Photo by Elizabeth Ferszt Brian Loftin and Joshua Jeffers are the developers that previously had a contract to purchase the Hayes Hotel from the City of Jackson.
By ELIZABETH FERSZT
Contributing Writer
After the sale of the Hayes Hotel to developer Collier Gibson was announced at last week’s Jackson City Council meeting, developer J. Jeffers & Co., filed a lawsuit against the city in Jackson County Circuit Court. At a hearing on Monday, March 3, Jackson County Circuit Judge Richard LaFlamme denied Jeffers’ request for an injunction to stop the sale of the Hayes Hotel to Collier Gibson.
Judge LaFlamme stated that the standard he must rule by is based on the merits and the public benefits of the case. Jeffers had previously had a contract with the city to purchase the property which expired on Dec. 31, 2024.
“How do you cure a default based on failure to close by deadline?” the Judge asked Plaintiff’s attorney, Thomas Cedoz, of Husch Blackwell, LLP, of Novi, Michigan.
Cedoz said “the cure is to close within 10 days” which J. Jeffers & Co. had tried to do, contacting the City Manager, Jonathan Greene, repeatedly, including on Dec. 20, 2024, Jan. 14, 2025 and Jan. 23, 2025, to try to arrange for a closing.
Cedoz also argued that the sales contract did not have a clause in it that automatically terminated the deal after a certain date, and that it had already been extended twice amicably by both parties.
But the court disagreed. “It’s crystal clear to me that [the merits] do not apply because the agreement had expired,” Judge LaFlamme said. “There’s no way to cure the Dec. 31, 2024, closing” he added, because the sales contract terminated.
The judge denied the motion for an injunction and quickly signed an order pre-prepared by City Attorney Matthew Hagerty, from the bench.
Brian Loftin, Jeffers’ chief development officer based in Chicago, stated after the hearing that all documents, permits, and financials have to be prepared by the seller’s side in order to go to closing. In this case, Loftin said, the “city attorney did not prepare anything for the closing [by Dec. 31, 2024],” basically shutting them (Jeffers) out of the process in the last two months.
In the Jeffers Company complaint, they allege that the City broke its contract with them because the City never sent the 10-day default letter—and also mislead them based on vague or non-existent communications, and did not notify them of the imminent sale of the Hayes Hotel to their competitor Collier Gibson on Feb. 26.
Jeffers was asking for an equitable remedy in the form of a preliminary injunction, as well as compensatory damages of $1.8 million. They may also file for consequential damages, including loss of opportunity and loss of reputation.
Jeffers’ attorney also stated they will file an Interlocutory Appeal to the Michigan Court of Appeals, and well as file an Amended Complaint to the 4th Circuit, “now that they know so much more” in terms of the conflicting timelines of when Collier Gibson was invited to make an offer, and their last communications the City.
In court Cedoz tried to make the point that there were essentially two contracts, a sales contract and a developer’s contract, that Jeffers had with the City. The city kept having them change the developer’s contract, which meant having to, in turn, change the dates for closing on the sales contract.
“It was like the City was negotiating a backdoor” to the Collier Gibson deal, he said. Jackson was “trying to assign the contract, but the contract had an express clause that it was not assignable.” Assignable means it can be given to another party.
Cedoz also stated that his client’s site plans, architectural renderings, site studies, surveys, and the much-coveted National Register of Historic Places designation through the National Parks Service is not merely due diligence required by any developer in a project of this scale. But that these are copy-righted materials. And that any new developer such as Collier Gibson, cannot freely use them nor assume the NRHP designation. They would have to apply all over again.
Cedoz stated in his arguments in court that the case is about the “Statutes of Fraud” which can occur in a real estate transaction when one party is misled. He also argued that the sale to Collier Gibson would cause irreparable harm to the Jeffers company, in that the Hayes Hotel is a unique property and cannot be replaced. And that it had already entered into leases with local vendors, and that a competitor will potentially have access to bona fide business secrets. “The City has kept the Hayes property vacant for over 22 years, Michigan law is clear that there is public interest in seeing that the [extant] contract is enforceable,” he said.
Cedoz also stated that he has sent a letter to Collier Gibson to preserve any discoverable evidence pending an appeal or perhaps further direct litigation.
