Stockbridge Select Board OKs extension of Elm Court special permit amid project delays

A developer has pulled the plug on an eight-year effort to create a resort at the Gilded Age Elm Court cottage in Lenox.

LENOX — In the end, it was a project whose time, if it ad ever come, was long past.

The demise of the Elm Court resort in a bucolic Stockbridge and Lenox residential neighborhood was really no surprise to most of us. This is not the occasion for building out a 112-room resort with a huge spa and a public restaurant. Not only has the COVID pandemic brought the hospitality industry to near-desperate straits here, there and everywhere, but there’s also evidence that the market for inns and other lodging establishments is saturated in the Berkshires.

Even though the town boards in both communities had extended the existing special permit for the project twice — most recently last summer — the hotel operator, Travaasa Experiential Resorts, had divested its properties in Hawaii and in Austin, Texas, while its parent company, the Amstar real estate investment conglomerate, retained only one hotel among nine properties in its portfolio.

Given years of litigation by concerned neighbors over what they saw as a hostile intruder in their rustic paradise, the proposal appeared far too ginormous for its setting along the Lenox and Stockbridge town line.

Nevertheless, there’s much to regret. Elm Court’s gorgeous, 13-room, 1886 mansion built for the Sloanes and Vanderbilt families, now extensively restored but still needing additional renovation, risks abandonment unless Berkshire Property Agents can sell it to a private investor for anything near the $12.5 million asking price. That represents Travaasa’s $9.8 million purchase price in 2012, plus the expenses and renovations by the development partner, Front Yard LLC.

It’s worth recalling that this grand relic of the Gilded Age was allowed to lie in ruins, violated by vandals, for four decades starting in 1958, until the Berle family finished restoring it in 2002 as a small-scale, boutique destination for weddings and other celebrations. That venture lasted only seven years, undoubtedly hit hard by the Great Recession.

The resort venture would have provided more tourism for the region, bolstered the tax rolls of Stockbridge and Lenox, created plenty of employment from entry level to management, and, as an extra bonus for Lenox, triggered close to $4 million in infrastructure upgrades along Old Stockbridge Road, potentially even a sidewalk.

Anyone who keeps an eye on the hospitality industry in the Berkshires, among the top sectors of the leisure economy here, knows that it’s hard times with no immediate end in sight for the pandemic.

Multiple properties are on the market, include the storied Apple Tree Inn across from Tanglewood, with an asking price of $3.5 million. Decades ago, it was the Avaloch Inn, and from 1976 to 1979 it was the outpost for Alice Brock’s legendary restaurant (“Alice’s at Avaloch”). Also new to the market is the 59-room Days Inn by Wyndham along Route 7/20, yours for $2.3 million.

The 1888 Cornell Inn near downtown Lenox can be had for just under $2.6 million, and for luxurious elegance, you can make an offer for the 1881 Kemble Inn, which went on the market late last winter for $4.6 million.

No wonder a project like Elm Court could not raise the necessary financing for what had been a $50 million resort eight years ago but had ballooned to near $75 million because of soaring construction costs.

Defending against the lawsuit by neighbors for more than two years also was “a huge, huge interruption that did have consequences that we’re still dealing with,” Travaasa’s local attorney, Nick Arienti, told the Lenox Zoning Board of Appeals last August as he advocated for the extension of the special permit.

Appearing before the Stockbridge Select Board in July, seeking the same extension (the property is mostly in Stockbridge, except for road frontage and an entrance), he expanded on the pandemic’s impact on the hospitality industry that froze the commercial lending market for construction-based “ground-up” projects. Financing for such ventures has “largely evaporated,” the attorney pointed out.

He explained that there’s “a stranglehold preventing funds from going to these kinds of projects industrywide” due to steep declines in revenue and lack of cash flow for lodging destinations and restaurants.

Arienti pointed out 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.”

It also stands to reason that the increasingly popular short-term home rental market fueled by Airbnb also created headwinds for traditional inns and hotels. There are anecdotal reports, especially from Cape Cod and the Islands, that these rentals are considered more safe during COVID times, since they can be rented by families weekly, after thorough cleansing and safety protocols.

There are exceptions to the adversity. Mill Town Capital, the private investment group based in Pittsfield, has invested more than $1 million for its purchase of the historic Gateways Inn on Walker Street in Lenox, including the addition of the Walker Street Grille to the remarkably robust and resilient downtown dining scene, now tented up and iglooed for the cooler-weather season.

The newest resort behemoth in town, Miraval Berkshires on the former Cranwell property, represents a reported $132 million investment by Hyatt Hotels Corp. Miraval and its less-expensive cousin on the property, Wyndhurst Manor & Club, are running a holiday sale, but a three-night stay for next weekend would cost $405 a night for two people. Even in November, a visit to the Berkshires in style is not for the fainthearted, but there are many less-costly alternatives.

It’s been encouraging to see all the hikers, cyclists and kayakers in our midst, even in fall foliage’s last stand. Whenever the health emergency eases, the area’s vital hospitality industry is bound to regain its vibrancy and allure for restive urbanites and suburbanites eager to de-stress and to revel in the pleasures of country life.

At the risk of looking like a cheerleader or an applicant for work at the nearest tourism bureau, I have to submit that sheltering in place around here is a privilege, not a punishment imposed by a vicious virus.

Clarence Fanto can be reached at cfanto@yahoo.com. The opinions expressed by columnists do not necessarily reflect the views of The Berkshire Eagle.