ESCANABA — An investigation into funds that went missing during a failed attempt to redevelop the site of the former Delta County Jail is still ongoing, according to the city of Escanaba.

“It has been absolutely ruled out that anyone from the city was involved in anything,” said City Manager Patrick Jordan. ” … There’s been no evidence, no implication, nothing that anyone at the city was involved.”

Citing the investigation is still open, Jordan declined to comment further on the case, which is being investigated both by Escanaba Public Safety and the FBI.

Around $29,000 worth of funds related to a state grant went missing during the city’s relationship with Proxima Management Group, which had publicly stated its intent to build a $23 million development on the sites of the former jail and Delta County Chamber of Commerce. The project included a $13 million hotel, as well as mixed-use retail and residential spaces.

Things went sour between the city and the developer in 2021. In September of that year, the city sent a letter notifying Proxima it was exercising the 60-day notice of termination required by the agreement between the two parties. At that time, the city had had no contact from Proxima for about eight months and no demolition work had taken place at the jail site.

“Regardless of the COVID-19 pandemic, the council members felt that due to the lack of any progress for two years on the removal of the old county jail, and the absence of any communications from the developers for many months, that the agreement between the City and Proxima should end,” a press release issued to announce the termination read in part.

While the ongoing investigation by the FBI has included work in both Michigan and California, Proxima itself is based in Indiana. A search conducted by the Daily Press revealed the company is still actively registered as an LLC to an address that has been associated with eight other LLCs over the past six years. Of those LLCs, only Proxima and two others — a motel and a holding company — are still active.

The address itself is the address of the motel in Portage, Ind.

Despite the failure of the city’s agreement with Proxima, interest in developing the site for a hotel property has not stopped. Following the termination of the Proxima agreement, the city sought proposals for the redevelopment of the properties and two potential ­developers presented plans for hotels at the site. However, after the city administration recommended awarding the project to a developer from Lower Michigan that was planning a hotel, the three remaining developers — all of whom were from Delta County — decided to present a combined plan to the council.

The new combined plan still included a hotel project on the old jail site, but because it was not presented through the request for proposal process the council did not know if it could legally accept it.

On the advice of new City Attorney Lisa Vogler, the city changed course and began the process of putting the land up for sale at the May 5, 2022 meeting.