Private-public partnership resurrects old Bedford getaway

By Jack Markowitz
FOR THE TRIBUNE-REVIEW
Sunday, September 9, 2007

They’re using the word “miracle” around Bedford these days.
It’s a nod to the revival — after 22 years of near-death experience — of the Bedford Springs Resort, the venerable vacation spot with gleaming front porches that seem to go forever and a history that stretches back 203 years.

Presidents slept there. But a glorious past can carry a hotel only so far if everything else is falling apart. The “Springs’ ” new owners, a half-dozen sophisticated investors from out of state, have bet $120 million that this piece of the past has a future.

They see a very modern aggravation — airport delays and hassles — nudging upscale Easterners to do their vacations and conferences, weddings and weekends, closer to home. Within two or three hours’ easy driving from Pittsburgh, Baltimore, Washington and Philadelphia, in fact.

In that market area of millions, Bedford Springs means to compete with the best. Namely, the Greenbrier in West Virginia, the Homestead in Virginia and other high-prestige — and high priced — watering places for the well-heeled and the politically and corporately influential.

So look for weekday room rates of $249 a night and up ($350 on weekends), golf rounds at $105 for hotel guests, $115 for drive-ins ($70 after 3 p.m.), and sumptuous but pricey breakfast, lunch and dinner menus. Not to mention concierges, valet parking, masseuses and white-gloved bellmen.

None of which would have been possible without the help of taxpayers.

Some $40 million in state and federal help has lifted the grand dame of Keystone State travel destinations to its legs again. “The hotel is probably better than it has ever been,” said Arthur P. Ziegler Jr., president of Pittsburgh History and Landmarks Foundation, which helped in the rescue.

“She sat there empty and forlorn for 22 years,” says Bedford historian-architect Bill Defibaugh. “I expected every day to get a call, ‘They’re tearing her down.’ ”

It all goes to show what money can do. Plus vision, patience, taste and, well, tax dollars.

Here’s one item. To give a new generation of guests an unspoiled view — and no noise, fumes or trucks, across elegant lawns and gardens — a half-mile of U.S. Route 220 was relocated behind the hotel. The traffic is now in a deep, $11 million highway cut that never would have happened without friends in Harrisburg and Washington.

Still, someone had to bring money. His own.

Meet Mark Langdale, 53, of Dallas. He’s the U.S. ambassador to Costa Rica, a friend and appointee of President Bush, and a real estate investor. From afar, he spotted a then-dying, dust-gathering hotel a decade ago. And never let up gathering partners, political allies and financial tools.

Pittsburgh History and Landmarks (which saved Station Square in its home city decades ago) threw a big life ring. It acquired the hotel’s outside. Right — just the outside.

That’s the historic facade of tall columns, old glass and white porches — the building’s skin. History and Landmarks legally owns all that by way of an “easement,” a legal contract by which the historic look of a National Historic Landmark should never be lost.

By giving up the easement, Langdale and his group, Bedford Resort Partners, acquired a $23 million federal income-tax credit aimed at historic preservation. Then they sold that as a market investment to Chevron, the California oil giant, to put into the reconstruction. As many as 400 skilled tradespeople have reworked the property for almost two years.

Result: The hotel, some of it dating from 1804, is practically new inside — in a stronger outside. The four-story architectural wedding cake lies four miles south of the Pennsylvania Turnpike’s Bedford interchange, just outside the 3,500-population county seat.

“Basically, we took the hotel back to the structure,” says Keith Evans, managing partner of Bedford Resort Partners, who oversaw the big fix. An associate jokes: “Keith said, ‘Take it upside down and everything that falls is gone. So we have new walls, new floors, ceilings, heating, plumbing and air-conditioning.”

Evans said it’s fair to say the place was “gutted.” To make larger guest rooms, now 216 of them (vs. 721 at the giant Greenbrier and 486 at the Homestead), walls were knocked down and about 60 old rooms sacrificed. Deteriorated timber was replaced by steel beams. Great white outdoor columns were sent to Altoona and Scranton for $75,000 rebuilds. But century-old, wavy window glass was kept; 19th century brides etched initials in it with their wedding diamonds.

“This ceiling was just hanging down,” said Cheryl Funk, marketing director, of the top-floor ballroom (capacity 300) three floors up from a soaring lobby of angled stairs and footbridges. Five restaurants, a huge kitchen (and several satellite kitchens), an antique-rich library, porches with painted rocking chairs — What would a grand old hotel be without them? — and long vistas of furniture and decor keep visitors walking and gawking.

