Tag Archives: amstar

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.

finke

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 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!

ascentsis

WHICH SHELL HIDES THE PEA?

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.)

Lenox-ZBA-470x353

DOES ANYONE HERE KNOW WHO OWNS ELM COURT?

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.

A Way Forward

Periodic major expansions in scale for the proposed resort have plagued the planning/permitting process from the start. In early meetings, the number of rooms was variably provided as 40 or 60, most of which were to be located in the existing mansion. Later, this grew to 80, then to 96 and finally to the current size of 112 rooms, most of which would be located in the proposed huge annex.

Over the same period of time, the restaurant has been variably described as “well off in the future”, or as “a small cafe”, or as “only for guests”, prior to its current iteration as a 60-seat full service restaurant open to the public.

The spa, early on, was described as “more like a workout facility”, yet soon ballooned to a 15,000 square foot pamper pavilion complete with swimming pool. To us, all this has seemed like a classic bait & switch strategy – the antithesis of a process where consensus is sought among all interested parties, through an open and transparent dialogue.

Recently, we sent a letter to the CEO of Amstar inviting his representatives to sit down with us in good faith and to seek common ground, and a way forward. Obviously, we are not interested in negotiating the location of parking lots; we hope they will commit to a process that will involve planning professionals from both Lenox and Stockbridge, as well as neighbors and other concerned parties, to approach the future of Elm Court with an open mind. If they are willing to make such a commitment, we are certain that there is a plan for this property that would satisfy the interests of all parties, including investors.

UPDATE AUGUST 18: Unfortunately, Front Yard/Travaasa/Amstar has indicated that they are not inclined to reduce the scale of their proposal, nor to participate in a different kind of process, built on consensus and transparency. It was worth a try, and at least on our side, the door remains open, should they wish to reconsider. 

 

Cradle to Grave

From the applicant’s own website:

amstarctog

And here is a bird’s eye view of our neighborhood, whose interests are not at all aligned with Amstar’s “seamless transition”:

NOT A GRAVEYARD; REAL FAMILIES LIVE HERE.

OLD STOCKBRIDGE ROAD IS ON THE LEFT OF THIS PHOTO, CONCEALED BY THE FOLIAGE OF LEGACY TREES. OUR NEIGHBORHOOD IS NOT A GRAVEYARD FOR FLIPPED REAL ESTATE; REAL FAMILIES LIVE HERE!

Finally, here are a few properties that are now in the Amstar “grave” (or exited) category.

amstarexits

Amstar is a commercial real estate fund, and they have the right to pursue whatever strategy they wish. But we will not let them destroy our neighborhood while they wait for the most profitable time to exit Elm Court!