By GABRIEL GOODWIN
Sunday Times Newspapers
WYANDOTTE — The $350,000 deal between Hotel Sterling and the city for the Sears building property recently came to a halt, so the council approved a second, similar option Monday.
City Administrator Todd Drysdale said the city received two offers for the property in late 2012 and the city accepted the bid from Hotel Sterling owners Ken and Rebecca Wickenheiser. The second bid proposal for the property by Daly Real Estate Services did not match the economic impact of a boutique hotel at the time, Drysdale said, so the city moved forward with the hotel.
The city approved the sale of the property June 17, 2013 and approved the tax-exempt status of the new commercial endeavor June 24. A tentative closing date was initially set July 15, 2013 so the construction could begin shortly thereafter and the entire renovation would have been completed around July 14, 2014.
Despite the initial quick pace, the developers hit a speed bump and Drysdale gave a hint that it may have been financial. He said there were documents required by the Michigan Economic Development Corp. to finalize a $458,000 grant awarded to the Wickenheisers for the redevelopment of the property, but the government entity told him those documents were not received by the required deadline.
The grant they received could not be transferred to another developer even though it would be used for the same property, Drysdale said, but the new developer could apply for any money available through the MEDC. He told the council the discussions with the MEDC revealed there was still a significant amount of money that was available for a similar project.
“Although the city has actively pursued the Hotel Sterling proposal from Ken and Rebecca Wickenheiser, it appears at this time that they are unable to meet the commitments associated with redevelopment of this property,” Drysdale said. “Our conversations with the MEDC discovered that state grant funding, up to $1 million, could be obtained by the developer if certain requirements are met in a timely manner.
“The ability to have significant, timely performance by the developer is essential to ensure that MEDC grant funding for redevelopment of this building remain in the city of Wyandotte. In order to meet the state’s timeframe, the city reached out to Daly Real Estate Services to determine if there was interest in the project.”
A signed purchase agreement, the proper financing, approved construction documents, and other significant documents would need to be forwarded to the MEDC for review and approval. Daly Real Estate Services owner Joseph Daly expressed enough interest in redeveloping the property that he drafted a proposal and submitted a purchase agreement to the council for $350,000 Monday.
The terms of the sale include a $100,000 down payment and the remaining $250,000 be paid over 18 months. Drysdale said Daly’s proposals is similar to the Hotel Sterling in some context, but the redevelopment of the building into a combined residential and commercial use is where the similarities end.
Hotel Sterling’s original proposal included two phases. The first phase would have created 21 hotel suites, a business center, and a conference room that will double as a banquet facility. A portion of the building also would be prepped — complete renovation of the exterior and plumbing, but the walls and floors will be left plain — for future retail space to be leased.
The building at 3061 Biddle Ave. — a one-story building north of the old Sears building that was included in the purchase — also will be converted to accommodate 21 guest suites, a conference and banquet center, exercise facility and a business center.
The plans for the second phase were to add an additional 12 suites on the third floor of the building, but that phase would have been started when the demand called for the expansion. The total investment in the property would have been $2.5 million when the full project was completed.
According to the developer’s plans and comments by city officials, Daly’s proposal could bring a total investment of approximately $4 million into the building.
The first floor would offer 9,000 square feet for office and retail space while the second and third floor held seven loft-style apartments — ranging from 875 to 1,325 square feet — with balconies on each floor.
The proposal also showed the developer’s interest in installing new windows along north, south and east facades; keeping existing stairways and existing elevator; and modernizing the mechanical systems to meet current building code standards. There also were indications made about upgrading and repairing the existing fire sprinkler system to meet current fire code standards.
The Sears building was constructed in the 1940s by the Sears, Roebuck & Co. and was the largest building between Detroit and Toledo during that time. Sears used the space until 1977 before moving to Lincoln Park.
Since, there have been a variety of business that opened and closed within the space. The majority of the building has remained vacant since 2003.
(Gabriel Goodwin can be reached at [email protected])