Northern Michigan’s Sugar Loaf Mountain Back in the News

With Leelanau County officials inspecting boarded up buildings and facilities and the property’s purported owner Enliko Sean Smith in the news again, we thought our readers could use a refresher on the byzantine backstory behind the defunct Sugar Loaf Mountain Resort. This story appeared originally in the December 2010 issue of Traverse, Northern Michigan’s Magazine.

Sugar Loaf Mountain Resort, a Northern Michigan ski resort, is quiet in the winter. The chairlifts that, from 1964 to March 2000, swept skiers to the top of one of the Midwest’s most renowned ski hills have sat silent for a decade. Now the red chairs, strung on weathered cables, just dangle above weed-clotted slopes. The chairs move only when big blows careen in off Lake Michigan and set them to swinging, or when a trespasser climbs onto an easy-to-reach chair, and the motion ripples down the line.

At the bottom of the hill, the main lodge stands dark and silent, growing more decrepit by the year. Local teens, of course, know the secret ways in. And so do animals. One realtor recalls stopping by the lodge to show a potential buyer the place, and as they pulled up a family of five raccoons crawled out a broken window on the second story and then ambled nonchalantly across the roof, the new residents in charge.

There are, however, two bright spots in this scene. The 72 town homes, which have been kept shipshape by their individual owners, and the golf courses, which are vibrant, but are no longer part of the resort.

The other bright spot? An awe-inspiring setting. To the west and north, the rippling blue deluge of Lake Michigan runs to the world’s edge in a mesmerizing mix of midnight blue and shimmering light. Lending intrigue, not far off shore North Manitou Island and South Manitou Island lie low and dark and mysterious. Along the wandering line of the mainland shore, the great bulb of Pyramid Point rises to the west, and to the north, the blunt-nosed sloping ridge of Whaleback.

Inland, that Leelanau patchwork rolls forth, land staked out in squares and rectangles of browns and greens—orchard, hayfield, vineyard, cornfield, woodlot and farmstead. Standing here on top of Sugar Loaf Mountain, you can’t help but think what many before you have also thought. Oh, the possibilities for this resort. How could it not work? It’s so beautiful. People would come from miles.

Thirty-six years of premiere skiing in a breathtaking setting. Then silence. As the 10th anniversary of the Loaf’s closing nears, and whispers of a pending deal circulate once again. Can Sugar Loaf—at one time the largest employer in Leelanau County—again be what it once was? Let’s start with “once was.”

Back in 1970, Dan Matthies was working in Saginaw in the banking industry when he received an invitation to move to Sugar Loaf for the winter to teach downhill skiing at the resort started by Jim Ganter six years prior. “They wanted to create the best ski school in the state,” Matthies says. The hook was teaching a new French ski technique when other Michigan resorts were teaching an Austrian technique.

Matthies started December 22 and was supposed to go back to Saginaw in the spring, but he became enthralled with Leelanau County and never left. For one, he was surprised to see that a ski instructor could make good money because of all the people coming in attracted to that new French technique. Toss in free housing, free three meals a day, “40 percent off booze,” and clients picking up the tab quite often, and, well, Dan Matthies was living large on Sugar Loaf Mountain. He began selling real estate at the resort, “condos, A frames, because I could tell this place was going to go bonkers,” he says.

In the off-season, Matthies would also help with marketing, hitting the ski show circuit with the other instructors in the ski school. They’d wear matching outfits and line up next to the booth like a team.

“We were the hit of the show,” he says. “It took a lot of money, but that’s what you needed to do to keep the people coming to Leelanau County.” And the people did come. Back then, on weekends at the height in the mid-70’s, cars jammed the parking lot and spilled out onto the approach road, lining both sides for half a mile and more, and 3,500 skiers a day would ride the hills.

Matthies was so sure of Sugar Loaf, he opened a ski shop inside the main lodge. He made his money on Friday night when busloads of ski-club guys, fresh from drinking on the bus on the long trip north, would stop in to the shop on their way through the lodge. They’d look dreamily at a hot set of skis and say, “Someday I’ll be skiing on those.” Matthies stood ready with his pitch line: “I can have you on those boards for the first run of the morning.”

One year he won a ski retailer of the year award for selling the most equipment from the smallest space. “It was a gold mine,” he says wistfully.

But despite the resort’s popularity, in 1981, Sugar Loaf declared bankruptcy, an ending that Matthies chalks up to borrowing money at too high an interest rate when expanding Sugar Loaf’s hotel in the 70’s. An investor group from near Detroit led by attorney John Sills picked up the resort for $7.5 million, which included one golf course, the airstrip, the hotel, the ski hill, a wastewater treatment plant and nearly 1,600 acres total.

