An $80M cleanup made Muskegon Lake trendy. Will ‘eco-gentrification’ follow?

MUSKEGON—New luxury homes, yacht slips, and trendy hotels and restaurants are cropping up along the glittering waterfront of this west Michigan city.

Nothing unusual for the Lake Michigan coast, long known for beach towns that cater to summer vacationers and wealthy second-homers. But to those familiar with Muskegon’s blue collar history, it’s a stunning transformation.

Not long ago, the shore of the 4,232-acre Muskegon Lake, a drowned river mouth that connects the city to the big waters of Lake Michigan, was so fully dominated by polluting factories that you could tell which ones were operating by the color of the water that day. It took decades of activism and more than $80 million to repair the damage, mostly on the public dime. 

The result is a lake with cleaner water, a gentler shoreline and better habitat for fish and wildlife. Good for swimming, fishing, boating and — for investors with the means to buy the land that industry left behind — capitalizing on the view.

“Are you looking for the ultimate first-class waterfront community?” asks an advertisement for Adelaide Pointe, one of several new developments cropping up on vacant former factory sites. 

A two-bedroom condo there lists for upwards of $700,000.

To many, the lake’s emerging cachet is something worth celebrating. It brings people, tax revenue and other benefits to a shrinking city of 37,000 people, where the median household income is nearly $25,000 below the state average. 

But Jen Sanocki and many of her neighbors feel conflicted. They look at the new homes, marinas and vacation rentals catering to wealthy out-of-towners, and wonder who, exactly, was meant to benefit from the cleanup that taxpayers funded.

“It’s going to bring some economic value to my neighborhood and Muskegon in general,” said Sanocki, president of Muskegon’s Nims Neighborhood Association. “But it does kind of feel like we’re creating a gated community on the water.”

Muskegon Lake and its namesake city are at a familiar crossroads for Great Lakes manufacturing communities that, after decades of industrial abandonment, suburban flight and economic malaise, have been made marketable again thanks to a massive publicly funded cleanup of the region’s most polluted waterways.

It leaves residents, policymakers and developers to grapple with a tricky question: Can cities like Muskegon embrace the wealthier newcomers who now want to live there, while ensuring that residents who endured the city’s darkest years get a fair share of its brighter future?

From ruin to rebirth

This story is part of a Great Lakes News Collaborative series examining the region’s “blue economy,” a term used to describe communities whose wealth is derived from and dependent upon water.

The term inspires visions of people living in harmony with nature. But for much of the Great Lakes’ modern history, it meant letting industry exploit the region’s abundant water for profit, with little concern about the consequences. 

Fishing species out of existence. Carving shipping channels to connect the Great Lakes to the ocean, which opened a gateway for invasive species. Building shoreline factories to easily access shipping routes, and then dumping toxic waste in the water.

Like many other Great Lakes waterways, Muskegon Lake became a casualty. 

“The stink from factories was the smell of money, as people referred to it,” said Alan Steinman, who has spent decades studying the lake and is the Allen and Helen Hunting Research Professor at Grand Valley State University’s Annis Water Resources Institute. 

Lumber barons built mills on the waterfront starting in the mid-1800s and then filled in the shallows with sawdust and debris until the lake had shrunk by 16%. When there was nothing left to log, heavier industries moved in: steel, paper, a coal-fired power plant and factories building car engines and war machines. 

Many of those who could move, did. Amid white flight to the suburbs, Muskegon’s white population dwindled from 98% in 1940 to 55% today. Those who couldn’t move — either because of their economic circumstances or racist housing policies — remained in the shadow of industry.

The lakeshore was so ugly and unsafe, Muskegon was built with its back to the water.

City Manager Jonathan Seyferth, a longtime resident, spent his childhood swimming at what’s now the local Boys & Girls Club, without realizing it sits on waterfront property. Virtually all of the windows faced inland.

“The lake was an afterthought,” Seyferth said. “It was a resource that we used.”

The Clean Water Act of 1972 ended the era of unregulated dumping, but it would take decades more to recover the water quality and habitat that had already been destroyed.

The United States and Canadian governments added Muskegon Lake to a list of 43 Great Lakes Areas of Concern — the region’s most degraded waterways — and partnered on cleanups with a citizen group known today as the Muskegon Lake Watershed Partnership.

