Hermitage Cash Flow Shortage

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  • mtsnow123mtsnow123 advanced
    Posts: 420
    “restructuring officer” means banks are overseeing = drastic measures to be taken including, possibly, bankruptcy……
  • TomWhiteTomWhite expert
    Posts: 581

    Hermitage avoids shutoff of utilities

















    Posted

    Sunday,
    January 7, 2018
    4:45 pm












    WILMINGTON — The Hermitage Club averted having its water and sewer services shut off at various properties by making a payment of past-due fees the day before a scheduled appeal hearing.

    "Just received payment in full from the Hermitage, with a request from them to cancel tomorrow's appeal hearing," Cold Brook Fire District Administrator Kimberly Hicks wrote to the Reformer at about 2:30 p.m. on Friday.

    The Hermitage runs a private ski resort at Haystack Mountain, a golf course, and inns and restaurants in the Deerfield Valley. The company owed Cold Brook about $87,000 for outstanding water and sewer bills going back six months.

    The Prudential Committee, which governs the Cold Brook Fire District, expected to have an appeal hearing Saturday morning. An attorney for the Hermitage requested the appeal hearing after the company missed a deadline Wednesday to make the delinquent payments. The company's finance director had asked whether a minimal payment could be made. Citing Vermont statute, Hicks pointed to an appeal hearing as the only way to avoid shutting off the services.

    Select Board Vice Chairman John Gannon, who is also a state representative, told the Hermitage a shutoff might be more expensive than the company understood because it would also shut down the fire suppression system.

    In October, the Hermitage's financial struggles were blamed on poor weather during the 2015-2016 winter season and a slow membership drive. Membership dues have not been sufficient to cover operating costs and real estate operations were subsiding those costs, company officials had said.

    Members were asked for a one-time due of $10,000 to help pay off vendors. Last month, company founder and CEO Jim Barnes reported having collected 75 percent of those dues.

    Last week, Hermitage Finance Director Chad Bullock said the company is "working through all our payables."

  • TomWhiteTomWhite expert
    Posts: 581
    Cash flow, weather woes force Hermitage Club cuts




    by

    Mike Eldred





    7 hours ago | 802 views | 0 0 comments | 18 18 recommendations | email to a friend | print







    WILMINGTON- After a weekend of valley-wide speculation about the continued operation of the Hermitage Club, the private resort has curtailed operations and laid off 15% of its workforce.

    According to Hermitage Club officials, the cutbacks are connected to this week’s warm weather, which nearly reached 70 degrees on Wednesday.

    “The Hermitage is open for business,” said Hermitage Club Director of Public Relations Meridith Dennes. “The mountain will be closed midweek due to weather, and there has been a reduction in force appropriate for the services being offered.”

    The speculation began on Friday, when word leaked that Hermitage Club employees were told not to cash their checks until Tuesday. A local Hermitage Club employee, who requested anonymity out of concern for possible workplace retaliation, confirmed the information. “We were told we had to hold our paychecks until Tuesday,” the employee said. “And that’s not OK for everyone, people have kids to feed.”

    The news spread fast and, according to the local employee, members were upset, not only that the club’s continued operation was up in the air, but also that employees’ compensation was in question. “It was a very sad day,” the employee said. “I heard about one member who went around giving ski instructors $100 bills because he was so distraught and didn’t want to see the club go down. A lot of members cleaned out their lockers and took their equipment home because of the uncertainty. Members were hugging employees. The worst part was getting hugs from children who don’t know if they’re going to be back again. There’s a real sense of community here.”

    An international employee working at the Hermitage Club on a temporary visa contacted The Deerfield Valley News, concerned that she was unable to cash her paycheck for the two-week pay period, and unsure of her employment. “I feel I am without a voice and now, it appears, without my hard-earned work compensation.”