But Matthies felt the new owners didn’t understand ski resort marketing. And by the late 1990’s, “the people weren’t coming,” he says. On a day in 1998, Matthies backed up a Ryder truck to the lodge and emptied his shop.

When Matthies said he could tell Sugar Loaf would go bonkers back in the 70’s, of course he meant “bonkers” in the good way. But “bonkers” can also mean in a not-so-good way. And that’s the kind of bonkers that describes things at Sugar Loaf from the late 90’s till now. During the 90’s the Sills group added a second golf course, designed by Arnold Palmer’s group, but still the resort struggled.

In 1997, Empire Bank took the resort back, but Sills’s group retained ownership of the golf courses and wastewater treatment plant. Many people in the community believe that splitting the golf courses from the ski resort created a fatal flaw for the property because it eliminated summer revenue.

Hotelier Remo Polselli, from Southfield, took over the ski resort in 1997. He spruced up the lodge inside and out and seemed serious about making a go of it, but due to accounting irregularities in Polselli’s books, the state refused to transfer the resort’s liquor license to him. “You can’t run a ski resort without a liquor license,” Matthies says. The resort closed in March 2000.

One of the saga’s kookier moments came in November 2000, when, despite the resort’s lack of running water a dad, mom (pregnant), their seven children and the dad’s parents moved into the shuttered resort. They told Eric Carlson, a reporter at the Leelanau Enterprise who has most closely followed the Sugar Loaf story, that they represented a religious-based organization that purportedly intended to purchase the resort and turn it into a family camp that taught character building. But the deal never happened, and the health department kicked the family out after a few weeks.

An especially low point: in 2003, Polselli pleaded guilty to federal tax evasion charges related to a different hotel and spent two years in prison.

Hopes rose in 2005 when Kate Wickstrom, a Leelanau County high school grad and operator of a Battle Creek Narconon addiction treatment center purchased the resort for $5.7 million. Wickstrom held a public celebration one bright April Saturday afternoon at Sugarfoot Saloon, near the resort, and locals filled it to standing room only.

She told the crowd that she hoped the restaurant would be open in August and that ski runs might open for the 06-07 season. Within days a construction Dumpster showed up in the resort parking lot and locals excitedly waited for renovation to launch. But an odd silence prevailed. Wickstrom was seen picking weeds from a fl owerbed, but otherwise, no crews appeared. The Dumpster was carted away. Eventually Wickstrom did produce a plan for the resort and replaced some windows in the hotel, but major renovation never happened. [Kate Wickstrom did not return calls for this story.]

As the first decade of the resort’s closure unfolded, various suitors appeared, and rumors of pending deals floated time and again, but they never closed. Speculation also ran high when it was disclosed that Remo Polselli’s wife was listed as the sole owner of the bank that held Wickstrom’s mortgage.

The tale reached a certain dramatic peak just this past spring when a 39-year-old Las Vegas hotel entrepreneur, Eneliko “Liko” Sean Smith arrived on the scene. He said he’d have the restaurant open for summer and people skiing again. But as the weeks passed, it became apparent he lacked the financial wherewithal to resurrect the resort.

He began soliciting donations online—people questioned the legality of soliciting donations for a for-profit venture. It was then revealed that Smith had connections to Remo Polselli, a relationship he had previously denied. Smith held an event at Red Ginger, in downtown Traverse City, where people could pay $100 to hear his plan, eat hors d’oeuvres and listen to his 19-year-old wife sing songs. Few people showed. By autumn, Smith had declared the deal dead and left town.

Perhaps the most stable force in the Sugar Loaf story in the past 10 years is Ed Fleis, who along with other investors purchased the resort’s two golf courses, the wastewater treatment plant and 120 acres of view property on the west side of the hill from John Sills in 2005. “Originally our intent was to get it all,” Fleis says. (The Arnold Palmer course was recently sold to The Homestead resort, which renamed it Manitou Passage.)

Fleis grew up two ridges to the east of Sugar Loaf on a farm along Schomberg Road. After high school, he headed to Michigan Technological University, earning a civil engineering degree in 1963 and spent most of his career in the Carolinas and Florida managing large development projects. He understands infrastructure, he understands golf course development, he understands resort financing, he understands the need for somebody with access to real capital to take on what he estimates to be a roughly $30 million investment to make Sugar Loaf viable. But he also understands the potential that Sugar Loaf still has and that the wonky tale of the resort’s past decade doesn’t diminish what its future can be.

