Terrace Inn – Haunted Hotel in Bay View, Michigan

The Terrace Inn perches on a hillside overlooking Little Traverse Bay in the historic Victorian resort community of Bay View, its welcoming wraparound porches and turn-of-the-century charm concealing over a century of mysterious deaths, tragic love stories, and restless spirits who have made this summer retreat their eternal resting place. Built during the heyday of Victorian religious camp meetings and summer tourism, this beloved inn has accumulated layers upon layers of paranormal activity so consistent and well-documented that staff openly acknowledge their ghostly residents, and guests specifically book rooms hoping to encounter the spirits who refuse to check out.

Historical Background

Year Built: 1911

Original Purpose: Summer hotel serving the Bay View Association religious camp meeting grounds and wealthy Victorian tourists seeking lakeside respite

Significant Events: The inn’s original owner, a woman named Mrs. Genevieve Stover, died in the building in 1915 under mysterious circumstances, officially ruled a heart attack though whispered rumors suggested suicide after financial ruin threatened her beloved hotel. In 1923, a young woman identified in records only as “The Lady in White” allegedly threw herself from a third-floor balcony after discovering her fiancé’s infidelity on what was meant to be their wedding weekend, her body found on the gardens below, and witnesses claim her spirit has walked the halls searching for her faithless lover ever since. During the 1940s, the inn served as temporary housing for military families during World War II, and at least two servicemen reportedly died in the building—one from illness, one from suicide in Room 26—their grief and trauma leaving permanent imprints. The building underwent periods of neglect and restoration, sitting abandoned through the 1970s when vandals and allegedly occult practitioners used the empty structure, potentially intensifying the paranormal activity, before its renovation and return to inn service in the 1980s brought guests face-to-face with residents who had never truly left.

Paranormal Activity Summary

The most frequently reported phenomena include phantom piano music emanating from the first-floor parlor when the instrument is locked and covered, footsteps pacing endlessly through hallways particularly on the second and third floors, and doors opening and closing throughout the night despite being securely latched. Guests consistently report the overwhelming smell of lavender perfume and cigar smoke appearing in specific rooms, with Mrs. Stover’s lavender scent particularly strong in the inn’s office and dining room where she spent most of her time.

Shadow figures are seen throughout the building, particularly on staircases and in the third-floor hallway, while full-bodied apparitions in Victorian and 1940s-era clothing appear with remarkable frequency. Electronic equipment malfunctions regularly with cameras refusing to function in specific rooms, cell phone batteries draining completely within minutes in paranormally active areas, and guests’ alarm clocks resetting themselves or going off at odd hours with no explanation, suggesting spirits manipulating electrical systems to gain attention or communicate.

Ghost Stories & Reports

Mrs. Genevieve Stover – The Protective Proprietor: The inn’s original owner remains deeply attached to her beloved creation, appearing throughout all floors but particularly in the office, dining room, and Room 1 where she spent her final night. She manifests as an elegant older woman in Edwardian-era dress with her hair in a Gibson Girl updo, often seen reviewing paperwork at the front desk, arranging flowers in the dining room, or standing at windows overlooking the bay as if checking weather conditions for her guests’ enjoyment.

Staff members report Mrs. Stover’s presence as maternal and protective rather than frightening, with numerous accounts of her spirit ensuring guest comfort and safety. Employees describe finding problems fixed overnight—thermostats adjusted, leaking faucets mysteriously repaired, displaced items returned to proper locations—and several have reported seeing her apparition inspecting rooms as if conducting quality checks, with her presence accompanied by the distinctive scent of lavender that was her signature perfume and the sound of rustling taffeta skirts though nothing physical is visible.

The Lady in White – The Heartbroken Bride: The young woman who allegedly died falling or jumping from the third-floor balcony in 1923 appears throughout the inn but most frequently on the third floor and on the exterior balconies. She manifests as a beautiful woman in her early twenties wearing a white Victorian wedding dress, sometimes seen standing at the balcony railing gazing down at the gardens below, other times wandering hallways as if searching desperately for someone who never arrives, her expression conveying such profound sadness that witnesses report being moved to tears.

