Leelanau County’s Sugar Loaf Resort: Q&A with Jeff Katofsky

Sugar Loaf Resort in Cedar has been shuttered since 2000. Leelanau County’s largest employer and a destination for thousands of travelers from around the region and downstate, the resort suffered through a host of owners who sold off parts—the golf courses, townhouses and water treatment plant—until Remo Polselli closed it for good 16 years ago. Polselli and subsequent owners, or those portraying themselves as owners, generated publicity, but nothing more.

Enter Jeff Katofsky, a Southern California attorney and property developer, who also is part owner of a minor league baseball team. Sugar Loaf was among three properties he was awarded as a result of court proceedings against Polselli. The former Detroit Metropolitan Hotel in Romulus is already in the midst of a complete renovation, and is expected to open later this summer as the Radisson Hotel Detroit Metro Airport. Katofsky is beginning plans to refurbish the St. Clair Inn in St. Clair. Like Sugar Loaf, it was a community hub, and it too has been sitting vacant, though for only two years.

With Leelanau County officials sorting through the mess of legal paperwork and nature slowly eroding the resort, returning Sugar Loaf to its former prominence is a massive undertaking. Katofsky plans to visit the property this summer, but isn’t yet making any promises to rebuild it, though he is hopeful such potential exists. We were able to connect with Katofsky for a question and answer session following his return home from a trip to St. Clair.

How was your visit to Michigan?

It was great. It was primarily about St. Clair. We’re all excited.

Tell us a little about your background.

I’m primarily a lawyer but I grew up in retail. My dad was a pharmacist, and it was like a little department store. I think like a retailer because of that. I’ve been doing this (construction and development) for a long time. Have I built a resort before? No. But I’ve built one and a half million square feet of residential and commercial property, half from the ground up, half rebuilding. So that’s easy. Customer service—that’s what I do as a lawyer, so that’s easy. Day-to-day operation— I’ll bring in a management team, First Hospitality of Chicago.

My job is to build a facility I’d want to take my wife and kids to.

Sugar Loaf was part of a package of other properties in Michigan. Was Sugarloaf even on your mind?

It was not on my radar. Michigan wasn’t on it. The settlement with option to purchase (the properties) was over some other deals with litigation with Polselli. The order (for reburbishing the hotels, starting with Detroit Metropolitan, then St. Clair, then Sugar Loaf) was based on what I see as how quickly I could do it. There are unique problems there with water and sewer.

You’ve said Sugar Loaf is in escrow, and you aren’t sure what to do with it or even if to do anything. When do you expect to determine a path forward, and what will factor into your decision?

It’s under contract to buy it. I have the out clause. Remo can’t get out of our deal. We have a significant amount of due diligence to do to get it in shape. Like in St. Clair, I’m not interested in throwing it together with Scotch tape.

I need time to get through all of it. I have a team of Michigan-based consultants. The building has been vacant for 15 years. I’m not interested in the property if the building has to come down. Every inch of the other building (the Detroit Metropolitan Hotel/Radisson) is being redone, but I’m not taking the building down. I can renovate in six to eight months, but if it’s from scratch it’s 18 months plus.

He (Polselli) doesn’t have the title free and clear till October. We won’t close until November. Romulus (the Radisson) will open next month. St. Clair I hope to have open next year. When Sugar Loaf will be up and running I couldn’t even guess. I will be there in July after we get Romulus open.

Financially, if the numbers make sense, it makes sense to open. It will be $40 million in St Clair. We certainly want to make it work. We’re spending money on studies. But it has to be a cooperative effort like in St. Clair. I’m not interested if there’s a bunch of lawsuits if I’m putting up tens of millions of dollars.

You’ve received some very favorable press downstate. Do you anticipate the same here? Or to put in another way, if you renovate and reopen Sugar Loaf you’ll be hailed as a hero. If not, you’ll be seen as the latest in a long line of letdowns like your predecessors. How comfortable are you with either of those roles?

The press is for the community. When it does its job, it gets information out to the people in a way they can understand it. I like to be an open book, (so there are) no rumor mills. It’s more about an accurate press. I just want to do my job. I’m not there. I’m a carpetbagger. I had time with the community in St. Clair. This is not about that, but the same applies. I know people want to know (about Sugar Loaf).

I’m into win-win. It’s odd to be in a situation where everybody wins, so you have to cherish those moments. As a lawyer and litigator, someone wins and someone loses. Like in St. Clair, if we get support and get people to come, everybody wins.

I’m a businessman. I don’t want to be a hero or a goat. This is an opportunity to make myself proud and make my family proud. I have really, really high standards. You (the community and Sugarloaf) have suffered through some bad situations, like St. Clair. I’m not him (Polselli). I understand you have to spend money to make money. I want to be called a smart businessman.

I want to make it a year-round facility. To make it a year-round facility I have some terrific ideas. If I can do that I will. If not, I won’t. I want to be able to walk down the street with my head held high.

You’ve lost 15 years. That’s a whole generation that doesn’t know it exists. Kids who were in grade school then—that’s an important demographic. We know it’s a significant hurdle from a marketing aspect, but first we have to build it.

Looking for a historical perspective on Sugar Loaf? See how Sugar Loaf got to this point on MyNorth.com.


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