Ann Arbor's South University Avenue is abuzz with rumors that a major redevelopment is in the works, with the potential to significantly change the face of the South U corridor.

Business leaders along South U, a largely student-centric business district catering to Ann Arbor's college crowd, say they're hearing that Oakland County developer Ron Hughes of Hughes Properties has an interest in redeveloping the Ulrich family trust properties that line both sides of South U and parts of Church Street.

There's speculation there could be a major redevelopment along both sides of South U from East University Avenue to Church Street, and possibly the southeast corner of South U and Church Street, possibly with new housing units rising above ground-floor commercial spaces.

"Everybody that I've talked to is excited about the possibility of reinventing South U, redeveloping South U," said Dennis Tice, president of the South University Area Association and owner of the Pizza House restaurant.

"If done right, it would be fantastic for not only South U, but for the surrounding areas and all of Ann Arbor," Tice said.

Tice and other business leaders said they haven't heard anything concrete yet, but they believe it's only a matter of time.

"I'm hearing there's a lot of new development that's going to happen on South University in the next few years. I don't know what it is exactly, but it's supposed to happen," said David Root, manager of the Brown Jug bar and restaurant.

Hughes confirmed on Thursday that his company has been managing the Ulrich family trust properties, which include a significant percentage of the commercial buildings along South U, for about a year now, but he said there are no immediate plans to redevelop the properties. He declined to comment on any future development plans.

"Right now we're managing the properties and that's basically what we're concentrating on," he said. "We're honoring all of the leases that are in place there on South University and basically concentrating on the management of those properties and getting our arms around all of the properties, getting to know the buildings, the tenants. We really don't have any development plans currently for the properties."

South U business leaders said it's their understanding that some existing commercial tenants are now on one-year leases and long-term leases aren't being signed because of the anticipated redevelopment. Hughes declined to comment on that.

Maggie Ladd, executive director of the South University Area Association, said she believes a major revitalization is in store for South U.

"There will be development in the South University area within the next few years, and I think we're excited to see that happen," she said. "There are no plans filed with the city yet, so I don't have anything concrete to tell you."

Ladd said the business association is interested in encouraging a diverse mix of residential and commercial tenants.

Hughes was the co-developer of the 14-story Landmark apartment high-rise that opened on South U in September 2012 with 600-plus bedrooms.

He also worked with Colliers International Ann Arbor in the last few years to redevelop the former Borders bookstore building on East Liberty Street in downtown Ann Arbor, turning it into a hub for stores, restaurants and offices.

In anticipation of a major redevelopment on South U, the Downtown Development Authority has started talking more seriously about redesigning the streetscape.

This past Wednesday, DDA officials discussed a $1.5 million streetscape project that would involve removing the large tree planters along South U. One of the concerns is that the trees have outgrown the planters, causing the pavement to heave.

Pollay said there's a potential to gain back some valuable sidewalk space by switching to tree grates that essentially put the planters below grade. She said that would help with the added foot traffic on South U, where multiple apartment high-rises have been built in recent years and another one is being built above Pizza House right now.

DDA officials and South U business leaders also believe the planters stand in the way of businesses being able to offer more outdoor seating for customers.

Pollay said there might be an opportunity to have the streetscape work done in conjunction with the anticipated redevelopment of South U.

The DDA's tentative work plan shows $250,000 worth of design work for the South U streetscape project happening in the fiscal year starting July 1, followed by $1.25 million worth of actual construction over the following two years.

The Ulrich properties include all buildings on the north side of South U from Ulrich's Books down to the now-closed YCI Clothing space, except for the Espresso Royal building in front of Ulrich's Books. The now-closed Stucchi's Ice Cream space and TCF Bank are not part of the Ulrich properties.

On the south side of South U, the Ulrich properties include everything from East University to Church Street, except for the Good Time Charley's building and the Village Apothecary. The parking lot behind the buildings is Ulrich property and is expected to be part of the footprint if there's a redevelopment.

The Ulrich properties also include the buildings that house the Brown Jug and the Launch skateboard shop at the southeast corner of South U and Church Street, as well as the property south of Charley's on the west side of Church Street.

David Greenwald, manager of the Launch skateboard shop, said he just hopes that whatever happens there still will be mom-and-pop shops on South U.

"This is a landmark for us," he said of the board shop at 1200 S. University Ave. "We've been here since 2001, so to see us go, that would be devastating."

Tice said Hughes has a good reputation as a developer and he has done good work in Ann Arbor, so he's optimistic about a redevelopment of South U.

"Ron knows what he's doing," he said. "And I think it would be a great thing for the area, and I think it's long overdue on South U."

Ryan Stanton covers the city beat for The Ann Arbor News. Reach him at ryanstanton@mlive.com or 734-623-2529 or follow him on Twitter.