Going once ...: Gateways Inn will be up for bid on online auction block
LENOX — Confronting a bleak and pandemic-shortened tourism season with Tanglewood and most other area cultural attractions closed for the summer, the owner of Gateways Inn, a boutique bed-and-breakfast, is planning to offer the inn at an online auction next week.
"This is not a regular auction of a distressed property or a bank auction for a property that has not paid the mortgage," proprietor Eiran Gazit said, pointing out that he and his wife, Michele, own the inn and a separate residence behind it free and clear.
The widely advertised sale effort by ConciergeAuctions.com, working with TKG Real Estate, is set for Wednesday through Friday, assuming that reasonable pre-bid offers are received.
The inn has 11 suites, a full-service restaurant and a popular nightclub featuring local performers. The 51 Walker St. property, including the owners' house, had been on the market last year for $3.2 million.
There's no "reserve" for the auction, meaning no minimum required bid. Concierge states that Gateways will be "selling to the highest bidder, regardless of price."
The Gazits purchased the inn and adjacent house in January 2012 for $2,250,000, including all inventory, and spent an additional $250,000 on renovations. The centrally located mansion, originally named Orleton, was built in 1912 for $108,000 in 1912 as a summer "cottage" for Harley Procter of Procter & Gamble fame, the co-inventor of Ivory Bar Soap.
After he sold it in 1925, the local landmark went through at least three ownerships as a luxurious private residence before it became a leading restaurant under chef Gerhard Schmidt and, later, a B&B owned by Fabrizio and Rosemary Chiariello, who sold it to the Gazits.
"This is a luxury property sale on a very high-end platform that only accepts one in five properties that approach them," Eiran Gazit told The Eagle in an email interview. "I am grateful to be included in this prestigious collection, and am impressed by the way they work and market the property all over the world."
The ConciergeAuctions website offers a virtual tour of the inn and preregistration for the online auction that begins at 4 p.m. Wednesday.
The following excerpts from the interview with Gazit have been lightly edited for length and clarity.
Q: What factors triggered your decision to auction the inn?
A: The decision was made in February, after a broker friend introduced me to Concierge. The inn has been on the market for a while now, and several times we were close to a sale, but at the last minute buyers backed out.
At first, we planned to have the auction in November, so that we would at least benefit from the summer and fall. which is when we actually make some money in a normal year. But when I realized there would be no summer this year, I brought the decision forward to the end of May, wanting to be the only property doing this, as I predict that many other properties in the area will follow my lead, and I did not want to be one of many.
A lot of people are waiting to see the outcome.
Q: Is the property being marketed primarily as an inn during a difficult time for the lodging industry, a high-end residence, or both?
A: So far, from people who are engaged in the process, I'd say half are looking at it as a residence and half as a boutique hotel.
Q: Is "selling to the highest bidder, regardless of price" to be taken literally? Or is "any reasonable offer accepted" the more likely outcome?
A: We have the option to cancel the auction before it goes live, which we shall do if we do not see reasonable pre-auction bids. This is not a fire sale. There is a 6 percent opening bid incentive, meaning that pre-bidders, should they be the winning bid, will receive a 6 percent discount on the pre-bid.
Q: How you will evaluate the online bids?
A: It starts with pre-auction bids, so people register with a proposal. In order to be included, they have to place $100,000 in escrow, basically to keep the gawkers away. So when the auction opens, we will already know what the starting point is, and will base our decision on whether to continue on that.
This is not a done deal yet, and if the sale does not go through, we have a plan B — continue to operate (under restrictions and guidelines).
Q: Do you see the online auction, the only possibility in these times, as an advantage, or would you have preferred a traditional, on-site in-person process?
A: Either way can work. The beauty of the online auction is that it is a time-limited, committed, no contingency, as-is sale. For buyers, it enables them to potentially purchase the property at a much lower price than a conventional process.
Q: How do you and Michele look back on your experience operating the inn since 2012?
A: Basically, we have put all the profits back into the business, always upgrading, always enhancing the experience of our guests.
This has never been about the money, but rather about creating an experience that people cherish. We took over a tired, unknown property and turned it into a destination for locals and tourists alike, regardless of whether they were staying with us.
We promoted farm-to-fork dining, sourcing our food from local farms; we promoted and supported live music utilizing the amazingly wonderful talent the Berkshires does not lack, and built a brand around it. We have made many friends in the process.
Q: What are your feelings about letting it go?
A: I learned long ago not to get emotionally attached to businesses I am involved in.
This is not my first rodeo and I try to look at things objectively. Regardless of the pandemic, it is time to let go and move on. We are leaving behind a solid business, with great staff and very loyal customers. I am proud of what we accomplished here, but as I get older I find it harder to juggle this with my other enterprises.
At the moment, I am working on two projects simultaneously in the attraction-experience business, which is my niche. Both assume, as I do, that at some point, the world will go back to what was normal, just a few months ago. So, I am busy.
Q: Assuming you receive and accept a reasonable offer, what are your immediate plans?
A: We plan to stay in the Berkshires. In the long term we plan to return to Israel, but who can make plans in these crazy times?
Clarence Fanto can be reached at email@example.com, on Twitter @BE_cfanto or at 413-637-2552.
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