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Garrett Group will no longer manage The Point, LP Lodge

January 15, 2010
By CHRIS KNIGHT, Enterprise Senior Staff Writer

LAKE PLACID - The Garrett Hotel Group is getting out of the hotel management business, and the luxury resort properties it has managed in the Adirondacks will now be operating on their own.

The Burlington, Vt.-based company will no longer be managing The Point on Upper Saranac Lake, the Lake Placid Lodge and three other resorts it was running around the country, according to David W. Garrett, chairman and CEO of the Garrett Hotel Group.

"What we've done is spun off the hotels to where they're managing themselves," Garrett told the Enterprise on Friday. "It's a simplification. The company will continue, but I just don't want to be in the operating business anymore."

Article Photos

The Lake Placid Lodge will no longer be managed by the Burlington, Vt.-based Garrett Hotel Group. A Manhatttan-based private equity firm is taking a controlling interest in the resort by helping to pay off its debts.
(Enterprise photo — Chris Knight)

Financial considerations, specifically a sharp decline in the travel and hotel business nationally, played a role in the decision, Garrett explained.

"It cost a lot more money to keep the infrastructure going to support all those properties," Garrett said. "When business is down so sharply, what are you going to do?"

The change means the support services the Garrett Hotel Group had provided to its resorts, including marketing, human resources and financial expertise, are now being done in-house at each hotel.

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The Point

The Point, an ultra exclusive resort originally built as the summer home of William Avery Rockefeller in 1929, was purchased by the Garret Hotel Group in 1986. Garrett said his company sold the property two years ago to Everlands, a members-only club that folded after its major financial backer, Lehman Brothers, declared bankruptcy in September 2008. The Point is now owned by a group of former Everlands members.

The Garrett Hotel Group continued to manage the resort even after the sale, until about two weeks ago.

"I resigned The Point as of Dec. 31, 2009," Garrett said. "They're basically operating themselves for the foreseeable future. I think their intent is to run it like we've always run it. The same management. The same chef. I think it's in fine shape."

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Lake Placid Lodge

The Garrett Hotel Group, which purchased the Lake Placid Lodge in 1994, has reached an agreement in principle to give up its controlling interest in the property to a private equity firm, which will help the lodge reduce a substantial amount of debt.

The additional investment from Manhattan-based Ramsfield Hospitality Finance, which already was a partner with the Garrett Hotel Group, will allow the lodge to continue operating without any noticeable change to its guests or the public, Garrett said. The resort has been saddled with debt from reconstruction of the lodge, which was destroyed by fire in December 2005.

"We had a huge construction mortgage to build this place and that's all coming due in June," Garrett said. "So that was of great concern to us. We went to (Ramsfield) and they've elected to become an equity player with us. That solves our problems."

Management of the lodge won't change, Garrett explained.

"The same people here now, including me, will still be here," he said. "We basically got a nice capital infusion and lowered our debt rather substantially. It turned what could have been disastrous into a very positive result."

In addition to its debt load, the lodge also had "far fewer guests" last year, according to general manger John Graham. He said those financial difficulties forced them to layoff "a couple" of the lodge's 40 workers. Graham also said the property could close down for a longer than usual stretch during the slow season in early spring, although that decision has yet to be made.

However, Graham said he's optimistic that the new year will be a positive one for the lodge.

"2009 was a tough year for everybody," he said. "Expectations with regards to 2010 are really positive. We're seeing a much better pace this year in terms of reservations relative to this time last year."

Graham said the lodge is grateful for the additional investment from Ramsfield Hospitality Finance. He said the firm has expertise in implementing the latest technology in the hospitality industry, which Graham said will be an added benefit to the lodge.

Neither Graham nor Garrett would reveal the amount of capital Ramsfield is investing in the lodge. The agreement is expected to be signed sometime in the next month.

In addition to The Point and the Lake Placid Lodge, the Garrett Hotel Group has also operated three other hotels: The Willcox in Aiken, S.C., and The Inn of the Five Graces and The Pink Adobe, both in Santa Fe, N.M.

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Contact Chris Knight at 891-2600 ext. 24 or

cknight@adirondackdailyenterprise.com.

 
 

 

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