Another hearing ahead for Acme former Kmart

Oct. 16—ACME — Plans to repurpose two empty retail spots in Acme are up for another public hearing.

Township trustees on Monday will hear comments on Strathmore Real Estate Group's plans after a township resident requested the hearing.

Acme Supervisor Doug White said he believes he has enough information to vote on the project after the hearing. But he wasn't sure if the board would make a decision that day.

"I wouldn't say one way or the other whether we're going to make a decision or not," he said. "That'll be up to the board, as far as that goes, after the discussion and everything, whether or not they're ready to make a decision or not."

The East Lansing-based developer wants to build 186 apartments outside both the former KMart and Tom's on U.S. 31 north of M-72, as previously reported.

Strathmore Real Estate also plans to turn the former Kmart into warehouse space, self-storage and a mix of other uses, including indoor pickleball, a fitness center, a coffee shop and space for nonprofit Grand Traverse Men's Shed, among others.

Truly Free, a company that sells natural cleaners, refillable bottles and subscription refills for its cleaning products, plans to reuse the former Tom's as an e-commerce site for packing orders, with some retail.

The project has some support — Nancy Sands, Tom's Food Markets president, wrote a letter in April backing the reuse of the company's former store and the vacant Kmart. Other commenters told township officials at past meetings they would be glad to see the empty stores get new use, while others still said they support adding more housing.

But the project's self-storage and warehouse space prompted calls to reject the proposal from township residents and others who argued the uses shouldn't be allowed there. They told township officials the prominent site in Acme's commercial corridor should be put to another use besides light industrial.

Jacob Chappelle, Strathmore Real Estate Group's principal and attorney, argued self-storage is the best use for the interior of a vacant big-box store. It's a low-intensity use, and they anticipate much of it would be rented by apartment tenants.

Planning commissioners wanted to be sure work vehicles going to and from the warehouse space didn't disturb residents, so they placed a limit on operating hours — 7 a.m. to 7 p.m. Monday through Saturday, with no Sunday deliveries, as previously reported.

Chappelle said he believes the restrictions are reasonable.

"So we've been very careful to pick uses and to lease spaces that are going to not only live very well with the apartments, which are 200 yards away on the same site, but that complement them," he said.

Planning commissioners had recommended approving the planned unit development in August.

While the proposed land uses have caused some controversy, so too has a criminal case involving a past member of the development company.

A U.S. District Court judge sentenced former Strathmore Development Company president Scott Chappelle to 38 months in prison Tuesday after pleading guilty to tax evasion. He also must pay $1,233,836.48 in restitution to the IRS, according to the sentencing order.

The case stems from what the Justice Department called Scott Chappelle's years-long efforts to avoid paying taxes that he and his businesses owed, according to a release. Those efforts included making false statements to the IRS, concealing a vacation house on Lake Michigan and more.

"Mr. Chappelle has taken full responsibility for his tax issues, all of which were related to difficulties so many real estate professionals experienced during the financial crisis that began in 2007, and he looks forward to having this matter behind him," said Timothy Belevetz, an attorney for Scott Chappelle.

Justice Department attorneys disputed Scott Chappelle's claims of financial hardship, noting he made them despite paying on multiple homes, a luxury yacht and elective plastic surgery, according to the release. Belevetz declined to comment on those accusations.

The U.S. Marshals Service will notify Scott Chappelle when he must report to prison, Belevetz said. Typically, it's some weeks after the sentencing hearing, he added.

The case caught the attention of several who urged Acme Township officials to reject the project, claiming it calls the developer's trustworthiness into question. These were allegations that Jacob Chappelle rejected as unfair, and which township Supervisor Doug White said don't affect trustees' evaluation of the project.

One such letter from a group called Acme Strong asked trustees in an email if approving the project posed a risk, and whether the developer's reputation and history should weigh on their decision.

Jacob Chappelle, who previously said he's Scott's son, said his father's case has no impact on the project.

He previously said Scott Chappelle had occasionally helped with the project, but had no financial stake or control over it.

Jacob Chappelle told township Attorney Jeff Jocks in an email that Scott Chappelle's involvement in the project was "purely in an advisory or consulting capacity," according to documents obtained by Jim Goran, an Acme Township business owner and project skeptic.

Both Goran and Acme Strong pointed to the email and others as indication that Scott Chappelle was involved in the project.

Jacob Chappelle declined to comment on the email, but he reiterated that his father has no interest or authority over the project.

White said township trustees' decision ultimately should rest on the project application itself.

"We're supposed to take this on the merits of what it is, not on what Scott Chappelle did before," he said. "It's on the merits of the project here."