After years of speculation about the future of the former Hackley Administration Building, a local developer has plans to convert the historic structure into a luxury hotel.

Wheelfish Group, a Muskegon-based developer behind many historic building transformations, recently began the process of remediating the building at 349 W. Webster Ave. to be able to transform it into a high-end travel destination tentatively named Hackley Square.

The Muskegon City Commission earlier this month approved a commercial rehabilitation district for the project, which will freeze the taxable value of the property for 10 years once construction is completed.

The Hackley building redevelopment is slated for completion as early as summer 2025. The estimated cost of the project is $11.5 million. Wheelfish also is seeking brownfield reimbursement for the project.

The developer has not yet chosen a general contractor for the project, but demolition is being done by Pro-Tech, and architecture is through Hooker DeJong. Coalition Companies is the owner’s representative.

Frank Peterson, vice president of operations at Wheelfish Group and former Muskegon city manager, said the ultimate goal behind converting the historic building into a hotel was to help the city preserve it.

“If we want to save it and want it to be sustainable and all these things, then we’re going to have to put something in there that will make enough money to take care of it,” Peterson said.

The current plan calls for 40-45 hotel rooms depending on the final layout. Peterson said the building has a lot of “nooks and crannies” that could influence the size of each room.

Peterson added the developers are considering some light retail aspects such as a spa or a bar and lounge to give guests a “higher-end stay opportunity.”

The historic building was built with money donated by philanthropist Charles Hackley in 1892. It once served as the city’s school and later the administration building for Muskegon Public Schools.

After the school district moved out of the building in 2020, Wheelfish Group founder Brad Playford bought it for $1 a year later with plans to convert it into some type of mixed-use development.

Playford at the time of the purchase said he intends to “do the right thing with the building to sustain it and keep it around for at least another 100 years.”

Playford and his wife, Kathleen, have restored other historic building in Muskegon, such as the former site of Nims Elementary School that now is home to their telehealth business AvaSure.

The Muskegon city commission last year explored the idea of relocating most city operations into the Hackley building, which at the time was already undergoing major renovations, including a new roof that received $2 million in state funding.

City officials have wanted the building to remain as a public institution. Mayor Ken Johnson at the time said using the building for city operations would “put that historic building back in the public domain.”

Peterson, however, argued the best way to keep the historic structure alive was to make it profitable.

City officials also are fleshing out a process to limit the amount of short-term rentals in Muskegon, and Peterson said the addition of a high-end hotel could help offload the short-term rental congestion.

To honor the legacy of the building, demo teams are saving many historic aspects of the building to be repurposed later, including dozens of pieces of old-growth lumber, a still- functioning 100-plus-year-old clock and other “stuff you don’t see today.”

“Our goal is to bring it down to the main level where people can see it and how it worked and just marvel at how stuff that was built so long ago still worked so well today,” he said.

Workers are removing about a foot of drywall and insulation installed around the 1970s so future guests will be able to see the original purpose of the building. Visitors on the third floor also will be able to see the building’s original roof trusses that were put up in the 1890s.

Wheelfish Group is a major force driving development activity aimed at preserving Muskegon’s historic buildings. The firm also partnered with Walker-based Dave Dusendang Custom Homes to convert the former Catholic Charities building at 1095 Third St. into a residential development with some possible mixed-use components.

The project, dubbed Midtown Center, also received commercial rehabilitation district approval from the city and is projected to cost between $11 million and $11.5 million.

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