Another Southfield highrise hotel to become abandoned

**cmubryan** · September-27-10, 05:06 PM

What a shame. First it was the Stouffer's Northland Inn, then it was the former Sheraton/Days Hotel/Ramada Hotel on Nine Mile, then it was the Holiday Inn on Telegraph and now it could be the former Michigan Inn/Sheraton/Plaza Hotel adjacent to Northland.

The hotel has been going downhill for at least 15 years, so it's really no surprise, just depressing. I took a walk through there a couple months back and it was pretty much falling apart.

http://www.clickondetroit.com/news/25182582/detail.html

**fryar** · September-27-10, 05:26 PM

The online reviews read like it's been a sh*thole for years. I wonder how long ago the owners stopped investing in the property at all, such as by paying the water bill. Google shows them as having had a HoJo's designation, which they appear to have lost.

Is this a strategic default of another kind? Squeeze out what money you can until the authorities shut you down, and then the heck with it?

**Detroitnerd** · September-27-10, 05:29 PM

Yeah, I suspect that is why things get so bad in the hospitality business. Squeeze money out of a dying business until it's gone.

But, hey, ain't this Detroit? Who cares? We're going to build better and more beautiful hotels north of M-59 ... just as soon as the "growth machine" gets switched back on!

lincoln8740 · September-27-10, 05:41 PM

Originally Posted by Detroitnerd

Yeah, I suspect that is why things get so bad in the hospitality business. Squeeze money out of a dying business until it's gone.

But, hey, ain't this Detroit? Who cares? We're going to build better and more beautiful hotels north of M-59 ... just as soon as the "growth machine" gets switched back on!

Me thinks someone should worry about the hotels in their beloved sustainable and walkable city before you laugh at the hotels north of M-59.

On a side note, I went to look at this hotel when it was going up for auction a couple of years back. The heat was off then as well and they were first "converting" it into apartments. I have been to many places that had the heat shutoff but to this day I have never felt temperatures that cold in my life!!!

Brand new elevator though but other than that you could tell it was a goner

**R8RBOB** · September-27-10, 06:54 PM

That's too bad. My high school class had our 10th year high school reunion at that hotel. I think back in 99 it was called the Michigan Inn. Back then, it wasn't that bad of a hotel. We had a nice meal and they had a bar that was cool.

That said, I went back to the hotel because they had Monday Nights at the bar and I believe they wanted to charge 20 bucks to get in. I knew I wouldn't be back after that.

**DetroitPlanner** · September-27-10, 09:58 PM

Nerd, I am surprised by all the new hotels by Metro. I don't know of anything new up by 59, but I don't get N of 8 mile much.

**professorscott** · September-27-10, 10:15 PM

The hotel business is complicated and doesn't work how most people think it does, at the chain-hotel level. One piece of the business is renting out the rooms, but the other side - some would say the larger side - is real estate management.

In the retail-store business, it is unheard of for a business to sell its property to a like competitor. You never hear of Macy's selling a store to Kohl's, or Sears selling to Penney's. But in hospitality it happens so often you don't even think about it: a Westin becomes a Ramada which three years later becomes a Holiday Inn then gets remodeled into a Best Western. That is the real estate side of the business at work.

At some point a property goes below a certain threshold and all you can do, if you're the owner du jour, is milk it for whatever cash you can get out of it, then it closes. This happens over and over and over, in Southfield and Minneapolis and Tempe and everywhere else.

Now, when you have it happening repeatedly all at once in a community, it says something about that community... but the problems of Detroit happily reach into any suburb that develops like Detroit itself did. Yesterday Detroit, today Southfield, tomorrow Sterling Heights and Taylor. If we keep making yesterday's mistakes, we will keep having yesterday's problems. This is just one manifestation of that.

**reddog289** · September-28-10, 01:00 AM

Thats a good explanation of the deal Professor. Kinda off the topic, But I always wonder why of all places did Inkster end up with so many Mom&Pop motels. I know that Inkster was started as a community for Black Ford workers and that Mich Ave is a main rd for travel. But why so many in that stretch?. Southfield has the office buildings so I can see that and it has quite a few major arteries running through it so that explains the numbers of large Hotels.
I remember that not so long ago the Southfield hotels as stated were still in good shape, and doing good business wise.

**CLAUDE G** · September-28-10, 01:02 AM

I saw that story earlier.

If you do the math, they are getting atleast $200 per week from some of these tenants, which is $800 over the course of the month, and when you multiply it by 70 tenants it comes to $56,000 per month.

