Category Archives: front yard llc

Fresh Vision

As reported recently in the Berkshire Eagle, “Front Yard LLC” (Amstar) has finally managed to attract a buyer for its distressed Elm Court property, for the exact amount of the promissory note (0% APR!) that had been held by Elm Court Realty LLC (Robert and Sonya Berle) since 2012: $8,000,000.

So ends the sad chapter of “cradle to grave” (their term, not ours) real estate speculators, and their ill-fated attempt to steamroll a neighborhood while bamboozling local boards with the tantalizing promise of joining a lucrative “world class wellness resort brand” that sounds like a spin-off from The White Lotus: Travaasa.

Where is Travaasa now? Maui, sold. Austin, sold. Berkshires, finally sold. Their tacky plan to attract investors for what was essentially a generic four-story motel using the disintegrating mansion as a Gilded Age fig leaf finally fades to black. It seems that sometimes you get the cradle, and sometimes the grave.

Now comes Linda Law, a new owner with a fresh & promising vision, an investor with experience in restoration and renovation (Blantyre), one who clearly treasures the historic character and cultural legacy of the Berkshires. She speaks of conducting extensive architectural research, and of a deeply felt duty of care. She also expresses the aspiration to recover “vibrancy,” and suggests a use that is “accretive to the community”. As a primary goal, she wants Elm Court to “shine a bright light globally, and be a beacon for Lenox, Stockbridge and the entire Berkshire region.”

Following the grim saga of Amstar, we welcome such a vivid and positive vision, and hope that she sees our neighborhood (her new neighbors) as potential sources of creativity, collaboration and support. Nobody cares about the distinctive character and rich history of Old Stockbridge Road more than the people who live here.

As for beacons of light during our deepening climate emergency, for further inspiration she may want to research the extraordinary non-profit Shelburne Farms, sited along the shores of Lake Champlain, once owned by a different set of heirs to the same Robber Baron fortune, and now the highly respected global leader in place-based, farm-based and sustainability education .

As relayed from their website:

Shelburne Farms is an education nonprofit on a mission to inspire and cultivate learning for a sustainable future. We believe that transformative learning experiences sow the seeds for a thriving and more just world. Our work seeks to create the space, spark the conversations, and share the stories to inspire educators, students, and learners of all ages to build a better future for everyone.

Sounds eminently “Berkshires” to us!

THE INN AT SHELBURNE FARMS

A New Chapter

As we have long predicted, “Front Yard LLC” has not been able to find investment capital for the implementation of a resort plan that made no sense from day one; a plan unsupported by market research and hospitality industry trends, even before the pandemic. Thus it has now been put up for sale as a private residence.

To recapitulate for new readers of this blog, including potential buyers:

Front Yard LLC is an investment shell within private equity real estate corporation Amstar. Amstar has never been a resort developer; they are a self-described “cradle to grave” fund that generates most of its return on exit.

The Travaasa brand was simply “feel good” smoke generated to enhance value in the short term and maximize profit on exit. Where is Travaasa now? Sold.

And what about the President of Travaasa Adam Hawthorne, who assured local boards during countless meetings of his firm commitment to build a global upscale wellness brand that would thrive for decades to come? Well, at least he is still at Amstar, though no longer any mention of Travaasa.

Also of interest: According to the Registry of Deeds, Elm Court LLC (the previous owners) still holds a promissory note for $8 million at 0% APR; the note has not been discharged.

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The neighborhood would of course extend a warm and grateful welcome to a new owner willing to undertake a responsible and environmentally sensitive renovation and restoration of the estate. If that is only feasible/sustainable within a vastly reduced footprint for the rambling pile at its heart, so be it! As we have stated from day one, we would also welcome and support a limited residential development such as Winden Hill or Bishop Estate.

We urge any potential buyer or investor to approach the neighborhood in a spirit of open and respectful dialogue, keeping in mind that we are an established & closely-knit neighborhood looking to retain the special qualities and historic character of Old Stockbridge Road. 

