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May 29, 1971 - Image 4

Resource type:
Michigan Daily, 1971-05-29

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Story of Campus Inn...

EDITOR'S NOTE: This article was
researched and written -hy eight
University graduate students-.Jana
itommersbach, Linda Busby, Bruce
Curie, Nellie Dixon, Susan Holtzer,
Karl Mnttnla, Tnm Seymnnr and
Terrell York. Mark Dillen, a Daily
night editor, assisted in the article's
rapid growth of the Ann Ar-
bor area in recent years, the
name John Stegeman evokes
thoughts of wealth and power.
And with good reason. More
than any other individual, John
Stegeman has been involved in
the expansion of Ann Arbor's
buildings and capital in the past
15 years,
Today, you cannot drive across
town without passing his Charter
Realty apartment buildings and
properties, office buildings anl
hotels. They give every sig:s of a
prosperous and diverse enter-
prise, an impressive test-atent
to one man's efforts.
Yet, despite his wealth and
power, all is not well for Stege-
man. He is plagued by law suits
totalling over $4.5 million, sever-
al local religious leaders are an-
gry with him and some local
Democrats would like to find P.
convenient way of putting him
out of operation. This is at least
partially due to the project which
was to be his crowning achieve-
ment: Campus Inn.
This hotel, whose white ex-
terior is set off by a row of Big
Ten pennants, corns co'mplete
with bar and cocktail lounge.
From its plush, r'd-carpeted
lobby, visitors can sip liquor and
look across the street at the First
United Methodist Churc. The
Grace Bible and Fir..t Baptict
Churches are nearby and, -itht
next door-like a .rey relic
from another age-is v building
used by the University School of
The story of Campus Inc. began
in 1965, when Stegeman gave up
an attempt to expand the pro-
fitable Bell Tower Hotel, and
turned his sights to the location
on Huron and State Sts. By 1967,
the Campus Inn Corp. -- con-
taining relatives and his lawyer
but based only on Stegeman's
money - had acquired several
lots to form an L-shap'xI parcel
whose total value, based on the
assessed valuation, was at least

loading of guests and luggage,
although this same requirement
had been waived for Ann Arbo:"'s
Sheraton Inn. DBSE issued a
stop-work order on th-3 Campus
and got, was a waiver by the
city Zoning Board of Appeals.
The Board, confronted with an
accomplished fact, apparently ce-
cided enforcing setback require-
ments would be impractical.
But in addition to blodoing too
far forward, Stegeman was dis-
covered to be building too far
west. In fact, his deiveway and
entrance canopy wsre three feet
onto the adjoining property be-

then-councilman Nicholas I1azar-
inoff and Mayor Robert Harris,
Stegeman assured the commis-
sion he did not intend to apply
for a liquor licen e.
Church officials remained e^,n
cerned; they say now they nid not
trust Stegeman.
As Stegeman was making pro-
mises back home, he was also
working in Lansiig for a chage
in the proximity law.
On Feb. 10, 1969 lie wrote to the
city administrator requesting
consideration for Ann Arbor's
sole available liqior license.
"... there is a movement under-
way," he wrote, "to gain differ-
ent treatment for conference-

the Council three days after Mil-
liken signed the bill into lawv,
Stegeman's attorney, Henry T.
Conlin, did just that.
"This beautiful new hotel has
been almost completed," Conin
wrote, "and we expect to have
same open in January if 1970.
We are extremely interestedl, Ls
part of our services to the coin-
munity, to have a Class B Hotel
Liquor License."
There were three hurdlc a left
between Stegeman and his li-
First, he had to appear before
the city's Special Liquor Commit-
tee. Then, their recommendation
was sent to the whole council,

ties. Era Interiors of Roseville,
and the R. & E. Dailey Co., con-
tracted to provide the facilities
at a cost of $58,000.
But Stegeman found himself in
trouble with DBSE once again.
He had neglected to apply for a
building permit for his hoped-
for bar.
On Mar. 18, DBSE threatened
Stegeman with another stop-work
order, and construction halted
for nearly a month,
Finally, on April 15, a bailding
permit was issued to the Campus
Inn for construction of the pro-
posed bar.
The next day, City Council's
Special Liquor Committes met to
consider Campus Inn's applica-
tion for a liquor license. At thit
meeting, Stegeman for the first
time was confronted by opposi-
available license in . hi city.
But there were also 26 patient
applicants whose requeats pre-
ceded that of the Campus Inn.
And there was Kazarinoff, who
launched a broadside at Stege-
man himself.
The meeting is difficult to re-
construct because formal minutes
are not kept. As City Clerk Har-
old J. Saunders remembers it,
both Stegeman and Conin were
present and participating in the
Kazarinoff said he did not op-
pose granting a liquor license to
the Campus Inn; he oppocsed a
liquor license for John C. Stege-
man. He cited Stegeman'.sulti-
ple building violations, tickets
and fines from DBSE, and raid,
in a prepared statement:
"To sell liquor under licen
from the State of Michigan is to
hold a trust. Those holding this
trust must be, before all 'No,
honest and law abiding. I submit
that the public record of this city
proves that John C. Stegeman
has been dishonest and a lass
Fifth Ward Democrat Henry
Stadler was absent from the
committee meeting. Kazarinoff
voted no. The other members,
Roy E. Weber (R-fourth 'wairl)
and H.C. Curry (D-first ward)
voted yes. Stegeman had won an-
other round. (The 26 applicants
in line before him were apparent-
ly not considered. In fact, they

