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Hotel plan at old Delta County Jail site scrapped

ESCANABA — A planned hotel development at the site of the former Delta County Jail has been scrapped after the developer failed to make progress on the project, but city officials say the city will continue to seek other developers for the site.

The city and the county have been working with Proxima Management Group since 2019 on the $23 million project, which would have included $13 million hotel as well as mixed-use retail and residential spaces at the jail site and on adjacent parcels, including the parcel occupied by the former Delta County Chamber of Commerce building. Early projections suggested the four-story, 80-90 room hotel would be completed next month after an 18-month construction period, but no construction or demolition has occurred at the site.

“I’m very disappointed in Proxima Management. They’ve had two years and nothing has happened other than work the state of Michigan has paid for,” said Escanaba Mayor Marc Tall, who noted no city or county money had been put towards the project.

After Tall, City Manager Patrick Jordan and City Attorney John M.A. Bergman met with County Administrator Emily DeSalvo and Delta County Commissioner Patrick Johnson to discuss the issue, the city council discussed the future of the city’s agreement with Proxima during a closed session the Sept. 2 regular city council meeting.

In a press release issued Friday, the city stated it had sent a letter to Proxima notifying the developer that the city is exercising the 60-day notice of termination required by the agreement.

“Regardless of the Covid-19 pandemic, the council members felt that due to the lack of any progress for two years on the removal of the old county jail, and the absence of any communications from the developers for many months, that the agreement between the city and Proxima should end,” read the release in part.

According to Tall, there had been no contact from Proxima for about eight months.

While very little had been done to develop the property, some of the preliminary work that was completed will be of use to a future developer.

“That brownfield work investigating what the soils are like underneath the jail, that has to be done anyway, and we have a copy of that so it doesn’t have to be redone for another developer, but at this point we are looking for new ideas,” said Tall.

In addition designating the site a brownfield — which would have reduced the project’s cost by returning a portion of the taxes collected on the property to the developer — and the city’s downtown development authority entering into an agreement with Proxima related to how taxes would be allocated as a result of the designation, the city had sweetened the deal for Proxima by eliminating much of the potential for competitive development. In February of 2020, the council approved a three-year moratorium on the construction of new hotels and motels in the city.

“As that was an act of the council, we’ll have to rescind that, as I expect we’ll do at some point,” said Tall.

Despite the council being “very disappointed” in the outcome of the city’s relationship with Proxima and the end of the development, Tall was hopeful for the site to be developed in some way in the future.

“We have a very attractive site. It’s a lovely view of the bay. I believe we’ll find another developer,” he said.

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