The Keefer House Hotel renovations could be finished by the year’s end, according to developers. Catherine Maxwell | Collegian
CL Real Estate now has until Dec. 31 to complete construction on the Keefer Hotel after the Hillsdale City Council voted to extend its previous August deadline.
Internal construction stopped on the hotel to install more structural support for the building’s outer facade, according to a press release from CL Real Estate. The building’s foundation also suffered significant water damage, to the point that it was nearly undermined, chair of the Tax Increment Finance Authority and COO of HJ Gelzer & Sons Inc., Andrew Gelzer said.
The hotel’s first proposed completion date was Dec. 31, 2021, according to public documents. But Gelzer said the pandemic, shipping delays, inflation, and unexpected costs and repairs pushed back the hotel’s opening multiple times. Last month, the city council pushed the deadline to the end of this year. Until the deadline, CL Real Estate pays taxes on the property as if it were still worth its purchase value, without renovations.
TIFA voted unanimously on Aug. 13 to extend its deadline beyond April 2025, Gelzer said, because of the committee’s familiarity with the construction. After the build is done, Gelzer said the primary focus shifts to opening the hotel, and that TIFA did not want to insert another deadline before the end of the year. As a result, the committee voted to extend its deadline until April 2025.
“We anticipate announcing the ribbon-cutting date and grand opening date as soon as the last details of the 34 luxury hotel rooms, historic public spaces, and fine dining restaurant are all completed, and the new staff are well-trained to make our guests happy, which we are working tirelessly to achieve,” CL Real Estate CEO Nathan Watson said in an email.
In August, CL Real Estate asked the city council to extend the Keefer’s completion deadline, according to public documents. The extension is subject to the Obsolete Property Rehabilitation Act, which freezes the assessed tax value of an eligible blighted property until fully renovated.
“The OPRA program was created to encourage and assist developers and property owners in the redevelopment of blighted buildings to make them vibrant commercial properties,” Senior Development Associate at CL Real Estate Brant Cohen wrote in the amendment’s proposal.
Without the council’s approval, CL Real Estate loses the tax freeze on the Keefer hotel, Cohen said.
TIFA purchased the Keefer Hotel and the adjacent Dawn Theater for $410,000 in 2014, according to Gelzer. The Keefer Hotel was appraised at $260,000.
In 2017, TIFA received two offers after spending years searching for a developer, Gelzer said. The first bid involved the purchase of the property under a land contract, with renovations occurring over 25 years. The other offer was from CL Real Estate, who offered to purchase and renovate the hotel in a 10-year window.
“What we have learned through the city’s and TIFA’s development of the Dawn Theater and now CL’s development of the restoration of the hotel, is that both buildings were within a year of collapse,” Gelzer said.
TIFA sold the Keefer Hotel to CL Real Estate for $60,000 in 2018, giving the company a promissory note for the difference upon completion of the hotel’s renovation as a way to keep the project moving, according to Gelzer.
Because of unexpected repairs, Watson said the total cost for the project has been approximately $16 million.
“The project involved a complete structural steel replacement of the nearly 140-year-old building’s timber-frame structure, and the return of an obsolete and long-neglected, but prominent downtown landmark into a luxury hotel,” Watson said. “Many local workers have been doing amazing work in this building. They’ve been working long hours and helping turn the Keefer into the pride of Hillsdale.”
Mayor Adam Stockford said he voted against the extension out of an obligation to be consistent.
“I think CL is moving along at the best pace they can, but the fundamental issue with the project has been a failure to manage expectations with the public,” Stockford said. “I will be pleasantly surprised if it’s done by December, but my experience and intuition tell me they’ll be open by early to late summer 2025.”
Councilman Josh Paladino, who voted to extend the deadline for the project, said he had other reasons for extending the project beyond economic development.
“Government has very little, if any, role in economic development,” Paladino said. “It does have a role in historic preservation, because some things have a value that isn’t in dollar terms, particularly when our history is so much more grand than our current time.”
Paladino said the public would have to bear the heavy burden of externalities if the building was not fixed.
“It’s a threat to the health and safety of people in the area,” Paladino said. “If it falls apart, it could hurt someone.”
Watson said that competition with Hillsdale College’s Dow Hotel and Conference Center and its proposed expansion will keep the Keefer on its toes to provide the best lodging in Hillsdale.
“We’ll attract the region’s guests along with the many college visitors that desire a high-quality stay at a unique boutique hotel in a charming downtown,” Watson said. “Our rooms, amenities, location, and service will set the Keefer apart from the Dow. There will be times, however, when we will support each other to accommodate the displaced hotel demand.”
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