Lakeshore Drive runs along the top of a 60-foot bluff south of Saugatuck, and for 38 years it has not gone all the way through. A storm in 1988 took out a stretch between Wiley Road and 126th Avenue, and the gap has stayed. Houses north of the washout reach the world one way; houses south of it reach it another; emergency vehicles coming from the wrong side go around. The Allegan County Road Commission has a $9.2 million proposal to replace the broken stretch with a new road farther inland. The engineering is at the preliminary stage, the environmental review and land purchases are still ahead, and the federal grant the plan depends on was turned down this summer.
What the lake has done
The 1988 washout was not the last. In the winter of 2019 and 2020, with Lake Michigan at record highs, a sinkhole about ten feet across opened in the pavement, the road could no longer safely carry heavy vehicles such as fire trucks, and twelve homeowners could not reach their properties. Jim Storey, then chair of the Allegan County Board of Commissioners, went to a state House subcommittee in February 2020 to ask for help and put the choice plainly: about $800,000 for a temporary fix or about $5 million to move the road, according to WWMT's coverage of the hearing. Saugatuck Township fire chief Greg Janik has said emergency runs to addresses south of the washout took 42 percent longer on average in 2017 than a direct route would have, the Commercial Record reported. Saugatuck Township's project page says the washouts have claimed two lives; it gives no dates or details.
The pavement sits anywhere from five to 100 feet from the edge of the bluff along a 2.25-mile study area between 126th Avenue and the township line north of Wiley Road, with the houses on the inland side looking across the road at the water. There is no second way in for properties north of M-89 or south of Wiley Road, the Road Commission's project description says.
The plan: 69th Street
Rather than armor the bluff, the Road Commission chose what engineers call managed retreat. A 2022 feasibility study and a 2023 site investigation, both paid for by Michigan Coastal Management Program grants through EGLE, weighed four options: do nothing and close the road when it fails; build 1.6 miles of stone revetment along the bluff; build a new road directly behind the lakefront houses; or build a new road farther inland on the section line and connect neighborhoods to it over time. The section-line road won, and it has a name already: 69th Street. The exact alignment is not final.
The design, from the Road Commission's September 2025 answers to residents' questions, is two 11-foot lanes with 6-foot shoulders, part paved and part gravel, a 34-foot roadway in all, plus a separate 10-foot path for walking and biking on the west side with a strip of preserved trees between them. It would run from 126th Avenue to 130th Avenue (Wiley Road), with three connector spurs out to the homes that have no other access. The design speed is 55 mph under state and AASHTO rules; the posted limit would be set later, possibly after a speed study. It is sized for about 2,000 vehicles a day, which is roughly what Lakeshore Drive carries south of 124th Avenue now. The route needs right-of-way from a number of private parcels, and the Road Commission expects no one to be displaced. Township manager Daniel DeFranco has said that once every parcel has access to the new road, the old Lakeshore Drive right-of-way could become a non-motorized linear park, the Commercial Record reported.
The money
The proposed funding package in the Road Commission's federal application totals $9.2 million: $7.4 million requested from the U.S. Department of Transportation's BUILD program for construction, and $1.8 million from Michigan and local sources for right-of-way ($700,000), design ($200,000) and contingency ($900,000). That $1.8 million would come from the Michigan Infrastructure Office's technical assistance fund ($1 million), the Road Commission ($550,000) and Saugatuck Township ($250,000), and the budget describes the state and township shares as contingent on the federal award. Construction cost estimates were refreshed in January 2026. The Michigan Infrastructure Office's own February 13 support letter puts the total at $9.4 million and the federal request at $7.6 million, a discrepancy the Road Commission has not explained publicly.
The Road Commission went after federal money twice. Managing director Craig Atwood told WHTC in December 2024 that landing funding for what was then an $8 million project was the agency's top goal for 2025 and that an application would go in the following month, the station reported. Saugatuck Township's board had voted on November 13, 2024 to back the effort. The application posted on the Road Commission's site is labeled a February 2026 resubmittal, with support letters that month from Rep. Bill Huizenga (February 5), the Michigan Infrastructure Office, Senators Gary Peters and Elissa Slotkin, state Sen. Aric Nesbitt, the Allegan County Board of Commissioners and Saugatuck Township, which passed a resolution of its own.
It did not get the grant. USDOT announced $1.73 billion in BUILD awards to 127 projects on July 7, 2026, and Reconnecting Lakeshore Drive is on the department's list of 2026 Projects of Merit, the applications that reached the highly rated tier and were not selected. The Road Commission has posted USDOT's rating sheet: a merit rating of Recommended, with High marks on economic competitiveness, environmental sustainability and partnership, Medium on the other five criteria, a Low Risk review, and a Highly Rated designation from the department's senior review team. Whether the project goes back in for the 2027 round, or another source of money has turned up since July, the Road Commission has not said publicly.
What happens next
The application says the federal environmental review began in January 2025 and projected clearance by September 2026, with right-of-way purchases in 2027 and 2028 and construction starting and finishing in 2029 if a grant came through. September has passed; the Road Commission's project page does not say whether clearance has been issued. The Road Commission's September 2025 FAQ promised a public meeting once the environmental assessment was formally under way and a 30-day comment period on the finished document; neither has been announced there. Until then, the gap in Lakeshore Drive stays where it has been since 1988, and the Road Commission's project page at alleganroads.org is where the studies, letters and updates live. If you live on either side of the gap and have news of the project, tell us.
