Member group wins Hermitage with $8M bid

Posted Friday, March 20, 2020 5:03 pm

WILMINGTON — A group of former Hermitage Club members made the highest bid in an auction for properties at an exclusive private ski area that was developed at and around the former Haystack Mountain in Wilmington.

"The court finds [the bid] does meet the best interests of the estate and complies with prior orders," said U.S. Bankruptcy Court Judge Colleen Brown during Friday's auction.

The Hermitage Member Group submitted an $8,060,000 bid for the resort, the six-person bubble chairlift known as the Barnstormer, the golf course, several inns and some undeveloped parcels of land. The sale included the Hermitage Inn, Snow Goose Inn and Doveberry Inn in Dover, and the Horizon Inn in Wilmington.

Janice B. Grubin, attorney for Jim Barnes, who purchased the old ski area in 2011, attempted to stay the proceeding on the grounds that attempts to market the properties were not adequate.

"The stay is denied," responded Brown. "Mr. Barnes had ample opportunity and notice to appear as recently as Jan. 31 and he failed to do so. This hearing is concluded."

Barnes marketed the Hermitage as a private ski area, a club, inns, a golf course, and homes for members. But last year, Berkshire Bank filed a foreclosure complaint against the Hermitage for defaulting on more than $17 million in loans and the Vermont Department of Taxes shut down Hermitage establishments for missing tax payments totaling more than $1 million.

Barnes has also been on the losing end of several civil actions by people who purchased lots and were building homes on the assumption the Hermitage Club would be financially viable.

CLUB MEMBERS

Jason Gross, a member of the board of directors who is listed as the buyer in sale documents, said the Hermitage Club represents "an escape from the hustle and bustle of the work week where families and friends can gather in a safe environment and interact with all the wonder offerings and people of the Deerfield Valley."

He said his group is in discussions with a number of different operators. The goal is to get properties up and running as possible. It is possible that "non-core assets" will be sold.

Gross said marketing efforts will be made to get more members.

Tim Treanor estimated about 150 families, including his own, are part of the new club as of now.

"Everybody is looking to see the property there become productive again and help contribute to the community," he said. "That's really important to everybody. It is a private club in a lot of ways but it has a very close relationship with the community. There's a real symbiotic relationship there."

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Treanor was a member of the Ad-Hoc Committee of Members, which received approval to participate in bankruptcy court hearings. He also is a managing member of Barnstormer Summit Lift LLC, which was made up of former club members who invested in the chairlift and will recover some funds through the sale.

In his opinion, club members are needed to make the mountain successful. He said it's unlikely Haystack could be run effectively as a public mountain.

Treanor sees the potential for a new club to be "very member friendly and community minded, and not just developers looking to maximize profits.

"I think that should make everybody feel safe and happy," he said.

With the closing anticipated to occur within the next few weeks, Treanor said the golf course could be the first asset to become operable. But he is unsure how much work would be needed.

"One of the things members are going to want to do, and I'm speaking for myself here, is get some aspect of the club open as soon as possible to keep up the momentum and enthusiasm of members and to attract new members," he said.

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Since the group of members did not have to put up additional money after submitting its first bid, he said remaining capital from the fundraising effort for the auction could go toward improvements and repairs.

Rainmaker Mountain LLC and Boyne USA Inc. submitted initial bids that kicked off the process but did not bid any higher at the auction. In January, Boyne offered $3.5 million for the Barnstormer, and Rainmaker offered $4 million for the other properties.

Treanor described a group of individuals — not professionals, but consumers of the club — prevailing at the auction.

"It's like the workers taking over a business or something," he said. "I think it's a positive thing to see and it will contribute to the quality of the club, people's enthusiasm and all that. I think it's a really, really good day for the members."

Some of the biggest challenges may still lie ahead, Treanor said.

"The current economic climate is something everyone has to contend with in every context so that's going to pose some issues," he said, "but we've got a lot of people who are committed and enthusiastic to take this on successfully."

GOOD FOR THE VALLEY

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Rep. John Gannon, D-Windham-6, described the auction results as "great news for the Deerfield Valley."

"Most of the member group have strong ties to the valley and understand the economic impact that the Hermitage Club had and can have on the valley," he said.

Gannon was a member of the club. He also serves on the Wilmington Select Board.

Dover Select Board member Sarah Shippee said she is pleased that the member group was successful.

"I think it's some good news for the valley at a time we all could use it," she said.

Immediate action may need to be postponed due to concerns about the COVID-19 pandemic, Shippee said, but she wishes the group "all good luck going forward."

The Southern Vermont Deerfield Valley Chamber of Commerce also praised the outcome.

"The chamber is very excited at the potential for this group to have an immediate positive impact on the club and our valley as a whole," said Eric Durocher, executive director of the chamber. "We look forward to watching the process of reopening play out so that the club can again become a staple in our community. The chamber is very happy to see a resolution reached on an issue that has been in limbo for quite some time."

Gretchen Havreluk, economic development consultant for the town of Wilmington, said she was surprised by the figure of the winning bid.

"It's a bargain for all of the properties that they got," she said.

She said she looks forward to working with the group to help make the club sustainable for a long-term future in Wilmington.

Bob Audette can be contacted at raudette@reformer.com.

Chris Mays can be contacted at cmays@reformer.com.