Hermitage Club Faces Foreclosure
Following what the bank said was a series of missed mortgage and tax payments Berkshire Bank filed a foreclosure complaint against Vermont’s troubled Hermitage Club, which has been building a private club at Haystack Mountain in southern Vermont.
On February 23, 2018, Berkshire announced it is seeking foreclosure on several Hermitage properties including the Hermitage Inn, Haystack Ski Resort and ski area lands, Haystack Base Lodge, Haystack Golf Course, Chamonix Townhouse Village, Haystack Golf Course, water rights to Mirror Lake, hundreds of acres of land, along with several smaller parcels. The foreclosure action also includes the Snow Goose Inn, the Horizon Inn, and the Doveberry Inn.
According to the complaint, Barnes and the Hermitage failed to meet their obligation to make payments on three loans, including a $15 million "base lodge" note signed in December 2014, a $1 million bridge loan in June 2016, and a second bridge loan of $1.1 million made in July 2017. Of the total $17.1 million in loans, the Hermitage and Barnes still owe $16,342,175.61 in principal, along with $213,799.76 in interest, and $43,603.79 in late charges.
The club’s position is that this is a necessary step to restructure the financial position. Hermitage Club public relations director Meridith Dennes said . "This was fully expected and it is the next logical step in a process that will assist to bring all parties to the table to reach accord….We believe it was needed and will help us to reach an agreement that will ultimately benefit all stakeholders."
After a weekend of valley-wide speculation about the continued operation of the Hermitage Club, the private resort has curtailed operations and laid off 15% of its workforce, more than 70 employees.
According to Hermitage Club officials, the cutbacks are connected to this week’s warm weather, which nearly reached 70 degrees on Wednesday. “The Hermitage is open for business,” said Dennes. “The mountain will be closed midweek due to weather, and there has been a reduction in force appropriate for the services being offered.”
The speculation began on Friday Feb 16, 2018, when word leaked that Hermitage Club employees were told not to cash their checks until Tuesday. A local Hermitage Club employee, who requested anonymity out of concern for possible workplace retaliation, confirmed the information. “We were told we had to hold our paychecks until Tuesday,” the employee said. “And that’s not OK for everyone, people have kids to feed.”
The news spread fast and, according to the local employee, members were upset, not only that the club’s continued operation was up in the air, but also that employees’ compensation was in question. “It was a very sad day,” the employee said. “I heard about one member who went around giving ski instructors $100 bills because he was so distraught and didn’t want to see the club go down. A lot of members cleaned out their lockers and took their equipment home because of the uncertainty. Members were hugging employees. The worst part was getting hugs from children who don’t know if they’re going to be back again. There’s a real sense of community here.
The club, situated on at the Haystack Mountain ski area formerly part of Mount Snow. On March 30, 2005, the American Skiing Company announced it had sold Haystack Mountain Ski Area for $5,000,000 to a group of local businessmen.The Haystack Club concept was created as a result, with the plans to open an upscale private ski area.
The club has run into a number of troubles over the years including a Permit Violations Lawsuit
According to a lawsuit filed by the Vermont Attorney General's Office, the group allegedly performed construction activities without land use permits, performed construction activities without a storm water permit, constructed a building without a wastewater and potable water supply permit and disturbed a wetland without approval. In his response, Hermitage Club President Jim Barnes said “Although the Hermitage didn’t agree with the allegations we agreed to 100% mitigation at our expense."[3] The Hermitage continued further dialogue with the state and although disagreeing with the penalties proposed, offered a proposal to settle this issue which has since been rejected.
Summer 2015 In the summer of 2015, the Club has replaced the Barnstormer Triple with the Barnstormer Express Six Person Bubble Chair. Also a new lodge has been constructed at the top of the Hayfever Triple.
