Revitalizing the old Thomas Edison Inn was the start of some big investments in St. Clair County. <span class='image-credits'>Chamira Young</span>

Investors spy something special in St. Clair County

The 2013 renovation of Port Huron's Thomas Edison Inn as a DoubleTree by Hilton hotel drew numerous benefits to St. Clair County, including the adjacent Blue Water Area Convention and Visitors Bureau and Baker College's Culinary Institute of Michigan. But perhaps most importantly, the Hilton development planted a flag in the sand for investors from outside St. Clair County.

The Hilton deal was led by JB Realty LLC, a group of Grand Rapids-based investors. Gerry Kramer, partner in Port Huron's Kramer Commercial Realty, says that was something new for St. Clair County's development scene.

"Prior to that point, it was basically the same local investors that were circulating, trying to do things on a much smaller scale," Kramer says.

Since the Grand Rapids-based group left its mark on St. Clair County, other investors from outside the county have taken an interest in the Port Huron area, as well. Last year saw the opening of Sperry's Moviehouse, owned and developed by Holland-based businessman Chuck Reid.

So far, these out-of-towners seem quite pleased with their investments in St. Clair County. Wheeler, one of the partners in JB Realty, says the Hilton is so far "doing very well" in meeting goals for a 10-year plan the partners developed. Reid is even more effusive about Sperry's success in its scant seven months in business.

"We've been phenomenal. How's that?" Reid chuckles. "We've been leading the market for the last six to eight weeks with several fewer hundred chairs than our competition, who's been there for many, many years. The new kid on the block has been doing a nice job of bringing customers and guests to downtown Port Huron."

Why St. Clair County?

Besides these completed developments, more projects by out-of-town developers are in the works. Port Huron native Allen Stevens, who had established himself as a developer in New York, has returned home to develop the planned Bluewater View condominiums on the waterfront property formerly belonging to Port Huron's YMCA. And Reid will soon begin construction work on a Port Huron location for his CityFlatsHotel chain at the former Michigan National Bank building downtown.

So what has convinced these out-of-towners that the Port Huron area is a good bet for their investment? Randy Maiers, CEO and president of the Community Foundation of St. Clair County, says the county has benefited from the "ripple effect" of Detroit's revitalization.

"A lot of investors or developers or potential businesses are realizing how close we are to the metro Detroit market," Maiers says. "I think some people have this perception that Port Huron is hours away from Detroit, when in fact we're maybe an hour and 10 minutes (away) and it feels like you're up north somewhere."

When he first visited Port Huron, Wheeler says he saw the community as eastern Michigan's rough equivalent, in amenities and charm, to western Michigan's Grand Haven.

"It's all to do with the water and the river, the appeal of the people," Wheeler says. "I think it's a great city and a community that has a lot of tradition. When you do real estate investments, tradition means a lot--people who are not willing to tolerate less than high-quality stuff. And I liked that about them."

Of course, there are more practical advantages for developers in the Port Huron area, as well.

"It's opportunity cost," Kramer says. "What you can get in St. Clair County is an opportunity when you compare it to anywhere else with a waterway for price per square foot."

Some out-of-town investors are also interested in projects that aren't quite materializing yet in Port Huron. Dan Casey, CEO of the St. Clair Economic Development Authority, says parties both in and outside St. Clair County are particularly interested in developing new warehouses in the county. Despite that interest, and companies in town who need warehouse space, those developments have yet to pan out due to the lower cost of existing warehouse space on the market.

"Brand-new construction costs a lot more to lease," Casey says. "There's a little bit of a sticker shock with that. There's both an opportunity and there's the availability of capital, but the dynamics of the deal just aren't there to make that happen yet."

What's next?

This influx of interest from out-of-town developers isn't just changing the physical environment of St. Clair County. Local stakeholders say it's also likely to cause significant shifts in the county's economy and the way the Port Huron community views itself. Maiers says St. Clair County is likely to continue taking advantage of its potential for tourism, even if it's just daytime tourism from the neighboring metro Detroit area.

"I think we're starting to realize that the more we tap into those things that make us a unique place to visit and enhance the quality of this place, the more we'll continue to prosper," he says. "Thirty years ago, everyone hung their hat on the next manufacturing plant."

Maiers says the continued out-of-town development has also driven more development among local investors. For example, he notes projects like the MidTown Lofts developed by Steve and Michelle Witt, which he says are the natural next step in a healthy cycle initiated by new amenities arriving in town.

"What populates a downtown?" Maiers asks. "These days it's nightlife, dining, coffee shops, cafes, pubs, and those are doing really well here. But I think what has to come in after that is downtown residents."

Community stakeholders aren't too concerned about sustaining development momentum in St. Clair County. Kramer says the many new developments in town have become "advertising for the economic health of our area," replacing the boarded-up businesses that might previously have turned some developers off. Casey, too, says he only sees good signs ahead for the county.

"As long as the economy continues to be strong, I think you'll see momentum growing for more and more investment," he says. "The city of Port Huron has been a great place, where for the first time in 30 years you're starting to see new construction occur. ... All of that investment builds momentum for more development happening in the community."
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