Downtown Muskegon gets boost with $8M hotel
Parkland Properties recently put the finishing touches on an $8 million renovation of a former Holiday Inn in Muskegon. The newly designed hotel is part of a multimillion-dollar investment into a revitalized downtown Muskegon, which includes plans for a new convention center.
The hotel at 939 Third St. was renovated into a Delta by Marriott, which Parkland owner Jon Rooks said is a new brand of hotels Marriott purchased from Canada and brought to the U.S.
“There’s only full-service Deltas,” Rooks said. “People either build new ones or we take older hotels and can renovate them to strict standards.”
Parkland, with Platinum Construction of Walker serving as general contractor, did a complete gut job of the former Holiday Inn. Rooks said nothing of the original hotel remains except for the bones.
The hotel is located in the heart of downtown Muskegon, in close proximity to the local breweries and distillery, as well as the festival grounds and military and art museums.
The 150,000-square-foot hotel has 200 rooms fully redesigned with new furniture and HD televisions. There also are 10,000 square feet of meeting space, a 1,000-square-foot fitness center and an indoor pool with hot tub.
Parkland also renovated the hotel’s restaurant space into a 200-seat restaurant named Timbers 939 in homage to Muskegon’s history as a lumber city. The restaurant and bar serves a mix of standard American fare and has a separate area for finer dining like steak and seafood.
Timbers 939 won the fine dining award at Chef Prize 2019, held last week at Hampton Green Farm in Fruitport.
The plan to renovate the Holiday Inn to a higher brand was part of a deal Parkland had with Muskegon officials to also build a $19 million, 45,000-square-foot convention center adjacent to it and the L.C. Walker Arena, which also underwent $3 million in improvements from the city over the last couple of years.
Rooks said Muskegon is a friendly and smart place to invest in. He also bought the Shoreline Inn at 750 Terrace Point Road in 2009. Owning both hotels downtown would help Parkland make positive-impact investments in the city, he said.
“We believe over time, the physical changes are going to surprise people,” Rooks said. “We were even surprised by how well the hotel turned out once renovations were complete.”
These investments did not come without challenges, however. In the midst of major renovation of the Delta, Parkland had been battling in court with the investors from which it purchased the hotel.
Parkland purchased the Holiday Inn from Muskegon Nights Inc., a Michigan corporation owned by shareholders Akram Namou, Tom Gasso and Malik Abdulnoor, for more than $6 million, according to documents from the Muskegon County Circuit Court.
All of the shareholders possessed special knowledge of the affairs and operation of the hotel they sold, according to the lawsuit. In addition, the group represented one of the largest groups of hotel operators in the state of Michigan, according to the documents. Abdulnoor and Namou together owned and operated 55 to 60 hotels.
They each also separately owned and operated other hotels, often with Gasso. Abdulnoor alone owed more than two dozen hospitality properties with Jimmy Asmar, his “business partner,” according to court documents. Parkland viewed the men as the most dangerous competitive threat to its operations.
To induce Parkland to purchase the assets of the Muskegon Holiday Inn from Muskegon Nights, the shareholders executed and delivered a noncompetition agreement, which prohibited each of them from undertaking any activities within a 14-mile radius of the hotel at 939 Third St. deemed to be in competition with Rooks until after 2028.
“The intent of the noncompete was to give us time to turn around the hotel without the fear of competition from these developers,” Rooks said. “Without the agreement, there was nothing stopping these developers from opening a new, competing hotel, once we closed on the sale.”
Parkland invested over $2 million in the first three years into deferred maintenance at the property and over $8 million in the last 12 months, according to court documents. Parkland also agreed to self-impose a room tax on the hotel to fund the construction of the new Muskegon Convention Center.
Parkland discovered in March 2019 that one of the developers, Abdulnoor, began planning and constructing two hotels near Lake Mall, 6 miles from the Holiday Inn, within four years of the sale.
“Mr. Abdulnoor took a silent role in the projects where his name was not on any public-facing documents, but almost all of the money for the construction came from him,” Rooks said. “When we discovered his secret involvement in March, we initiated the current lawsuit.”
The court recently ruled Abdulnoor and the other parties involved with him violated the noncompetition agreement by constructing these two competing hotels. The ruling halted further construction of both buildings.
Parkland currently is waiting for the court to determine the proper damages and remedy.
“Our hope is that the defendant’s hotel shells can be re-purposed for a different use — such as apartments or senior living — that does not violate our agreement,” Rooks said.
Posted By: Grand Rapids Business Journal on September 13, 2019. For more information, please click here to read the source article.
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