As industry gradually retreated from the lakefront, those partners stepped in to dredge contaminated sediments, excavate hundreds of millions of pounds of industrial debris, plant trees and reopen wetlands. 

In the early days, a cleaner lake seemed so out of reach, “we had to prove to people that it was even possible,” said Kathy Evans, a longtime member of the watershed partnership. 

“They had to see it to believe it.”

But after several decades and more than $80 million (mostly federal dollars with other public and private sources mixed in), the lake is now clean enough to remove from the Areas of Concern List — and for a new debate about how its future should look. 

Who benefits?   

On a macro level, cleaning up Muskegon Lake has been an economic boon for Muskegon.

Researchers at Grand Valley State University found in 2018 that the local economy had enjoyed a 6-to-1 or better return on investment, including rising housing values and more tourism. The rate of return is climbing higher as developers remake the lakefront.

But in a working class city that is 30% Black, some fear the benefits of Muskegon Lake’s cleanup are accruing primarily to wealthy, mostly white newcomers while racial minorities and low-income residents get pushed out of the newly desirable neighborhoods. 

There’s a term for the phenomenon: “eco-gentrification.”

“There’s a lot of perceived positives” stemming from the lakeshore’s redevelopment, said Marria McIntosh, who leads an anti-gentrification nonprofit called Thredz Inc. “But how can our community benefit from it?”

No fewer than four major residential or mixed-use developments are planned or underway on the former industrial sites along the water, most of them made possible with the help of state and locally public incentives. When finished, they’ll boast a combined thousands of housing units and investments approaching $1 billion. For-sale signs have cropped up on other properties.

Ryan Leestma, who owns the Adelaide Pointe development on the site of a former steel foundry with his wife Emily, said the new condos, marinas, breweries and other amenities, help Muskegon compete with other waterfront cities that have built their economies around a wealthier clientele. 

“We have more beaches than anybody else. We have more state parks than anybody else,” said Leestma. “But certain demographics wouldn’t go to Muskegon because there wasn’t premium product.”

Amid Muskegon’s newfound popularity, the city’s average home value has skyrocketed from $109,000 in April 2020 to $174,000 today. 

The average resident’s paycheck hasn’t grown in equal measure, leading to worsening income inequality and housing affordability issues that have been made worse by investors buying affordable homes in the neighborhoods near the water and flipping them into vacation rentals.

The risk is “a glittering lakeshore in one corner of the city, and then in the other corner you’ve got a bunch of houses in ruins and dilapidated infrastructure,” said Amanda Buday, a Grand Valley researcher who has studied residents’ attitudes about the Muskegon Lake cleanup. 

A push for access and affordability

Another key tension point: How to ensure the average person can easily access the cleaner lake their tax dollars paid for, when the shoreline is ringed almost entirely by private property.

For decades, many of the vacant former factory sites along Muskegon Lake were treated as de facto parks, accessible to anyone who cared to wander in with a fishing pole. But recently, fences have been erected on the perimeter of some, while others have filled in with homes and boat storage garages. 

“It’s a huge topic,” said Sanocki, the neighborhood association president. The lake’s cleaner image means “people want to look at it, people want to be at it, people want to see it. People want to touch it.” 

City officials too have a desire for more public parks and beaches, Seyferth said. But they can’t force investors who bought the former factory sites to maintain unlimited access just because their predecessors did. 

“If the city was able to fork over a couple million bucks, we could go buy a piece of property and it wouldn’t be a problem,” Seyferth said. “We can’t afford to do that, so it ends up being more piecemeal.”

Instead, the city is mulling new public access requirements for waterfront developments, and has teamed up with the local chamber of commerce and other allies to persuade developers that open waterfronts are good for business. At Adelaide Pointe, for instance, the Leestmas have agreed to open their shoreline to the public in exchange for permission to use the municipal marina’s boat ramp and lift.

At another planned development called Windward Pointe, on the 122-acre site of the former Sappi paper mill, city officials negotiated public features like boardwalks and fishing docks and an option to buy several lots for a public park. 

And they recently unveiled a vision to expand the public lakefront near downtown Muskegon by swapping a city-owned campground for part of a property that now houses a boat storage facility, and then buying additional land from a shipping port company. 