On a misty October morning, Fleis stands 40 stories high above Lake Michigan on the brink of Awful Awful, the radically steep ski run that helped make Sugar Loaf a darling of Michigan’s hotshot skiers in the 70’s. Around him, the land falls away dramatically, and that stunning view plays out: the water, the islands, the farmland, and the forests, today colored in shades of gold and bronze.

Fleis listens carefully, speaks thoughtfully. And today, you can see his mind working that tricky balance that successful developers must strike: romantic vision and grounded pragmatism.

Something else is also shaping what Fleis can and cannot say. Rumors are circulating that some kind of Sugar Loaf deal is in the wind involving an investment group headed by David Skjaerlund, from Owosso. Skjaerlund spent the past several months getting options on several Sugar Loaf town houses and nearby properties, according to Tony Mattar, who co-manages the town house association.

Working quietly and insisting on nondisclosure agreements, Skjaerlund has succeeded in avoiding the media attention that surrounded Liko Smith. [Skjaerlund did not return calls for this story.] An Internet search shows Skjaerlund is an entrepreneur with a Ph.D. in Animal Science and a focus on rural development. His most recent high-profile project was a $100 million ethanol plant near Ithaca, Michigan, that ceased construction after a $60 million investment when the ethanol market collapsed.

Fleis, also bound by confidentiality agreement, cannot comment on particulars of any sort of Sugar Loaf deal, but he agrees to talk broadly about what a developer must consider in looking at the resort’s potential. “With the kind of investment it takes, you can’t get the return strictly by having a ski resort—a ski operation and a nice resort building,” he says. “It has to go into commercial development. Some sort of village center with fairly extensive residential development.”

By commercial development, Fleis means more than the traditional set of retail boutiques you see at ski resorts. He means office space and all the workers who would fill that space every day—a business park.

Fleis scans the Sugar Loaf grounds from on high and points to the airstrip and a golf fairway that runs alongside it. “If you removed the airstrip—which many people might object to—and move that fairway, you could open up a lot of land for a village center,” he says. Turning to the west, he traces his finger along the ridgeline. “And on the west side of this hill there are some very valuable view properties.”

As for the existing lodge, he agrees with virtually everybody who has looked seriously at the property: the lodge will almost certainly be demolished. Then the practical side of Fleis’s developer mind pushes a note of caution into his voice. “But you need the residential, and the housing market is still so down. You end up with a lot of holding costs when things don’t move forward.”

County commissioner David “Chauncey” Shifl ett has been one of the most ardent proponents of getting Sugar Loaf back in operation, a passion helped in part by the fact that he lives nearly at the foot of the mountain and sees it sitting vacant every day. He has worked with county planner Trudy Galla to establish a brownfield development authority in large part to address any contamination issues at Sugar Loaf—subsequent studies of the buildings and underground storage tanks have found very little contamination. He and Galla have also laid the groundwork for a tax increment finance zone that could help the developer pay for demolition and cleanup costs.

Like Fleis, Shifl ett also sees no way for Sugar Loaf to exist in the traditional mode of a ski resort. There’s just not enough revenue to support the expensive ski infrastructure, he says. People have discussed the possibility of having the county purchase just the hill and run it as a community ski hill. “But I don’t see the leadership on the park board to do that now,” he says.

Shiflett has been beating the drum for a business center there for years now—high tech info-based businesses that just need a fat data pipeline to do their work. “We have an aging population. We have to figure how to attract young working families that doesn’t revolve around recreation. We need employment opportunities, like intellectual arts, multimedia content creation, maybe a film production studio. People working day in and day out, not just on the weekends,” he says.

Given the shenanigans surrounding Sugar Loaf’s decade of closure, it’s surprising how optimistic the people are who have worked closely with the resort. “Do I think people will be skiing there within the next five years? Yes,” says county planner Galla. “I get calls every six to eight weeks from people interested in Sugar Loaf.”

She intends to take a presentation to an annual national brownfi eld conference this year and show off the resort to thousands of developers from across the country who specialize in brownfield development. “I feel very positive that something will happen. I can’t imagine it will continue to sit there vacant with the carrying costs on that site.”

Meanwhile, Sugar Loaf Mountain waitsto impress the next would-be developer. That knockout view from the top, the adrenalin thrill of Awful Awful’s steep, Leelanau’s shore so close. And the developer will think what so many before have also thought. How could it not work?

Jeff Smith is editor of Traverse. smith@traversemagazine.com
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