Deed transfer avoids foreclosure on Saranac Waterfront Lodge, which opened in November 2020
By James M. Odato
The lender for most of the money to create Saranac Lake’s newest hotel has taken control of the property in lieu of foreclosure, according to public records.
The owners of Saranac Waterfront Lodge handed over the deed to the 93-room hotel and restaurant along Lake Flower to a recently formed limited liability corporation with the same address as Champlain National Bank.
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Champlain National President Steven Cacchio said the move, dated last week, is a prelude to an announcement that may come this summer.
“The property is going through a transition,” he said. “There’ll be a lot more to share in another week or two, maybe some exciting news about the property and what is going on.”
The transaction occurs amid heavy supply, dipping demand and low occupancy — less than 39% for the first four months or this year — among Essex County hotels, according to the Smith Travel Research organization.
Built with a mix of private and public money
The waterfront lodge opened in November 2020 with private and taxpayer funds. Champlain National committed $13 million.
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The project’s owners received $11.5 million in public money though NY Green Bank, a division of the New York State Energy Research and Development Authority.
Empire State Development (ESD) awarded a $2 million grant for the project with the understanding the lodge would have 71 employees by January 2023, according to public records. A spokesperson for ESD said the $28 million project ended up receiving only $1 million from ESD “due to failing to meet their job commitment. “
“This particular project took two underutilized and older motels and transformed them into a world class hotel. Unfortunately, this project had challenges, including a fire early on, plus COVID-19, and we are hopeful a new operator will take advantage of the tremendous investment in this location,” ESD said.
The village of Saranac Lake provided $734,000 but that was paid back in 2022, records show. Plus, the Essex County Industrial Development Agency extended sales tax breaks on construction, furnishing and fixtures.
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Green Bank officials have declined to discuss their involvement or the hotel’s status other than saying the bank made an equity investment in the lodge’s ownership with the potential to share in profits. It said Monday that it is aware the lodge’s title was transferred but would not provide details.
The lodge is not the only hotel in the Saranac Lake that received state funding. The nearby Hotel Saranac, renovated for reopening in 2018, won nearly $5 million in ESD funds plus historic preservation tax credits. It has 82 guest rooms and added 20 suites in a structure adjoining the hotel.
Transfer of ownership
Documents on file in the Essex County clerk’s office show that the lender took over the property “in consideration” of $13 million and after reaching a collateral surrender and liquidation agreement.
Lenders listed in the deed transfer are Champlain National Bank, Evans Bank N.A. in Williamsville and Cattaraugus County Bank in Little Valley. “We remain confident in the property and its continued success,” said Kathleen Rizzo Young of Evans Bank.
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The public filings show that the owners group transferred the Waterfront Lodge’s deed to Lake Flower Street LLC, which has the Willsboro address of Champlain National. The document said the action was in lieu of a foreclosure and that a deed transaction had started on May 23. A foreclosure action is a sign that the lodge business has been unable to generate enough revenues to meet all financial obligations.
What’s next?
Bank representatives have offered the lodge for sale to some of the hotel owners in the region this spring, according to several operators.
Its ownership group is called Saranac Lake Resort Owner LLC. NY Green Bank is among equity investors in that group and the bank won’t reveal the identities of the other investors. The lodge continues to operate and is not in receivership, Green Bank said last month. It referred questions to Evans and Champlain National on Monday.
Saranac Lake Resort Owner retained HEI Hotels & Resorts to manage the lodge, Green Bank said.
Photo at top: The Saranac Waterfront Lodge along Saranac Lake’s Lake Flower. Photo by Mike Lynch
This story was updated to include Empire State Development grant details.
We stayed there with a group for 3 nights this May, for an amazing deal of only $120/night/room that I found on booking.com. Hotel was great, and a steal. Restaurant- not so much – we much preferred Hotel Saranac and Bitters and Bones for dining. But at the rate I got, it was obvious they were having trouble filling rooms. Parking lot mostly empty.
Yeah, the hotel was a steal……..of taxpayer funds. Since when does NYSERDA, the New York State ENERGY (caps mine) Research and Development Authority lend money to a hotel and get into the hospitality business? Shameful. Thankfully I don’t live in New York anymore so I don’t have to witness my hard-earned tax dollars wasted, at least not on the state level.
My family and I stayed here in 2021 and the hotel was gorgeous and affordable at the time. We were not impressed with the restaurant but that is besides the point. We wanted to return this last year for the Saranac Lake Ice Festival but the rates were over double what we paid in 2021 so we did not bother to attend.
NY GREEN BANK (GB) is building hotels under the guise of “green energy project” Before the joint opened there were issues “commonly called RED FLAGS”. GB’s initial commitment of $5M quickly grew to $11.5M to get the doors open. If a project doesn’t make sense and can’t be funded by an entrepreneur throwing tax dollars at it will not make it a good idea or successful!
Jonathan.. thought a reflection on the waterfront Lodge at all… But for some reason this specific month of May most lodging in the tri lakes was down by roughly a third and the average restaurant was off 20 to 40%
From a hospitality business owner w multiple locations in Tri Lakes
We had a delicious and memorable meal right on Flower Lake, summer of 2021 when we were staying in Tupper Lake. We had a look at the common spaces of the hotel, loved the location, and were definitely considering a future stay there, should our travels bring us back to the area. I hope that business picks up in the coming season and it remains an option for visitors.
When this project was conceived the old Hotel Saranac was also in the process of getting a complete overhaul. Saranac Lake village is a very cool, affordable alternative to Lake Placid and many of the workers and families in the region live there. When I heard that they were going to tear down the two motels and build a luxury level hotel I was very skeptical at the time that this village could support both coming on line around the same time. I believe both had construction delays, big cost overruns and of course COVID dealt a nearly fatal blow to many small business owners. I have not been in this property but have heard they went through a number of chefs and the food was never very great. It looks nice on the website but Lake Flower isn’t Lake Placid or Mirror Lake. No beach, marina nearby, prices were very high, seems it wasn’t meant to be. On the other hand, now someone will probably come in a pick it up cheap and make a go of it. Just remember, Lake Placid Lodge tanked after the fire and the super expensive rebuild. Original investors took a big loss. I’m hopeful that the village continues to make progress because I think it’s cool, but I think it might be better to focus on work force and locals housing and not try to compete with the nearby hospitality industry.
Here’s a thought.
Now that New York State owns the Saranac Waterfront Lodge it can staff the hotel with cheap illegal alien labor! New York could also use the rooms to provide additional housing for some of the illegals who are currently sleeping on the streets of New York City! New York could use closed facilities like Camp Gabriels and Moriah Shock Incarceration to house even more illegals! (And the absurdity of it all is that there are people in the state government and also a number of NGOs who I’m sure are thinking about shipping illegals into the Adirondacks, too.)
At least the new consortium of banks appeared and took on the debt and a new management company. We will be spared a gray, dark hulking abandoned building but it is sad that the hotel failed. Two steps forward, people, one step back.