Category Archives: amstar

As We Predicted

From the recent edition of “Travel Weekly”:

Miraval Group has acquired the Travaasa Austin Resort from Amstar Group and will spend the next two years expanding and redeveloping the 220-acre property into what will become the Miraval Austin.

Miraval will increase the hotel’s room count to 120 from 70, expand the property’s main restaurant and more the double the spa space. Miraval plans to finish the redevelopment in January 2019.

Miraval, which operates its eponymous resort in Tucson, Ariz., earlier this year took over spa operations at Southern California’s Monarch Beach Resort as part of its expansion plans for its Life in Balance Spa brand. Miraval also said this year that it will redevelop the Cranwell Resort in western Massachusetts.

As opponents of the Dumb Growth project to “save” the rotting Gilded Age pile known as Elm Court by building a massive new big box franchise-style hotel have stated from the start: Amstar, the Otto Happel family office real estate portfolio, is not in the hospitality business.

Amstar buys and flips commercial properties. Most of their total return is generated in the exit strategy, also known as “the grave”. We suspect that main investor Otto Happel has decided to exit the “Travaasa wellness” delusion entirely, and that a sale of the Hawaii property will follow soon. Then what happens with Elm Court?

Bamboozled by unrealistic expectations of tax revenues, boards in the towns of Stockbridge and Lenox failed to grasp what was behind the bizarre idea of using a derelict mansion as a fig leaf for a Courtyard By Mariott or Hilton Gardens, or whatever is at the end of the exit ramp when Amstar dumps the property.

Let us hope that opponents of the development scheme prevail in their appeal of the hasty, ill-considered decision to approve a project that sacrifices the legitimate interests of a residential neighborhood to a handful of real estate speculators. Let us also hope that Amstar investor Otto Happel has a closer look at what his managers have been up to and concludes that building a project in a neighborhood overwhelmingly opposed to the idea is just plain bad business.

The purchaser of the Travaasa “flagship” in Austin, Miraval, recently purchased the nearby Cranwell resort, slated for significant expansion during 2017. With massive development also proposed for the former Desisto property across the town boundary in Stockbridge, we ask once again: how is any of this sustainable? Dumb Growth compounds to absurdity and then inevitably collapses.



Due Diligence?

Anyone who has been involved in the ongoing struggle to prevent a monstrous big-box style franchise-ready motel — not unlike the one that now looms over Route 7 north of Lenox — from being dropped into the middle of a historic, residential neighborhood, will remember the unsavory spectacle of a red-faced Amstar CEO Gabe Finke lecturing and chastising  the “little people” gathered inside the Stockbridge Town Hall.



Having heard Finke express Amstar’s long-term commitment to the well-being of the town and for the careful restoration of Elm Court, grandly throwing in an offer to pay for a controversial, unwanted and unnecessary sidewalk that would forever change the character of the road and the neighborhood, the curious reader might ask: where is Gabe Finke now? For that matter, where is Amstar?

Amstar Group, the real estate fund that owns the Travaasa brand, represents one part of the global real estate holdings of German billionaire industrialist Otto Happel, with a family office based in Lucerne, Switzerland. Finke once worked for Happel, but roughly a year ago the boss apparently had enough of Finke’s strange investment ideas, such as an assortment of shopping malls in Turkey and residential apartments in the, um, peaceful Ukrainian capital of Kiev.

Who knows what the distinguished Mr. Happel made of the Elm Court acquisition and the absurd plan to hatch a luxury resort in the middle of a neighborhood overwhelmingly opposed; what we do know is that Finke was shown the door in a split described in the business press as a “messy divorce”, with Amstar Advisors (Finke still at the helm) parting company with Amstar Group.

A year later, even the name is gone: Finke re-incorporating as Ascentris, once again displaying his penchant (as with with the pseudo-Sanskrit “Travaasa”) for ersatz words. We note the complete absence of any holdings in the hospitality industry in the revamped Ascentris portfolio. In any event, Finke, the man who hoodwinked the naive members of a money-hungry Stockbridge Select Board, is long gone from the Elm Court scene. So much for long-term commitments!



Given the massive infrastructure work required to make the Elm Court viable, the project is essentially a public/private partnership. Here are the two unbreakable rules of such partnerships, from the point of view of the public entity (in this case the town of Lenox):

1) Know with whom you are doing business.

