Editor's note: This story is part of Southwest Michigan Second Wave's On the Ground Battle Creek series.
Battle Creek Unlimited is the new owner of the McCamly Plaza Hotel with big plans to restore it back to its “glory days,” says Joe Sobieralski, President and CEO of BCU.
BCU purchased the hotel property for an undisclosed sum through 50 Capital Ave. Development Corp., a new for-profit development arm of BCU created for the express purpose of serving as a holding and ownership entity for the hotel renovation project.
Sobieralski says terms of the purchase agreement prevent him from disclosing the actual amount spent to buy the property located at 50 Capital Avenue SW. He also could not provide an actual dollar amount for the renovations, saying instead that it is likely to be in the “multimillion-dollar” range.
The decision to purchase the property comes after the former owner, Neil Freeman, chairman and CEO of Aries Capital LLC of Chicago, did not meet deadlines for rebranding the hotel into a Hilton DoubleTree. That rebranding was to have taken place in October 2018.
“It was kind of a dance for several years,” he says. “We don’t have the time nor the patience to just wait for others to come in and take care of these items. The Milton
was the first example of the community coming together to get a project done that we knew was possible to accomplish.
“We are taking the opportunities to become the developer to take care of some of these larger developments that we all know will contribute to the economic vitality of Battle Creek.”
Although BCU now owns the 15-story, 239-room hotel, Freeman retains ownership of McCamly Place, the mall portion of the complex. BCU loaned Freeman $3.5 million out of a Direct Investment Fund two years ago to complete the required upgrades to become a Hilton-owned property. The Direct Investment Fund is a revolving loan fund administered by Battle Creek Unlimited with monies from the City of Battle Creek's Economic Development Fund and the Downtown Development Authority's Revolving Loan Fund.
In January, BCU filed a lawsuit against Freeman and several limited liability corporations that also were involved in the hotel redevelopment project to recoup the loan and interest accrued.
Although the outcome of that lawsuit is yet to be determined, Sobieralski says he expects to have the hotel project completed in 2022 and he is focusing his attention now on putting together a capital stack — different layers of financing sources that go into funding the purchase and improvement of a real estate project.
“This will not be a quick reprogram. We have several months of planning, design, and financing ahead of us,” he says.
Calling the property a “strategic asset,” Sobeiralski says, “It’s extremely important for the business community we have here in Battle Creek to see this kind of business. To have an updated, branded hotel of that size driving business and disposable income into the community is extremely important.”
In addition to providing lodging, he says the renovated property will have the capacity to hold events that will further add to the economic vitality in the city’s downtown area.
The property opened in 1981 as the Stouffer Battle Creek Hotel. The building is adjacent to the Kellogg Arena, a 6,500-seat concert and event venue, and across the street from the world headquarters of the Kellogg Company.
Improvements will include new mechanical equipment, an exterior facade makeover, guest room renovations, and upgrades to the event space. BCU plans to bring two new internationally recognized hotel brands to Battle Creek and will contract with a hospitality management group to oversee day-to-day operations.
Suburban Inns, a hotel a hospitality management company based in Hudsonville, has been retained by BCU to assist with rebranding and renovations. Suburban Inns is a second-generation family business founded in 1979 that designs, builds, owns, and operates eight hotels in three different markets in Michigan – Grand Rapids, Holland, and Midland. Their award-winning hotels offer excellent service and amenities from the three largest premium franchised brands – IHG, Marriott, and Hilton.
Peter Beukema, CEO of Suburban Inns, says, “We are excited to assist Battle Creek Unlimited to develop, rebrand, renovate, and position this property for future growth. The property has tremendous potential due to its unique size, location, and event space. I am confident that this property can be transformed into a showpiece that’s a regional draw for Battle Creek.”