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Strange Matter Coffee Co. in hot water

Developer Gillespie Co. sues over renovations to Michigan Avenue shop

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One of Lansing’s more popular coffee shops could soon find itself at risk because a developer is waging a legal battle over allegedly unpaid bills.

The Gillespie Co., owned by developer Scott Gillespie, filed suit against Strange Matter Coffee Co. in January for breach of contract for more than $25,000 in allegedly unpaid renovations at its new Michigan Avenue location. Owner Cara Nader said she plans to take the case to trial if necessary as she continues to dispute the costs.

Nader said her business could be in jeopardy. Gillespie holds the lease to both Strange Matter locations — the other is downtown on Washington Square — for the next two years. Attorney fees can be expensive. And no tenant wants to pick a fight with the landlord — especially over money.

“I don’t know where this will lead,” Nader explained. “My business is everything to me. I don’t want to see it go under, but I’m also out of my depth with all of this shit. I make coffee for a living. I don’t fight legal battles. I don’t really know what the future holds, but there is a lot more uncertainty now than there has ever been.”

Nader moved to Lansing in 2014 and quickly carved out a niche for a quality pour with a shop at 2001 E. Michigan. Around the same time, Gillespie was looking to launch a mixed-use development across the street that would eventually become The Venue, a four-story mix of retail and apartments.

Nader said Gillespie, who she said was a frequent customer at the time, suggested Nader could lease a larger space there. Afternoon beers turned into a signed agreement and plans were underway to build out a new shop across the street.

“We talked about it a lot, and I explained that I still didn’t have that kind of capital,” Nader said.

Nader said she thought Gillespie would cover renovation expenses. Strange Matter, she said, would pay for portions of the work, but Nader said she thought parts of the capital investment would be repaid by virtue of her shop being a successful, longstanding tenant inside the building.

The total costs weren’t discussed until after the work had been completed, Nader maintained. And unlike typical renovations, Nader said she wasn’t given the option to approve the work as costs continued to climb.

“I was under the impression that some of these things were just covered in the lease,” Nader added.

Eventually, Nader discovered that Gillespie planned to hold Strange Matter responsible for more costs than she anticipated. She said she was shocked to receive bills for $24,186 and $9,814. But, given the seven-year lease she signed with Gillespie, Nader penned her signature on both invoices.

“This guy held both my leases for the next several years,” Nader explained. “If I agreed to pay him $500 a month, maybe he would’ve just let it go. Honestly, I would’ve paid the $500 per month forever — even though I didn’t think I needed to pay it — just so I wouldn’t have to create this sense of instability with my landlord.”

According to court records, the payment plan called for Gillespie to be made whole by Dec. 31, 2018, regardless of the remaining balance. Just before Christmas, Nader paid off $8,665 and tried to call it square. But Gillespie, who still tallied a $24,000 debt, filed a lawsuit to recover the rest.

Several billed costs were for renovation that Nader contends to be Gillespie’s responsibility. Monthly installments from June through October — paired with the final payment — were more than enough to cover the costs of the project, she maintained. And a court order to pay more could lead to financial ruin.

“Since the new location has opened, it has been a struggle,” Nader added.

“A lot of the costs exceeded my expectations. Additionally, I had to pay Scott Gillespie like $12,000 in money that I just do not have. I’m not super caught up on rent right now. We’re behind on both locations. We’re still behind on the water bill.”

Nader also argued that several renovation costs, such as electrical upgrades, were grossly inflated compared to industry standards. She recognized that she signed the invoices for the renovations and ultimately agreed to a payment plan that fell short — but it was only because the alternative was an immediate lawsuit from Gillespie, she said.

Now, with the lawsuit facing Strange Matter regardless, Nader said she plans to dispute the bill in the courtroom.

“It was entirely because I just didn’t know what else to do. It was terrifying,” Nader added.

“It was really just me trying to avoid a lawsuit that I thought would have costed me my business. I wouldn’t say I was afraid, but I was just very out of my depth on this. The plan is to fight it because, at this point, I don’t have another option.”

The lawsuit requests a judgment that would force Nader to pay out an additional $24,186, plus Gillespie’s court fees and attorney costs. Strange Matter has yet to file a formal response.

No hearings have been scheduled. Gillespie directed a reporter to court filings and declined to comment.

“There was an agreement to pay and now they just don’t want to pay” said Gillespie’s attorney, John Fifarek.

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