One never knows what they’ll leave with when they shop at Junga Ace Hardware. Last December, Mark Kuykendall was looking for a filter for his furnace so he popped in to see his long-time friend, Jim Junga at his Michigan Avenue hardware store.
Their conversation blossomed into a plan to build a $9 million, 63-room and 47,000-square foot full-service Best Western Plus hotel on Michigan Avenue, across from the Rentschler Farm Museum. Junga also plans to build a new hardware store on the property, which they’ve agreed to buy from the city for $430,000.
Kuykendall, who has worked in the hotel business for nearly 40 years, had been trying to buy out his partner at the Holiday Inn Suites on Boardwalk Drive in Ann Arbor. The deal fell through at the last minute. Junga had begun looking for property because he planned to build a new hardware store.
“So, I told Mark, why don’t we look at property that we can collectively use,” Junga said, remembering their conversation.
The hotel project is one of two big projects planned for Saline’s east side. Emagine Entertainment is building a luxury theater across the road. The cinema is expected to open in February.
The partners are in the process of identifying investors before they line up financing. That could happen by early spring. If so, the hotel could open its doors by March of 2018.
“We’re deep into the effort to obtain funding for the hotel. We have had many encouraging discussions with investors and lending groups,” Kuykendall said. “We’re very confident.”
The partners must raise about $3 million privately before obtaining financing if they go the conventional route.
“We welcome local investors. We want maintain local control as much as possible,” Junga said. “Everything that’s been pledged so far is from local folks.”
Their project will soon be ready to present to qualified investors.
They are also deep into the design phase.
“The hotel will feature all the amenities you would expect in a quality hotel,” Kuykendall said.
The hotel will be full service – featuring a restaurant and bar. To honor Saline’s place along US-12 and the history with Henry Ford, they’re planning a roadhouse theme.
Another key feature is a 1,500-square-foot banquet room that can serve about 125 people. The hotel will also include a pool and spacious exercise room. There are plans for an enclosed patio and sundeck/fire pit.
“It’s going to be a very nice hotel of very good quality,” Kuykendall said.
The first floor of the three-story structure will be about 19,000 square feet.
Kuykendall has been in the hotel business for 38 years, including 21 years in the Ann Arbor market. He is a second-generation “hotel guy.” Originally from Ypsilanti, he moved to Beeville, Texas, with his mother and younger brother when his older brother was at the naval base there. He met his wife there and stayed to work in his father-in-law’s hotel. When Kuykendall moved to Saline 20 years ago, he thought the town could support a hotel. In fact, he and Jim Haeussler, owner of Peters Builders, discussed opening a hotel in Saline. Haeussler will be the builder of this project.
“There’ve been conversations about a hotel in this market for years. My involvement in the Holiday Inn prevented me from doing anything here,” Kuykendall said.
There are several reasons why Kuykendall believes a hotel will work in Saline. He cites the multi-national employers in the area. They include Faurecia, Toyota, Liebherr, Klingelnberg and Windsor Mold.
It’s on a busy road – US-12. There are no other hotels in this section of Washtenaw County.
And, Kuykendall said, the proximity to Ann Arbor is very important.
“Ann Arbor is the leading hotel market in Michigan and the upper Midwest,” Kuykendall.
So why would a customer choose to stay in Saline?
“Saline is on US-12. It has easy access to anywhere on the south side of Ann Arbor and to US-23 and I-94. There are some very nice restaurants in Saline, a couple new breweries and a new movie theater coming in,” Kuykendall said. “NASCAR is right down the road.”
Junga’s new hardware store would probably open in 2020. Junga said business is strong at his store, which has beat his business model projections every year since opening seven years ago. Junga Ace is among the top 10 percent of performers in the country, he said.
Junga has several reasons for wanting a new store. He said that hardware store owners do better when they own their own store. And he’s looking to leave something more substantial to his children, who will take over the business when he retires.
Secondly, he needs more space. He has 10,500 square feet. The new store would be 15,000 square feet. Plus, he plans a 6,000 square-foot garden center.
“We’re going to have more for inventory and we’ll be able to have a nicer, better looking presentation,” Junga said.
Junga also relishes the chance to design a space specific to his needs. He wants better coverage for customers as they enter and exit, a designated space for shopping carts, and up-front storage for things like salt workers don’t have to haul it from the back of the store.
“We’re just looking for ways to make it more user-friendly, both for the customers and the business,” he said.
Today, Junga employs 24 people.
In their hunt for place to build a hotel, Junga and Kuykendall started in downtown Saline. With the help of City Councillor David Rhoads, they explored the feasibility of a boutique hotel at 147 W. Michigan Ave., the undeveloped downtown property known to many Saline residents as “The Pitt.” They worked with the owners of the property but couldn’t come up with a deal.
“At the end of the day the property was small. The environmental assessment was open. And there were five different property owners involved and the group was a little dysfunctional and a decision might have been in a judge’s hand,” Junga said. “So, we began looking east.”
The next place they stopped was a city-owned property on East Michigan Avenue. The city was planning to rezone the property. Initially, Kuykendall and Junga looked at the lot adjacent to the Oaks Shopping Plaza. But the lot was oddly shaped.
“We tried some layouts and it just didn’t work,” Junga said.
So, they moved to the eastern lot. They made an offer and began negotiating with the city.
One of the major issues was that the developers wanted the city to pay the $225,000 cost for moving the DTE powerlines. As Junga pointed out, the city had done so when the The Oaks plaza was developed. The city agreed to do so and accepted the $430,000 offer for the property.
Initially, Junga was going to purchase the property and lease it to the hotel. But the partners learned that lenders were probably going to be uncomfortable with that idea because “you’d have perhaps unbalanced leverage, with the small guy holding the bigger guy.”
Now, the plan is for Junga and his son to buy the property and then sell two third of the property to the hotel.
Junga will keep a couple acres to build his store, which probably open in around 2020.
The partners praised Mayor Brian Marl and Councillor David Rhoads for their assistance.
“David Rhoads has done a lot of behind-the-scenes work to help us out. And Mayor Marl has spent some of his political capital with fellow council members to help us get this far,” Junga said.
The support of the city is important.
“Best Western wants to see several things from us. We’ve got an experienced operator in Mark. And we’ve had great support from the City of Saline on this,” Junga said.