  • TomWhiteTomWhite expert
    Posts: 581
    Over the weekend, rumors circulated about meetings between Hermitage Club President James Barnes and members. Club member John Gannon confirmed at least one meeting took place, at which Barnes asked club members for more money to continue operations for the rest of the ski season. “Jim (Barnes) proposed that members each contribute $3,000 to the club to cover payroll through April 1,” Gannon said. “He also told us he’ll have a proposal sometime during the week concerning the sale of club assets to the membership.”

    In October, the club levied what they called a “one-time membership dues adjustment” of $10,000, effectively doubling dues for 550 members. At the time, the $5.5 million raised through the charge was said to be earmarked for vendor debt repayment, property tax payments, and operations.

    The $3,000 dues charge to 550 members would raise an additional $1.65 million. However, Gannon said that, based on the reaction of members at the meeting, it appeared unlikely to succeed. Another source said members reacted to Barnes’ proposed $3,000 payment with raucous abuse, shouting accusations and demanding accountability.

    Club officials declined to comment on the prospect of any offer for the sale of the club. Gannon says he fears the strategy is intended to counteract pressure from a sub-group of club members who have had their offers to purchase the club rebuffed by Barnes.

    “As I understand it, the group of members have been trying to reach a deal for months and have made a number of proposals,” Gannon said. “I worry that an untenable offer is setting members up for the fall, to blame us when the club goes bankrupt and people don’t get paid.”

    On Tuesday, Dennes said that payroll had been met, and employees were able to cash their checks, as they had been promised on Friday. A local employee confirmed that their paycheck was, eventually, cashed on Tuesday. “I got to the bank after 9 am on Tuesday and there was already a long line,” the employee said. “By the time I got there, the account was depleted, but later we were told to go back, and everyone I talked to was able to cash their check by the end of the day.”

    On Wednesday, the Hermitage Club announced that it would be closed midweek due to unseasonably warm temperatures, and that 15% of the workforce had been laid off. The club also said that contracts with workers who have J1 and H2b visas would be honored. According to unconfirmed sources, however, international workers were among those who were eliminated, and one source suggested that their contracts do not guarantee employment for any specific time period.

    According to Dennes, the club will provide support to individuals affected by the workforce reduction.

    “The club will work with the local labor force who have been impacted by the restructuring,” she said. “We have brought in people from the Department of Labor to make sure people get placed in a timely manner. We’ll do everything to make sure individual needs are met in the interim. We care deeply about our employees, and understand the impact.”


    Read more: Deerfield Valley News - Cash flow weather woes force Hermitage Club cuts

  • TomWhiteTomWhite expert
    Posts: 581
    Bank files for foreclosure on Hermitage properties

















    Club house











    By Mike Eldred

    WILMINGTON- Berkshire Bank filed a foreclosure complaint against the Hermitage Inn Real Estate Holding Company, the Hermitage Club, and Hermitage owner James Barnes in Windham Superior Court Friday afternoon.

    Hermitage Club officials said that the bank's action was anticipated, and suggested it could spur ongoing negotiations. "This was fully expected and it is the next logical step in a process that will assist to bring all parties to the table to reach accord," said Hermitage Club public relations director Meridith Dennes. "We believe it was needed and will help us to reach an agreement that will ultimately benefit all stakeholders."

    Berkshire Bank is seeking foreclosure on several Hermitage properties including the Hermitage Inn, Haystack Ski Resort and ski area lands, Haystack Base Lodge, Haystack Golf Course, Chamonix Townhouse Village, Haystack Golf Course, water rights to Mirror Lake, hundreds of acres of land, along with several smaller parcels. The foreclosure action also includes the Snow Goose Inn, the Horizon Inn, and the Doveberry Inn.

    According to the complaint, Barnes and the Hermitage failed to meet their obligation to make payments on three loans, including a $15 million "base lodge" note signed in December 2014, a $1 million bridge loan in June 2016, and a second bridge loan of $1.1 million made in July 2017. Of the total $17.1 million in loans, the Hermitage and Barnes still owe $16,342,175.61 in principal, along with $213,799.76 in interest, and $43,603.79 in late charges.

