Inn goes on the auction block
LENOX - The historic Cornell Inn, a property that dates back to 1777, is being auctioned online by the failing German bank that acquired it in 2010.
The three-day event on the auction.com site is believed to be the first time a Berkshire County lodging site is attempting to be sold, eBay style, to the highest bidder, said Robert Romeo, owner of Century 21 Franklin Street Associates.
While Romeo first marketed the 28-room, three-building inn for an initial asking price of $3.9 million in 2008 - later reduced to $3.5 million - the minimum bid for the online auction is $425,000.
According to Darren Foster, a vice president at auction.com's office in Newport Beach, Calif., the final selling price of the property - which went through foreclosure before the private Metro Funding Corp. bank based in New Jersey purchased it - may remain undisclosed for a time if the auction is successful.
As of late Wednesday night, a bidder had offered $725,000. The property's assessed value is $1,733,300, Town Hall records showed.
Lance Fyfe, 40, the current innkeeper, grew up in Richmond and has 24 years of experience in the hospitality industry at numerous Berkshire establishments, including Eastover, Cranwell Resort, Kimball Farms, Jiminy Peak and Kripalu. He has been improving the cash flow at the Cornell by cutting rates and offering $99-a-night, pre-season specials.
Having been promoted from chef to manager in late March, Fyfe has been working to boost the bottom line; annual losses have been reported as more than $100,000 last year under the previous local manager.
In an interview with The Eagle on Wednesday, Fyfe emphasized that the inn will not leave reservation holders high and dry this summer and fall, no matter the outcome of the auction effort. He said he had only learned about the planned Internet sale of the inn last week.
He's taking reservations for coming months, offering rates from $180 to $300 for high season with a two-night weekend minimum stay.
"I assume whoever buys the place would at least be smart enough to stay open all the way through fall foliage," said Fyfe, who employs a staff of 12, all but three of whom are parttimers. He lives on the third floor of the Main House.
"I love it here, it's a great location, really nice," said Fyfe. But in the last several years, he said, only June through August have been profitable.
Three or four potential buyers have surfaced recently, according to Fyfe. One is from New York City, who would retire and live at the inn. Another is from Texas, who would retain the current staff, and there has been local interest as well, he added.
Whatever price a successful bidder might pay before the auction concludes at 3 p. m. today, structural upgrades and renovations to the property - believed to total as much as $1 million - would be required over time.
Also still to be resolved is a debt of $ 680,000 in unpaid state taxes. The property is current on its local taxes.
The debt stems from previous owners, Billie and Doug McLaughlin, who abandoned the property without advance notice in September 2009, leaving fall-foliage tourists who had booked rooms out of deposit money and with no place to stay.
The property at 203 Main St. is at the foot of Kennedy Park and on the northern gateway to the historic downtown village.
It has had a complex history of successive ownerships and managers since then.
After it was acquired by Metro Fund, a private bank based in New Jersey, the new owners hired Israeli tourism entrepreneur Eiran Gazit to manage the inn and restore its tattered reputation.
But in late 2010, the inn was sold to the German bank WestLB. AG, a commercial bank based in Dusseldorf, Germany, partly owned by the German state of North Rhine-Westphalia, which has now approved a law to split up and wind down the troubled bank by order of the European Union. The EU had bailed out the bank during the 2008 global financial meltdown.
Trimont Realty Corp., based in Atlanta, has been managing the property for the German institution, while the inn's operation has been run by Lodging Unlimited Inc., based in Chicago. The real estate firm Grubb and Ellis, based in Atlanta, arranged for the online auction.
Executives of Trimont, Lodging Unlimited, and Grubb and Ellis - all contacted by The Eagle - either did not return calls or declined comment on Wednesday.