Hermitage Cash Flow Shortage

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  • Their biggest mistakes cash flow wise, was being way to impatient with the entire permitting process (that's an entirely different discussion on its own) and then getting in trouble with a slew of local, state, and even I believe at one point federal regulators that basically stopped much of their real estate development that was supposed to make the finances work.

    The cash void from their hotel, that was if I recall correctly, was supposed to be fully constructed and operational prior to this season, and the lack of the something like 30 million in pre-construction sales RSVP's members had made for the project looms massively in their current financial woes now.

    Did they spend too much, making assumptions about things down the road?  Maybe.... On the flip side though, with the clientele they were marketing to, facilities that weren't top tier, just wasn't going to be a strong selling point, so in essence they went on the old adage, you have to spend money to make money
  • Selling stuff at that mountain is not unheard of. As I recall, a few years after the place opened as Haystack, they sold some or all of their snowmaking equipment because, they said,  they were in a snow belt and didn't need it. They did, but they needed money more.
  • Harvey said:

    Sounds like the infrastructure is there, just maybe not the business model.




    I think that's correct, but also as Joshua S. pointed out, they legally weren't permitted to turn to public ticket sales to help defray costs.

    As far as the business model, I think they went over-the-top. Started with the gatehouse -- good grief. Also think they could've made the lodge work for their purposes. They spent money with reckless abandon, which tends to be a bad business model. ;)
    Are you referring to the entrance Gatehouse, right off of Handle Road? I remember the previous owners of the Haystack Club (first iteration after Mount Snow sale) putting up that big, wooden gatehouse.
  • Well they are closed for the season according to Barnes' press release yesterday morning, but driving by this morning showed a mountain covered top to bottom, edge to edge with at least a couple foot base and not one brown spot on the place.
  • Sully said:

    Well they are closed for the season according to Barnes' press release yesterday morning, but driving by this morning showed a mountain covered top to bottom, edge to edge with at least a couple foot base and not one brown spot on the place.

    Where can I find this press release?
  • I have taken a backseat to this conversation as I wanted to see where it would go. As a person who got to use the club as his own (due to friends) & saw more “REAL” music then most would see in a lifetime, it is sad to see the way it has turned out. That being said, the writing was on the wall to all who wanted to see it right after the winter of 15/16. The magic number for members was 1400 family’s. That winter they hit 750 & never grew past there. In fact after this past October, it’s down to 500-550. The number just don’t work in the current model. Do I think the club will survive, Yes. Do I think it will look completely different, Yes. Gone will be the day of Headliner music acts, top food & service & 3pm corduroy. But to some, the ability to hang with their own kind and not have to deal with the proletariat will go a long way. The club will be more crowded going forward, it will have to be to make numbers work, but not like Mt. Snow, Stratton or even Bromley on a weekend.

  • edited March 28
    Bondman said:

    obienick said:

    Haystack has 1 CTEC triple, 1 Poma triple, and 2 Sky-Trac quads in addition to the bubble six-pack.  They also have a large fan gun fleet.

    The triples are too old to move. The quads are short. The residual value of all that equipment is peanuts when you have a 30 million dollar clubhouse that can't move. Haystack mountain will operate as a private club. 
    Actually the former Barnstormer Triple an 1985 the same age as Hayfever was moved to West Mountain in NY and became 2 lifts with the drive and return of Barnstormer becoming the West Express.
    The CTEC is a 1987. The Tage quad is a good length but it has wicked huge spacing between the chairs and is slow. The Stags Leap Quad isn't bad in size after all it goes from the bottom of lower mountain to above the base of the New Barnstormer Bubble and this lift has a mid station!
  • Mount Snow could use Barnstormer to replace Nitro or Sunbrook. I think Nitro makes the most sense, installing a heated bubble six pack to go with a new base lodge. Then you move Nitro back to Sunbrook. The two new quads can e used here as well. You have a couple options from replacing Tumbleweed and getting rid of an older Yan. Could also talk to Skytrac and split one of them up and replace Heavy Metal at Carinthia and Beartrap or maybe just replace a North Face lift. 