2) Focus on long term track record and experience within the industry, such that the town is not left holding the bag when things go wrong. 

Alas, local boards in both Stockbridge and Lenox never even tried to answer these questions; on the night of the final decision made by the Lenox ZBA,  board members had no clue  about what sort of business Amstar really was, nor even who actually owned Elm Court: Green Tea, Front Yard, Travaasa, Adam Hawthorn, Gabe Finke or Amstar Advisors. (The correct answer is Otto Happel, through what remains of the Amstar Group, and with Front Yard LLC serving as the shell corp.)



As for the second question, none of the town boards reviewing the proposal seemed at all concerned that  Amstar Group lacks a track record in the hospitality industry; by industry standards the Travaasa “brand” is both too small (a mere two resorts in operation) and too young to have been adequately tested by market cycles. As we have said a hundred times, falling on deaf ears, Amstar Group is not in the hospitality business. They are in the “cradle to grave” portfolio flipping business.

We predict that such lack of basic due diligence regarding the private partner in this high-impact and dumb-growth project will come to haunt both towns with a long list of unintended consquences. If the monstrous thing is ever built. Maybe the hapless Mr. Happel, victim of bad investment advice, will finally have a closer look at where his money is being spent, grasp the inanity of the idea, and pull the plug.

No Other Recourse

Many people have asked us over the past several months why residents in the Old Stockbridge Road neighborhood did not appeal the sham process conducted by the Stockbridge Board of Selectmen. The answer is simple: we had every confidence that the process in Lenox would be held to a far higher standard, and that the letter and spirit of the Lenox Zoning Bylaw would be vigorously upheld.

Alas, such confidence was misplaced. Over the course of several confused and chaotic meetings, conducted with little direction or focus on verifiable facts, the Lenox Zoning Board of Appeals (ZBA) appeared not to comprehend what it was supposed to be doing, namely, evaluating the Amstar/Front Yard LLC proposal with strict reference to the Lenox Zoning Bylaw. In fact, references to the Bylaw were few and far between, crowded out by grandstanding and cheerleading in favor of Front Yard’s ludicrous scheme to “save” the derelict mansion by building a second massive pile right next door.

Supporters of the project were permitted long, rambling and irrelevant riffs on the vast riches that would instantly flow into every Lenox pocket from the Elm Court gold mine, while opponents were chastised and dismissed. Meanwhile, throughout this sad spectacle, serious safety questions regarding the profoundly inadequate traffic study submitted by the applicant, as well as a host of other issues, remained unanswered and unexamined. The representatives from Amstar/Front Yard would simply object that even minor restraints on activity would dig into their profit margins (extracted at the expense of many lifelong residents) and the ZBA would instantly cave in.

Numerous invitations from the neighborhood to sit down with the applicant and the town to try to find some reasonable common ground were ignored. In addition, several attempts from residents to point out how the application did not meet the high standard appropriate for a project of this size were suppressed.

From the beginning, the neighborhood has sought reasonable compromise and moderation, with countless suggestions for intelligent and thoughtful checks and balances. The neighborhood would openly welcome any proposal that respected our own history and interests. Dropping a huge resort with spa and restaurant into the very heart of a long-standing historic residential neighborhood in One Big Dump is EXTREME — unprecedented in the Berkshires.  Smart Growth criteria, to which Lenox has long paid lip service, were thrown under the Amstar/Front Yard bulldozer. The result? A project that would bring the most Dumb Growth imaginable, bringing profit to a handful of speculative investors while negatively impacting one of the town’s most distinctive and established residential neighborhoods.

With no other recourse, in defense of their rights to the safe enjoyment of their own properties, a number of residents in the neighborhood decided to file an appeal with state Land Court.

The promoters for a project of this massive scale in a neighborhood where the vast majority of residents are opposed should at least be obliged to obey the law. Have they? With the filing of a broad-reaching appeal that challenges numerous aspects of the ZBA’s decision and conditions, that is now for the Land Court to decide. We look forward to the forthcoming process. At the very least, we should be able to answer a number of questions that have haunted this process from the very start, questions that town officials in both Stockbridge and Lenox appeared determined never to ask.