2016-10-20 / Front Page

Clear title to ‘Loaf

Hurdle cleared in restoring resort
By Eric Carlson
Of The Enterprise staff

The long-awaited sale of Sugar Loaf Resort appears to be imminent.

Seriously.

California real estate developer and attorney Jeff Katofsky told the Enterprise he would be in Michigan by the time this newspaper hit the streets this week. He expects to acquire the long-shuttered ski resort from its current owner before the end of this month.

And for the first time in more than 16 years, legal title to Sugar Loaf Resort is no longer clouded, according to the Leelanau County Register of Deeds Dorothy Miller.

She reported that as of 5 p.m. Monday, a six-month redemption period expired as part of a mortgage foreclosure process against a corporate entity known as S.L. 2002, which formerly owned the resort. The current, official owner is yet another corporate entity known as 4500 Investments, L.L.C.

Both 4500 Investments and S.L. 2002 are controlled by a former owner of the resort, Remo Polselli, who has a long track record of using a variety of corporations to buy and sell resort and hotel properties throughout the U.S.

Katofsky said he will ensure Polselli has nothing to do with plans for Sugar Loaf going forward.

Katofsky has already acquired two other properties Polselli owned in Michigan as part of a settlement in a lawsuit tied to hotels that Polselli owned in other states. Earlier this year, Katofsky acquired the historic St. Clair Inn in St. Clair County for a reported $4 million as well as the Metropolitan Hotel in Romulus near Detroit Metro Airport for about $8.5 million.

Miller said about $6 million was owed on mortgages on Sugar Loaf Resort. Katofsky wouldn’t say how much he might be paying to acquire the resort.

“My first priority is the Metropolitan Hotel which has been closed for two years and is now reopening,” Katofksy said. “My second priority is the St. Clair Inn.

“Sugar Loaf is third on my list,” Katofsky said.

Katofsky said he’s been so busy focusing on the Metropolitan Hotel and the St. Clair Inn that he has yet to visit Sugar Loaf Resort — but expected to do so very soon.

“What I find during a walk-through will determine my next step,” Katofsky said. “If there are still a lot of roadblocks and legal issues, I’ll bail out. If everything needs to be torn down and we need to start from scratch, I might not move forward either.”

Indeed, the Leelanau County Construction Code Authority has threatened to demolish Sugar Loaf Resort if its owner doesn’t bring it into compliance with state codes. Code Authority head Steve Haugen and Leelanau County Prosecuting Attorney Joseph T. Hubbell earlier this year filed criminal misdemeanor charges against 4500 Investments, L.L.C. for code violations, and a bench trial was slated to begin a week from today, Oct. 27.

On Monday, Hubbell sent a letter to an attorney who represents 4500 Investments, to assure him that “Leelanau County has no intention to have any of the buildings demolished if a sale (of Sugar Loaf) is consummated.”

The Enterprise acquired the letter by filing a Freedom of Information Act request.

“Leelanau County is willing to work with any purchaser so that the sale may be consummated and improvements begun,” Hubbell wrote. “When the transfer of the title to the property has occurred, we intend to dismiss the pending criminal case against 4500 Investments, L.L.C.”

Katofsky said Sugar Loaf is a ski resort and will remain a ski resort if and when he acquires it. He said he is not a skier.

He does own a minor league baseball team in Utah, however, and is listed by the California Bar Association as a licensed attorney in good standing.

“I’m only interested in Sugar Loaf if we can open up a top-rate ski resort and an upscale hotel,” Katofsky said.

“A few folks in St. Clair greeted me as some kind of hero who was going to come in and save their town by saving the St. Clair Inn — but I’m not a hero, I’m a businessman,” Katofsky said. “I’m not in this for charity and I’m not doing it for the town.”

Katofsky added: “The St. Clair Inn will work, and I’m pretty confident Sugar Loaf will work, too. But it will probably take tens of millions of dollars. I’m not going to do it half-assed.”

Katofsky said he is aware that Sugar Loaf Resort is officially a “brownfield” and may be eligible for certain tax incentives and loan programs that could subject a project to requirements of the Leelanau County Brownfield Redevelopment Authority.

Katofsky said he is already working with the company Envirologic on his properties downstate. The Leelanau County Brownfield Redevelopment Authority retains Envirologic to oversee its projects.

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It doesn't sound like there

It doesn't sound like there is a clear path to "restoring resort." That sounds like a long way off to me.