REDC transfers grant to Lake Flower resort developers
SARANAC LAKE — The investors behind the Lake Flower Resort and Spa will be able to use a $1.3 million state grant previously awarded to a different development group.
The North Country Regional Economic Development Council has approved the reallocation of the Empire State Development grant to Saranac Lake Resort LLC. The company is under contract to buy three motels at the north end of Lake Flower Avenue: the Adirondack Motel, the Lake Flower Inn and the Lakeside Motel. They would be demolished to make way for a four-story, 32,000-square-foot resort that won state Adirondack Park Agency approval earlier this month.
“The funds from ESD have been a critical part of the project from the very beginning,” resort attorney Matt Norfolk wrote in an email. “Saranac Lake Resort LLC and its developers appreciate the support of the REDC throughout the funding process and the project approval process.”
A different company, Lake Flower Lodging LLC, was awarded what was originally a $2 million grant for the hotel project in December 2013 as part of that year’s state Regional Economic Development Council awards. At some point the amount of the award was reduced from $2 million to $1.3 million, although the Enterprise wasn’t able to determine when and why.
When the project stalled in early 2015, a new group of investors took it over and signed agreements to purchase the three Lake Flower Avenue motels. These investors are Leland C. “Lee” Pillsbury and Mark Pacala.
Pacala, who lives in Washington, D.C., and owns a vacation home in Lake George, is an investor focused on health care and senior housing, and an operating partner with Pamplona Capital Management, managing the firm’s health care portfolio. He was a board member of the Adirondack Chapter of The Nature Conservancy for 10 years.
Pillsbury, of Annapolis, Maryland, has a long history in the hospitality industry and is chairman of Thayer Lodging Group, a hospitality investment company he co-founded in 1991 and sold in 2014. In January, he was named managing director of Thayer Ventures, a venture capital firm focused on travel technology.
Garry Douglas, co-chair of the North Country REDC, said transferring the grant to the new investors, which happened last year, but hasn’t been reported until now, was never really an issue.
“That happens with projects sometimes that there are changes in the development team from the time they start until they get underway,” he said. “As long as the project itself doesn’t essentially change, or they aren’t seeking more money, they want the same amount of money for essentially the same project, it’s pretty routine.”
The money won’t be awarded until after the resort is operating and has met certain employment thresholds. The same is true, Douglas noted, for a $5 million grant awarded to Roedel Companies, which is restoring the Hotel Saranac and plans to reopen it this spring.
“They haven’t yet received a dime of the money that was allocated to them; they’ll get that upon completion of the project,” he said. “The two hotel resort projects in Saranac Lake were among our original priority projects. They are ones we remain very committed to seeing carried out. So obviously we are pleased at all signs of progress. Now, speaking for the council in this case, we hope that 2017 is a year that we see one project completed and the other begun.”
With APA approval now in hand, Saranac Lake Resort developers have said they’re talking to contractors and architects but they haven’t set a timeline for the start of construction. The project still needs several other approvals, including a State Pollution Discharge Elimination System permit from the state Department of Environmental Conservation, a DOT highway work permit and a Department of Health permit for the pools, hot tub and restaurants.
The Lake Flower resort is also the subject of a lawsuit filed against the village Planning Board last year by Roedel Companies. It claims the village didn’t follow its own rules when it approved the project. The village and the resort’s developers have asked a judge to dismiss the case.