    This is all fantasy of course, but damn would Mount Snow's lift infrastructure look ten times better with these touches.
  • Why weren't they permitted to sell to the public? 
    "Making ski films is being irresponsible with other people's money, in a responsible sort of way..." 
    Greg Stump
  • edited March 29
    Mount Snow, under ASC in those days, put it into the deed when they sold the mountain.
    bmwskier said:

    Why weren't they permitted to sell to the public? 


  • I thought it had a 10 year statute of limitations?
  • It would be interesting to see the wording of this particular deed restriction.   Wonder if they could work around the membership requirement like Utah gin mills used to do with membership forms and such.

  • It would be interesting to see the wording of this particular deed restriction.   Wonder if they could work around the membership requirement like Utah gin mills used to do with membership forms and such.

    I wonder how that is written as well. I know some private clubs that were allowed to serve drinks past 2:00 am had memberships for as low as a $1.00 and they would sign you up at the door. If they had say $1.00 membership dues and then a ticket price would that work for the general public?
  • edited March 29
    flbski said:

    I thought it had a 10 year statute of limitations?

    The resale "right of first refusal" expires in 2025.  I can't easily find any details on the other deed restrictions.   They do have an allowance to sell lift tickets to locals, don't know how well that is defined.  Hermitage said they would sell 250 per day for $85 each if you could produce a driver's license with a local address.  Don't know if that was defined in the restriction or by Barnes.

    I am compelled to point out to Mr. Trackbiker that Bachelor TV contestants got to ski there, while we did not. 
    :D

  • edited March 29
    Bondman said:

    obienick said:

    Haystack has 1 CTEC triple, 1 Poma triple, and 2 Sky-Trac quads in addition to the bubble six-pack.  They also have a large fan gun fleet.

    The triples are too old to move. The quads are short. The residual value of all that equipement is peanuts when you have a 30 million dollar clubhouse that can't move. Haystack mountain will operate as a private club. 
    The triples are not "too old to move" and are in great shape. They would sell.

    The Quads would also sell.
  • edited March 29


    I am compelled to point out to Mr. Trackbiker that Bachelor TV contestants got to ski there, while we did not. 
    :D
    #1. That probably voided the deed restriction because they are not members and certainly not locals.
    #2. I would have not wanted to even be in the state of Vermont while they were there never mind at the resort itself.
    #3. I heard they were snowboarders and didn't ride very well if at all
    #4. No wonder they are going broke. People join clubs like the Hermitage to get away from people like that.
    #5. The administrator needs to add more emojis to this site.

    :P   :D
  • edited March 29
    Wow.   The contestants are merely "hoping to find love" and they're doing it "for the right reasons."

    the emojis work fine for me....as they say on Bachelor Nation....Mr. Cynic, will you accept this rose?

        
    @};- :-??

  • I am SO glad they didn't come to Sugarbush even though we used to be known as Mascara Mountain. Having GMA was fun a few years ago-- everyone was in the base area trying to get on TV and Heaven's Gate was empty-- and we groomed a lot in anticipation of that. 

    The Bachelor? Not sure how that would work out. 
    "Making ski films is being irresponsible with other people's money, in a responsible sort of way..." 
    Greg Stump
  • newpylong said:

    Bondman said:

    obienick said:

    Haystack has 1 CTEC triple, 1 Poma triple, and 2 Sky-Trac quads in addition to the bubble six-pack.  They also have a large fan gun fleet.

    The triples are too old to move. The quads are short. The residual value of all that equipement is peanuts when you have a 30 million dollar clubhouse that can't move. Haystack mountain will operate as a private club. 
    The triples are not "too old to move" and are in great shape. They would sell.

    The Quads would also sell.
    Youre missing the point
  • Many of the local eating and drinking establishments liked having the cast and CREW in town for the duration of the onsite shoot (some of the crew were in the area for close to 2 weeks between pre shoot set up work and post shoot break down) - a few of the later night locals bars saw some decent added business during early December from them

    Like the show or not, it added to the local economy, and not just Hermitage owned locations
  • Hermitage Club's tumultuous season still a success in
    founder's eyes

     

    KRISTOPHER RADDER - BRATTLEBORO REFORMER The
    Hermitage Club at Haystack Mountain.

    Posted Monday,
    March 26, 2018 7:18 pm

    By Chris Mays cmays@reformer.com

    DEERFIELD VALLEY — Despite
    the bumpy ride for the Hermitage Club this winter season, the company's founder
    is describing it as a successful one as local officials hope for a brighter
    future.



