to how it used to be, but times change,” he said.

Narayan said he still believes South U is a place where new businesses can try new concepts.

“I think businesses change and I think that is more of a reflection on how retail has changed,” he said. “Whether it’s quirky or not – that’s the eye of the beholder.”

Perry Porikos owns The Brown Jug and The Blue Leprechaun one block apart on South U.

“I don’t mind changes, but I think the timing is always of the essence,” he said

Construction and parking issues have been drawbacks, he said.

“Development is always good for the area, but you have to have the backup system to support it,” he said.

It may not continue at this pace, but Shaffran foresees the University of Michigan’s growth to continue to impact developments across not only South U, but all of Ann Arbor.

The Ann Arbor campus is the largest university in the state, with applications cresting 100,000 for the first time for the fall 2024 semester.

“If anything, the buildings are going to get taller,” Shaffran said.

Read more stories here about the University of Michigan’s expansion throughout Ann Arbor.

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