City officials are also trying to combat gentrification by building affordable housing on city-owned lots and capping the number of short-term rentals allowed in Muskegon. 

“We’re starting to see Muskegon mentioned in the same breath as Grand Haven, Holland, Traverse City and Ludington when it comes to places that people think of vacationing and being on the beach,” Seyferth said. But avoiding negative consequences for longtime residents is “something we’re really conscious of.”

McIntosh said while it’s encouraging to see developers making portions of their properties accessible to the public, it’s not a substitute for truly public land. She wonders whether low-income and minority Muskegonites will feel welcome. 

“If I’m walking down that sidewalk and I’ve got my 5-gallon pail, and I’ve got my fishing rod, and I’ve got my cutoff shorts and my white T-shirt that is not so white anymore … and you in your $700,000 house are looking out your window, and you see me,” she said, “public don’t seem so public at that moment.”

The past is never far behind

Those who pushed for Muskegon Lake’s recovery say they’re now focused on protecting the investment taxpayers made in a cleaner lake, while managing new environmental challenges that the cleanup program was not designed to address.

Climate change is warming the water and fueling toxic algae blooms. PFAS foam showed up last year, its source unknown. And the new wave of shoreline development raises the potential for habitat destruction and polluted runoff from chemically-fertilized lawns, rooftops and parking lots.

“I just hope that we don’t have any more of our restored habitat ruined,” Evans said.

She was referring to Adelaide Pointe, which has been cited by the Michigan Department of Environment, Great Lakes and Energy (EGLE) for violations including dredging the lake bottom, damaging wetlands and covering a habitat restoration project with rock rubble.

Many Muskegon residents were angry about the violations — a furor that only grew when they learned of a March 7 letter in which the owner, Leestma, begged a top Trump administration official to “override” EGLE’s authority.

Writing to EPA Administrator Lee Zeldin, Leestma complained of being “targeted” by state regulators and implied Muskegon residents should be thankful for his development. He called it “sorely needed,” while comparing Muskegon to Detroit and Flint and falsely claiming it has “half the education and half the median income of the rest of the state.” 

Muskegon’s household income is 65% of the state average. It has a slightly lower percentage of high school graduates than the state average, and half as many bachelor’s degree holders.

McIntosh, the anti-gentrification advocate, saw the letter as offensive but unsurprising.

“That’s the kind of mindset that people bring,” she said. “Like, ‘you should be happy we’re doing anything in your broke community… and most of the developers feel that way.’”

Leestma eventually reached a settlement with EGLE that requires him to repair some of the environmental damage, and imposes fines that vary from about $200,000 to $500,000 depending how thoroughly he complies. 

He may have a polarizing personality, he told Bridge Michigan, and he regrets the letter. But he sees his development as a step toward a prospering Muskegon that has “room for everyone.”

“If this site was totally fallow and there was nobody here, there’s no spending going on whatsoever,” he said. “But I can tell you, there’s 200 more employees now than there were a year and a half ago.”

Unfinished business, unresolved debates

Meanwhile, the legacy of Muskegon’s industrial past still looms over the effort to remake the rest of the waterfront.

At the former Sappi paper mill property, redevelopment plans call for a mixed-use district with housing, a marina, shops and parks. But first, someone needs to clean up the pollution Sappi left in the soil and groundwater, including PFAS and explosive levels of methane. Taxpayers are again dipping into their pockets, this time with a $15 million state cleanup grant.

Rory Charron, chief operating officer for developer Parkland Properties, said the company has experience making dirty sites clean and usable again. The long-term goal, he said, is “doing something safe and meaningful for Muskegon and West Michigan, which will serve as a catalyst for future economic growth and development.”

While she watches that process play out, Evans is keeping an eye out for opportunities to shield more of the lakeshore from development. A “for-sale” sign recently cropped up on a wooded wetland where a creek drains into Muskegon Lake.

“We should get that,” she said, before listing off all the potential benefits for fish, wildlife, and the public. 

She knows Muskegon’s economic fortunes and development patterns will only keep changing, and debates about the benefits and drawbacks of those changes aren’t going anywhere. 

But amid it all, she said, she hopes that “people in the future feel like they belong to the lake, rather than the lake belonging to them.”

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