The water bill I think is nothing compaired to what the gas bill might be. DTE don't play games either, they might have to let you run up a bill all winter, but on the first warm day they come shut everyone off.

Any odds on it, that place has probably got a $400,000 outstanding gas bill!

**rooms222** · September-28-10, 03:55 AM

Originally Posted by reddog289

Thats a good explanation of the deal Professor. Kinda off the topic, But I always wonder why of all places did Inkster end up with so many Mom&Pop motels. I know that Inkster was started as a community for Black Ford workers and that Mich Ave is a main rd for travel. But why so many in that stretch?. Southfield has the office buildings so I can see that and it has quite a few major arteries running through it so that explains the numbers of large Hotels.
I remember that not so long ago the Southfield hotels as stated were still in good shape, and doing good business wise.

The US Highway system was the major interstate travel route before the interstates. I think that any place along those routes ended up with some motels [[you see them in the UP, etc), especially those places with minimal or no zoning at the time. Inkster has a lot of hotels, but so does Telegraph Road in Redford, another place with minimal zoning back then.

Two other considerations would be:

Is the place a logical place for where many people would stop for the nights? Being on the outskirts of a major city would be..

Is the place one where economically the motel has not been replaced by some other development in the last 50 years? If Inkster had a brighter economy, some of those motels would have been torn down.

**Hermod** · September-28-10, 04:35 AM

Originally Posted by fryar

The online reviews read like it's been a sh*thole for years. I wonder how long ago the owners stopped investing in the property at all, such as by paying the water bill. Google shows them as having had a HoJo's designation, which they appear to have lost.

Is this a strategic default of another kind? Squeeze out what money you can until the authorities shut you down, and then the heck with it?

It is called "capital rescue" where you just take your depreciation reserves and pull them out of the business. The railroads were doing this until harley Staggers eliminated a lot of th regulation so that they could make a profit.

**Hermod** · September-28-10, 04:42 AM

Originally Posted by reddog289

Thats a good explanation of the deal Professor. Kinda off the topic, But I always wonder why of all places did Inkster end up with so many Mom&Pop motels. I know that Inkster was started as a community for Black Ford workers and that Mich Ave is a main rd for travel. But why so many in that stretch?.

There used to be two types of travelers, those who traveled by train or air and stayed in downtown hotels and those who traveled by car and stayed in motels. Those looking for a motel looked for a place on the edge of town going in. M-12 [[Michigan Ave was the main road in from Chicago.

If you ever travel US-1 as opposed to I-95, you can see this phenoenom all the way up and down the east coast.

.

**cmubryan** · September-28-10, 06:17 AM

Or the owners may just have more expenses including the mortgage than income? I've seen this in property management many times where, especially in today's economy the bottom line is red and one has to pick and choose which, if any vendors they will pay. The mortgage and employee paychecks come first, then it's the utilities, then its general other bills. Up until about 6 months ago, I was managing a highrise apartment building [[not in Michigan) that had $700,000+ in payables and we celebrated every month when we could make our mortgage payment. The thing that I learned to do was communicate with the utility companies and vendors and follow-thru on what I promised them. I came real close to the building's electric being shut off but avoided it partially because of communication. It was fun to watch the payables go down as we took the property up in occupancy and evicted those non-paying residents.
Now, I've also seen it where the property could cover all the bills and cash flowed well but the owners decided to pull thousands of dollars in cash out of the property to fund other projects or pay themselves.

It can work both ways but something tells me that there isn't much cash flow here given the number of cars in the parking lot on any given evening.

**Danny** · September-28-10, 08:04 AM

Poor residents of the Plaza Hotel. Maybe it's a conspiracy from the slumlord to kick the poor out of the hotel as a secret deal with the another "Trumpesque" real estate broker. Therefore that slumlord is not going to pay its water bill. Keep Southfield middle class black. NO POOR BLACK DETROITERS ALLOWED!

WORD FROM THE STREET PROPHET

As the divide between the poor and middle class continues in the Metro-Detroit area.

Neda, I miss you so.

**DetroitPlanner** · September-28-10, 09:39 AM

Originally Posted by rooms222

The US Highway system was the major interstate travel route before the interstates. I think that any place along those routes ended up with some motels [[you see them in the UP, etc), especially those places with minimal or no zoning at the time. Inkster has a lot of hotels, but so does Telegraph Road in Redford, another place with minimal zoning back then.

