Sugar Loaf Resort abandoned, mired in ownership issues

John Russell
Special to The Detroit News

Cedar — The bells sit silent in Sugar Loaf Resort’s campanile, the chairlifts rock quietly, covered in peeling paint and snow. The resort lies empty and deteriorating.

After a series of high interest rate mortgages and poor winter weather, the destination resort with stunning views of central Leelanau County and Lake Michigan sits abandoned, and the county is left to work its way through a legal slalom.

Ever since the resort opened in 1947, thousands of guests from Metro Detroit looking for a golf or ski getaway or to gawk at fall colors have made the trek north to escape the hustle and bustle of the city.

But today, after a series of high interest rate mortgages and poor winter weather, the destination resort with stunning views of central Leelanau County and Lake Michigan sits abandoned and the county is left to work its way through a legal slalom: The resort’s founders have died, subsequent owners defaulted in 1981 and possession of the destination resort has since passed into the hands of five different people.

The golf course and ski hills went silent in 2000 when the resort, at one time the largest employer in Leelanau County with more than 300 employees, finally closed.

The impact hit the regional economy like a lake-effect blizzard. Rental rooms have gone unfilled; restaurants, stores and gas station sales plummeted; hundreds of workers no longer had winter employment in a region where jobs in the offseason are difficult to find.

“Traffic from there was 50 percent of our winter business,” said Peter Bardenhagen, who owns the Sugar Foot Saloon just a couple of miles from the resort. “It’s been a pretty good struggle in the past years since it closed.

“Regular customers keep us going, but we’ve had to cut back our winter hours,” Bardenhagen said. “The whole county has felt the impact of the closing of Sugar Loaf.”

Colliers International in Detroit lists the asking price of the resort as $8.72 million. That includes a 144,000-square-foot lodge and hotel with restaurant furniture, two pools, two large storage buildings, four tennis courts, 478 acres, five chairlifts and an airport with a paved 3,500-foot landing strip.

That price is much different than the Leelanau County Equalization Department value of the resort. It lists eight parcels at Sugar Loaf under Rock Investment Advisors LLC with a value at just over $1.7 million.

A tangled situation

Sorting through ownership, pending sales that fell through and dreams of reopening the resort has created a quagmire for county officials.

Steve Haugen, Leelanau County construction codes inspector, has been working on issues with the property for several years. Gaining access to the resort’s buildings in February 2014, he, county administrator Chet Janik and Realtor John Peppler found at least 23 building code violations and ordered repairs or removal of structures.

There is no estimate as to how much it would cost to bring the facilities up to code because it’s unclear who is responsible.

“I have sent out letters to 16 different parties that might hold an interest in correcting this situation, and have narrowed it down to three or four interested parties,” Haugen said. “We’re at a point where I’m talking to our prosecuting attorney to move forward.”

“There have been so many shell issues, the 13th Circuit Court in Leelanau County will decide who should be responsible,” he said.

Sales date to 1981

Southfield attorney John Sills acquired the resort from Empire Bank in 1981 for $7.5 million. The sale included the lodge and hotel, golf courses, an airstrip, condo units, a wastewater treatment plant and 1,600 acres.

Empire Bank took back the resort in 1997. That same year, Southfield hotelier Remo Polselli bought it, but could not get a liquor license. Polselli ran the resort until it closed in March 2000.

In 2005, two golf courses and the wastewater treatment plant were sold. One course was bought by the nearby Homestead Resort and renamed. A second course operates as The Old Course at Sugar Loaf is open to the public.

Kate Wickstrom bought the remaining property in 2005 for $5.7 million from Polselli. She transferred the deed back to Polselli in 2013, but an attempt to register the deed in 2014 failed due to questions about the signature’s authenticity.

Meanwhile, in 2010, Eneliko “Liko” Smith, a Samoan Olympic-level boxer, claimed he bought Sugar Loaf and three years later announced plans for a 560-acre snowboarding resort called “The RoK at Sugar Loaf.” Nothing has come of his plans.

A third attempt by Wickstrom in November 2014 to transfer the deed as successful, with Rock Investment Advisors listed as owner of the property and Polselli listing himself as spokesman.