The city’s attorney argued that indeed the sales contract did expire automatically, and stated in email, “After that date we will be at the mercy of [City] council.”
Loftin stated that there’s nothing to stop Collier Gibson from simply flipping the Hayes Hotel, or tearing it down. Loftin emphasized twice that Jeffers “wants to do this project,” and that he personally spent the last four years of his life working on it, including arranging for logistical details such as finding the correct contact at the EPA, to loop in the City Manager, Jonathan Greene, to negotiate on a three-way call, a $4.5 million federal grant, as well as a $1 million grant from Consumers Energy, a local corporate partner.
Loftin said that Jeffers had also built other important local relationships, including having signed lease agreements with a Jackson-based restaurateur/caterer, a boutique for men’s and women’s clothing, and a gym/fitness center.
Company founder and principal Joshua Jeffers stated that the city then wanted Jeffers to include low income housing in the plans. But there was also a disagreement over whether or not the city really intended Low Income Housing Tax Credits, which is a federal program administered by the Michigan Department of Economic Development.
This would not have been Section 8 Housing or traditional housing vouchers, but the “naturally occurring affordability” of the Jackson area based on 60% average monthly income, said Loftin.
Loftin said that City Manager Greene came up with the LIHTC idea, but then later stated, “it’s not what they [the City] are looking for.”
Jeffers says, “We still believe we own the building. This is still our project.”
Loftin and Jeffers, as well as their lawyer Cedoz emphatically underscored that Collier Gibson did not go through the normal Request for Proposal or Request for Developer Qualifications process that is required by the city to sell any of its assets.
Indeed, according to its own rules set out in the City of Jackson Purchasing Manual, the bid procedure for City owned property in absence of a public auction must include “a notice inviting offers…published in at least one applicable [newspaper] and on the City’s website not less than seven days before [it is sold]” – The City did not do this in regard to Collier Gibson.
Loftin and Jeffers confirm that after their first and only presentation in March 2022 to the City Council, they have not spoken directly with any city council members, nor attended any subsequent meetings with council or the mayor. “We have had zero interaction [with City council]” and this is bizarre based on their normal way of conducting business collaboratively with cities and aldermen/women.
The Judge did not take testimony from either Brian Loftin or Joshua Jeffers.
These developers, J. Jeffers & Co., who negotiated with the City for the sale and use of the Hayes Hotel over the past three years, still have a website (https://www.thehayesjackson.com/) up that shows their plans for renovating and rebuilding the Hayes, with 84 residential apartments in floors 4-10, and site improvements including “upgrades street and pedestrian appeal; new bike racks, planters, and greenery; updated parking lot and lighting; and [new] curbs and dining bump-out facing the park.”
The ground floor would have had a main entryway on Mich. Ave, as well as restaurants and retail spaces; the second floor would restore the grand ballroom and other event spaces; the third floor would have 15 short-term rental units, or fully furnished apartments (i.e. hotel rooms).
J. Jeffers stated their vision for the Hayes hotel as “a rehabilitation that will preserve and highlight historic elements of this landmark [10-story] building… while transforming it into residential and commercial spaces.”
The Jeffers plans seemed to be fully fleshed out, thoughtful, ambitious, but also feasible. It was unclear as to why they were not implemented. At the Feb. 25 City Council meeting, a member stated, “it just didn’t work out.”
By press time, The Morning Star still had not heard back from Collier Gibson for comment. The Morning Star also reached out to the City of Jackson Communications Director, Aaron Dimmick, for his response to a few questions about more details as to the sale of the Hayes Hotel. These queries went unanswered.
The questions included how long the city had been in negotiations with Collier Gibson (C-G) before they took their offer. And why was the price so low, at just $25,000 for a 10-story building still in good shape structurally? Also, whether or not C-G or its future investors would get any tax benefits from the city for this development? And when would the renovations begin?
Dimmick later responded in an email on behalf of the City, “We are not commenting on anything Hayes-related at this time.”
Loftin stated after the hearing, “This is what we do. We [Jeffers & Co.] figure out how to do things no one else can, and we have all the keys, but they have taken away the door.”
