After one full day of scratching my head, following is the solution that I have come up with.
Create a file "project_makefiles.m4.in" like this
AC_CONFIG_FILES([ apple/USERDIR/Makefile ]
Add the below to configure.ac
m4_include([project_makefiles.m4])
Create a wrapper script like "build.sh" which will create "project_makefiles.m4" from "project_makefiles.m4.in" by replacing "USERDIR". This is done before the automake.