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ESCANABA — Light was shed on some of the issues that have held up development of the former Delta County Jail and Chamber of Commerce properties at a special meeting of the Escanaba City Council on Monday morning, but how these issues will be resolved to allow development to move forward remains to be seen.

“I think we all learned the phone game when we were kids and we try to avoid that,” Mayor Mark Ammel said at the meeting.

The main concern of the board and the three developers present at the meeting was the purchase agreements, which are still in the negotiation phase. Although all contracts were on hold, the reasons for the delays were as varied as the projects themselves.

The North Shore Marine Terminal & Logistic development project, which mainly involves extending the sea wall along around 260 feet of shoreline near the former prison site, was the first to be discussed on Monday, as the council considered that it was likely to have an impact on neighboring development.

Aaron Kadish, project manager for North Shore Marine, raised concerns about the city’s assessment of the property, saying the comparative properties used in the assessment were not appropriate because they had completed the seawall.

“Once it’s done, it can approach that value, but there’s a huge expense to get there,” Kadish said.

Assuming North Shore Marine and the city reach an agreement on the price, Kadish said work on the seawall would begin as soon as permits are approved. All necessary paperwork has already been filed with the state, but the filing fee has not been paid, as the city has indicated it will not reimburse the developer for the fee if the sale fails.

Council member Ron Beauchamp, who called for Monday’s special meeting to be convened, raised concerns about the construction of the sea wall and the impact the piles could have on the proposed hotel development of the Terrace Bay Hotel on the site of the old prison. He said past construction of the sea wall had shaken buildings and damaged foundations near the shipyard.

“There was only damage to buildings that were not fundamentally sound, right? Was there any damage to buildings?” Nick Kobasic, general manager of North Shore Marine Terminal & Logistics, asked Beauchamp.

When Beauchamp replied that he thought nearby buildings had been damaged by the construction of levees last year, Kobasic said he was unaware and that vibratory pile installation is standard practice. around the world, often near skyscrapers and other structures.

The pilings, however, weren’t a concern for the Terrace Bay Hotel, which aims to put a Hilton hotel on the site of the former prison.

From a technical standpoint, Terrace Bay expected the two biggest obstacles to its project to be the re-engineering of the city’s storm sewer system, which will have to cross the property acquired by North Shore Marine, and the removal and replacement of utilities that are currently installed in the old prison.

But Terrace Bay’s biggest concern is finalizing a purchase agreement.

From a property acquisition perspective, Terrace Bay has arguably the most complicated set of tasks to complete. To complete the hotel, the developers must acquire the site of the old prison, a small strip of additional land owned by the city, and a portion of land that would technically be part of North Shore Marine’s land purchase in the city. North Shore Marine has already indicated that it will sell the land in Terrace Bay for the project once its own purchase agreement is finalized.

The council’s biggest concern on Monday was who owned the old jail and why. In 2010, the county passed a resolution giving the city and the Downtown Escanaba Development Authority the right of first refusal to purchase the property if the county vacates the property. Although there was some debate over whether or not the council intended to refuse the acquisition of the property – with Beauchamp adamant that was never the intention – city manager Patrick Jordan ceded the city’s claim to the property earlier this year.

“I didn’t want to be the one delaying the projects the county was ready for, so I informed the council, wrote the letter, also wrote the letter for the DDA, … got it signed and had it delivered to Emily (DeSalvo, County Administrator),” said Jordan.

Terrace Bay is already in the final stages of talks with the county to purchase the jail site.

Most board members expressed that they felt the county had been responsible for prison ownership from the start, stating that any combination of properties was really a marketing ploy used to seek developer proposals after the failed development of the property by Proxima, a developer who expressed plans to build a hotel on the site, but unexpectedly ceased contact with the city after securing the project.

The RFP was successful in that it attracted the attention of four developers, all vying for the jail and chamber sites. The three developers currently seeking to buy the properties have each submitted larger proposals, as has the Red Deer Lodge development team, which has submitted its own hotel project. Initially, it was recommended that the city offer the project to Red Deer, but at the last minute the three local developers presented a collaborative plan for the land.

The majority of council wanted to award the land to local developers, which caused some legal problems as the projects had not been reviewed through the RFP process. This prompted the city to begin the process of selling the land outright, which required purchase agreements as well as appraisals consistent with the city’s land sales policy.

Red Deer largely faded into the background in the months following the council’s decision in May to order Jordan to negotiate sales with local developers, but at Monday’s meeting the developer again make his presence known.

“We understand that the former Chamber of Commerce building at 230 Ludington Street is being offered for sale by the City and we would appreciate the opportunity to make a competitive offer to purchase it,” read Karen Moore, Board Member, excerpt from a letter to the Board from Jason Konrad, President of Konrad Construction and member of the Red Deer Lodge development team. “We only learned late in the day on Friday 23rd September that a special council meeting was to be held on Monday 26th September to discuss the sale, and unfortunately we are unable to attend the meeting in such a short time. . We requested the ability to appear virtually, but were informed that we would not be allowed either. »

It was not specified who, if anyone, received the letter other than Moore and Jordan.

Matt Sviland – who, along with his wife, Beth, constitutes Swanee, Inc. – expressed his displeasure with the letter, which targets the property he and his wife intend to purchase and redevelop into condominiums.

“We felt like they were behind the scenes the whole time, and we felt like that was the reason it was delayed for so long, hoping we’d give up, but, you know, I’m so happy that you felt it your civic duty to read this to everyone at this meeting. Thank you,” Sviland told Moore.

Sviland had other concerns about the purchase agreement being drafted for the property. Drafts of the deal called for the property to be returned to the city if construction did not progress on schedule – which Baybank vice-chairman Jeffrey Slagstad told the council would interfere with its ability to lend to the Svilands, because there would be no collateral for the loan. Later drafts included timelines that still hampered financing, failed to recognize the multi-phase nature of the project, and ignored changing economic conditions caused by interest rate hikes.

The three developers and their attorneys have been asked to attend a meeting this morning with city counsel and subcommittee members Moore and council member Tyler DuBord to further discuss the developers’ respective agreements. Although today’s meeting, which is not a public meeting, was scheduled before Monday’s special meeting, not all developers were notified until Monday morning. It is unclear how many will attend or have lawyers present.



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