Historic Hotel Sale to New Developer Proceeds Despite Legal Challenge
JACKSON, MI — The sale of the historic Hayes Hotel to Ohio-based developer Collier Gibson for $25,000 is moving forward after Jackson Circuit Court Judge Richard LaFlamme denied a preliminary injunction request from the previous developer, J. Jeffers & Co.
The Jackson City Council approved the deal on Feb. 25 after the agreement with J. Jeffers & Co. expired on Dec. 31, 2024. The city expects to close the sale within the next week, according to Jackson spokesperson Aaron Dimick.
Developer Claims City Breached Contract
J. Jeffers & Co. filed a lawsuit against the city of Jackson in Jackson County Circuit Court, arguing the city breached its contract. President and CEO Joshua Jeffers said it was a complete shock to learn the city was planning to sell to an unknown group.
The Milwaukee-based developer stated it had invested $2 million into plans, environmental analysis and other costs to prepare the building for redevelopment. The company also secured $11 million in grants and incentives through the state of Michigan, the Michigan Economic Development Corp. and private corporations.
According to a four-page statement from J. Jeffers & Co., the company met with city officials four days before the Tuesday decision. They discussed a July 2025 groundbreaking, and Jackson did not notify the company about Collier Gibson approaching the city.
City Manager Explains the Decision
City Manager Jonathan Greene said the city changed its plans because the ideas for the project were pretty far apart. He said the city planned to convert the building into market-rate apartments, while J. Jeffers & Co. focused on workforce housing.
Jeffers has battled through inflation, supply-chain issues, and rapidly rising construction costs. Through it all, J. Jeffers & Co. has stuck with the City in their shared vision for the redevelopment of the Hotel Hayes into 99 apartments with ground level commercial space for local businesses, according to the company statement.
Jackson spokesperson Aaron Dimick said the city would not comment on J. Jeffers' statement. Earlier this week, Dimick said J. Jeffers & Co. had three years to get the development going but could not get plans together. The project ran out of momentum, and the city decided to go with a different developer.
Dimick said the delays from J. Jeffers & Co. were due to closing funding gaps. The city switched gears because the development agreement has expired and Collier Gibson has a plan that the city feels aligns with their vision for The Hayes, Dimick said.
New Developer Plans Mixed-Use Facility
Collier Gibson's $35 million plan will create a mixed-use facility with 109 apartments, co-working space, a restaurant and a gym. Current proposed tenants include Snap Fitness and Block House, a restaurant and esports venue, according to the proposal submitted to City Council.
Collier Gibson did not respond to a request for an interview, but provided a statement via email. Collier Gibson is excited to be chosen as the developer for the Hayes building downtown. The mixed-use property will be comprised of market-rate apartments on the upper floors and commercial units on the first and second floors. The city and community support thus far has been overwhelming, and we are humbled and honored by it. We look forward to leveraging our experience and relationships to ensure that this project is successful.
Previous Dealings With Hayes Hotel
The Hayes Hotel opened in November 1926 and has been vacant since 2003. In the last 20 years, the city has spent roughly $1.5 million to preserve it, according to Dimick.
Jackson has worked throughout the years to bring the Hayes Hotel new life. Many deals have gone before City Council, but did not make it far. In 2004, an Indiana developer offered $800,000 to turn the hotel into affordable housing, but that did not come to fruition after downtown business owners spoke out against it.
An option agreement in 2010 from the Lansing-based Gillespie Group came forward until it evaporated as Michigan's recession grew. In 2012, another plan came to the City Council proposing the building become a healthcare complex, but it never made it off the table after then-mayor Martin Griffin said it read like a Nigerian bank email.
Holland-based Geenen DeKock Properties also made a deal with the city in 2015, but this fell through due to the developer's lack of funding.
Judge Denies Injunction Request
Jackson Circuit Court Judge Richard LaFlamme denied a request for a preliminary injunction on March 3. J. Jeffers argued in court that they believed the contract did not expire on Dec. 31 due to ongoing discussions with the city. Ultimately, there were no written agreements to that effect, which resulted in Judge LaFlamme's decision.
Another hearing is set for March 24, when the city will seek full dismissal of the J. Jeffers lawsuit.
"It's been an almost three-year slog, giving this developer every opportunity to move forward," said City Attorney Matthew Hagerty. They didn't meet their contractual obligations. The contract expired, and the city was free to move on with a new developer at that point.
Hagerty said one of the big issues was for the proposal to have the development be financed in part through low-income housing tax credits, or LIHTC, which was not going to be supportable by city council. Jeffers changed course and said that they could do a market rate. But these were all discussions that happened after the purchase agreement had already expired.