Category Archives: stockbridge board of selectmen

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.

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 spectacle of a red-faced Amstar CEO Gabe Finke lecturing and chastising the “little people” gathered inside the Stockbridge Town Hall.

HOW DARE YOU GET IN MY WAY

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. 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. 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 a naive Stockbridge Select Board, is long gone from the Elm Court scene. So much for long-term commitments!

WHICH SHELL HIDES THE PEA?

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. In any event, 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 consequences. If the monstrous thing is ever built. Maybe the honorable Mr. Happel will finally have a closer look at where his money is being spent, grasp the fundamental unsustainability of the idea, and pull the plug.

Occupy Elm Court

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From our perspective, the public review of the Front Yard/Amstar proposal for Elm Court represents a Berkshires variation on a “too big to fail” bail-out, strikingly similar to the sorts of public bail-outs of fraudulent corporate activities during the financial crisis of 2008-2009, bail-outs that precipitated the Occupy movement.

In the case of Elm Court, a wealthy family (Vanderbilt-Wilde-Berle) has allowed their sprawling mega-mansion to decay, and then has effectively transferred the cost of the repair to the public, by selling the derelict property to a corporate “partner” who will dump a four-story spa hotel into the heart of our densely settled residential neighborhood, all in the name of “saving” Elm Court.

We are disappointed that our local boards appear to be playing along with this toxic bail-out, without giving serious, detailed consideration to the carefully researched and wide-ranging objections submitted by the neighborhood.

Elm Court is not the only history worth preserving. Our neighborhood, including other former Gilded Age properties such as Bishop Estate and Winden Hill, has its own strong, vital history worthy of respect and preservation. Instead, we now face a future of digital speed signs, road-widenings and other so-called traffic calming measures that will forever change one of the most distinctive and appealing roads in the Berkshires. Over the long run, this will be seen as a profound loss to the town, and to the Berkshires.

Why has everyone — from Selectmen to town staff — so passively lined up behind such a preposterous scheme, without exploring more sustainable and more reasonable alternative uses? Why is the disrepair of a private property, once owned by one of the wealthiest families in United States history, a matter of public interest? Is there some deeply entrenched pattern of obedience to the Lord of the Manor in play here?

From the start of this long process, the applicant has refused to budge on the core issues of massive scale and high intensity of use. We hope that the Lenox ZBA will listen carefully to the depth and seriousness of our concerns, and impose strict conditions on the special permit, introducing a measure of moderation and balance to Front Yard LLC’s monolithic proposal.

Without such moderation and restraint, Front Yard can be sure that the neighborhood will be openly hostile to their wretched big-box “Travaasa” spa-hotel for many years to come. Further, the town of Lenox will have alienated an entire neighborhood by selling us out to a shadowy real estate “fund” who successfully played rope-a-dope with town boards, slipping through review with major aspects of their plans left undisclosed and undiscussed.

The problem with such actions? Public trust and good will are currencies you can only spend once. Once they are gone, they are likely gone for a long time.

A Very Bad Fit

Among the many materials ignored by the Stockbridge Board of Selectmen during their kangaroo hearing, there was a report researched and submitted by a nationally recognized expert on neighborhood character, Dr. John Mullin. He writes:

There is no definition of the neighborhood in the submitted material. Concerning the physical characteristics, it is a long settled and established neighborhood, marked by the gentle curves and slopes of a narrow scenic road, without the need of sidewalks. It is a place of multigenerational families, committed to place and community, who enjoy the seasons and the natural environment. Their homes can be characterized by steady reinvestment with a significant number relying on their own water and sewer systems. I would ask the applicant to compare these traits with their proposal to determine the degree of compatibility between the neighborhood and the project. It would appear that they are not.

Dr. Mullin then includes an excellent chart that compares the values and qualities of the neighborhood to the values and qualities of the proposed resort. This chart clearly demonstrates that dropping a corporate mega-resort into an established residential neighborhood is a very bad fit.

Did the Stockbridge board of Selectmen consider these excellent points? Of course not, since their minds had already been made up, many months before. They smelled money, and figured there was no downside to a project where the revenues would accrue to Stockbridge at the expense of a neighborhood that was located for the most part in Lenox. People in the neighborhood were belittled, bullied and ignored.

So will the various Lenox boards pay closer attention to the expertise and analysis of Dr. Mullin? We hope so, but it seems that many towns don’t care anymore about neighborhoods or families: corporations, and their interests, rule the roost. Unfortunately for our towns, such a large and ill-considered scheme is likely to carry very substantial unintended consequences, and the smell of money may quickly turn into a far less welcome stench.

We urge Lenox board members to exercise maximum due diligence and to pay close attention to every aspect of this project, above all, input from the people who actually live here.

