2017-06-01 / Local News

Greilickville hotel close to OK; some units could be ready in ‘18

Brownfield updates its plan
By Eric Carlson
Of The Enterprise staff


WEST BAY Development project manager Mac McClelland, right, accompanied developer Ron Walters, left, to a Leelanau County Brownfield Redevelopment Authority meeting Tuesday morning in the county Government Center. A local TV news crew also covered the meeting. WEST BAY Development project manager Mac McClelland, right, accompanied developer Ron Walters, left, to a Leelanau County Brownfield Redevelopment Authority meeting Tuesday morning in the county Government Center. A local TV news crew also covered the meeting. Plans to redevelop the former Zephyr Oil Company property in Greilickville into a 118-unit hotel and a 28-slip marina on West Grand Traverse Bay received a boost Monday from the Leelanau County Brownfield Redevelopment Authority.

Members of the authority board heard from developer Ron Walters of West Shore Partners, L.L.C., which owns the 11-acre parcel along M-22 in Elmwood Township, and project manager Mac McClelland from the engineering firm Otwell-Mawby.

West Bay Partners was seeking an amendment to a Brownfield plan approved for the property in 2007 when a group of investors led by Walters first tried and failed to undertake a similar project just as a nationwide economic recession was beginning.

The amendment outlined a new timetable for the Brownfield Authority to “capture” the difference between the taxable value of the undeveloped property now and its higher taxable value once it is fully developed. The “tax increment financing” arrangement will help pay for up to $5.3 million in activities that will be undertaken to conduct environmental tests, demolish existing structures on the site, and clean up the property.

The original plan called for the financing arrangement to end in 2022. That will moved to around 2032.

The combined public and private investment in the project has been estimated at around $20 million.

Walters said some of the 118 hotel units may be marketed as “condotels,” meaning that some of the units may be purchased outright by investors.

Brownfield authority board member and County Board representative Patricia Soutas-Little expressed concern that if some of the hotel units became condominium units owned by separate individuals, the advantage of creating more seasonal lodging in the county might be set back.

Walters assured her that while individual investors may purchase individual units, owner occupancy beyond 14 days will not be allowed. He said the arrangement makes financial sense because of the high demand for hotel units in the busy summer months when higher rates can be charged than might be available from the outright sale of units.

“We’re exploring every possibility for how individual units will be dealt with,” Walters said. “The hotel will be operated as a hotel with the possibility that some of the units may be individually owned.”

The unit owners could not claim a “homestead” exemption on their property, thus affecting the tax increment financing arrangement with the loss of the 18-mill state education tax on “second homes” and commercial properties, McClelland added.

Walters explained that although the hotel and marina projects are being pursued simultaneously, the permitting and approval process for the marina is more involved and will take longer. Not only will the Michigan Department of Environmental Quality need to approve, so too will the Army Corps of Engineers.

The Elmwood Township Planning Commission is slated to hold a public hearing on the marina portion of the project later this month, having held a public hearing on the hotel portion of the project last month. Elmwood planners approved the hotel project at their last meeting and will meet again on June 20.

That is also the date of the next regular meeting of the Leelanau County Brownfield Redevelopment Authority when Walters and McClelland are expected to return with an application for grant funding that will help pay for environmental testing of the property.

Walters said site work is expected to get under way this summer, with building beginning in 2018. He said about half of the hotel units may be available by next summer.

The Leelanau County Brownfield Redevelopment Authority voted 6-0 at this week’s meeting, with member Kate Sterken absent, to approve the amended brownfield redevelopment plan pending a final review by the county’s environmental consultant, Envirologic, and the head of the brownfield authority, county planning director Trudy Galla.

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