2016-11-17 / Front Page

Sight unseen, ‘Loaf bought

By Eric Carlson
Of The Enterprise staff

KATOFSKY KATOFSKY It’s finally, really happened.

After remaining closed for more than 16 years, and under essentially the same ownership for nearly 20 years, Sugar Loaf Resort has been sold.

The resort’s new owner, real estate attorney and investor Jeff Katofksy of California, plans to make a “stealth visit” to Leelanau County sometime around mid-December to see his new property in person for the first time.

“Even though I’ve taken possession of Sugar Loaf, I’m still in the due diligence phase of this project,” Katofsky told the Enterprise this week. “I need to see what we can do there and what makes the most business sense before I make any big announcements about what happens next,” he said.

Katofsky said that people working for him have visited Sugar Loaf numerous times since he struck a deal with the former owner earlier this year, so he understands the challenge of bringing the dilapidated property back into shape.

BROKEN GLASS, “no trespassing” and “for sale” signs have long been evident at Sugar Loaf Resort. However, the resort is under new ownership as of this week. BROKEN GLASS, “no trespassing” and “for sale” signs have long been evident at Sugar Loaf Resort. However, the resort is under new ownership as of this week. Katofsky said he hopes he can turn Sugar Loaf Resort into a profitable business, with a “better year-round product” than was previously offered there. He said that skiing and snowboarding would certainly be a part of that.

Documents recorded Monday in the Leelanau County Register of Deeds office indicate that a Nevada corporation known as “Sweet Bread, LLC.,” purchased the resort from a Michigan corporation known as “4500 Investments, L.L.C.,” for $3 million.

Katofsky is listed as the managing member of Sweet Bread, while Remo Polselli is managing member of 4500 Investments.

Also recorded Monday in the Register of Deeds office was a $6 million mortgage on Sugar Loaf Resort. Sweet Bread, L.L.C. is the borrower and Farmer’s Merchant Capital, L.L.C., of Montana is the lender. The mortgage note is due and payable on Dec. 31, 2019.

“It will probably take three to four years of work and an eight-digit investment before we can reopen the resort,” Katofsky said. “We could open more quickly by doing it the wrong way, but we want to do it the right way.”

The resort is in such bad shape that the former owner was facing criminal misdemeanor charges for a long list of Construction Code violations. The head of the county’s Construction Code Authority, building official Steve Haugen, said he’s remained in touch with both Polselli and Katofsky on a regular basis over the past several months.

The former owner of the resort was slated to face a bench trial on the misdemeanor charges in 86th District Court in Leelanau County last month, but the trial was postponed as county officials were advised that a sale of the resort was pending.

Haugen said it’s almost certain that charges will be dropped against 4500 Investments, but he will still have legal recourse against the new owner, Sweet Bread, if a plan isn’t presented soon for bringing the resort back into compliance with the Construction Code.

“Mr. Katofsky and I have agreed to meet here in Leelanau County sometime around mid-December,” Haugen said. “But we don’t have an exact date or time, yet. And we definitely don’t want his visit to turn into a three-ring circus.”

Katofsky agreed. He said he hoped to keep a “low profile” during his first visit to Leelanau County next month.

“I do have plans for the resort,” Katofsky said, “but I don’t know yet if we can actually do them – if it’s financially and physically feasible. That’s why I don’t want to make any big announcements right now. I may not have any plans to unveil until sometime next year.”

Announcement of plans to revive Sugar Loaf can’t come fast enough for Tony Mattar, co-manager of the Sugar Loaf Townhouse Owners Association. The association is currently working with Cleveland Township on establishing a Special Assessment District that will help them pay for a new water system to serve the townhomes.

The current water system serves both the townhomes and Sugar Loaf Resort but has fallen into disrepair.

“We’re cautiously optimistic that Mr. Katofsky is someone we can work with,” Mattar said.

Katofsky said Tuesday that if the townhouse owners want to dig a new water well at the bottom of Sugar Loaf Mountain, he might be unable to carry out his plans and would withdraw from the project.

Similarly, Katofsky said he is hoping to receive cooperation from the Sugar Loaf Service Company which owns and operates a sewage treatment plant serving both the resort and neighboring residences.

The previous owner of the resort had been embroiled in a long and complex series of lawsuits involving the sewage treatment plant and other neighboring property owners.

“I will certainly talk to any of them,” Katofksy said, “but I’m not sure what to tell them at this point. If this isn’t all done in a cooperative way, then I’m out of here.”

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