MUSKEGON, MI – The former Sappi paper mill property on Muskegon Lake has recently gone back on the commercial real estate market with two lots being offered for a total listing price of $17.5 million.

Aerial view of the former Sappi plant pictured on June 3, 2010. Please credit photo by Marge Beaver/Photography Plus.

The NorthStar Commercial real estate listing for the 120-acre former industrial site with nearly a mile of Muskegon Lake shoreline could be a game changer for the community.

The cleanup and future redevelopment of the site remains a huge issue of public debate. The new real estate listing raises as many questions as it answers.

Property owner Melching Inc. – the Nunica-based demolition company of Doug Melching – purchased the property from Sappi Fine Paper of North America in September 2011 for $2.3 million.

Melching has begun extensive demolition of the property, which is expected to take two years, and proposed a maritime-based industrial center that created plenty of opposition among concerned citizens. Melching and his environmental consulting company continue to work with Michigan Department of Environmental Quality regulators on environmental issues on the property.

The property came with deed restrictions that limits redevelopment to industrial uses and limits environmental cleanup activities of Melching. According to the deed documents, those restrictions will be assumed by any new owner.

Broker/developer Steve Wilson has listed the site with two lots:

• The first lot is 119 acres of industrially zoned land that has a mile of Muskegon Lake waterfront with deep-water port access and aggregate docks. After demolition, 281,700 square feet of former Sappi industrial buildings will remain. The first lot is listed for $12 million.

• The second lot is a 10-acre parcel that is the former paper manufacturing company’s power plant. The plant currently is able to produce 21 megawatts of power but that could be increased to 37 megawatts with renovations. Also able to produce steam, the plant is fueled by pulverized coal, biomass, natural gas or wood chips. The second power planted is listed for $5.5 million.

“With the onsite power supply, Mid-Michigan Railroad service and approximately 280,000 square feet of industrial building space available, this site makes for a fantastic redevelopment opportunity,” according to the NorthStar listing.

Neither Wilson nor Melching were immediately available to discuss the property’s listing on the commercial real estate market. Melching told The Chronicle he will be available to discuss the new real estate listing later Thursday.

The listing package includes a copy of the proposed Muskegon Maritime Business Park plan that shows the property divided into eight parcels for bulk storage, a concrete plant, industrial facilities, manufacturing and the power plant. That plan has been shown city of Muskegon planners but it has never been subject to a site plan review.

The NorthStar real estate listing shows how the value of the property has declined since Sappi ended paper production on the site in 2009 after 109 years of operations. The total taxable value of the paper mill property has dropped to $3.8 million or $7.6 million of market value, which currently generates $45,413 in property taxes, according to the real estate listing.

As recent as 2009, Sappi owned the industrial site when it had a $31.3 million taxable value and was generating around $2.6 million in property taxes.

MLive will continue to cover the latest development with former Sappi paper mill property.

Email: dalexan1@mlive.com

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