CEDAR -- Leelanau County may put the brakes on a pricey study of environmental problems at Sugar Loaf Resort until the long-shuttered property's ownership questions are resolved.
The county's Brownfield Redevelopment Authority poured about $40,000 into efforts to revive the former ski hill and recreation area that closed for skiing in 2000. County officials hope to use brownfield money to attract a buyer for the 300-acre resort.
But they'll step back now, after learning the resort's mortgage is controlled by a corporation with ties to former resort owner and convicted felon Remo Polselli.
Polselli sold the property to current owner Kate Wickstrom in 2005. Wickstrom never developed the property. She acknowledged mounting financial problems this week, and said she hopes to sell the resort.
David Shiflett, a county commissioner and chairman of the county's brownfield board, said he's "very, very concerned" about resort ownership questions. He wants ownership matters clarified before the county spends more money on the site.
"The Brownfield Authority is researching its options as to who's really in control of the property at this point," Shiflett said. "We're just trying to understand where we stand at this point."
Polselli retains Sugar Loaf ties
Wickstrom said she's upset by reports that Polselli could still have a financial stake in the resort. She learned about 18 months ago that her Sugar Loaf mortgage held by Florida-based TransCapital Bank is backed by a "personal guarantor."
The bank hasn't disclosed the guarantor's identity to her, she said. But 13th Circuit Court and Leelanau County documents reviewed by the Record-Eagle show the resort's mortgage was assigned in August to a Michigan limited liability company whose managing partner is Hanna Karcho Polselli, Remo Polselli's wife.
That company made a collateral assignment of the Sugar Loaf mortgage to a Southfield bank for a $750,000 loan, according to county records.
Polselli acquired the resort in late 1997 and closed it in 2000. He launched various attempts to reopen or sell the property before Wickstrom purchased it in 2005 for $5.7 million.
Polselli was sentenced in 2003 to federal prison after being convicted for tax evasion tied to an unrelated property.
TransCapital Bank attorney Leonard Zedeck did not respond to a request for comment. Calls to Detroit-area attorney Jerry Abraham, who represents Polselli in another federal tax action filed in late 2009, were not returned.
'Need to move on'
Wickstrom hopes to sell the property, but knows she won't recoup her purchase price, she said. The resort continues to attract the attention of potential buyers, but hasn't recently been appraised and Wickstrom isn't sure what it might fetch, nor what the bank would accept.
"The people who are looking at it now have the wherewithal to make it happen," she said.
Wickstrom said she's in no position to do anything but sell the resort. She recently lost a home to foreclosure in Grand Traverse County, and said resort struggles have taken a toll on her and her father, who's helped maintain the site in recent years.
"I need to move on with my life," she said.
Wickstrom said she's received no foreclosure notices, but other financial deadlines loom. A 2007 property tax bill totals almost $102,000, county Treasurer Chelly Roush said, and the payment deadline is March 31. Back taxes must be paid to keep the property from a county tax sale and potential foreclosure.
County officials contend they didn't waste time and money researching environmental problems. Shiflett said that work documented various problems like water and mold damage in resort structures.
County Planning Director Trudy Galla said investigators found the "worst conditions" in the resort's old tennis barn, a dilapidated building that sustained significant damage in recent years.
"It's just no good anymore," she said.
But the research also discovered only minor water and mold problems in the main resort building, "much, much less than anybody ever thought," she said. The county's review also documented two underground fuel storage tanks on the grounds, one of which officials did not know existed.
"The work that we did, I think, is good work," Shiflett said. "Certainly we want to help a viable landowner or developer at Sugar Loaf."
Sugar Loaf's ups and downs
-- 1962 -- Sugar Loaf Resort launched in Leelanau County by local businessman Jim Ganter.
-- 1981 -- Sugar Loaf turned over to Empire National Bank after resort declares bankruptcy.
-- 1982 -- Empire National Bank sells resort, then around 1,600 acres, for $7.5 million to SYB Inc. headed by Birmingham attorney John D. Sills.
-- 1997 -- Resort property, down to about 500 acres, goes back to Empire National because of unpaid debts. Two golf courses and sewage treatment plant at resort retained by Sills.
-- 1997 -- Sugar Loaf taken over by Mountain Management Inc. of southeast Michigan, headed by company chairman Remo Polselli.
-- 1999 -- Sugar Loaf listed for sale in the Wall Street Journal for $8.5 million; Mountain Management files for bankruptcy listing more than $1.2 million in unpaid bills.
-- 2000 -- Resort closes in late winter after three consecutive mild winters create more financial problems.
-- 2001 -- Sugar Loaf's restaurant and hotel re-open in late summer, and ski passes sold for the upcoming ski season.
-- 2002 -- Resort closes again in January; purchasers of season ski passes get refunds.
-- 2005 -- Sugar Loaf sold to Leelanau County native Kate Wickstrom for $5.7 million.
-- 2008 -- Leelanau County seasonal resident Brad Lutz signs purchase agreement in February with Wickstrom for Sugar Loaf after it's listed for sale for $6 million. Lutz pulls out of the deal in April, citing insufficient time to complete "due diligence" on the property.
-- 2009 -- Leelanau County seeks $10.5 million in federal "stimulus" money through the state to buy the resort and wastewater treatment plant, upgrade the property and offer it for sale.
-- 2009-10 -- County spends $40,000 from a U.S. Environmental Protection Agency grant for environmental assessment and related work on Sugar Loaf property.