longing to the Staffn anFuneral
Once again, DBS2 issued a
stop-work order. And once again,
Stegeman had his way by set-
tling the matter out of court for a
reported sum of $7,000, though
Staffan declines to discuss par-
ticulars. And conscruction pro-
Stegeman h a d comple:ed
stage one. He had 215 roonis but
no liquor license-an 'ulnost cer-
tain parlay to financial disaster

The sense of the meeting, explains the Rev.
Hoover Rupert, was "we'd been had!" Their
anger was directed at Stegeman, more than
liquor-and had Stegeman not been involved,
Rupert says, "I don't know what the vote would
have been."

On February 17, 1967, an initial
building permit was acquited "to
build a 215-room hotel," at a pro-
posed cost of $2,700 000. Con-true-
tion began soon afterward.-
Theoretically, with a certain,
amount of land, you can only put
up so much building. No so for
Stegeman. He built first. and
worried about boundtries after-
With construction already un-
derway, the Department of Build-
ing and Safety Engineering
discovered the hotel was being
erected too close to the sidewalk.
Hotels are expected to be set
back to permit loading and un-

Since the Sheraton INn had failed
with a :iecense, the chancs for
a "dry" hotel eemed almost
Until the end of 1969, state law
positively forbade the serving 'of
liquor within 500 feet of any
church or school. The Campus
Inn is within 300 feet of three
churches. Althogh the law was
clear; people were already un-
easy. It was difficult to believe
in the reality of a day "usiel.
Very early on, the question was
raised at a meeting of the City
Planning Commassion, by the
Rev. Kendall Cowing of the First
Methodist Church. According to

convention hotels in terms of the.
500 foot rule."
Two days later, sta e Sen. Gl-
bert Bursley (R-Ann Arbor) in-
troduced an amendment to the
proximity law which permitted
the licensing of liquor establish-
ments within 500 feet of churches
unless the churches voiced ob-
An even more lenient bill, in-
troduced a month late: iin the
House by Rep Antony Wierzbicki
(D-Detroit), was finally passed
by both houses. It require) only
that churches be notified v.hen
licenses are granted within 500
feet and that the state Liuor
Control Commission hold a w ar-
ing if .the churches filed a omi.1
AS THE BILLS went through
the legislature, Stegeman
traveled to and from Lansrng,
talking to legislators and testify-
ing before the Senate Commnecce
Committee, to which Bussley's
bill had been sent.
Commerce Committee Chair-
man Sen. Harvey R. Lodge re-
members "feelings ran higis"
over the amendment. RangeA on
one side were hotel and restaur-
ant interests and people in er-
ested in the convention bisminesc.
Standing on the other side, with
a finger in the dike, stood the
Michigan Council on Alceh'tl
Problems (MICAP)- the 'ca-
while M i c hi g a n Temperance
League. The name change ap-
parently signaled a similar
change in emphasis: MICAP
soft-pedaled moral and aeligleus
objections and concean:rat( 'f its
fire on rising alcoholiass. This
time, they lost.
Robert Hammond, MCAP's
executive director assdI chief lob-
byist, maintains that legislators
promised no licenses would be
issued over church objections.
But the bill, signed by Gov. Mli-
ken in December of 1969 gave
broad discretionary powers to the
state Liquor Control Commission
and set no limitations on their ac-
tions. And so the first big leg-il-
hurdle had not only been cleared
but demolished.
Now Stegeman could request
the liquor license. In a letter to

which would approve or reject
it. Finally, the license could 'hen
-but only then-be grantedl by
the state Liquor Control Com-
mission. That Commission can
act only on recommendations
from local" governments ; they
cannot grant a license on their
The hotel opened on schedrle
in Jan. 1970, and shortly the'e-
after, before any action was
taken on the liquor license, work
began on dining and bar facili-

420 Maynard Street, Ann Arbor, Mich.
Edited and managed by students at the
University of Michigan
Editorials printed in The Michigan Daily express the individual
opinions of the author. This must be noted in all reprints.
Saturday May 29, 1971 News Phone: 764-0552

of Charter Realty, Stegeman's realty company and home of
Stegeman's financial operations. Secretive about his financial
affairs, Stegeman has declined requests for interviews and makes
few public comments on his business practices.

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