From a standalone Airbnb in Elk Rapids to one of the area’s buzziest and fastest-growing hospitality brands: Such is the story of Fernhaus Studio, a business that is quickly becoming a household name in northern Michigan. In the past three years alone, Fernhaus has played a key role in revitalizing numerous key landmarks in Leelanau County – whether by transforming an old, weathered grist mill in Glen Arbor into a busy café or by morphing Leland’s iconic Riverside Inn from seasonal haunt to year-round staple. 2024 will see the brand grow its presence in and around Traverse City – albeit, not without a bit of public backlash: Already, Fernhaus has caught some heat for how it’s handled the management of the downtown coffee shop formerly known as Brew.

Amidst all this growth and divisiveness, The Ticker sat down with Fernhaus co-founders Kelsey Duda and Turner Booth to talk the roots, growth, identity, controversy, and future of their budding hospitality titan.

First, some background: Two years ago, Ticker sister publication the Traverse City Business News profiled “The Relocators,” 28 professionals who had moved to northern Michigan during the pandemic. Duda was one of them, along with two other members of the then-brand-new Fernhaus team.

The seeds for Fernhaus were planted the better part of of a decade ago, when Duda bought a property in Elk Rapids and used it to design and build a vacation rental from the ground up. Her goal was to break into the field of hospitality design, and the Elk Rapids property – which Duda dubbed Fernhaus – was her prototype: a micro-hotel concept where every detail was deliberately chosen with guest experience and comfort in mind.

“I designed and built the Airbnb just as a hope to get into the hospitality world,” Duda says. “I've always been inspired by hotel spaces and by food and beverage, but I was formerly just a residential interior. designer. I felt like I needed to build my own little model to break into that world.”

Duda’s proof-of-concept worked: When the rental, dubbed “The Fernhaus,” launched three years ago, it drew spirited acclaim from Airbnb guests, netted coverage in magazines like Domino and Better Homes & Gardens, and gave Duda the juice she needed to break into hospitality full time. Soon, she’d quit her job in Grand Rapids, relocated to northern Michigan, and linked up with Booth, the managing partner of local commercial real estate asset management firm Cochran Booth & Co. The partnership led to the creation of Fernhaus Studio, the broader hospitality arm of what Duda had started with her Airbnb.

At the time, Booth was in progress on a multi-year restoration of a historic 1800s grist mill in Glen Arbor, with plans to turn the property into a café, restaurant, museum, boutique hotel, and more. Booth brought in Fernhaus to lead the development of a food and beverage program for the property, as well as to design its overall décor, style, and feel. The new business, called The Mill Glen Arbor, officially launched last spring, with a café opening inside the space in April and a lodging component called The Mill House coming online early in the summer.

Fernhaus Studio’s influence on local hospitality quickly spread beyond The Mill. After Leland’s Riverside Inn changed hands for the first time since 1997 – with Cochran Booth as the buyers – the Fernhaus team came in to lead a revamp ahead of the 2022 summer season. One key aspect of that reimagining? While the Riverside Inn has typically closed down in the off-season, the property is remaining open this winter for the first time ever, with weekly Thursday-through-Sunday hours. And speaking of revamps, this past summer saw the Fernhaus team open Millie’s Pizza and Ice Cream in Glen Arbor, a new pizza parlor in the space formerly occupied by Riverfront Pizza & Specialties; Riverfront had closed its doors in the fall of 2021.

Perhaps most notable to Traverse City residents, in March 2022, Fernhaus took over the day-to-day operations of the beloved downtown TC coffee shop Brew. At first, the coffee shop continued operating mostly as it had been. But in mid-August of last year, customers found a note posted on Brew’s doors announcing the end of an era. “To our loyal Brew customers: Thank you for your support over the years,” the note said. “It's been a pleasure and we look forward to welcoming you to what's next. Please stay tuned.”

Since then, Fernhaus has rebranded the space as “Outpost,” a “pop-up partnership with The Mill Glen Arbor and Panther Coffee” that serves goods from both.

Controversially, the change from Brew to Outpost went beyond branding, with Fernhaus closing the extensive indoor seating areas that long made Brew one of downtown’s most popular work, meetup, and hangout spots. Instead, the pop-up mostly functions as a small storefront, with coffee, sandwiches, and Mill-made pastries and breads offered primarily on a grab-and-go basis. The change has drawn backlash in the community, particularly from past Brew regulars.

For their part, Booth and Duda are aware of how divisive the shift to Outpost has been. Their message to the community? Don’t judge until you’ve seen the full picture.

“The evolution from Brew to Outpost, there’s been plenty of commentary on that,” Booth acknowledges. “Brew was a great center of community, and we hope to have Outpost be something similar going forward. We do have plans to continue on with Outpost beyond just this pop-up phase, and to expand and reopen the back area of 109 East Front Street. We can't share a ton of details at this point, but something is in the works and we plan to have it open in the spring.”

Booth also notes that this isn’t the first time Fernhaus has dealt with some backlash. In 2021, a group of Glen Arbor residents pushed back against Booth’s vision for The Mill, criticizing it as overly commercial and faulting the township for allowing a rezoning request that allowed the project to move forward in the first place. In that case, the public pushback even led to a ballot referendum – though voters in Glen Arbor ultimately decided to uphold the rezoning and allow The Mill project to move forward as planned.

“Despite all that controversy, I think you'd be hard-pressed to find someone who doesn't enjoy what The Mill is today,” Booth concludes. “There's always going to be a negative commentary, but at the end of the day, the projects should be judged by their final results and not by the year or two it’s going to take to get there. We are trying our best to create lasting businesses that serve a community – things that these communities will be very happy to have within them. We’re not trying to take away anything; we’re trying to enhance. I think we’ve done that in Glen Arbor, and over time, people will see that we’re doing the same in Traverse City.”