(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.”