Hermitage Club may have new lease on life
"After months' long negotiations, the club has signed a nonbinding term sheet with Berkshire Bank to buy out its debt as part of this overall transaction," Barnes wrote Wednesday night in an email to club members. "The primary goal of the Hermitage Club is to close this restructuring and prepare for a successful 2018/2019 fall and winter season. The proceeds from the restructuring will provide the means to settle claims and disputes that have arisen due to the lack of cash flow from closed club operations."
Berkshire Bank had filed a foreclosure complaint against the Hermitage in February after the company failed to make mortgage payments on three notes totaling more than $17 million. Judge John Treadwell appointed a receiver to protect and preserve foreclosed properties in Dover and Wilmington — including the company's private ski resort at Haystack Mountain, golf course, Hermitage Inn, Snowgoose Inn, Horizon Inn and the Chamonix Townhouse Village —as the company looked for a way to restructure to avoid public auction.
For several months, Barnes told members, his company had been working with "a large institutional investor" with "substantial experience" in the ski and resort industries to provide funding to restructure finances.
"We are pleased to announce that we have signed a nonbinding term sheet with Oz Real Estate to provide capital for restructuring the club's assets and for real estate development," he wrote. "The potential transaction with Oz Real Estate contemplates the club's debt with Berkshire Bank to be restructured or bought out."
The New York-based Oz Real Estate says on its website that it "invests in both opportunistic real estate private equity and real estate credit in the United States and Europe. Founded in 2003, Oz Real Estate has raised approximately $3.8 billion of dedicated real estate capital and completed more than 107 transactions across 19 diverse real estate asset classes."
Barnes told members the club also closed on a bridge loan from a third party, which will provide funding for efforts around due diligence and keep "key staff" on board for the transaction. Those staff members include Interim President Bob Rubin, Finance Director Chad Bullock and Information Technology Director Peter Wong.
Barnes said an interim advisory committee made up of four members has been asked to help with the transaction. And once the transaction is completed, he added, governance will move to a formal board of directors. Club members will be asked to vote for representatives to serve on the board.
Harper Sibley will be the company's new president. Barnes said more than a dozen members were asked to interview a candidate for Sibley, who has 35 years of club management, hospitality and real estate.
Sibley has developed and managed projects in New England, Florida and the Caribbean including golf clubs, beachfront properties and marinas, according to a biography provided to members. In Florida, he worked on planning and residential development of the Harbor Golf Course at the Ocean Reef Club in Key Largo.
From 2002 to 2006, according to the biography, Sibley was on a team that acquired and developed a two-acre waterfront property on Harbour Island, Bahamas.
"He was responsible for the acquisition, equity and debt financing, project design and entitlements, construction, resort real estate sales, club concept and hotel operations," the biography says. "The project sold over $30 million of real estate and marina slips in an 18-month period and was completed on time and on budget."
In 2017, Sibley was asked to assist in developing the Southampton Beach Resort on Bermuda. He "worked with Bermuda authorities to remove the former buildings, develop the site plan, and begin sales and marketing activity when the recession of 2008 stalled the project," according to the biography.
Sibley "will work closely with the advisory committee and lead the club through the successful completion of this transaction and into the future," Barnes wrote.
In the email Barnes thanked Rubin, vice president of construction and development at Hermitage, "for stepping in as interim president and maintaining our club assets while we worked on these restructuring agreements."
Heidi Higgins, assistant vice president and marketing officer at Berkshire Bank, told the Reformer her group is "not in a position to talk about this specific instance due to privacy and legal concerns."
Barnes and Rubin did not immediately respond to an email requesting comments.
Rep. Laura Sibilia, I-Windham-Bennington, is optimistic about the deal.
"The club being open versus being closed is certainly better for the valley," she told the Reformer. "I am hopeful if this deal proceeds it includes adequate remedies for the numerous local small business owners who have been financially impacted and that Mr. Sibley understands that reestablishing trust is as important as reestablishing commerce."
Dover Select Board Chairman Josh Cohen told the Reformer he wishes "the club the best of luck and success for the future."
Reach staff writer Chris Mays at email@example.com, at @CMaysBR on Twitter and 802-254-2311, ext. 273.
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