    The bank's complaint also notes that "all taxes, assessments, and other charges" on the mortgaged properties must be "paid current," and any unpaid taxes or other debts owed on the properties "become additional indebtedness owed by (the defendants)." According to Wilmington officials, checks presented for Hermitage property taxes on February 23 failed to clear, and property taxes due previously are delinquent. The failure to pay taxes on the properties "is a default under the mortgage, among other loan documents, by Hermitage Inn Real Estate Holding Company LLC, Hermitage Club LLC, and James R. Barnes."

    The action also lists as defendants, along with Barnes and the Hermitage, about 45 individuals, businesses, and government entities that have filed liens or writs of attachment against Hermitage Club properties totalling more than $9.7 million. The amount includes a $1.5 million writ filed by Reinhart Food Service, two $1 million writs filed by individuals for residential properties, and $1.2 million in liens filed by the Vermont Department of Taxes. According to Berkshire Bank's complaint, the 45 creditors' claims are "junior and inferor to that of (Berkshire Bank)."

    Boiler plate language in the complaint warns occupants of the properties that their right to remain on the premises may end when the foreclosure is completed.
    (I didn't find the thread someone else started on Hermitage.)
  • mtsnow123mtsnow123 advanced
    Posts: 420
    As mentioned a little while ago, why not momentarily forget all this drama and see the Bachelor at the Hermitage. Article here: http://www.dvalnews.com/view/full_story_obits/27546697/article-Real-drama-at-Hermitage-Club-tops-made-for-TV?instance=news_page
  • rickbolgerrickbolger expert
    Posts: 1,322
    About 18 months ago I saw advertising on trash receptacles around the financial district in NYC touting the exclusivity and fabulousness of the Hermitage "no lift lines" or "you own the mountain" something to that effect.   Seemed like an odd choice of vehicles for an upscale promotional message.  In retrospect, perhaps it was fitting  :-??

  • trackbikertrackbiker advanced
    Posts: 139

    About 18 months ago I saw advertising on trash receptacles around the financial district in NYC touting the exclusivity and fabulousness of the Hermitage "no lift lines" or "you own the mountain" something to that effect.   Seemed like an odd choice of vehicles for an upscale promotional message.  In retrospect, perhaps it was fitting  :-??

    Didn't Barnes make his money in the trash business? Maybe he got a special deal on the trash receptacles.
  • lotsoskiinglotsoskiing expert
    Posts: 1,136
    Have any private clubs, aside from the small ones in WNY and in Canada (none of which luxury) survived? It seems like the luxury/exclusive country club ski area model is not sustainable.
  • rickbolgerrickbolger expert
    Posts: 1,322
    perhaps Round Top?  (Plymouth/Bear whatever it is)  Does that still operate?  For a while it went with a hybrid model, I suspect that would be more sustainable -- but then you'd have a harder time tapping the members for additional funds.

    There is another private member deal in California, but is definitely low brow 

  • rickbolgerrickbolger expert
    Posts: 1,322


    Didn't Barnes make his money in the trash business? Maybe he got a special deal on the trash receptacles.




    Ah! That might explain it.

  • lotsoskiinglotsoskiing expert
    Posts: 1,136

    perhaps Round Top?  (Plymouth/Bear whatever it is)  Does that still operate?  For a while it went with a hybrid model, I suspect that would be more sustainable -- but then you'd have a harder time tapping the members for additional funds.


    There is another private member deal in California, but is definitely low brow 
    Plymouth Notch appears to be operating, as per their website. Last entry was 2/8 on a powder day.
  • TomWhiteTomWhite expert
    Posts: 581
    Holimont in Ellicottville, NY is around the corner from Holiday Valley. It is large and appears to be going strong.
  • lotsoskiinglotsoskiing expert
    Posts: 1,136
    TomWhite said:

    Holimont in Ellicottville, NY is around the corner from Holiday Valley. It is large and appears to be going strong.

