It was a bad week for ski resorts in New England. First, the prospective owner of Saddleback Mountain in Maine was arrested in Australia on charges of fraud stemming from investments in a program similar to the EB-5 program that Jay Peak Resort got caught up in. Then, one of the crown jewels of the Hermitage Club was auctioned off after defaulting on a loan.
On June 25, the Inn at Sawmill Farm, a crown jewel on the financially troubled private 838-acre ski resort, The Hermitage Club at Haystack Mountain, went up for auction following a default on mortgage payments and closing of the ski resort for failure to pay back taxes to the state.
This follows months of legal troubles for the financially strapped club and two lawsuits against the club and its former CEO by its former manager: one a whistleblower suit, the other for alleged sexual harassment and discrimination.
There are no criminal charges against Connecticut-based developer James Barnes, the former president of the Hermitage Club but he and the Club are now facing a boatload of civil lawsuits and financial challenges following failures to pay taxes, mortgage payments, and vendors.
On June 25, the Inn at Sawmill Farm, an 18-acre, 21-guest-room property in West Dover that The Hermitage Club bought in January 2015, was auctioned off and went to the highest bidder for $1.2 million. That was its current mortgage holder, Ivmja, an LLC operated by the Wildwood Crest, N.J. Tenaglia family (owners of the Jolly Roger Motel in Wildwood Crest). Sheriff Keith Clark of Windham County held the auction that was attended by fewer than a dozen people. “The good news,” Sheriff Clark said in a phone interview, “is that the foreclosure process probably comes as a relief to a lot of local tradespeople who didn’t know if they would ever get paid or what would happen.”
In February, Berkshire Bank filed a foreclosure suit stating the Hermitage Club had defaulted on three loans worth $16.6 million. In March, the state of Vermont padlocked the resort for failing to pay more than $1 million in taxes.
Barnes is also being sued by three homeowners who allege that they advanced him more than $2 million to build homes that never materialized. Add to that, his former general manager, Robert Balewicz has filed two suits, according to reporting by Chris Mays in the Brattleboro Reformer: one, as a whistleblower, alleging fraud and the other accusing Barnes of sexual harassment and discrimination against him and his co-worker and partner, John Santaniello. These charges Barnes has denied. In April, the attorney for the Hermitage Club withdrew his services. It seems he hadn’t been paid either.
According to the Hermitage Club’s own website: “Having acquired The Hermitage Inn in 2007, owner Jim Barnes’ vision to connect the Inn with the surrounding mountain culminated with the 2011 acquisition of Haystack Club. With the completion of development and the realization of a single property, the name of the club was changed to The Hermitage Club at Haystack Mountain to reflect its grandeur and history.”
From 2011 on, that “grandeur” was enhanced by building private resort homes and condos around the former Haystack ski area and new clubhouse. It began attracting investors and homebuyers who flew in via chartered plane to the Deerfield Valley Airport (which the club purchased and then sold in 2016) for exclusive, private performances by bands such as Train and The Counting Crows. At one point in 2016, the club had 1,400 acres, an airport, a golf course, two inns and the 88,000-square-foot clubhouse. Memberships started at $10,000 (for two weekend nights and five weeknights for four guests, all skiing and club benefits included) to $65,000 for full membership.
In 2005, Haystack Mountain was purchased by Robert Foisie, who had similarly grand visions for the resort, which was shuttered again in 2007. Barnes bought the resort from Foisie later that year.
Berkshire Bank filed a foreclosure complaint in February and appointed Alan Tantlef, a consultant in the hospitality industry, as the receiver for the resort in late May. The Deerfield Regional Airport and a few other Hermitage properties were already put up for sale. On June 25, the Inn at Sawmill Farm, went up for auction, ultimately ending up with the current mortgage holder, Ivmja. As Sherriff Clark said “It’s a beautiful property and classic Vermont. I used to live right down the road and I sure hope it comes back. “
The local paper, the Brattelboro Reformer has been covering the cases extensively. As an opinion column in the paper stated on May 21:
“As for the Hermitage Club, much hinges upon whether the business plan for a private ski mountain and four-season resort still has potential, or if someone else has a better idea for the property. A number of people did, after all, invest in the concept of a private club, where they could ski without weekend crowds and enjoy a vacation home. It might yet succeed, with the right management and business plan.”