Hermitage Club pins hope on condo hotel

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WILMINGTON — Officials at the Hermitage Club hope building a condominium hotel at its members-only ski resort at Haystack Mountain might help reverse its fate.

"The Hermitage Club has been under some financial stress for about a year, perhaps a little longer," Hermitage President Harper Sibley said Monday during an approximately 17-minute hearing with the Wilmington Development Review Board. "Fortunately, we are in the process of securing new financing for which the permit status of this hotel is an important piece of collateral."

The resort was foreclosed by mortgage holder Berkshire Bank in February and the company is working on getting a $30 million loan to reopen this winter. The lender has gone unnamed in two letters to club members.

Plans for the hotel's construction were approved locally in September 2015 in a DRB decision. A one-year extension of the approval was granted in March, covering September 1, 2017 through Sept. 1, 2018. At the time, Hermitage officials cited financial struggles for not starting the project.

The company now wants two more years to build the 184,000-square-foot, 79-foot-tall, 83-unit hotel with seven duplexes.

"We think it's going to take more than 12 months to get an Act 250 permit," Sibley told the board, referring to state permitting needed to move forward.

He said the Hermitage had not yet filed an application but he "guessed" that may be done in January "because we are sprinting to get open for the Christmas season with limited staff."

"All the parties of interest in the Hermitage Club realize that the hotel is an important part of our economic future because the business model of running any kind of resort or club on a four or five month winter season is simply not sustainable," he said. "And proof of that is where the Hermitage is, which should be in better shape than other resorts because of our membership base and the income associated with that. In spite of that, it's fallen under financial stress because of the huge amount of infrastructure associated with trying to run a ski resort."

Other resorts, Sibley said, have built hotels. And that "allows you to extend the season into the spring and the summer and the fall by offering weddings, and groups and conferences using the facilities in the off season," he said. "Although there are some lovely inns in the area ... there are not enough beds to generate the kind of business that we want to do."

Sibley said one of the first things he did since becoming president in August was to cancel a plan for foreign workers to come work at the resort. Last year, 180 employees had special visas to work at the club, he said.

"We think the hotel is an important part of providing year-round employment to people in southern Vermont, both during its construction and also as we operate it," he said. "We'll have roughly 120 employees on a year-round basis."

Sibley said the agents listed in paperwork for the project — the company's attorney Bob Fisher and vice president of construction and development Bob Rubin, who testified during the last extension request — could not make it to the hearing but the owner and company founder Jim Barnes had designated him an agent.

"Does he still control the property?" DRB member Fred Houston said of Barnes.

"Very much so," said Sibley.

"What about the receiver?" Houston said in reference to Alan Tantleff, who was appointed by Judge John Treadwell in Windham Superior Court, Criminal Division in May to protect Hermitage properties before they are sold or auctioned.

"The receiver controls certain assets at this time but there's been no transfer of ownership," Sibley said. "They do have control of the property but not legal ownership."

Houston also asked whether any construction work had been done since the last DRB hearing related to the project.

"Nothing has been done, sir," said Sibley.

Responding to questions from DRB member Jessie Couture regarding recent changes in the Americans with Disabilities Act, Sibley said the Hermitage intends to be in compliance with all of the law's requirements.

Wilmington Fire Chief Scott Moore and Assistant Fire Chief Bill Spirka wanted to take a fresh look at an agreement between the Hermitage and the department in which the company would contribute to the purchase of a new ladder truck and construction of a garage to house it in order to accommodate the large project.

"We'd like to revise, well not so much revise, but correct our agreement that we had with the Hermitage," Moore said. "There were corrections that were supposed to be made well over a year ago and I don't believe they ever changed them."

Moore questioned whether the agreement was "legal" because he said he did not know whether former fire chief Ken March had ever signed the document. Spirka said the department did not have a copy of the document.

The DRB has 45 days to issue a decision on whether to grant the extension.

"I'm sure you can appreciate our scope is the zoning aspects of all that," DRB Chairwoman Wendy Manners told Sibley after his testimony. "The last decision stated that 'while the land use plan may not be in conformity with all provisions of the current zoning ordinance, the plan was in conformity with the zoning at the time the original decision was granted. In consideration of the changes to the zoning ordinance occurring since this decision, and including but not limited to height maximums and waiver provisions, and in consideration of good faith efforts by the Hermitage to develop the plan that was in conformity in 2015, the board finds that extension of one half the original duration of one year was warranted.'"

Manners added, "That was the thinking at the time. I'm not saying that's the thinking today that we'll arrive at but that was kind of the scope of how we looked at it in the past."

Reach staff writer Chris Mays at cmays@reformer.com, at @CMaysBR on Twitter and 802-254-2311, ext. 273.

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