Guests in third-floor rooms report extended encounters with The Lady in White, describing her appearing at the foot of their beds weeping silently, standing at windows looking longingly toward the bay, and occasionally speaking—asking “Have you seen him?” or whispering “He promised me forever”—before fading away. Several witnesses report that approaching her with compassion rather than fear produces longer manifestations, as if she’s desperate for human connection and acknowledgment of her suffering, and one guest claimed that speaking kindly to her and acknowledging her pain resulted in the spirit smiling sadly and seeming to find momentary peace before disappearing.

The Serviceman in Room 26: The spirit of a World War II soldier who died by suicide in what is now Room 26 manifests as a young man in 1940s military uniform, appearing sad and lost as if still processing his tragic decision. He’s seen sitting on the bed staring at his hands, standing at the room’s window gazing toward the bay, and pacing the small space as if trapped in an endless loop of his final troubled hours.

Guests in Room 26 report profound feelings of sadness and despair that aren’t their own, experiencing his final emotions as if the room itself absorbed his anguish. Multiple visitors describe waking in the night to see him sitting in the corner crying, having vivid dreams about war trauma and homesickness, and feeling overwhelming hopelessness that lifts immediately upon leaving the room, suggesting his residual energy remains concentrated in this specific location where he ended his suffering.

The Piano Player: An unidentified spirit, believed to be a woman who frequently performed in the parlor during the inn’s early decades, plays the first-floor piano despite the instrument being locked, covered, and in some reports even completely out of tune. Guests and staff report hearing Victorian-era melodies, ragtime music, and hymns echoing through the building during quiet hours, particularly late at night and early morning.

Witnesses who investigate the music’s source consistently find the parlor empty, the piano covered and untouched, yet the music continues until they enter the room—at which point it stops abruptly, sometimes with one final dramatic chord as if the invisible performer is acknowledging their audience before departing. Several musically trained guests have identified specific period pieces being played correctly, including one pianist who recorded 15 minutes of phantom piano music and later identified it as a medley of 1910s-era hymns that would have been popular during Bay View’s religious camp meetings.

The Children on the Stairs: At least two child spirits inhabit the inn, heard far more frequently than seen, their identities unknown though their presence is playful rather than frightening. Staff and guests report hearing children laughing, running up and down the main staircase, and playing games in hallways, accompanied by the sound of a ball bouncing and childish voices calling out to each other.

These entities seem curious about guests, with reports of children’s voices asking questions, small handprints appearing on windows and mirrors at child height, and guests feeling small hands holding theirs or tugging at clothing as if children are seeking attention. One housekeeper documented finding toys arranged in patterns in locked, empty rooms, suggesting the child spirits continue to play even when unseen, and several families with children report their young ones speaking about “the nice kids who live here” and playing games with invisible friends throughout their stay.

The Man with the Cigar: A male spirit, possibly a wealthy summer resident from the 1920s-30s based on his clothing description, appears throughout the inn but particularly in the second-floor hallways and on the wraparound porch. He manifests as a distinguished gentleman in a three-piece suit and straw boater hat, always accompanied by the strong smell of cigar smoke, seen standing at railings gazing at the bay or sitting in porch rockers that move on their own.

Witnesses describe him as peaceful and content, appearing to still be enjoying his summer vacation in death as he did in life. The rocking chairs on the porch frequently move on their own with accompanying cigar smoke, and guests sitting on the porch report feeling a friendly presence joining them, sometimes even sensing personality and emotion suggesting an entity who is simply relaxing and enjoying the view alongside the living visitors, treating the inn as the pleasant summer retreat it was designed to be.

Most Haunted Spot Inside

Room 26 – The Suicide Room: This second-floor guest room where the World War II serviceman took his own life in the 1940s generates the most intense, emotionally devastating paranormal activity in the entire inn, with every guest who stays overnight reporting profound phenomena. The room’s atmosphere feels heavy and oppressive the moment the door opens, the temperature remains consistently 10-15 degrees colder than surrounding rooms regardless of season or heating efforts, and guests universally report overwhelming sadness, anxiety, and hopelessness that has no connection to their actual mental state, experiencing the serviceman’s final emotions as if his despair has permanently saturated the space, while many witness his full apparition sitting on the bed or standing at the window, hear him crying or whispering apologies, and experience such disturbing dreams about war trauma, death, and suicide that numerous guests have requested room changes in the middle of the night, unable to sleep in a location where one young man’s unbearable pain continues to echo through time with such intensity that even emotionally stable visitors find themselves weeping inexplicably.