More than a half-dozen presidents have visited the place, including Pennsylvania’s own James Buchanan, who used it as a summer White House before the Civil War. Others on the register included Dwight Eisenhower and Ronald Reagan (while California governor).

The first post-revival wedding was in late August with 225 guests. Extra help was sent in by Texas-based Benchmark Hospitality International, contract operator of this resort and more than 30 others. The first new guests in a generation arrived July 12 without any “grand opening.” It seemed more important to get 275 resort employees up to speed for a “world-class destination luxury resort.” That’s the goal, not an easy one.

The Greenbrier, in White Sulphur Springs, W.Va., and the Homestead, in Hot Springs, Va., plus Nemacolin Woodlands in Fayette County and the Hotel Hershey near Harrisburg are viewed as the elite competition for individuals, corporate meetings, special events and, hopefully, congressional and other government retreats.

“The luxury segment is one part of our industry that’s continued to grow,” said Todd Gillespie, Bedford Springs’ vice president of marketing and sales. He said four groups already are signed for 2008 — and one as far out as 2011.

No numbers are being released, but “we’re very optimistic about the early results,” Evans says. “Bookings have been very good.”

Word-of-mouth from the hard-to-please can be elusive. An early guest from Rochester, N.Y., told a reporter the new staff isn’t four-star yet. “It’s beautiful around here, but they’ve got to get the kinks out,” she said.

But Helen Ferry, Dorothy Ritchey and Marcia Davis, all from small Bedford area towns, thought the restoration exciting and the food “delicious.” They bused in on a senior citizens weekday tour with buffet lunch (fare: $26.50). “Before they started working on it,” Ferry says, “you’d come up here and think somebody dropped a bomb.”

A new “spa” wing has been built for body-pamperers, with guest rooms topping $300 a night. The outdoor-pool complex overlooks a first-rate view: the restored 18-hole golf course that occupies a valley between hills veined with hiking trails. Bringing the 6,785-yard golf course back to the 1924 Donald Ross design was an $8.5 million labor. Look for serpentine bunkers, tufted hillocks, wetlands, wildflowers and meandering Shober’s Run.

Restoration work in the hotel aims for the high-ceilinged look of the resort’s pre-World War I heyday around 1905. But underpinning the charm are amenities geared to at least a half-decade in the future, Gillespie said: elegantly tiled bathrooms, iPod docking stations and high-definition flat-screen TVs behind the doors of antique-looking chests.

And, of course, year-round occupancy. The old hotel closed in winters.

Historian Defibaugh, whose antique photos decorate the long corridors, said Bedford folks never quite lost hope after the hotel’s depressing 1986 shutdown. “Developers came in with high hopes but very little money,” he said.

Wonderful what a major investment will do, though. Along Pitt Street, downtown Bedford’s main stem, merchants see signs of contagious rebirth. “I know three businesses that say they would not have opened had it not been for the Springs,” says Kim Foreman, owner of the Green Harvest Co., a cafe and bakery.

“I’m planning a third fitting room, the weekends have become so busy,” says Elaine Housel, owner of Elaine’s Wearable Art, a clothing and jewelry retailer. “Women on vacation can only sit around for so long. They’re coming to town to shop.”

There are reports of higher home prices around Bedford, but Todd May, at Johnson Real Estate, cites a “certain amount of speculation on business properties in town,” retirement-home buying by Baltimoreans, who like the lower housing costs across the Pennsylvania border, and some new industries opening.

Sharyn Maust, managing editor of the Bedford Gazette, says of the hotel’s revival: “Obviously it’s great, but I like old buildings.” Some of her readers have written angry letters, disapproving of public funds going to entertain wealthy out-of-towners. “In effect they’re saying ‘I’ll never see any benefit from this,’ ” Maust says.

At this point, the resort is no bonanza for local and school tax collectors. It’s cocooned in its own state-delineated “Keystone Opportunity Zone.”

That’s a sweetener for investors. It was laid out when the idled hotel was desperately seeking a savior in 2001. Thanks to the Opportunity Zone, no real estate or personal property tax has to be paid for 10 years, through 2010. The hit wouldn’t be heavy in any case. Annual real estate tax only would be about $32,000. That’s on a laughably low assessed value of $394,000 and “fair market value” of $2.3 million. Considering all that’s been invested, a future shock seems inevitable.

