As reported in Crains Detroit Business, "an abandoned eyesore across from Grand Traverse Resort springs back to life". A long-abandoned retail site across the street from Grand Traverse Resort and Spa is roaring back to life, with two formerly empty big box stores almost fully leased out and a major residential development springing up around it.
Strathmore Real Estate Group of East Lansing, Michigan is redeveloping the site in Acme Township, just north of Traverse City and right across U.S. 31 from the famed golf resort. The reborn site, called Oak Shore Commerce Park, has nearly leased out 135,000 square feet of empty retail space and is partway through building nine new three-story apartment buildings with a total of 171 units on what had been 22 acres of parking lot.
Two apartment buildings are built and totally rented, three more are scheduled to be finished this summer, with four others are set to begin construction then. The apartments will be known as Oak Shore Commons.
According to Strathmore CFO Jacob Chappelle, a two-bedroom apartment in the new buildings will rent for about $1,500 a month, just below the median rent for a similar apartment in the Grand Traverse region. Those who have leased retail space include Truly Free Home Inc., a fast-growing maker of hypoallergenic cleaning products. Truly Free occupies the 51,000-square-foot former Tom's Supermarket that closed in 2019, unable to compete with a nearby Meijer that opened in 2015. The 84,000-square-foot building just to the north of the Tom's had been empty since the Kmart there was one of 150 nationwide that closed in 2017.
Chappelle said that the construction budget for the complex was $64.4 million, including $49.3 million for the apartments, $9.8 million for the Kmart building and $5.5 million for the Tom's. The rehab and construction budget is in addition to the acquisition costs in 2022 of $1.2 million for the Tom's site and $2.4 million for the Kmart.
Strathmore has more than two dozen retail and residential projects finished or underway in the southeastern U.S., the Midwest and Ontario. "The biggest challenge in any real estate project is the financing. While our group regularly partners with national lenders and capital groups for construction lending, at the beginning of this project, the largest lenders were not inclined to invest millions of dollars in the northern Michigan region," said Chappelle, who is particularly hands-on with the project since he and his wife live in one of the apartments.
Oak Shore Commons Project was able to get substantial funding from Lansing-based Capitol National Bank, and East Lansing-based Michigan State University Federal Credit Union, with MSUFCU the primary construction lender. "People didn't think saving these buildings was possible," said Chappelle, "but saving Tom's and Kmart and getting them leased out was the key to the whole project. If we had had to tear those buildings down, this wouldn't have worked." The general contractor is Flint-based E&L Construction Group, with Charlevoix-based Performance Engineering doing civil engineering and site planning and Lusk Architectural of Columbus, Ohio, designing the apartments to fit the regional market.
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Retail operations in the former Kmart building include a 24/7 Golf simulator operation; the Northwind Health and Fitness Center; Flex Self-Storage; a 10,000-square-foot Red Bull Distribution center and the Pickle U. an indoor pickleball center with eight courts. The building also includes the GTC Men's Shed, a nonprofit whose space is provided free of charge. Its woodshop includes a variety of machines that volunteers use to build tables, sheds and other items for area charities.
According to township Supervisor Doug White, the conversion of empty big-box space generating no tax revenue for years generated $67,275 in tax revenue in 2023; $159,482 in revenue in 2024 and projected revenue in 2025 of $336,394, a substantial sum for a township whose 2020 census count was 4,456. (White had a personal impact from the closing of Tom's in 2019. His wife, Michelle, used to deliver large volumes of sweet cherries from a family farm in Elk Rapids to Tom's each week of sweet-cherry season. Deliveries plummeted as soon as Meijer opened, and it had other suppliers.)
Chappelle, who lives with his wife, a dog and two cats, said the apartment complex will not charge any pet fees as an added inducement for renters, though he said demand for housing is so high, inducements are almost irrelevant. "We know this is going to do well. People want to live here,'' he said, referring to the Grand Traverse area in general and, in particular, being across the street from one of the most popular golf destinations in Michigan. Chappelle said early in the township approval process, he was told a scheduled hearing had to be moved to a much bigger space. He feared the worst, that locals, perhaps those in the many high-end condo projects surrounding Grand Traverse, might not want to be close to a large retail operation that would involve a lot of traffic.
The power of pickleball
When he got to the meeting, he got good news. There weren't folks opposed to it there to air their gripes, it was a small army of pickleball fans who had heard the project might include pickleball courts and they wanted to voice, or yell, their approval.
That turn out was due chiefly, or at least in part, to Dave Sexton putting out the word via email that he and his wife, Deb, wanted to run a pickleball center and needed their support.
Years ago, he was a racquetball instructor in Georgia and retired in 2022 after being a maintenance supervisor for 20 years with Northwestern Michigan College in Traverse City. She had retired after teaching grade school for 30 years in nearby Kingsley. After retirement, they began to play a little pickleball, then a little more, then a lot.
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Dave said one day he suggested to her they might have some fun and make a few bucks if they found an old building or pole barn where they could put in a couple of courts. It would help that for years he had owned a flooring business on the side and could do a lot of the work himself. They heard about the old Kmart having been bought and suddenly a bunch of courts seemed to make more sense than one or two, and they ended up signing a 10-year lease on almost 17,000 square feet. He was able to cut down on the cost of the buildout by making the floors himself, impregnating polyurethane with rubber. Pickle U. has been open just over a year, and this past January, nearly 900 customers played on one of the courts, at $7 an hour each. Pickle U., which also has a small shop selling gear like polo shirts, T-shirts and hats inscribed with the word "pickleball," is open 8 a.m. to 8 p.m. Monday through Saturday and 1-5 on Sunday. There is no membership charge.
For apartment leasing information please visit our website at Oak Shore Commons.
