Developer Considering Business Hotel in Downtown Ferndale
(Crystal A. Proxmire, Aug. 19, 2021)
Ferndale, MI-  Ferndale Planning Commission on Wednesday had discussion over initial concepts presented by a developer interested in a hotel concept that is unique to the area at the corner of W. 9 Mile and Pinecrest.  The Ferlito Group is considering the 1111 W. 9 Mile site, and presented only preliminary concepts to the commission for feedback before investing in more in-depth plans.
Because the presentation was only a concept plan, details could change as the developer and the city work out details.  Residents and Planning Commissioners had several concerns about the property and the operations, meaning it’s likely these details will change.  But the starting point for discussion has the property boasting 28 rentable rooms  in a three story building with about 33 parking spots on the ground floor as well as a small retail space that could serve as a coffee shop.
OPERATIONS
Developer Michael Ferlito explained that no support staff would be onsite.  Guests would book their room online as they would a Short Term Rental (STR), which includes sites like AirBNB, using a management platform called Great Stays.  Guests would be given a code to enter the building and to access their room. Check in would be done digitally.
Ferlito stated that the system would be set up so that people with local zip codes would not be allowed to rent the rooms if they have not rented a room in the Great Stays system before, or if their user rating is low.  The system also does a background check of potential renters to deny those who have criminal backgrounds or previous problems.
“I know everyone is worried about noise and parties,” he said.   He explained that the intent was to attract out of town workers – people he called “digital nomads” who enjoy traveling to unique places and working from their hotel rooms.  On weekends there would be a two-night minimum, which he said dissuades people from renting the room just to party.
There is also a noise monitoring system that tracks decibel levels in the room.  He said it monitors the sound levels and automatically contacts the police if noise levels are above a certain level for 30 minutes.  An on-call maintenance and security person in the area could also be sent to the building in the event of guest issues including problems and maintenance.
Planning Commissioners and residents who attended the meeting questioned the lack of on-site management.  They also questioned how creating a space that operated more like a cluster of STRs than a traditional hotel would work with the City’s STR ordinance.  Commissioner Dustin Bowerman-Hagfors noted that the ordinance was written with the intent of spacing out STR properties so they would not be concentrated in one area.
STR-style hotels with digital check-ins are popping up across the country.  When asked to give an example, Ferlito cited 139 Cadillac Square in Detroit where there are 45 rentals managed with this digital model.  The property seems to have both long term and short term rentals and rules listed online are similar to those expressed at Wednesday’s meeting.
Baker and others expressed concern about the lack of onsite management.  STR-Style lodging is a relatively new business, so the lessons are still being learned in terms of how best to run them.  But there are more and more of them, in big cities, tourist towns, and even suburbs like Ferndale.
In April Justin Winslow, President & CEO of the Michigan Restaurant & Lodging Association  met with hotel owners in Novi for a “Hope for Hospitality” Discussion.  He explained that the hotel industry is becoming more automated, a trend that accelerated during the pandemic as staffing shortages and concerns over social distancing pushed hospitality professionals towards new methods and procedures.  Plus it saves on labor costs.
However, because it is a new trend, the lessons of the business model are still be learned.  Planning Commission Chair Kate Baker asked the Ferlito come back with more examples of similar businesses, and that the management model be discussed.
THE PROPERTY
The property is currently home to a building that was formerly a dry cleaning facility.  Dry cleaning properties are known for chemical contamination, and the developer has not yet studied the state of the soil on the property or the cost of remediation.
The property itself is about 200 feet wide along 9 Mile and 60-63 feet deep.  The initial concept calls for a three story building with the ground floor holding parking and a small space for a café or other retail.  A five foot setback would allow for some shrubbery.  The second and third floor would also have a room for guest amenities.  The lobby would have an open feel, taking up two stories.
The existing site at the southwest corner of W Nine Mile and Pinecrest is zoned Mixed Use 2 (MXD-2) adjacent to R-1 (Single-Family Residential) to the south, and C-2 (General Commercial) to the east. The applicant’s proposed concept for a business hotel (“lodging facility” in the City’s zoning ordinance) is not permitted in the MXD-2 district, but lodging facilities are a special land use in the C-2 zoning district.
The developer has not yet purchased the property, as they are still in the initial exploratory phase. Ferlito said he wanted to come to Planning Commission for feedback and to see if the concept is one they would consider before investing in more in depth plans.
FEEDBACK AND POTENTIAL CHANGES
As this was a preliminary discussion, there are likely to be changes based on Commissioner and public feedback.
Several residents spoke against the project due to the height and the use. Rabbi Herschel Finman is the Director of Jewish Ferndale, a community center located on Pinecrest next to the property.  Among his concerns were aesthetics and the height.  He said that his wife called it “taking away the big sky.”  He also was not fond of the alley being used for the driveway.
Others wanted to know if the zoning were changed to allow this project, would it open the door for others to come in without scrutiny if the development fell through.  But the rezoning would be conditional and it would revert back to Mixed Use 2 if the building wasn’t constructed within a certain time-frame.
Commissioner Greg Pawlica, who also serves on City Council, urged the applicant to consider other properties in the city that might be a better location for a hotel, but said he would consider their plans if they decide to move forward.
Commissioners were clear about not having a long stretch of brick wall along 9 Mile, with Planning Commission Chair Kate Baker saying “we’d rather have more retail frontage.”
“I can’t have a bank wall on 9 Mile,” she reiterated.
WHAT HAPPENS NEXT
Ferlito listened, and said that there is room to consider and revise his plans.  If he decides to move forward with more detailed plans, residents in the area will be notified and more public discussion and a hearing would occur. There is no set timeline as Ferlito and his team go back to the drawing board.
Documents from the Wed. Aug. 18, 2021 Planning Commission meeting can be found on the City of Ferndale website.
Recommended Reading:
Ferndale Considering Regulations for Airbnbs/Short Term rentals (March 21, 2021)
Hospitality Businesses in Novi Share Struggles, Hear from Industry Expert  (April 25, 2021)