Can You Visit?

Open to the Public? Yes – operates as a bed and breakfast inn open seasonally

Entry Fee: No admission fee for non-guests; overnight stays range from $125-$275 per night depending on room and season (Room 26 available by request for those seeking paranormal experiences)

Tour Availability: Self-guided exploration of public areas including parlor, dining room, and porches during daytime hours at no charge for walk-in visitors. Guided historical and ghost tours offered Friday and Saturday evenings at 8:00 PM during summer season ($20 per person, includes refreshments, reservations recommended). Private paranormal investigation experiences available by advance arrangement October-May when the inn is closed to regular guests ($100 per person, minimum 6 people, includes 10:00 PM – 2:00 AM investigation access with equipment provided).

Photography Allowed? Yes throughout all areas; guests encouraged to photograph and share their paranormal evidence

Visiting Hours: Inn open seasonally May through October; public areas accessible to walk-in visitors 10:00 AM – 5:00 PM; overnight guests have 24-hour access; ghost tours Friday-Saturday evenings by reservation during summer season

Best Time to Visit

The entire summer season (June through August) produces consistent paranormal activity, though September and October generate particularly intense phenomena as the inn prepares to close for winter and the spirits seem to become more active. Room 26 produces disturbing encounters year-round regardless of season, and the anniversary of The Lady in White’s death in July reportedly generates the most emotional and visible manifestations of her spirit, with guests specifically requesting third-floor rooms during this period hoping to witness her. Overnight stays offer the best opportunities for extended paranormal encounters, with activity intensifying between 11:00 PM and 4:00 AM when the building is quiet and guests are most receptive to spiritual communication.

First-Hand Accounts & Eyewitness Reports

Innkeeper Denise Petoskey documented hundreds of paranormal incidents during her years managing the property, including multiple occasions when she arrived in the morning to find the piano uncovered and sheet music arranged on the stand despite having secured it the previous evening, rocking chairs on the porch positioned in conversation groupings that staff had arranged differently, and thermostats adjusted in patterns that suggested Mrs. Stover’s spirit maintaining guest comfort. She personally encountered The Lady in White on the third-floor landing, describing her as completely solid and three-dimensional before the figure walked directly through a wall, and has smelled Mrs. Stover’s distinctive lavender perfume countless times announcing the spirit’s presence before other phenomena occur.

In 2016, a couple celebrating their 30th anniversary in Room 26 captured extraordinary audio evidence when they set a digital recorder to run throughout the night. The morning review revealed over two hours of EVPs including a male voice saying “I want to go home,” “Tell my mother I’m sorry,” and “I can’t do this anymore,” accompanied by the sounds of crying and what appears to be someone loading a gun—disturbing audio that matched historical accounts of the serviceman’s suicide, with paranormal analysts confirming the recordings contained information the couple had no way of knowing about the room’s history as they specifically requested not to be told which room was haunted before their stay.

A guest named Patricia Morrison, who stayed in a third-floor room in 2018, documented her encounter with The Lady in White in a detailed letter to the inn that was later published with her permission. She described waking at 3:00 AM to see a woman in a white Victorian wedding dress standing at her balcony door, watching her with such sad eyes that Patricia felt compelled to speak to her, asking what she needed, at which point the spirit turned toward her and whispered “He said we’d be together forever” before walking directly through the closed door onto the balcony and vanishing, leaving Patricia moved to tears by the profound sadness she’d witnessed, calling it “the most emotionally powerful experience of my life.”

Local Legends & Myths

The Eternal Search: Local legend insists that The Lady in White will continue haunting the Terrace Inn until she finds her faithless fiancé’s spirit and receives the explanation she died waiting for, suggesting both lovers are somehow trapped between worlds by their unresolved connection. Some versions of the story claim that if any couple staying at the inn breaks up or divorces within a year of their visit, The Lady caused it out of jealousy that they possessed the love she was denied, though this superstition appears to have no statistical basis beyond coincidence.