    Yep, but it strikes me as a family club place, not built on the premise of exclusivity and luxury. Just a nice place to ski with others, like a boat club vs. a yacht club. It's the high-end exclusive place that I don't see making it.
  • jaytremjaytrem advanced
    Posts: 170

    TomWhite said:

    Holimont in Ellicottville, NY is around the corner from Holiday Valley. It is large and appears to be going strong.

    Yep, but it strikes me as a family club place, not built on the premise of exclusivity and luxury. Just a nice place to ski with others, like a boat club vs. a yacht club. It's the high-end exclusive place that I don't see making it.
    Just skied there a few weeks ago.  Nice place but it's not like Hermitage at all.  General public is welcome during week days (always thought the Hermitage should have gone that direction too).  The lodges at Holiday Valley were actually much more fancy.  Also skied Hunt Hollow on that trip, same deal, general public is welcome during the weekdays and not at all fancy.  There's a good amount of successful low key clubs out there.  Only big time exclusive ones I can think of are Yellowstone and Hermitage.

    Hoping to do a trip report when I get the time (gotta keep Cisco happy).
  • obienickobienick expert
    Posts: 1,102
    Neither the Hermitage Club nor the Yellowstone Club are member equity.  That's the trouble.  IIRC the ones in NY that are working are member equity.
  • jaytremjaytrem advanced
    Posts: 170
    Seems like Yellowstone might be going okay these days.  They're in the process of building a huge expansion.  Prior owner was up to some shady stuff.  Not saying he wouldn't have failed anyway, but it certainly didn't help.

    Good question on the NY ones.  Looks like they were at least initially opened by investors.
  • z1000307470z1000307470 advanced
    Posts: 142
    Yellowstone's founder put the YC up as collateral on a $375 million loan from Credit Swiss and allegedly kept $209 million for themselves. That was the source of the problem at the YC. It is now running smoothly.
  • mtsnow123mtsnow123 advanced
    Posts: 420
    Another update about Hermitage paying their oustanding taxes just in the nick of time. Link
  • rickbolgerrickbolger expert
    Posts: 1,322
    Aside from the names and the target audience, this is like re-living the latter days of Vernon Valley/Great Gorge

  • DrJeffDrJeff advanced
    Posts: 381
    mtsnow123 said:
    Today, yes.... Will they come through with some cash by the weekend and open up like they did last week/weekend?? To be determined..... Last week they didn't confirm on their social media sites that they were going to be open for the weekend until Thursday.....

  • nospeed411nospeed411 novice
    Posts: 9
    As of yesterday the sheriff shut the doors on Hermitage....They were issued a cease of ops order by the state of Vermont as of Monday morning.  Apparently they owe more than 1.5 million in back sales and hotel taxes.  Now it makes sense why they filmed the "Bachelor Winter Games "there....guessing they were hoping for a giant payday to hold off the tax man 
  • TomWhiteTomWhite expert
    Posts: 581
    Minus the photos, here's the Liftblog.com article.

    State of Vermont Shuts Down The Hermitage Club

    March 20, 2018Peter
    Landsman
    5 Comments

     

    Notices
    posted on buildings at America’s second largest private ski resort are
    clear.  “Please take notice that Hermitage Club LLC failed to post the
    bond required by the Vermont Commissioner of Taxes…and may not conduct any
    business at this location.”  News of the closure comes less than a month
    after a Massachusetts bank filed a $16.6 million foreclosure complaint related
    to three separate loans now in default.

    The
    Hermitage Club features one of only five bubble chairlifts with heated seats in
    the United States.  It opened just over two years ago.

    The Hermitage owes the
    State of Vermont more than $1 million in rooms, sales and meals taxes. 
    The two parties had been operating under a payment plan that allowed the ski
    resort to open on weekends this winter.  A $112,000 payment wired to the
    state on Friday was enough to keep the lifts spinning until Sunday.  A
    note to members posted at the club yesterday says, “We are working diligently
    to secure the funds to allow us to open for this coming weekend and will keep
    you posted.”  The local newspaper references some employees who said they were
    escorted from the property by police.  I can only imagine the frustration
    they must feel losing their jobs after months of uncertainty.

