A Tale of Two Developments

How tiny houses and a wellness center are redefining how northern Michigan real estate projects look

They’re two of the most unique and widely discussed developments in recent northern Michigan memory: The first, a community of tiny houses that has now been gestating for more than five years; the second, a wellness resort in Leelanau County that’s unlike anything currently operating in the region. This week, Northern Express takes a look at these two one-of-a-kind projects, their winding roads toward development, and when (or if?) locals might expect to see them finished.

KOTI: A Tiny House Village Years in The Making

It was all the way back in December 2017 when The Ticker, sister publication to Northern Express, broke the news that local businessman Dan Kelly (owner of Catering by Kelly’s) was planning to build a new condominium complex in Acme Township. The vision at the time was to build 156 single-unit condos, which Kelly described as “microflats,” along with more than 50,000 square feet of commercial and office space. The development spans nearly 20 acres of land off M-72.

Dubbed KOTI—which is Finnish for “home”—Kelly’s development was initially pitched toward real estate investors. In late 2018, Kelly hosted potential buyers at the Williamsburg Event Center to present floor plans and discuss investment potential. Kelly said at the time that his concept was to create a “two-fold deal” for buyers, where they could “own a condo as an individual home” if they so wished, but also put it into a short-term rental pool to be managed by the KOTI team.

While Kelly originally hoped to break ground on the project in 2019, start dates got pushed back and were eventually delayed even further by the arrival of the pandemic. Construction has been underway at the site since June 2021, though, and phase one of the buildout—which spans 32 structures, including an administrative office and the first batch of housing units—is nearly complete. Kelly’s target is to finish the first phase in time for the 2023 summer tourism season.

When KOTI does launch, it won’t do so with Kelly’s initial vision. Rather than being sold to investors and then offered as part of a rental pool, all KOTI flats will remain owned by Kelly and his team, who will manage the units in-house as short-term vacation rentals.

KOTI is currently taking reservations for this summer via its website, kotiexperience.com. Right now, the booking system lists 16 two or three-bedroom units for rent, with first availability starting on June 1.

For a two-bedroom microflat, prices will range from $325 per night during the January-April “low season” and reach $571 per night during the June 1 to Sept. 4 high season. High-season rentals carry a seven-night minimum booking, while the rest of the year only requires a two-night minimum. For a three-bedroom unit, rates jump to $400 on the low end and $642 on the high end.

In addition to the residential units, KOTI is putting in a new restaurant and beer garden at the former Stained Glass Cabinet Company building on the premises. That part of the project is slated for completion sometime this summer. A second phase of residential units are expected to come online in spring 2024, while the mixed-use commercial piece of the puzzle will come at a later date.

Wellevity: Northern Michigan’s Most Controversial Development Project?

One of the biggest controversies in Leelanau County in 2023 has been the debate over Wellevity, the new wellness resort concept that has been proposed for the top of the Timberlee property in Elmwood Township. If built, the development would bring a hotel, residences, spa services, a restaurant and bar, and other amenities to one of Leelanau County’s most desirable hilltops.

But a vocal contingent of local residents has pushed back against the project, arguing that it would have an enormously negative impact on their neighborhoods and should therefore be blocked by the township planning commission.

The developers of Wellevity are currently seeking a special use permit (SUP) from Elmwood Township to develop approximately 100 vacant acres in a district zoned “rural-resort.” The project is described in township application materials as “a full-service wellness resort that will address the core components of health, wellness, and thriving to create an environment of self-care and healing.” The resort would purportedly offer “all facets of holistic wellness in one place,” including fitness classes, spa services, guided meditation, yoga, wellness retail, and more.

“You no longer need to go to a gym, a special grocery store, and a spa to achieve balance,” Wellevity proclaims in its SUP application. “[Wellevity] is a place of learning, support, relaxation, connection with nature, movement, and tranquility. Our goal is to create a place where the community can gather with friends and family and make healthy decisions together.”

If approved, Wellevity will boast multiple hospitality-related components and amenities, all owned and operated by the resort. Those components include a spa and fitness center, a “meditation dome,” a retail market, a restaurant and bar, a multi-use event space, a greenhouse, outdoor pavilions for weddings and other celebrations, cabins and cottages available for rent, a kids' club, and a main lodge with hotel guest room accommodations.

While the property would offer lodging—township materials indicate 30 guest rooms between the lodge and the spa buildings, as well as 20 cabins and cottages encompassing a total of 58 rooms—the Wellevity application repeatedly stresses that the concept is more “community center” than hotel. The majority of amenities and services proposed would be open to anyone, not just overnight guests, and the property’s trails and outdoor recreation areas would be available for the public to use at any time, free of charge.

Finally, Wellevity plans to offer multi-use spaces both in and outdoors for business conventions, retreats, classes, family reunions, weddings, and other events. Application materials note that musical options “such as a DJ, acoustic or amplified bands may be offered in these spaces,” but that Wellevity would always “intend to maintain a peaceful and serene environment on campus” and would align its outdoor music hours with other venues in Elmwood Township.

Despite the developer’s attempts to offer features and amenities that might appeal to locals, the response to the Wellevity proposal by nearby property owners has been overwhelmingly negative. Since January, meetings of the Elmwood Township Planning Commission have been dominated by discussion about Wellevity. In public comment, locals have raised concerns about everything from light and noise pollution to environmental impacts.

While residents have identified numerous complaints about the Wellevity plan, the core sticking point in the debate so far concerns the developer’s plans to use a pair of private neighborhood roads—Cottonwood Drive and Timberwoods Drive—as access routes for the resort. Residents argue that their roads are not sufficient to serve a major resort development, and that allowing the project to proceed would lead to wear and tear, excessive traffic, safety concerns for pedestrians, and more.

Currently, township planning commissioners are trying to decide whether to side with the developers or the residents. On Tuesday, April 18, commissioners deliberated for two hours about the resort proposal, but ultimately adjourned before making a final decision.

Instead, the main news at that meeting was a vote by commissioners to allow Lauren Teichner—an attorney representing a group of roughly 100 neighbors who oppose the Wellevity project—to present findings of fact related to the township’s zoning standards. Teichner claims that the development does not meet zoning requirements and should therefore be denied its SUP request.

It is likely that the zoning will ultimately prove to be the crux of the matter: Regardless of resident opinions, if planning commissioners find that the Wellevity project does in fact meet township zoning standards, they are required by law to approve the SUP application.

Teichner will present her arguments at an upcoming special meeting of the Elmwood Township Planning Commission, scheduled for 6:30pm on Wednesday, May 24, at the Elmwood Township Fire Station.

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