2017-02-09 / Front Page

County officials believe Polselli has ties to Sugar Loaf

By Eric Carlson
Of The Enterprise staff

Remo Polselli is likely still playing a role in ownership of Sugar Loaf Resort, county officials believe.

Meanwhile, the new owner of the resort, an attorney from California, is being put on notice that he must bring the resort into compliance with the state Construction Code by May 1 or face legal action from Leelanau County.

County officials confirmed this week that the current owner of the resort, California real estate attorney Jeff Katofsky, has told them that Polselli “holds the paper” on the resort and is underwriting Katofsky’s mortgage.

A company controlled by Katofsky, Sweet Bread L.L.C., acquired Sugar Loaf Resort on Nov. 14, 2015, from a company controlled by Polselli called 4500 Investments, L.L.C.

According to a warranty deed on file in the county Register of Deeds Office, the sales price was $3 million — but Katofsky has since insisted he actually paid far more for the property.

Filed the same day as the warranty deed was notice of a $6 million mortgage given to Katofsky’s corporation by a Montana corporation known as “Farmer’s Merchant Capital, L.L.C.” That corporation was registered in the State of Montana just weeks before the sale of Sugar Loaf was consummated.

“When Jeff Katofsky told me Remo Polselli still ‘holds the paper’ on Sugar Loaf Resort, I took it to mean it was through Farmer’s Merchant Capital in Montana,” said Steve Haugen, head of the Leelanau County Construction Code Authority.

County administrator Chet Janik said he was given the same impression in a conversation he had with Katofsky as well.

Katofsky himself declined to tell an Enterprise reporter who the principal owners of “Farmers Merchant Capital” are when asked about it direct- ly late last year, saying, “It doesn’t really matter who my bank is.”

Back in 2010, after a local woman named Kate Wickstrom had been the nominal “owner” of Sugar Loaf Resort for some five years, members of the community were surprised to learn that Polselli controlled Wickstrom’s mortgages on the resort.

Wickstrom eventually relinquished control of the resort back to Polselli before action was taken to clear title to the property so it could be sold to Katofsky last year.

Haugen said he has been in touch with Katofsky since last year to press a need to bring the resort into compliance with the state Construction Code. It took Haugen more than a year to get Polselli to demolish a dilapidated building on the property known as the Sugar Barn — and Polselli never did bring the rest of the resort up to code.

Haugen said Katofsky has three choices, but only one realistic one. He can remodel the resort immediately, the least likely option, or demolish it. The third option, and the most likely one, will be for the new owner to place boards over windows and doors, cover a leaking roof, and possibly erect a fence around the property in keeping with strict Construction Code requirements.

That can’t happen soon enough for county officials and neighbors of the resort. Last week, county administrator Janik convened a meeting with Haugen, Leelanau County Prosecuting Attorney Joseph Hubbell, and two county commissioners representing the Sugar Loaf area.

District No. 6 Commissioner Casey Noonan represents Cleveland Township — where most of the resort is located — plus Empire and Glen Arbor townships. District No. 5 Commissioner Patricia Soutas-Little represents Centerville Township where part of the resort property is located, as well as Leland Township.

Also present at the Feb. 1 meeting were local businessman Pete Bardenhagen, owner of the Sugarfoot Saloon near Sugar Loaf; Kris Wakeman of the Sugar Loaf The Old Course golf course and the Sugar Loaf Service Company, which operates a sewage treatment plant serving the neighborhood; and Scott Little, a property manager with the Sugar Loaf Townhouse Owners Association and operator of a water system serving the property.

Bardenhagen, Wakeman and Little all expressed deep frustration with the continuing decay of Sugar Loaf Resort and the lack of action by county and township officials to do something about it.

According to a draft record of the meeting, Janik explained that county’s primary responsibility regarding Sugar Loaf is to enforce the Construction Code. Janik later said the county will give Katofsky until March 1 to begin work to bring Sugar Loaf up to code. If the code violations are not corrected by May 1, Janik said, the county may take legal action against Katofsky.

Polselli acquired Sugar Loaf Resort in 1997, adding the resort to a long list of troubled properties he owned across the U.S. The resort has been closed since March 2000.

In 2001 Polselli was convicted of tax evasion in North Carolina and was incarcerated in a state prison. In 2003, he was convicted on felony tax evasion charges by the federal government and spent time in a federal prison.

A Michigan native, Polselli is currently believed to be based in California. No run-ins with the law appear for Katofsky, who is an attorney in good standing with the State Bar of California. He and family members own a minor league baseball team and he appears to have a history of success in real estate. Katofsky said he acquired an option to purchase Sugar Loaf Resort in a court settlement with Polselli that involved two other Michigan properties Polselli controlled

One of them, a hotel in Romulus near Detroit Metropolitan Airport, has been rehabilitated by Katofsky and is back in business. Another, a historic inn in St. Clair County, is still undergoing renovation. Katofsky has said he will focus more of his attention on Sugar Loaf Resort once he is done with his other Michigan properties.

He said no one should expect to see major development at Sugar Loaf for at least another two years.

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Isn't about time Leelanau

Isn't about time Leelanau County got this matter under control? Good grief.