The Keefer House Hotel, located downtown, is undergoing renovations. Jillian Parks | Collegian
CL Real Estate told the city council on Dec. 16 that it needs until September to finish its renovations to Keefer Hotel, which was supposed to be completed in 2021 but has suffered from a series of delays.
The company will now have until Sept. 30, 2025, to complete construction. The Hillsdale City Council passed the extension 6-2 with Matt Bentley (Ward 2) and Jacob Bruns (Ward 1) voting against. CL Real Estate declined to comment on the extension.
“I voted in favor of it because I think the threat to the city is greater from the project being stalled than the threat to the city from the project continuing,” Acting Mayor Joshua Paladino said. “And I think there’s little risk. We’ve already foregone all the tax revenue for this project, so we’re not taking on any additional burden. The only burden we’re taking on is that they promised to have this done by 2021, and they were promising all of this economic activity and growth, and now it’s not happening.”
In the event that CL Real Estate had its tax abatement through the Obsolete Property Rehabilitation Act revoked and abandoned the project, the building would need a new company to take it on, along with the multimillion-dollar tax.
“If [the state] revokes the certificate, it most likely sets off a chain reaction where their private investors, as well as public dollars are also revoked and the project is stalled, which is not good for anyone,” Paladino said. “Right now, we have a more than half-finished building that at least won‘t fall over.”
According to chair of the Tax Increment Finance Authority and Chief Operating Officer of HJ Gelzer & Sons, Andrew Gelzer, the interior floors of the building were bowed, causing structural issues of which CL Real Estate was aware. However, after years of vibrations from floor construction, the main pins securing the front facade to the body of the building came loose.
“My understanding, and I‘m not a structural engineer, is that all of the shoring work caused structural issues they knew to exist to become exacerbated way ahead of schedule,” Gelzer said.
As a result, the columns that hold up the building shifted, and the project had to stop work for three days. The front facade was reinforced with shoring, which will remain in place until the project is completed.
“Before they got started, during and up to this issue, they’ve had structural engineers keeping an eye on every inch of this building,” Gelzer said. “Other companies might have just kept going and said, ‘That‘s probably fine,’ but this company has been so stringent on safety, and at this point they don’t want their investment to literally fall apart.”
Ward 4 Councilman Robert Socha said he voted last month to extend the deadline, in part, because he believes it’s a good cornerstone for a renaissance in downtown Hillsdale.
“Without this project having been taken on, the building probably, I don‘t know if it would have already collapsed, but it was on the way to imploding because it was structurally unsound,” Socha said. “That was all discovered in this process, and it’s taken longer than anybody had hoped. But the blessing behind that is we have a building that‘s going to outlast our children‘s children.”
Socha said at the Dec. 16 meeting that he would vote for this project forever, as long as CL Real Estate keeps getting work done.
“I don’t know if I’d be persuaded to amend any of the agreements or tax incentives, just because they’ve invested millions of dollars in the building that probably would have collapsed in on itself,” Socha said. “But at the same time, why does the city have timelines if you‘re just gonna perpetually extend them forever, right? My hope is that it won’t matter, because we’ll all be dining in the new steakhouse here in late summer.”
Paladino said he would be in favor of amending the contract with CL Real Estate to enforce stricter deadlines with penalties. According to Paladino, two other members on council were willing to explore that, but the other five wanted to let it proceed as it stands.
“I’m not particularly keen on punishing them or anything,” Paladino said “The problem is the way this contract is written. There’s no enforcement mechanism. All of the deadlines are totally arbitrary and fake. It just comes down to the council.”
Bruns said he voted against the extension to explore other options for finding ways to ensure that CL Real Estate feels urgency to finish the project.
“The relationship seems backward to me, where the city feels like it has to make things easier for CL,” Bruns said. “This was an agreed upon contract. CL did not fulfill its obligations, so I would like to take measures to make sure that that doesn‘t happen again.”
Gelzer expressed confidence in the urgency the company already feels.
“I‘m confident that this is the last time that they will have to go before council to ask for any kind of extension,” Gelzer said.
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