When contacted in Laguna Beach, California, Polselli was abrupt. “If you are on a fishing expedition,” he said, “contact the broker,” and hung up.

A broker for Colliers couldn’t be reached despite numerous attempts by The Detroit News.

3 solutions noted

Haugen has no idea how many hours have been spent on Sugar Loaf issues over the three years he has been involved. He suspects there will be a lot more time spent before any resolution.

There are three possible solutions, he said: Bring the whole complex up to code, board up windows and doors to secure the facility or demolish the structures. Demolition could cost $1.3 million, but the cost of the other two options isn’t known.

Leelanau County Prosecutor Joe Hubbell is reviewing the situation and said Haugen’s next step is getting administrative search warrants signed. “Once that’s signed he’s going to go into the buildings to confirm that the construction code violations continue to exist, which we believe they do,” Hubbell said. “After that, he’s going to issue his show-cause tickets, which will be filed with the 86th District Court, and we’ll proceed from there.”

Leelanau County Board of Commissioners Chairman Carolyn Rentenbach said the board wants to keep the resort on the tax roles and hopes a resolution will come soon.

“The owner is in violation of the building codes, and it is in the hands of the county prosecutor for resolution,” she said. “Some members on the board wish to protect the rights of private property owners, so we are moving toward resolution.”

The sentiment was repeated by Tom Pleva of Pleva’s Market in Cedar. “We used to have 1,000 cars pass through Cedar on a weekend in the winter,” he said. ... “It hurts a lot in the winter months not having that traffic; it’s definitely had an impact.

“As soon as things get cleared away about the property, it could reopen. It’s just not happening soon enough.”

John Russell is a photojournalist and writer from Traverse City.

Sugar Loaf through the years

1947: Three Leelanau County men, Stanley Ball, Hans “Peppi” Teichner and Art Huey, open the Sugar Loaf Winter Sports Club along M-22 on the west side of the mountain. A farmhouse is used as the clubhouse.

Mid-1950s: Sugar Loaf Mountain is closed.

1962: Jim and Pat Ganter reopen Sugar Loaf Resort, eventually adding a hotel, indoor tennis, a golf course, 3,500-foot paved airstrip, 72 townhouses and a wastewater treatment plant. Expansion of the slopes and addition of five chairlifts made it a modern ski area.

1981: High interest rates on loans and poor winter weather prompt default on a loan and Empire Bank takes over Sugar Loaf.

1981: John Sills, a Southfield attorney and an investment group, acquire Sugar Loaf for $7.5 million. The sale includes the lodge and hotel, one golf course, the airstrip, wastewater treatment plant and 1,600 acres.

1997: Empire Bank reaquires the resort, but Sills’ group retains a golf course and wastewater treatment facility.

1997: Southfield hotelier Remo Polselli buys the resort, but cannot obtain its liquor license.

2000: Sugar Loaf Resort closes.

2003: Polselli pleads guilty to tax evasion, serves more than a year in prison.

2005: Kate Wickstrom, a graduate of Glen Lake High School in Leelanau County, buys the resort for $5.7 million from Polselli.

2009: Sugar Loaf’s mortgage is assigned to a Michigan corporation known as 4500 Investments LLC and managing member Hanna Karcho Polselli, wife of Remo Polselli.

2010: Eneliko “Liko” Smith, a Samoan Olympic-level boxer, claims he has bought Sugar Loaf. He apparently never had any financial stake in the property.

2013: Wickstrom claims she transferred the title for Sugar Loaf back to Remo Polselli and Rock Investment Advisors.

2013: Smith releases a plan for a 560-acre snowboarding resort called “The RoK at Sugar Loaf.” Nothing comes from the announcement.

2014: Leelanau County Construction Code inspector Steve Haugen inspects the property, finds cosmetic damage and up to 23 violations of the county’s building code. Deed to Sugar Loaf is recorded in Leelanau County as Rock Investment Advisors.

2016: Inspection by Haugen needed again to update condition of the property for code violations.

Source: John Russell research