    "We are thrilled to have completed a wonderful and safe experience for our
    members," Jim Barnes, Hermitage founder, said in a press release
    announcing "the completion of a successful 2018 season" on Monday.
    "With unprecedented snow fall and with our earliest season start yet, we
    had 18 full weekends of corduroy skiing."



    This month, the Hermitage had to shut down operations twice at its private ski
    resort at Haystack Mountain and other tourism-related establishments. The
    Vermont Department of Taxes ordered the actions after not receiving tax
    payments for sales, rooms and meals. A foreclosure complaint from the Berkshire
    Bank includes $1.2 million in liens from the Department of Taxes as well as
    liens from various contractors and vendors.



    Last month, the Hermitage had a visit from a "rapid response team"
    coordinated by the Vermont Department of Labor to work with 50 to 80 employees
    whose jobs had just been unexpectedly terminated. The company at the time said
    layoffs had to do with preserving the long-term health of the company, a week
    of unseasonably warmer weather and fewer families visiting due to the start of
    spring sports.



    "Going forward, we will reduce our core group of employees — as we always
    do this time of year — and put the mountain to bed and begin to prepare the
    golf course for opening on Memorial Day Weekend," according to the press
    release issued on Monday.



    Rep. Laura Sibilia, I-Windham-Bennington, called the Hermitage "a very
    important attraction and employer in the Deerfield Valley.



    "There are so many small employers invested in the Hermitage's short- and
    long-term success, Vermonters reliant on wages and employment, and state
    programs benefiting from the tax revenue the business generates that I can only
    wish Jim well," she told the Reformer.



    Gretchen Havreluk, Wilmington's economic development consultant, was not
    surprised that the Hermitage would be closing now.



    "It makes sense," she said. "There's a lot going on. Yeah, it
    was a great ski season for them. But of course, they have other challenges
    there that hopefully will be overcome within the next few weeks."



    Havreluk has been looking at economic impacts on the town with the Southern
    Vermont Deerfield Valley Chamber of Commerce and downtown organization
    Wilmington Works, but was not prepared to comment on any data. She is staying
    positive about the future.



    "Now that the season is over, I hope the Hermitage Club can focus on
    getting their financial house in order," said Rep. John Gannon,
    D-Windham-6, who also serves as vice chairman of the Wilmington Select Board.



    The Hermitage is currently in good standing with the Department of Taxes, an
    employee from the department told the Reformer on Monday. A company spokeswoman
    previously said the two parties were entering a payment agreement but the state
    would not comment.



    Property taxes in Dover have been paid for the Hermitage Inn and the Snowgoose
    Inn. Previously, the threat of tax sale loomed.



    "Berkshire Bank has stepped in to pay the property taxes on the properties
    that Berkshire Bank holds the mortgages to," Dover Treasurer Marco Tallini
    told the Reformer.



    He said the mortgage holder for the Inn at Sawmill Farm has filed a foreclosure
    complaint and the property is currently in delinquent status.



    More than $700,000 is owed on taxes for properties in Wilmington, including the
    ski resort, the golf course, townhouses, the Horizon Inn, the former Nordic
    Hills Inn, 24 West Main St. and several parcels of land.



    "They are on our tax sale list," Wilmington Treasurer Christine
    Richter told the Reformer. "Obviously their tax revenues are a huge part
    of our general fund money basically because, even though a lot of it is school
    money, we have to pay the school and the state even if we don't collect. So
    we're pretty hopeful that they'll either pay or someone will pay the taxes at
    the tax sale when we have it."



    Wilmington officials are just trying to stay in a positive frame of mind for
    now, Richter said. She expects the tax sale will be held in June.



    "We're hoping that this will take care of it one way or another so we can
    get our funds so we won't have to scramble or have a problem year,"
    Richter said. "But until we get to the end, we don't know."



    Reach staff writer Chris Mays at cmays@reformer.com, at @CMaysBR on Twitter and
    802-254-2311, ext. 273.

  • edited March 30
    DrJeff said:

    Many of the local eating and drinking establishments liked having the cast and CREW in town for the duration of the onsite shoot (some of the crew were in the area for close to 2 weeks between pre shoot set up work and post shoot break down) - a few of the later night locals bars saw some decent added business during early December from them

    Like the show or not, it added to the local economy, and not just Hermitage owned locations

    Interesting insight!

