Hemitage Cash Flow Shortage

TomWhiteTomWhite advanced
in NELSAP Forum Posts: 477

Hermitage Club taps members to pay off debt

Hermitage Club bubble liftHermitage Club members welcome the new Barnstormer lift, which takes riders to the top of Haystack Mountain in a bubble protected from wind and snow with heated benches. Photo courtesy Hermitage Club " data-medium-file="https://i2.wp.com/vtdigger.org/wp-content/uploads/2016/01/20160110__p_REF-L-NewLift-01101_500.jpg?fit=300%2C200&ssl=1" data-large-file="https://i2.wp.com/vtdigger.org/wp-content/uploads/2016/01/20160110__p_REF-L-NewLift-01101_500.jpg?fit=500%2C333&ssl=1">In January 2016, the Hermitage Club members welcome the new Barnstormer lift, which takes riders to the top of Haystack Mountain in a bubble protected from wind and snow with heated benches. Photo courtesy Hermitage Club

(This story by Chris Mays was published in the Brattleboro Reformer on Oct. 20, 2017.)

DEERFIELD VALLEY — To pay off some debt, the Hermitage Club is requiring members to pay an extra, one-time $10,000 fee.

“We believe the one-time 2017 dues adjustment will provide some relief to several suppliers and vendors in the valley,” Hermitage Club CEO and founder Jim Barnes said. “They have been incredibly patient and we want to make things right.”

His group closed an “equity and convertible debt offering” on Monday. Members were asked to buy equity in the company, with hopes of securing $5 million to pay off debts and move forward with other projects in the pipeline. Hermitage officials said the company will return all subscription fees and cash related to equity offerings.

The Hermitage Club runs a private ski resort at Haystack Mountain, a golf course in Wilmington, and restaurants and inns in Dover and Wilmington.

The company blames cash flow problems on delays in getting state permitting, poor weather in the 2015-2016 winter season and a slow membership drive. Hermitage officials said membership dues have not been sufficient to cover operating costs. Those costs, they said, are being subsidized by real estate operations.

Club members are asked to pay the dues immediately. That will allow for payments owed to suppliers, vendors, contractors and towns.

“The funds collected will be used to enter into a vendor management program whereby the local community will be able to rely upon a predictable repayment schedule of the amounts due from the club,” said Dan Solaz, chief financial officer at Hermitage. “The balance of funds collected will be used to operate the club until our financing package is finalized, which is expected to be a first quarter of 2018 event.”

The goal is to “clean up the balance sheet, allowing the club to pursue $30 million to $60 million of outside capital that will improve and strengthen the capital structure,” according to Hermitage.

Then the company can focus on finding new members and addressing a “pent-up real estate demand,” documents stated. The company said it is still paying for 2015 renovations related to the mid-mountain cabin and the Club House.

Several properties in Dover owned or affiliated with the Hermitage are heading to tax sale, according to Dover Treasurer Marco Tallini.

Taxes, penalties and interest are owed in an amount between $155,000 and $160,000 for the Hermitage Inn, the Inn at Sawmill Farm, the Snowgoose Inn, the Deerfield Regional Airport and a house on Tannery Road. The latter two properties have been sold to limited-liability corporations but were included in the estimated amount owed to the town.

The property owners were sent an initial demand letter requesting payment, Tallini said.

“That due date was Oct. 1 and we have not received payment,” he said.

Tallini expects the tax sale to occur on the second or third week of November. The property owners will have a 12-month redemption period to pay the back taxes plus interest to the highest bidder.

In Wilmington, the Hermitage struck up an agreement to pay delinquent taxes to avoid tax sale earlier this year. Selectboard members voiced concern given the reduced rates at which the payments were made.

The Hermitage was on the list of property owners late for the August tax payment, according to Wilmington Town Manager Scott Tucker.

“The next payment for this fiscal year is due in late February,” Tucker told the Reformer. “We certainly would like delinquent taxpayers to begin paying even on a monthly basis to meet their full tax obligations by February. There is significant pressure put on the municipal budget since we must pay our school obligations on time, regardless.”

https://vtdigger.org/2017/10/20/hermitage-club-taps-members-pay-off-debt/#.Wft7-LpFzIU

Comments

  • lotsoskiinglotsoskiing expert
    Posts: 753
    To quote Astro: "Ruh roh"....
  • joshua_segaljoshua_segal expert
    Posts: 1,809
    You could smell that coming - but surprised by the timing given the current stock market bubble.
  • z1000307470z1000307470 advanced
    Posts: 100
    What a surprise
    8-|
  • lotsoskiinglotsoskiing expert
    Posts: 753

    You could smell that coming - but surprised by the timing given the current stock market bubble.

    Good timing for them to ask for an extra $10k pp before the bubble bursts and members don't have the ability to get the dough as easily.
  • timberleaftimberleaf intermediate
    Posts: 39
    I hope Rob Thomas got paid...
  • powderstudpowderstud intermediate
    Posts: 37
    The double-speak and inherent contradictions in that story were truly awesome.  Even Sarah Huckabee Sanders would be impressed.
  • ski_itski_it expert
    edited November 3 Posts: 1,741

    They shoulda asked Gregg Allman for trail naming right fees when he was still alive. They built a mid-mountain cabin? What the heck for?

    Now I feel guilty that they didn't charge me to ski there.

    ISNE-I Skied New England | NESAP-the New England Ski Area Project | SOSA-Saving Our Ski Areas - Location SW of Boston MA
  • rickbolgerrickbolger expert
    Posts: 1,120
    TomWhite said:

    The company blames cash flow problems on delays in getting state permitting...

    Didn't they flat-out ignore the permitting process in certain projects? I recall they started digging or something?

    Permitting stuff is a nightmare, especially in VT these days but if you don't play by the rules they can grind you down. They kind of go overboard but it's their sandbox I suppose.
  • DrJeffDrJeff advanced
    Posts: 298

    TomWhite said:

    The company blames cash flow problems on delays in getting state permitting...

    Didn't they flat-out ignore the permitting process in certain projects? I recall they started digging or something?

    Permitting stuff is a nightmare, especially in VT these days but if you don't play by the rules they can grind you down. They kind of go overboard but it's their sandbox I suppose.
    For the big stuff, like the new lift and the hotel they want to build, their clubhouse, they went through/are going through the proper channels permitting wise as I recall.

    If memory serves me correctly, the 2 issues they had were #1 involving doing some clearing/regrading work on a section of snowmobile trail at is within the national forest service land just outside their own land, and #2 they did some work along the shore of their snowmaking pond that is adjacent to their entrance where they installed a dock or something similar so that the pond could be used for stand up paddle boarding. Violations, yes. MAJOR violations, not as I recall
  • rickbolgerrickbolger expert
    Posts: 1,120
    What I'm wondering is, did they get somebody's nose out of joint and now it's coming back to haunt them
  • NELSBEERNELSBEER advanced
    Posts: 259
    Looks like 'the Vision' got a little ahead of the reality of income, sounds a lot like every business in the ski industry at one time or another.

    The heated six-pack bubble lift probably cost about the same as their shortfall. Yet it is an important part of the image being projected; given the limited crowds & operating schedule it probably isn't covering its cost yet. This year The Hermitage should have twice as much water as last year for snowmaking at no cost other than pumping it due to Mount Snow's move to West Lake. The limitations on ticket sales should be disappearing as well. With some descent marketing they may be able to turn the corner and get ROI to cover costs... the big question is how quickly.

     
Sign In or Register to comment.