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Sullivan County IDA Signs Off On Package Of Benefits; Villa Roma Joins Raft of Catskills’ Properties Being Bought, Renovated Or Razed
By Tina Traster
After a faltering start to purchase the Villa Roma Resort and Conference Center in upstate New York, the buyer has once again lined up financing incentives from the Sullivan County Industrial Development Agency (IDA) and has represented in its application that the $15.7 million sale of the property will close in the third quarter of 2023 — sometime late October, early November, according to the buyer.
Fay Hospitality Catskills LLC, which is prepared to move forward with the acquisition of the Villa Roma Resort in the Town of Delaware, received approval from the Sullivan County IDA in mid-August. The package includes a mortgage tax exemption of $153,000, a sales tax exemption of $384,000 and a 15-year PILOT (payment in lieu of taxes) agreement on the improvements the buyer plans to make to the facility that would qualify as real property improvements.
The original deal was slated to close in 2022 but financing delays stalled the timeline. The IDA did grant two extensions to the applicant but ultimately required Fay Hospitality to submit a new application to conduct an updated cost-benefit analysis. In its narrative to the IDA, the applicant said finance delays associated with post-COVID market conditions, interest rate increases, and most recently the 2023 banking crisis, led to the temporary loss of funding from a key financial lender, Corfinancial Corp.
Now the project is on track to close in the third quarter, according to Attorney George C.D. Duke of Connell Foley, who is representing Fay Hospitality.
Fay Hospitality Catskills submission to the IDA says Fay “remains committed to this project and is sufficiently capitalized to move ahead.”
Fay Hospitality Catskills (a Delaware corporation formed in 2021) is an affiliate of UK-based Fay Investment and Asset Management, an investment firm focused on investments in real estate and hospitality. According to its website, “the Fay team offers a combination of core, value-add, opportunistic and special situations/turnaround investing expertise, asset management and extensive local market relationships in Europe and the US.”
While the website boasts oversight of more than $2 billion of luxury hotel real estate, it does not list any particular property owned or managed by Fay. Fay’s founder, Sandeep Wadhwa, heads up the organization, which has a foothold in London and Manhattan, according to the website.
Wadhwa was involved as a representative in the sales and management for The Sahara India Group of both The Plaza Hotel and the Dream Downtown Hotel in Chelsea. The Plaza Hotel, one of New York’s most iconic buildings in which Subrata Roy-led Sahara India group had majority stakes, was acquired by a Qatar government-owned fund for about $600 million in 2018.
The Qatar-backed Katara Hospitality, which owns the iconic Plaza Hotel, nabbed the ground lease for the Dream Downtown hotel in Chelsea for $125 million after a default in 2021.
This is Wadhwa’s first venture in owning a hotel property, and compiling a management team to run the hotel. The buyer is eyeing development of 100 townhomes on the site.
Villa Roma, located on 435 acres, joins a raft of other Catskills hotels that have or are in the process of being sold and transformed. Unlike most of the resorts, which were a draw for Jewish people escaping hot city summers and reflected Jewish culture, Villa Roma has always had an Italian flavor. It was established later than many of the renowned hotels, and continues its operations to date.
Large iconic hotels like the Granit that have fallen into disrepair or have faded away in the Catskill Mountains in Ulster and Sullivan counties and are targets for redevelopment. Somerset Partners LLC plans to raze The Nevele Resort in Ellenville off Route 209 and replace it with a modern hotel and luxury housing. YO1 Longevity & Health Resorts now stands on the former site of the Kutsher’s Hotel and Country Club in Monticello. Kutsher’s closed in 2013. The property was sold to Veria Lifestyle, a company owned by Indian billionaire Subhash Chandra, for $8.8 million. Resorts World Catskills, a large hotel and casino, is situated on the site of the former Concord Hotel. The former Fallsview in Ellenville is now Honor’s Haven.
Wadhwa, among other developers, are banking on the explosive post-COVID interest in resorts like Villa Roma, which are roomy and have large campuses to spread out on. He also believes a purchase like this is strategic because the hotel has multiple revenue streams including timeshares, the golf course, skiing, restaurants, and more.
To satisfy the IDA, a cost-benefit analysis prepared by Shepstone Management Company of Honesdale, PA found the benefits from the project exceeded its costs by more than $14 million.
In addition to the purchase price for Villa Roma, the applicant has indicated it plans to spend $5 million to renovate the property, and $2.4 million for structural and facility repairs. The July 14 application says renovations and improvements will begin six months after the closing. The applicant estimates the project will create 65 construction jobs and retain 269 full-time employees and 100 seasonal workers.
Fay plans to repair and renovate the property, including upgrading hotel rooms, public spaces, meeting spaces, the club forum and indoor pool, the club house, the recreation and fitness center, the Club House catering center, spa, and the ski chalet.
The PILOT agreement does not provide any abatement on the existing assessed value, but the improvements will enjoy a 100 percent abatement for five years, and then reduce by 10 percent each year in the following decade, phased out completely after 15 years as per Sullivan County’s Uniform Tax Exempt Policy.
In 2017, Villa Roma challenged its tax assessment, and in 2022, won the challenge in court, securing a reduction in its assessed value of $13 million. As a result, several years of overpayments were due back to the owners. The Town’s portion was $401,140, Hortonville Fire District $100,877, and the ambulance district owed $43,835.
Villa Roma began as a rooming house with Bocce courts 60 years ago and has expanded numerous times into a full-service resort, wedding venue and meeting and conference center. Villa Roma is the Town of Delaware’s largest employer.
Some 60 years ago, Ernesto Vindigni opened a quaint boarding house with 46 hotel rooms, 10 cottages, a pool, and two bocce courts. While bow hunting in October of 1969, Martin Passante came across Villa Roma and noticed the “for sale” sign. He convinced his two friends, Albert Aprea, and Danny Vaccaro, to partner with him on the purchase of the resort property. He eventually became the property’s sole owner.
In April 2006, the Villa Roma resort suffered a fire in its main building, including the lobby, dining room, kitchen, offices, and some guest rooms. While the timeshares and the golf course were not affected, most of the remaining resort had to be shut down temporarily until the owners could assess what was usable. In 2008, Passante finished a two-year, $27 million hotel renovation that included a 650-seat ballroom, lounge and dance club, 150-seat cafe, outdoor guest Jacuzzi spa, and a fifth pool.
Villa Roma’s website says the property has 24 timeshare buildings, 139 hotel rooms, an 18-hole PGA Championship golf course, indoor and outdoor tennis, racquetball, volleyball, bocce, shuffleboard, basketball, Indoor & outdoor heated pools, Fun Park, fishing pond, Go-Karts, Bumper Boats, arcade room, bowling alley, fitness center, nightly entertainment and three year-round restaurants.