The resort’s new owners number six partners: Langdale, Evans and John Ferchill, head of the Ferchill Group, of Cleveland, and three of his associates. Ferchill is a veteran developer of historic properties, like 99 percent-occupied Heinz Lofts on Pittsburgh’s North Side.

Here’s how $120 million was put together, according to Timm Judson, chief investment officer of Felcher. Owners’ equity of $10 million; historic tax credit of $23 million, the History and Landmarks easement; $28 million in state grants under the Pennsylvania Redevelopment Assistance Capital Program; another $11 million in PennDOT funds for highway relocation; a $40 million senior mortgage held by Marshall Investment Group, of Minneapolis; and a $9 million second mortgage by Hudson Realty Capital, of New York.

Using public funds to subsidize private enterprises is a perennial issue for debate. State and federal laws favor it for historic property. But well-placed friends help.

Two lawmakers have long backed efforts to keep Bedford Springs alive: U.S. Rep. Bill Shuster, R-Everett (and his father, former Rep. Bud Shuster, a kingpin among public works promoters in Congress), and former state Sen. Robert Jubelirer, R-Altoona, who lost a re-election bid after helping to engineer an the since-rescinded legislative pay increase in 2005.

The Ferchill Group’s Judson says there’s no way the resort’s revival could have happened without the state’s $40 million-odd input (in grants and PennDOT funds), a third of the total cost.

Says Evans: “Many people tried for a long time to get it done and they couldn’t. The state had a great treasure that had not been open for 20 years, and it now has a viable new employer bringing in tourist dollars that did not exist before.”

Pittsburgh Landmarks’ Ziegler agrees — when it comes to the architecturally irreplaceable: “It’s so hard to do these buildings on a market basis,” he said. “As for subsidizing, it just couldn’t be done without it. And keep in mind, these owners have their own money in. They have a mortgage. I think it’s little short of a miracle.”

The competition

The Greenbrier, White Sulphur Springs, W. Va.

250 miles south of Pittsburgh and southwest of Washington, D.C.

• Acreage: 6,500.

• Opened: 1778.

• Rooms: 721, including suites, guest houses.

• Rates: Per night : traditional room, $379 to $489. Higher level rooms, suites: $529 to $900.

• Golf courses: Three, per player round: $195, after Oct. 21, $130.

• Fact bites: 26 presidents have visited. A $50 million renovation completed last April. 112,000-square-foot underground bunker can be toured. Built “top secret” for Congress in case of Cold War blowup, it was never used.

• Details: 1-800-624-6070, www.greenbrier.com.

The Homestead, Hot Springs, Va.

250 miles south of Pittsburgh, 210 miles west of Washington, D.C.

• Acreage: 3,000.

• Opened: 1766.

• Rooms: 483, including suites

• Rates: Per night, $225 to $450; with meal packages, $310-535; golf packages, $620 to $1,120.

• Golf courses: Three, rounds per player depending on course, $120 to $245.

• Fact bites: 23 presidents have visited. Golfer Sam Snead had early experience as a pro here. Spa massages at $150, $220 for 50-minute and 80-minute rubs respectively.

• Details: 1-800-838-1766, www.thehomestead.com.

Bedford Springs Resort, Bedford, Pa.

100 miles east of Pittsburgh, 135 miles northwest of Washington, D.C.

• Acreage: 2,200.

• Opened: 1804 (on spring property purchased 1796).

• Rooms: 216.

• Rates: Introductory rates per night: $249 up.

• Golf courses: One, 18-hole round per player, $115, $70 twilight (after 3 p.m.)

• Fact bites: Seven presidents (some say nine) have visited. A 36-star flag behind registration desk flew at Civil War’s end. Indoor pool in a classic 1905 Grecian “temple” is spring-fed, heated.

• Details: 1-866-623-8176, www.bedfordspringsresort.com.

Contractors

A partial list of Pennsylvania “midwives” to the rebirth of Bedford Springs:

Reynolds Construction Inc., Harrisburg, general contractor; Miller Electric Construction Inc., Allison Park, electrical systems; G.N. McCrossin Co., Bellefonte, heating, ventilating, air-conditioning, and foundation of the spa wing; Rob-Bern Associates Inc., West Mifflin, carpentry; W.G. Tomko & Sons Inc., Finleyville, plumbing; L.R. Constanzo Co., Scranton, windows and columns; Hemlock Hills Landscaping Co., Altoona, interior landscaping (flower boxes, potted trees etc.).

Jack Markowitz can be reached at jmarkowitz@tribweb.com.