Equity firm to purchase historic Grand Hotel on Mackinac Island

Candice Williams
The Detroit News

The historic Grand Hotel, known for its opulence, signature red geraniums, breathtaking views and world-famous front porch, is about to have a new feature: a sold sign.

The Musser family, which has owned the Mackinac Island getaway since 1979, has reached an agreement to sell the property to an affiliate of private equity firm KSL Capital Partners, the parties announced Tuesday.

While terms of the sale have not been disclosed, the sale is expected to close within 30 days. Dan Musser III will serve as chairman, and no staff reductions are planned.

The historic Grand Hotel on Mackinac Island will have a new owner, the hotel owners announced Tuesday.

“It has truly been an honor and a privilege for my family to serve as steward of this incredible Michigan landmark for nearly nine decades. This is a role we have not taken lightly, nor was this decision to transfer ownership to KSL,” Musser said in a statement Tuesday.

►Read more: The Grand Hotel — a summer experience

Pivot Hotels & Resorts, the lifestyle and luxury division of Davidson Hotels & Resorts, will manage the 397-room, 332,500-square-foot hotel, officials said Tuesday.

The hotel under new ownership will respect existing reservations, gift certificates and special packages, including Grand Club memberships. Such packages allow guests to purchase up to 25 years of visits over 100 nights at the Grand starting at $50,000.

“KSL is a seasoned investor in travel and leisure businesses, with a depth of resources and capabilities to provide exceptional service," Musser said. "KSL has owned and operated some of the most prestigious destinations in the world, and we are pleased that they will help preserve the history and heritage of Grand Hotel.”

The Grand Hotel, a National Historic Landmark, sits on Michigan’s historic Mackinac Island and overlooks the Straits of Mackinac and the Mackinac Bridge. The hotel is open from early May to late October and is in its 133rd season. The property is known for having the world’s longest front porch at 660 feet in length.

“KSL understands the importance of Grand Hotel to Mackinac Island, the State of Michigan and beyond, as well as its history, charm and traditions,” said Michael Mohapp, a principal of KSL, in a statement.

“It is both a privilege and a great responsibility to take over ownership. We are grateful for the trust that the Musser family has placed upon us, and for Dan’s continued guidance that will help ensure that Grand Hotel remains a driving force in drawing visitors to Mackinac Island as it has for generations.” 

KSL Capital Partners is a private equity firm that specializes in hospitality, recreation, clubs, real estate and travel services. It has offices in Denver, Colorado; Stamford, Connecticut; and London.

The Mackinac Policy Conference is an annual tradition at the Grand Hotel on Mackinac Island.

According to the equity firm, it has raised approximately $12 billion of capital across debt and equity funds since 2005. KSL Capital's holdings include the Margaritaville Hollywood Beach Resort in Hollywood, Florida, Monarch Beach Resort in Dana Point, California, and Hotel Viking in Newport, Rhode Island.

"I trust the Musser family would only sell to a firm that understands the heritage and importance of the hotel to their guests and to Pure Michigan," said Dave Lorenz, vice president of Travel Michigan, the state's tourism marketing division.

"The new company has a history of showing respect for the operations of other properties they have purchased so I expect the tradition of excellence will continue."

Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association, said the sale comes as a little bit of a surprise given that the same family has owned the hotel for so long.

Winslow said he believes the hotel will be in safe hands with KSL and Davidson Hospitality Group, both of which he is familiar. He noted that the CEO of Davidson Hospitality Group, John Belden, is a graduate of Michigan State University’s School of Hospitality Business.

The change will go unnoticed to most, if not all, travelers of the Grand Hotel, Winslow said.

“With Dan remaining a critical fixture, I think there is very little for the casual traveler, even a Michigan native with a sense of history, to observe that will alter their experience,” he said.

The acquisition comes during a recent growing trend of private equity firms purchasing boutique hotels, said Ted Hunter, chairman of real estate practice at the law firm Lowenstein Sander LLP in New York and New Jersey.

"They're following the money," Hunter said. "Travelers over the last five years have been demanding a more unique destination type of hotel experience rather than just a bed, clean towel and a pillow. It’s more of a millennial preference than the generation before."

The Grand Hotel opened its doors for business in the summer of 1887 with 200 rooms. It immediately drew guests by lake steamers and rail from such places as Chicago, Montreal and Detroit for $3-$5 a night.

Two films are well known for shooting on location at the hotel. In 1947, "This Time For Keeps" was filmed there. It featured Jimmy Durante and Esther Williams. In 1980, "Somewhere In Time," was released. The cast included Christopher Reeve, Jane Seymour and Christopher Plummer.

The Mussers in name have played a role in the hotel's history since 1951 when R.D. Musser joined the staff. But the family is related to W. Stewart Woodfill, who bought the Grand Hotel in 1933. Woodfill is Musser III's great uncle.

In 1960, R.D. Musser became president. He wound up purchasing it 19 years later. Then in 1989, Musser III became president.

The hotel's operations now include an 18-hole golf course, tennis courts, gift shops, outdoor activities, bars, on- and off-premise restaurants and meeting space.

Recently, the Musser family focused on restoring the world’s largest summer hotel to its 1887 appearance. The third floor had dormers then, but the roof was eventually rebuilt and the dormers removed around 1915.

So over the past four winters, the hotel underwent transformation to restore the original look, as space near the roofline was converted into one- and two-bedroom luxurious suites, some with parlors.

Among its signature events is the Mackinac Republican Leadership Conference being held later this month. Vice President Mike Pence will serve as a keynote speaker.

But the main attaction is the Detroit Regional Chamber's Mackinac Policy Conference. The annual spring confab has drawn the state's top lawmakers, business leaders and movers-and-shakers there for the last 39 years. 

Sandy Baruah, president and CEO of the chamber, said in a statement that he expected the spring tradition to continue after the sale.

“The Grand Hotel and its incredible, dedicated staff are our extended family," he said. "Both the venue and the Grand’s team are key factors in making the Mackinac Policy Conference unique and special. 

"... Our team is comforted to know the Grand’s executive leadership team, including Dan Musser III, will remain in place. We look forward to working with the Grand Hotel under its new ownership in planning the 2020 Mackinac Policy Conference and beyond.”


Twitter: @CWilliams_DN