Two other considerations would be:

Is the place a logical place for where many people would stop for the nights? Being on the outskirts of a major city would be..

Is the place one where economically the motel has not been replaced by some other development in the last 50 years? If Inkster had a brighter economy, some of those motels would have been torn down.

Another thing to consider is that Greenfield Village was a major tourist draw and was developed after much of Dearborn was established but before the advent of major freeways. Inkster is not far from the area, close to transportation routes of US-12 and US-24, and was open land at the time.

**DetroitPlanner** · September-28-10, 09:42 AM

Originally Posted by professorscott

In the retail-store business, it is unheard of for a business to sell its property to a like competitor. You never hear of Macy's selling a store to Kohl's, or Sears selling to Penney's. But in hospitality it happens so often you don't even think about it: a Westin becomes a Ramada which three years later becomes a Holiday Inn then gets remodeled into a Best Western. That is the real estate side of the business at work.

In most cases a hotel is not owned by the chain, but the developer who enters into a contract with the hotel. This is the same way gas stations work but on a larger scale.

lincoln8740 · September-28-10, 10:04 AM

Originally Posted by professorscott

But in hospitality it happens so often you don't even think about it: a Westin becomes a Ramada which three years later becomes a Holiday Inn then gets remodeled into a Best Western. That is the real estate side of the business at work.

.

This only happens if the hotel is in trouble. Most hotel franchise agreements are for ten years and are extremely one sided to the chain. So when a hotel is failing they pull the flag and the owner is left to find another chain

**Gistok** · September-28-10, 12:57 PM

Originally Posted by rooms222

Is the place a logical place for where many people would stop for the nights? Being on the outskirts of a major city would be.

Interestingly enough this also appears to be the case on I-94 in Macomb County. When driving towards Detroit, there is a sudden congregation of about 1/2 dozen hotels/motels within 1/2 mile of each other near 13 Mile & I-94 in Roseville. Ironically there is no 13 Mile I-94 exit... but the Gratiot and Masonic/Little Mack I-94 exits are each less than 1/2 mile from where 13 Mile tunnels under I-94.

**Detroitnerd** · September-28-10, 01:02 PM

The thing about Inkster is that it's Dearborn's vice suburb. Why else would there be so many S&F motels just past Gulley Road?

**JBMcB** · September-28-10, 02:11 PM

Originally Posted by Gistok

Ironically there is no 13 Mile I-94 exit... but the Gratiot and Masonic/Little Mack I-94 exits are each less than 1/2 mile from where 13 Mile tunnels under I-94.

The Little Mack exits end up about 200 yards from 13-mile, and most of the hotels in that area are on Little Mack.

The roads in that area are weird.

**Onthe405** · September-28-10, 02:24 PM

What a depressing & tragic downhill slide. In the 70s/80s, Michigan Inn was one of only two of the prestigious chain of Seattle-based Western International Hotels in MI. The other was the Detroit Plaza [[original name at opening) at RenCen. I believe Michigan Inn was one of the state's few 4-diamond hotels.

WIH was an extremely respected, quality hotel management firm. In the heyday of conglomerates, United Airlines purchased WIH in an effort to expand within the travel industry. Unfortunately, the public frequently confused WIH with Best Western International---lodging at the opposite end of the scale--so they changed the name to "Westin". Sadly, the name was subsequently sold off and eventually degenerated into another bland Starwood/Sheraton brand. However, that transformation is minimal compared to the decline of this property into a disbanded HoJo transient hotel. Very sad.

**cmubryan** · September-28-10, 05:44 PM

I think the Westin brand has actually improved in the last 15 years. I know when Marriott took over the Ren Cen hotel in 1996, the hotel had become a little run down, much beyond what today's Starwood would allow for a Westin.

**hudkina** · September-28-10, 06:29 PM

I agree. Westin is hardly a "degenerated brand". If anything it's at the top of the business-class hotels. St Regis hotels are for old money types, W hotels are for douchy types, Westin hotels are for business-types, Sheratons are for families, and Four Points are for budget travelers.

DetroitDad · September-28-10, 07:19 PM

Originally Posted by Detroitnerd

Yeah, I suspect that is why things get so bad in the hospitality business. Squeeze money out of a dying business until it's gone.

But, hey, ain't this Detroit? Who cares? We're going to build better and more beautiful hotels north of M-59 ... just as soon as the "growth machine" gets switched back on!

No, haven't you heard? We're all moving to Atlanta now.