     

    Opened in 2011 on the
    site of the defunct Haystack Mountain ski area, the Hermitage Club currently owns
    a 2015 Doppelmayr bubble high-speed six place lift, two recent Skytrac quads, a
    1985 Poma triple and a 1987 CTEC triple.  As I wrote a few weeks ago, lots of legal maneuvering likely
    lies ahead and many of these lifts could find new homes in the event of a
    liquidation.

     

  • TomWhiteTomWhite expert
    Posts: 581
    Here are five comments on Liftblog.

    ·      If no
    one purchases the Club, a la Tamarack or Spanish Peaks, the lifts will probably
    be auctioned to cover debts. Someone’s going to get a steal on Barnstormer if
    that happens.

    If the club is
    liquidated, Barnstormer would be the PERFECT replacement for the Barker
    Mountain Express at Sunday River, and with Boyne reacquiring full ownership,
    that could become a reality. That would be awesome if they could make out like
    a bandit and grab Barnstromer for a fraction of the cost when new, truck it
    over to the river, and use it to replace the aging Barker Quad, which as of
    recently can only run at 700 fpm MAX and has become far too unreliable to be
    one of SR’s main lifts.

    Barnstormer could also be
    used at Jay Peak to replace the Bonaventure Quad and provide a different
    enclosed lift to get marginal skiers off the tram that have no business being
    on that terrain.

    The Barker lift at Sunday
    River needs to go. 700 fpm is just too slow. Especially for one of the busiest
    lifts on the mountain. But I think Boyne would rather just buy a brand new lift
    than a re-tread.

    I doubt anyone is going
    to purchase the club and assume all debts. 16mil is a lot and the club has not
    once been profitable.

  • nospeed411nospeed411 novice
    edited March 21 Posts: 9
    There has been rumors here in the valley of a Mt Snow take over.....however I callkgcuvuvouv on that ever happening again.  Sadly Hermitage is worth more dead than alive as far as mechanical assets are concerned.  

  • DrJeffDrJeff advanced
    edited March 21 Posts: 381

    There has been rumors here in the valley of a Mt Snow take over.....however I callbjhhjl on that ever happening again.  Sadly Hermitage is worth more dead than alive as far as mechanical assets are concerned.  


    The actual Peak folks I've talked to, who are in somewhat of a position to be in the loop of the companies potential interest in the Hermitage Club and acquiring it, have been quite quick and decisive with a no answer (too much likely $$ for not enough return, too many permitting issues to connect them, not in the overall company strategy, etc) What Peak may have interest in, should The Hermitage go to a bank liquidation sale situation at some point, is some of their lifts. That is much more plausible.

    Around the Valley, I have heard a number of people, "who heard from a friend of a friend of a friend who is the 2nd cousin twice removed from X at Peak" type rumors about Peak buying the Hermitage.... Nothing more concrete than that, and nothing like the multiple times that Peak management have said "no" when flat out asked if they're buying the Hermitage...

  • TomWhiteTomWhite expert
    Posts: 581
    Is the original Hermitage inn still in business?
  • lotsoskiinglotsoskiing expert
    Posts: 1,136
    Last post on their Twitter account was March 19....an ad for a property management company in Arlington, which is a ways away from that area...weird
  • bubblecufferbubblecuffer advanced
    Posts: 301
    Were there permit related issues that prevented the Ski-LTD/ASC merger of Snow and Haystack or was it strictly budgetary?  

    The geographical location of Mt Snow attracts endless throngs of skiers with tons of money.  I wonder if Mt Snow's contribution to Peak's general financial success is strong.  I'm not a very big fan of Peak, but they've figured out how to make money in very challenging industry and I do like what they did for Crotched.

    Let's face it, a megaplex connection of skiing in the Cold Brook are would rival anything in the East.  Haystack has water.
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