The Telling Detail

Sometimes, the deeper meaning of a long story finds expression in a single document. So it is with recent minutes of the Stockbridge Board of Selectmen, that offer readers a sad chronicle of naive boosterism and derogation of due process. Here is a snippet from those minutes early in the process of “reviewing” (read: shamelessly promoting) the Amstar proposal for Elm Court:

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Chuck is Selectman Charles Gillette; Chris is Chris Manning, one of the former presidents of the revolving door real estate operation that carries the pseudo-Sanskrit brand name “Travaasa”. The snippet speaks for itself, but here’s the neighborhood response to Mr. Gillette, Mr. Manning and to Travaasa president-du-jour Adam Hawthorn: that “little elderly lady” has a name, and a life, and a residency on Old Stockbridge Road that spans five decades. She deserves to be treated with respect, not dismissed as powerless, and thus considered irrelevant. Rather than caution Mr. Manning for his arrogant statement, Mr. Gillette merely wonders if the fact that “she is in Lenox” may become a problem. So much for the ideals of public service!

The Stockbridge minutes are full of telling vignettes such as this one; we recommend them to all Stockbridge voters. Is this who you are, the sort of town you wish to be? Do such “leaders” truly represent the best and brightest of Stockbridge and the Berkshires?

A Few Pertinent Facts

UNTROUBLED BY FRESH QUESTIONS AND NEW INFORMATION

On the evening of September 8, in a decision likely to go down in Stockbridge history as the worst ever, and one that may haunt the town mightily in years to come, the three sitting members of the town Board of Selectmen (BOS), acting as the Special Permit Granting Authority (SPGA), gave permission to Front Yard LLC to proceed with their plans to drop a huge commercial resort into the middle of an existing residential neighborhood. For fee payments and tax income that may well turn out to be illusory, the BOS thereby sold out the longstanding residents of Old Stockbridge Road, some of whom have been there for decades, and many of whom actually bought their lots from previous owners of Elm Court.

One young citizen who attended the meeting told us that he was so disturbed by what he had witnessed that he was questioning whether he wanted to continue to live in the Berkshires. Others told us they thought the entire process had been a sham. Though equally shocked by the refusal of the SPGA to carefully weigh and consider relevant factual evidence, all of the evidence, through rational deliberations, we were not at all surprised by what transpired over the course of the hearing. We had facts that strongly suggested that the decision to approve had already been made, way back in 2012. But don’t take our word for it; here are their own minutes.

FACT I

For the BOS meeting of June 13, 2012, we find the following, with red highlighting added for emphasis; the “Chris” mentioned is Chris Manning, the now-departed former President of Travaasa: BOSjune13 Mr. Shatz knew that he would eventually preside over the hearing for a special permit as the Chair of the SPGA, yet there he was back in 2012 actively coaching the applicant as to how they could slide a bylaw amendment designed to facilitate the approval of this one property through an unpredictable Special Town Meeting on zoning issues that was eventually scheduled for February 19, 2013. Even though that meeting was subsequently presented with an incomplete and inaccurate description of the project, and even with all that preparation and help from the Selectmen, the amendment still did not pass. What to do?

FACT 2

Here we are on March 6, 2013:

march62013

Owner Bob Berle and his attorney, David Hellman, who would subsequently become the attorney for Front Yard LLC, then went away and did what they were told: they crafted a freshly worded amendment, tailor made for Elm Court.

FACT 3

They return on March 27:

march272013 At the regular 2013 Town Meeting to follow, the BOS gave a ringing endorsement to this amendment, written by the owner’s attorney in consultation with the BOS; Amstar once again presented a partial and significantly smaller version of their plan; a few emotional pleas were made to “save Elm Court”; and the amendment finally passed.

Then came the time for those same three members of the BOS – Mr. Gillette, Ms. McMenamy and Mr. Shatz – to put on their hats as the SPGA, a role in which they are supposed to have open minds throughout an objective and impartial process. Not easy for them to do, having been such eager and supportive Berle/Amstar cheerleaders for the previous two years!

Mr. Gillette, for example, thought that the Town Meeting vote on a bylaw amendment was an indication of unambiguous support for the project, and that his thinking cap could thus be placed on a high shelf somewhere; at least, such was the crux of his statement following the decision on Monday night. As for the Chairman Mr. Shatz, despite strong and relevant new information and analysis entered into the record, he was so convinced of the gratuitous irrelevance of his own SPGA hearing that he had already written up his findings before the evening had even begun!

We leave it up to each reader to reach their own conclusion regarding the ethics of all this, but we can comfortably assert that such behavior is highly irregular for an SPGA, and should raise serious questions, for all concerned residents of Stockbridge.

Do you want the same people who serve as boosters and political consultants for commercial developers to then preside over the permitting process? Is this good for the town and in the public interest, over the long term? Should not the members of the Stockbridge BOS, deeply involved in enabling this project through the bylaw amendment, have recused themselves as the SPGA, and deferred to their Zoning Board of Appeals? Again, we leave each reader to reach their own conclusion.

We close with Article XXIX of the Constitution for the Commonwealth of Massachusetts that expresses a noble, fundamental principle for the rule of law reaching all the way back to Magna Carta:

FACT 4

article29 To all those who witnessed this process, and to all those who have duly examined the above three excerpts from the Stockbridge BOS minutes: do you believe this properly high ethical standard has been met?