Independent Bank is seeking a court-appointed receiver to take over parts of the $85 million Adelaide Pointe development in Muskegon, alleging developer Ryan Leestma defaulted on millions in loans and can no longer manage the project’s mounting financial and regulatory issues.
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A major lender is suing to take control of key assets
Independent Bank filed a complaint in Kent County Circuit Court requesting immediate appointment of a receiver over its collateral, which includes the incomplete condominium building on the northwest end of Adelaide Pointe.
The bank alleges that Leestma and his companies violated their loan agreements by failing to pay back over $17 million in promissory notes that matured in July. According to the complaint, Leestma lacks the “financial wherewithal” to complete the project, leading the bank to take legal action to protect its collateral.
The project faces significant unpaid debts and taxes
An investigation by Independent Bank uncovered numerous financial problems beyond the defaulted loans. The complaint details over $200,000 in unpaid and delinquent real estate taxes owed on the property. Additionally, the project is entangled in a $76,500 lawsuit filed by a contractor and faces over $400,000 in unpaid invoices to various professional service providers. The bank argues these mounting debts demonstrate the developer’s inability to manage the project’s finances and complete construction.
Adelaide Pointe blames sales delays, not mismanagement
Recently appointed Adelaide Pointe CEO Aubrey Glick pushed back against the bank’s claims, asserting that the issues are confined to the condominium building and will not impact other business units, employees or customers tied to the development. She attributed the slow pace of condo sales to nine months of construction delays and the unavailability of a demo unit to show prospective buyers.
Glick stated she “whole-heartedly” disagrees with the bank’s appraisal and anticipated sales would increase once a demo unit was available. She expressed confidence that the bank remains committed to the project’s success.
The development has a documented history of environmental and legal troubles
The project’s financial woes are compounded by a history of regulatory and legal conflicts. Leestma received four violation notices from the Michigan Department of Environment, Great Lakes, and Energy (EGLE) for issues including improper dredging that caused sediment plumes in Muskegon Lake, unauthorized marina expansion and destroying wetlands.
He also recently settled a year-long legal battle with a contractor over a nearly $1 million lien for unpaid work, and another contractor had filed a lien for over $66,000.
Leestma has already stepped down due to controversy, scaling back future plans
Leestma stepped down as CEO of Adelaide Pointe after a letter he wrote to the U.S. Environmental Protection Agency blaming the project’s woes on Gov. Gretchen Whitmer’s “radical environmental and anti-capitalist policies” was made public.
While he remains the owner, he has shelved plans for additional development stages, including a hotel, restaurant, and more condos. Leestma cited the toll public criticism has taken on him, stating he felt “bullied to the point where it’s just not good for my mental health.”
Generative AI was used to summarize takeaways based on an originally reported story. It was reviewed and edited by MLive.