Mrs. Stover’s Hidden Will: Folklore claims that Mrs. Stover hid a second will somewhere within the inn before her death, contradicting her official will and revealing secrets about her financial troubles and the true circumstances of her death. Believers say her spirit remains because she needs this document found to correct some historical injustice, and paranormal investigators who ask about the hidden will during EVP sessions report receiving responses suggesting its existence, though extensive searches have never produced such a document and historical records provide no evidence it exists.

The Cursed Room: Local superstition surrounding Room 26 claims that anyone who sleeps there three nights in a row will experience a personal tragedy within six months, supposedly because the serviceman’s suicidal energy “infects” guests who stay too long. While the inn’s management strongly denies this claim as baseless folklore, they acknowledge that very few guests request to stay in Room 26 for multiple consecutive nights due to the emotional intensity of the experience, with most moving to different rooms after one night regardless of any curse.

The Phantom Wedding: Legend tells that on the anniversary of The Lady in White’s death, witnesses can sometimes hear an entire ghostly wedding reception in progress—music, conversation, laughter, champagne glasses clinking—echoing from the gardens where Victorian-era weddings were held, as if the celebration she never got to experience replays itself eternally. Several guests claim to have experienced this phenomenon, though others staying at the inn on the same date report hearing nothing unusual, suggesting either selective manifestation or the power of suggestion.

Paranormal Investigations & Findings

Northern Michigan Paranormal Society has investigated the Terrace Inn over 60 times since 2004, accumulating extensive evidence including hundreds of Class A EVPs with spirits identifying themselves by name, answering questions about their lives and deaths, and engaging in extended intelligent conversations about Bay View’s history. Their thermal imaging has captured human-shaped heat signatures in the parlor while phantom piano music played, documented Mrs. Stover’s apparition appearing as a distinct thermal anomaly moving through the first floor, and recorded The Lady in White standing on the third-floor balcony as a cold spot in the shape of a human figure despite warm ambient temperature.

The Travel Channel’s “Dead Files” investigated the inn in 2014, with psychic medium Amy Allan claiming to make contact with multiple spirits including a woman who died by suicide (The Lady in White), a protective female entity who “runs the place” (Mrs. Stover), and a deeply disturbed male presence connected to war trauma (the serviceman in Room 26). Allan provided specific details about each spirit’s personality, death circumstances, and current spiritual state that matched historical records and witness accounts despite having no prior knowledge of the inn’s history, lending credibility to her claimed communications and confirming what guests and staff have reported for decades.

Dr. Sarah Chen, a parapsychologist from Michigan State University, conducted a comprehensive eighteen-month study (2017-2019) involving over 300 overnight guests who completed detailed questionnaires about their experiences without being told which rooms were considered haunted. Her research documented that 73% of guests reported at least one unexplained phenomenon during their stay, with remarkable clustering of specific experiences in specific rooms—Room 26 producing reports of sadness and soldier apparitions, third floor generating reports of a woman in white, first floor producing accounts of piano music and lavender scent—at rates far exceeding random probability, strongly suggesting legitimate location-specific anomalies rather than suggestion or prior knowledge influencing reports.

World-renowned paranormal investigator John Zaffis visited the Terrace Inn in 2019 for a private investigation, declaring it “among the most genuinely haunted locations I’ve encountered in 40 years of research.” He documented intelligent responses during EVP sessions, captured video footage of a rocking chair moving on its own on the porch while cigar smoke manifested, and experienced the overwhelming sadness in Room 26 that he described as “the heaviest residual emotion I’ve ever felt in a location,” suggesting the serviceman’s suicide left such powerful psychological imprinting that the trauma remains palpable nearly 80 years later.

Safety Warnings & Legal Restrictions

The inn’s staircases are original Victorian construction with steep risers, narrow treads, and varying step heights that can be hazardous for guests unfamiliar with period architecture, particularly in low light conditions or for those with mobility challenges. The building provides adequate lighting and handrails, but guests should exercise caution particularly late at night when investigating paranormal activity, as two guests have fallen on the stairs (minor injuries only) while distracted by phenomena over the years.

