Signature Associates

After lawsuits, bills, blight, a blaze and Taserings, Southfield hotel hits market

The former Plaza Hotel & Conference Center in Southfield flatlined in more ways than one.

And now it is up for sale in the hopes that someone will resuscitate it, even as the city is seeking a receiver and to foreclose upon a mortgage it has on the long-vacant and troubled building off the Lodge Freeway.

One look at the water usage history through Southfield public records and you have an approximate time of death: October 2010.

When people in the hotel were being kicked out because of unsafe conditions around that time, a mother of seven and two others were Tasered by police, MLive.com reported.

In the more than a decade since the 14-story property at 16400 J.L. Hudson Dr. shuttered when natural gas and water were turned off over unpaid bills, the city, its Downtown Development Authority and the hotel’s owner have been embroiled in legal battle after legal battle at the county and federal level.

The owner, an entity called Shefa LLC run by Montreal resident Sidney Elhadad, has claimed in federal court that the city and DDA were embarking on a land grab and suggested that antisemitism was at play.

Elhadad and his attorney say in their federal court filings that the city and DDA had come out on the losing end on various rulings in various courts and that they wanted control of the property because of its proximity to another key site: the former Northland Center shopping mall.

I emailed Elhadad seeking comment. His attorney with Farmington Hills-based Wood, Kull, Herschfus, Obee & Kull PC said he was unable to comment due to time constraints. The city declined comment, citing pending litigation.

Elhadad told my colleague Sherri Welch in 2016 that the ownership group and hotel were victims of the downturn.

“When we took over in 2009-10, we took over at the worst possible time. We didn’t have a choice to close it down,” he said at the time.

The Plaza Hotel, at one point the Michigan Inn when it was built in 1974, was on the verge of foreclosure when Shefa filed for bankruptcy in February 2014, according to a federal court complaint the city filed last month.

Owing some $4.1 million to the city and county in unpaid property taxes and water and sewer bills, the city and Shefa reached a resolution two years after the bankruptcy filing, the city’s complaint says.

The city has a first-position mortgage on the property and Shefa was required to make $2.1 million in improvements, plus get site plan approval within six months of the February 2016 approval of the confirmation order. However, the site plan expired a year after it was approved and no building permits were issued, according to the complaint.

However, the city says Shefa — without getting permits — started internal demolition even though there is asbestos at the hotel, where there was a fire in March 2019 caused “by an intruder who gained access because the property had not been secured.”

Some three dozen code violations have been issued at the property since 2013, the city says, including six after a district court consent order in January 2021 to board up broken windows and doors, keep the property free of debris and secure the property.

Shefa paid about $10.4 million for the hotel, which sits across from the former Northland Center mall that’s being redeveloped and next to Ascension Providence Hospital, in a foreclosure auction in November 2009, according to Southfield land records. In the months prior to the sale, the outstanding water bill alone was north of $300,000, records show.

Former Oakland County Treasurer Andy Meisner told us in 2016 that as of March 30 that year the county attempted to foreclose on the property but a series of actions by Shefa and Elhadad prevented that.

The ownership group challenged the property tax assessments before the Michigan Tax Tribunal and took out an additional mortgage on the property with an Israel-based lender, which presented logistical challenges for the county to give notice of foreclosure, he said.

“It was about delay and buying more time to speculate for the values to go up,” Meisner said at the time.

Robert Haver, vice president in the local offices of Colliers International Inc., which is marketing the property, said Tuesday that the property could be converted into a mixed-use building with either 175 hotel rooms and 132 apartments, or 319 hotel rooms and 34 apartments.

It sits on about 9 acres and there is no asking price.

Posted By: Crain’s Detroit Business on April 12, 2022.  For more information, please click here to read the source article.

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