    Thanks TomWhite for posting that too.  This guy reminds me so much of Gene Mulvihill, and I mean that in a positive way.  Early 1990s he had a lot of stuff going against him but his drive and energy kept things moving forward.    When everything is crashing and disintegrating...put out a press release, declare success!   I love it.
     

    #2. I would have not wanted to even be in the state of Vermont while they were there never mind at the resort itself.

    See here! The Bachelor franchise not only helps people find love, it's a veritable engine of economic progress! I think you owe all of Bachelor Nation an apology.

    @};- @};- %%- :-O **==

  • http://www.dvalnews.com/view/full_story_obits/27557117/article-Barnes-declares-season--successful--filings-show-troubles-?instance=home_news_left

    Hoping the link works... Looks like the house of cards is collapsing quickly on Barnes and the Club now. They havent paid anyone, at all, by the look of things.
  • Sully said:

    http://www.dvalnews.com/view/full_story_obits/27557117/article-Barnes-declares-season--successful--filings-show-troubles-?instance=home_news_left


    Hoping the link works... Looks like the house of cards is collapsing quickly on Barnes and the Club now. They havent paid anyone, at all, by the look of things.
    Wow... this is uglier than I had thought. Looks like they are being sued by everyone...
  • Sully said:

    http://www.dvalnews.com/view/full_story_obits/27557117/article-Barnes-declares-season--successful--filings-show-troubles-?instance=home_news_left


    Hoping the link works... Looks like the house of cards is collapsing quickly on Barnes and the Club now. They havent paid anyone, at all, by the look of things.
    Looks like Barnes learned from the President.  When a policy disaster occurs, just declare it a success!
  • http://www.dvalnews.com/view/full_story_obits/27557773/article-Hermitage-Club-shut-down-by-tax-department-a-third-time?instance=home_news_left

    At this point it is completely the fault of the State of Vermont for handling this and allowing this to happen in their state. They knew the Club wasn't paying their taxes on the local and state levels for more than the past 12 months. How can a business be shutdown for tax issues three times in one month? Where else does this happen in any industry?
  • Good thought, but I think all the issues in the state from all the storms were at the front of the line.
  • edited April 1
    Bondman said:

    newpylong said:

    Bondman said:

    obienick said:

    Haystack has 1 CTEC triple, 1 Poma triple, and 2 Sky-Trac quads in addition to the bubble six-pack.  They also have a large fan gun fleet.

    The triples are too old to move. The quads are short. The residual value of all that equipement is peanuts when you have a 30 million dollar clubhouse that can't move. Haystack mountain will operate as a private club. 
    The triples are not "too old to move" and are in great shape. They would sell.

    The Quads would also sell.
    Youre missing the point
    Your point was not lost, but iregardless of their potential value as part of the total assets on property the lifts will sell.
  • Sully said:

    http://www.dvalnews.com/view/full_story_obits/27557773/article-Hermitage-Club-shut-down-by-tax-department-a-third-time?instance=home_news_left


    At this point it is completely the fault of the State of Vermont for handling this and allowing this to happen in their state. They knew the Club wasn't paying their taxes on the local and state levels for more than the past 12 months. How can a business be shutdown for tax issues three times in one month? Where else does this happen in any industry?
    This happens all over the place, in many industries and all types of duties. Partial and late payment is better than no payment, and that is what happens when a business is shuttered.
  • newpylong said:

    Bondman said:

    newpylong said:

    Bondman said:

    obienick said:

    Haystack has 1 CTEC triple, 1 Poma triple, and 2 Sky-Trac quads in addition to the bubble six-pack.  They also have a large fan gun fleet.

    The triples are too old to move. The quads are short. The residual value of all that equipement is peanuts when you have a 30 million dollar clubhouse that can't move. Haystack mountain will operate as a private club. 
    The triples are not "too old to move" and are in great shape. They would sell.

    The Quads would also sell.
    Youre missing the point
    Your point was not lost, but iregardless of their potential value as part of the total assets on property the lifts will sell.
    Iregardless is not a word. The lifts will not be sold. The entire package is for sale at a price that Mr. Barnes wants. He still holds the cards. 
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