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Half-built hotels near Muskegon mall to become apartments after sitting vacant for years

Half-built hotels that have sat vacant for 3 ½ years will be turned into apartments following approval of the plans by Fruitport Township.

A no-compete clause halted construction of the two buildings on East Sternberg Road near the Lakes Mall in Muskegon County. They remained vacant until the township enacted a blight ordinance about a year ago and began pressuring the owners to do something about the buildings that had become eyesores.

In January, the owner, Stellar Hospitality, proposed turning the buildings into apartments and on Tuesday, March 15, the township planning commission endorsed that plan. The planners approved a planned unit development site plan revision for the properties at 1951 and 1989 E. Sternberg Road.

The planning commission is requiring an $8 million performance bond to ensure the project is completed, said township Supervisor Todd Dunham, who serves on the planning commission.  It also gave the owner two years to complete the project, Dunham told MLive/The Muskegon Chronicle. The matter does not need to go to the township board for approval.

“I just want them to complete the project,” Dunham said. “It’s a relief.”

The owner will have to provide Dunham information about the integrity of the structures. Planning commissioners had concerns about the stability of the buildings since they had been exposed to the elements for nearly three years, he said.

Plans call for 82 one-, two- and three-bedroom apartments along with an outdoor pool, Dunham said. Renderings provided to MLive earlier show the two buildings connected by a common space.  Modifications will be needed for the parking lot, with fewer parking spaces needed but more access for emergency vehicles, Dunham said. The hotels would have had about 200 rooms combined.

The planning commission also is requiring a second entrance off of Quarterline Road.  Dunham predicted there would be ample demand for the apartments, saying “they won’t have any problems renting them.”  Joel Yono, a spokesman for Stellar Hospitality, was unavailable for comment when contacted by MLive.

It wasn’t until the township approved a blight ordinance about a year ago that the developer began taking concerns of township officials seriously, Dunham said.  The hotels that had been exposed to the elements were encapsulated and “homeless” people who were staying in them were kicked out, he told MLive earlier.

The four-story buildings, which were to be a Holiday Inn Express and a Town Place Suites by Marriott, are in Muskegon County’s busiest retail area on Harvey Street that includes the Lakes Mall. They’re also near a proposed location for a casino.

Construction on the hotels was halted around March 2019 as the result of a successful non-compete lawsuit brought by Parkland Properties, which owns the Delta Marriott and Shoreline Inn hotels in downtown Muskegon.

Stellar purchased the property, located six miles from the downtown hotel, in March 2017.

After construction of the hotels began in 2018, Parkland Properties, owned by Jon Rooks, filed a lawsuit alleging violations of a non-compete agreement stemming from Rooks’ purchase in 2013 of the downtown Marriott, which was a Holiday Inn at the time.

He purchased the hotel from an ownership group that included Stellar Hospitality CEO Malik Abdulnoor.

The purchase included the non-compete agreement that prevents the sellers from owning, operating or being involved in any way in a hotel business within 14 miles of the Holiday Inn Muskegon Harbor until 2028, according to court documents.

Posted By: mlive on March 16, 2022.  For more information, please click here to read the source article.

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