JACKSON, MI – The city of Jackson has invested approximately $1.5 million over the years to keep the Hayes Hotel building intact for potential redevelopment.
Past deals with potential developers have fallen through, but the city and the Jackson Anchor initiative are once again looking for a partner to help return the historic building to its former glory.
The city purchased the building and its parking lot for $2.3 million in 2002. Since then it has invested time and money into keeping the building dry and intact.
“We believe the money we have been putting into the building has been keeping it up for when we can redevelop the building,” said Aaron Dimick, city spokesman.
The city has conducted partial demolition on a majority of the inside of the 10-story hotel, along with adding a new roof to the building. Demolishing the structure would cost more than $2 million, and the city doesn’t want to lost the downtown building, Dimick said.
“This would be lost forever,” Dimick said. “We wouldn’t be able to redevelop it, we wouldn’t be able to return this to a community resource.”
The Hayes Hotel opened in November 1926, with a restaurant, a lounge, a grand ballroom and ornate fixtures throughout. It closed under mounting debt in 1975.
Consumers Energy, which had purchased it for $225,000 in 1973, then converted the building, which was next door to its headquarters then, into office space. The building has been vacant since 2003 when Consumers moved to its current Jackson headquarters.
However, more effort from the city is being made this time around to get a developer into the building, Dimick said. This includes working more closely with the Jackson Anchor Initiative and creating more awareness to the site, he said.
“We’ve been really going to great lines to make the development community aware of this and know that it’s there,” he said.
The city hosted an August showcase for potential investors to discuss positive things happening in the city and the potential of the building, Dimick said. The city is also confident developers will be interested in a project the size of the hotel, due to its “good bones and location,” he said.
“We believe doing a project of this size, if you were building a new building, it would cost way more,” Dimick said. “We believe to an investor, this is something that is really cost effective for them.”
Additionally, the city and Anchor Initiative will add incentives, such as historical tax credits and Brownfield Redevelopment incentives, to the table to hopefully draw investors in, said Scott Fleming, Anchor Initiative CEO.
The Michigan Economic Development Corporation will also provide a $100,000 incentive upfront to the chosen developer to help out with engineering and architectural costs, Fleming said.
“Overall, we will have enough incentives to help a developer have a return on investment,” Fleming said.
Renovation of the building is estimated to cost approximately $25 to $30 million, Dimick previously said.
The preferred development scenario for the hotel building now involves rehabilitating the existing structure for mixed-use, including commercial, residential and hotel, Fleming said.
What ultimately goes into the building will be decided by the developer once it is sold. Potential developers who have inquired about the building have not shown much interest in turning the building back into a hotel due to them seeing a lack of profit for it, Dimick said.
“All of the developers all agree they want to keep the retail space on the first floor, and the restaurant and possibly the ball room,” Fleming said.
Potential developers have until Oct. 1 to present their proposals. A panel of 12 people will look into the developers’ finances and plans for the building, Fleming said. It is hoped there will be a solid plan for the building by the end of this year.
“It’s really going to take an investor who has the funds available to make it happen. That’s what it really comes down to,” Dimick said.
More from MLive: