The Point claws out of foreclosure
SARANAC LAKE – The end of a long foreclosure process is in sight for one of the Adirondacks’ most luxurious and exclusive resorts.
The Point on Upper Saranac Lake, a former Rockefeller family retreat, is scheduled to go up for sale at a public auction next month, more than three years after its owners defaulted on a multi-million-dollar loan they used to buy the property.
The company that has held that mortgage and foreclosed on it, Lehman Commercial Paper Inc., recently sold the mortgage to a married couple who are longtime patrons of The Point. They hope to win title to the property at the June 8 sale, keep the resort operating and improve it.
Since the couple holds the loan, they can bid up to the amount that’s owed, more than $10 million, and it won’t come “out of pocket,” which gives them an advantage compared to anyone else who wants to bid. The chance of someone bidding more than the debt is “unlikely,” a source familiar with the proceedings told the Enterprise.
“It’s a positive thing for The Point because, once the auction is finished, we’ll have certainty,” said Cameron Karger, the resort’s general manager. “We’ll have a sense of where we’re going from here.”
Originally built as a private retreat for William Avery Rockefeller in the early 1930s, the great-camp-style resort is located on a 75-acre peninsula. It has a large main lodge and boathouse, and 11 rooms spread across four original log buildings that rent for between $1,600 and $3,500 per night.
In 2007, the Vermont-based Garrett Hotel Group sold The Point to a group of investors who had been involved with Everlands, a high-end club that foundered amid the economic meltdown of 2008-09. The resort’s owners, incorporated as Point Property Co. LLC and Point Annex Land Co. LLC, had taken out a $12.5 million loan through Lehman Brothers to cover part of the purchase price. The mortgage was renegotiated in 2010 and reduced to $10 million.
In early 2013, however, the owners defaulted on the mortgage, and attorneys for Lehman Commercial Paper Inc. began foreclosure proceedings in Franklin County State Supreme Court. The court appointed a referee, attorney Brian Stewart of Malone, to determine the amount the Point Property Co. owed.
In December 2014, Stewart issued a report saying $13.7 million was due but only $11.5 million was secured by the mortgage, according to court documents. In September of last year, state Supreme Court Judge John Ellis of Tupper Lake confirmed the amount due and ordered the property put up for sale at public auction. He also awarded Lehman Commercial Paper Inc. $80,000 in attorney fees.
Lehman put the loan up for bid earlier this year, and it was sold to PT Property Holdings LLC for an undisclosed amount, according to an “Assignment of Mortgage” filed in the Franklin County clerk’s office on March 31. David Weinberger, a New York City-based attorney for PT Property Holdings, declined to say who is behind the LLC or what they paid.
The mortgage assignment documents were signed on behalf of PT Property Holdings by Pierre F. Lapeyre, the co-founder and senior managing director of Riverstone Holdings LLC, a New York City-based private investment firm that focuses on the energy field. He didn’t return a message left at his office Wednesday.
Carger said the loan purchasers as a husband and wife who are longtime patrons and fans of The Point, but he declined to identify them by name.
“They’ve been guests of the Point for many years,” he said.
Karger described next month’s auction are a necessary step in the legal process to complete the foreclosure.
“It’s certainly nothing to be scared of,” he said. “It has to happen. It should be a positive chapter for The Point.”
The Point employs about 40 people. Over the past three years, its operations have been overseen by a court-appointed receiver.
“When you’re in receivership, the directive is to maintain and protect the asset, but not to improve,” Karger said. “You can’t do major capital improvements, and the property can’t move forward in a positive direction because there’s not a lot of money being spent. It’s really just the bare necessities.
“What would be scary is being stuck in receivership forever. An auction has to happen legally in order to clean up the title for us to get out of receivership. That’s the final piece of the foreclosure. The staff and the management, we’re all really excited about it.”
The auction is scheduled for 10 a.m. June 8 at the Franklin County Courthouse, 355 West Main St., Malone.