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Elm Court Investors

Both the Stockbridge and Lenox Zoning Boards recently approved extensions to the special permit granted to Front Yard LLC for the creation of a “Travaasa”-branded resort on the property. At those meetings, as reported by the Berkshire Eagle, an attorney representing the applicant alluded to delays caused by litigation filed by owners of neighboring properties; increased material prices; and the “complexity” of the project.

We have a few other ideas why investors may be leery of throwing money into the potentially bottomless money pit at Elm Court:

I      The project makes no economic sense. There is already existing over-capacity in the Berkshire hospitality industry. The expansion at Cranwell/Miraval will certainly put increased pressure on the industry, above all in the market segment targeted by Amstar/Travaasa. Demographic trends also pressure the market, with younger generations staying away from “destination resorts”, expressing preferences for Airbnb, glamping or smaller inns touch as Tourists in North Adams. In turn, older guests prefer the familiar traditional choices such as Blantyre, Wheatleigh and the Red Lion, all of which are running well below capacity. Then there are Canyon Ranch and Kripalu in the “Wellness” category to which Travaasa also aspires: formidable, established competition, with recently expanded capacity presently not being filled. Where is the market for Elm Court “Travaasa”? We don’t know, because Front Yard never made their case for economic viability during any of their appearances before local boards.

II.    The risks and costs associated with the promised “extensive renovation” of the existing Elm Court mansion are unknown. Are there serious lead paint and asbestos issues? Are the foundations for the wings structurally sound? Do other aspects of the rotting mansion retain structural integrity, or will it become necessary to essentially rebuild a sprawling Gilded Age trophy house? If that is the case, then why build a four-story big box right next to the “renovated” sprawling mansion, with all the associated costs of new construction?

III.    In order to obtain the special permits, the Amstar CEO at the time, Mr. Gabe Finke, promised to pay for both extensive municipal infrastructure (a complicated and expensive sewage connection as well as water upgrades), together with a sidewalk that would run from Elm Court to the town of Lenox, a sidewalk that many — if not most — of the impacted properties oppose. What are the risks and costs associated with this work? Here again, no specificity was provided regarding the budget nor engineering for these promised improvements in any of Front Yard’s appearances before local planning boards. Investors would need to carefully evaluate how these substantial risks and hidden costs might negatively impact their return.

IV.    Front yard/ Amstar has no development experience for a property of this size — or any size! Zero. They are a “cradle to grave” fund that buys properties, tries through a variety of strategies to add value to those properties, and then sell to the highest bidder. They make their money on the exit. Do investors trust Front Yard LLC and Travaasa — a brand now limited to a single operating property, in Hawaii — to manage a major development  project such as this? Obviously, they would need a development partner; but would any experienced developer be willing to assume the many known unknowns and unknown unknowns associated with this project? Amstar/Front Yard are promising a return of 7 or 8 percent based on 60 to 70 percent occupancy. Everyone has a dream, but are these numbers even remotely grounded in reality?

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Obviously, there are future uses for the property that would make economic sense, and that the neighborhood would support. For example, the rotting wings could be removed, leaving the original (and far more architecturally distinguished) core of the residence as a small, boutique luxury inn. Such an Inn would be the heart of a limited residential development along the lines of nearby Bishop Estate, with most of the land held in common, and managed by an HOA. Canyon Ranch has struggled to sell its two million dollar condos, but the market for second homes, above all in prime locations such as Old Stockbridge Road, remains strong. As many of us who live here have submitted from the start of this long process, a reasonable, low impact use would be welcomed and supported. The existing plan, a plan that adds a second huge structure directly next door to what was once the largest private residence in North America in a market already saturated with resorts, hotels and other options, is just plain silly. No wonder the Front Yard attorney reports “difficulties” in rounding up investors!

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” a rotting Gilded Age mansion 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 sells commercial properties. Most of their total return is generated in the exit strategy, also known as “the grave”. Main investor Otto Happel may eventually decide to exit the “Travaasa wellness” brand entirely; then what happens with Elm Court?

In our opinion, bamboozled by unrealistic promises 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 Amstar investor Otto Happel has a closer look at the project 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.