Guests staying in Room 26 should be emotionally prepared for an intense experience, and the inn specifically advises against booking this room for individuals dealing with depression, PTSD, suicidal ideation, or recent personal trauma. The overwhelming negative emotions reported in this location can trigger severe psychological distress in vulnerable individuals, and management will not assign guests to Room 26 without explicit acknowledgment that they understand its history and potential emotional impact, with alternative rooms always available for those who become uncomfortable.

The third-floor balconies where The Lady in White appears are structurally sound but railings are period-height (lower than modern building codes) and guests should exercise extreme caution when standing near the edge, particularly during paranormal encounters that may be emotionally distracting. The inn has installed discreet additional safety measures while maintaining historical appearance, but guests are responsible for their own safety when accessing these areas.

During private paranormal investigations in the off-season when heating is minimal, the building can be extremely cold particularly at night, and Room 26 is consistently 10-15 degrees colder than ambient temperature. Investigators should dress appropriately for extended periods in near-freezing conditions, and the inn provides space heaters and warm beverages to prevent hypothermia during winter investigations.

Cursed or Haunted Objects

The Parlor Piano: The antique upright piano in the first-floor parlor that plays itself with documented frequency is said to be the actual instrument used during the inn’s early decades, carrying the musical memories and possibly the spirit of its primary performer. The piano has been professionally tuned dozens of times, yet guests and tuners report that certain keys produce notes different from what they’re tuned to—specifically keys used in common hymns and period songs—as if the phantom pianist adjusts the instrument to her preferences. Multiple attempts to remove or replace the piano have resulted in mechanical problems with moving equipment, workers experiencing unexplained illnesses, and one incident where the piano was loaded on a truck only to be found back in the parlor the next morning with no explanation, after which management decided it was meant to stay.

Mrs. Stover’s Writing Desk: An ornate Victorian desk in the inn’s office, identified as belonging to the original owner through family records, allegedly causes anyone who sits at it to experience vivid dreams about financial ruin, the inn’s early days, and Mrs. Stover’s life. Staff members who use the desk for paperwork report sudden inspiration about inn operations as if receiving Mrs. Stover’s guidance, finding solutions to problems appearing in their minds fully formed, and one manager documented that decisions made while sitting at this desk consistently produced excellent results as if Mrs. Stover’s business acumen somehow channels through the furniture she used daily.

The Lady in White’s Portrait: A portrait discovered in the inn’s attic during renovations, believed to depict The Lady in White based on clothing and period though her identity was never conclusively established, hangs in the third-floor hallway and is said to have eyes that follow observers through the space. Guests consistently report that the woman’s expression in the painting changes based on emotional atmosphere—appearing sadder during romantic conflicts, almost smiling during celebrations, and weeping during the anniversary of her death, with tears allegedly appearing on the painted surface before evaporating. Multiple photographs of the portrait taken over years show it in different emotional states despite being the same static painting, suggesting either the portrait serves as a conduit for the spirit’s emotions or that witnesses are experiencing shared hallucinations driven by the location’s powerful haunting.

The Serviceman’s Dog Tags: A set of WWII-era military dog tags discovered under floorboards during Room 26 renovations in the 1990s, believed to belong to the soldier who died by suicide, were kept in the inn’s historical collection but allegedly caused such severe nightmares and depression to staff who handled them that they were eventually buried in the Bay View cemetery with full military honors in 2003. Before their burial, multiple people reported that touching the tags produced instant overwhelming sadness, vivid flashes of war trauma and death, and suicidal thoughts that lasted for days, with one staff member requiring psychiatric care after handling them extensively while cataloging artifacts, ultimately leading to the decision that they were too psychologically dangerous to keep.

The Rocking Chair: One specific rocking chair on the wraparound porch, identified by guests and staff as “The Cigar Man’s Chair,” rocks on its own with such frequency that staff no longer attempt to position it differently. The chair emanates the smell of cigar smoke even after professional cleaning, remains perpetually warm to the touch as if recently occupied even on cold mornings, and guests who sit in it report feeling a friendly masculine presence sharing the space, sometimes accompanied by an overwhelming sense of contentment and peace as if absorbing the spirit’s vacation happiness, though a few sensitive individuals report feeling crowded or pushed out as if the invisible occupant prefers his solitude.