Questioned by Select Board member Roxanne McCaffrey about a potential sale of Elm Court, Arienti said,“my clients have not alluded to that possibility at this point. As far as I understand, they are intending on getting the project done and want the ability to make that happen. I think they would be disappointed to walk away. They think it’s a great use and provides a lot of access to the property by the public, and it’s just a beautiful property.”
He went on: “Will they walk away? I don’t know, I’m sure they don’t want to hold it dormant forever but I can’t speak for them specifically on that.”
Arienti emphasized the pandemic-related statewide, national and international impact on the hospitality industry that froze the commercial lending market for construction- based “ground-up” projects. Financing for such ventures has “largely evaporated,” especially on the open market, the attorney said. He told the Stockbridge Select Board that Front Yard “continues to seek financing in every way, shape and form, but at the moment there’s a real stranglehold largely preventing funds from going to these kinds of projects industry-wide” due to steep declines in revenue and lack of cash flow for lodging destinations and restaurants. Arienti stated that “until they’re able to operate and demonstrate the potential for that income to return, both to fill rooms and make these types of destinations run, the market is not supporting that type of financing.”
Construction had been anticipated to begin this year, he noted, and with the pandemic expected to continue for the foreseeable future into next year and beyond, the market is not expected to loosen until there’s a solution aimed at a “new normal.”
The two-year extension request is realistic, according to Arienti, in order for Front Yard to regain progress toward financing. Otherwise, the current permits in Stockbridge and Lenox would expire on Sept. 6. After a 15-minute discussion with the attorney, the Stockbridge Select Board voted 3-0 to extend the permit until Sept. 6, 2022.
“I hope everything works out,” said board Chairman Ernest “Chuckie” Cardillo. “I’ve been looking forward to that project.”
At the time, Front Yard’s 2012 purchase of Elm Court was reported as the highest price ever paid for a residential property in the Berkshires.
Travaasa Experiential Resorts now owns one property, in Hana on Oahu in Hawaii. In 2016, Travaasa sold its Austin hotel to Hyatt’s Miraval Group. Miraval opened its Lenox destination, formerly Cranwell Spa & Golf Resort, on July 15.
BY CLARENCE FANTO
STOCKBRIDGE — Eight years after a resort developer paid $9.8 million to the Berle family to purchase the Elm Court property, including its Gilded Age mansion built in 1886, the project remains in limbo.
With financing hard if not impossible to come by, Front Yard, LLC, is seeking a third extension of its special permit first approved by the Stockbridge Select Board in September 2014.
The project calls for a $50 million, 112-room hotel on the 90-acre estate, including 16 existing suites in the mansion.
Front Yard is the local developer for Travaasa Experiential Resorts, a division of the Denver-based Amstar Group, a major real estate investment firm.
Since three acres of frontage and part of the main entrance at 310 Old Stockbridge Road lies in Lenox, a parallel request for a two-year extension will go before the Lenox zoning board on Aug. 3, said Great Barrington attorney Nicholas Arienti, who represents the developer locally.
As a condition of the current Lenox permit, if and when construction of the resort starts, Front Yard would be required to begin a $3 million to $4 million infrastructure upgrade for the town along Old Stockbridge Road.
“It’s been a somewhat challenging market lately for construction funding,” Arienti said. “The major problem they ran into, which is not unique at this point, is the result of the COVID-19 pandemic.” The hospitality industry was decimated by the shutdown of the travel industry beginning in March, he added.
But Travaasa had encountered financing resistance for several previous years, he conceded in response to questions from Stockbridge Select Board member Patrick White.
Asked whether the proposed resort might morph toward a “residential concept,” Arienti acknowledged that could be a “contingency plan in the event that this project doesn’t go forward.” But the developer would have to “go back to the drawing board” and seek a new special permit from both Stockbridge and Lenox since the current approval is only for resort development, he said.
“Were they faced with the reality that the project could not go forward for some reason or they decided that it just wasn’t going to work out for financing and other reasons, they might,” said Arienti. “I think they will keep their options open if necessary because they’ve invested a gigantic, substantial sum” for the purchase and “multiple millions of dollars” for upkeep, for legally required permit engineering and the hiring of construction managers and consultants.
“They don’t want to walk away from this project, that’s not their intent,” he asserted. “They still intend to see the permitted project through, if they can.”