City likely to send Lighthouse Inn to ‘as is’ auction
Vacant since 2008, historic property suffers from water damage, mold, neglect
New London — There was a time when visitors to the Lighthouse Inn would have been greeted in the lobby by a smiling hostess.
These days, visitors are more likely to be met by a flashlight-wielding city official offering a dust mask and a waiver to be signed before entering.
The city appears poised, even anxious, to send the storied historic property on Guthrie Place to an “absolute auction,” one with no minimum bid and no strings attached.
Representatives from the city’s Office of Development and Planning have prepared options for the City Council to ponder, but their research points to an auction through a professional service as the fastest way to relieve the city of what has become a liability.
Economic Development Coordinator Ned Hammond said he has been in contact with professional auction firms and will present pros and cons to the City Council’s Economic Development Committee at its meeting Monday.
Hammond said professional auction outfits — while there are no guarantees on a final price — have marketing reach well beyond what the city has.
During a brief tour of the inn on Friday, Hammond pointed out water damage from past roof leaks, overgrown shrubbery and mold — plenty of mold.
Otherwise, the inn is frozen in 2008, when it abruptly closed. Chairs are stacked on tables in the main dining area and bar, Christmas knickknacks decorate a mantle, and well-made beds and clean bathrooms remain in the 27 guest rooms of the former mansion.
There are 54 rooms in all, split between the mansion and the aging Carriage House on the 4.2-acre property in the middle of a residential neighborhood.
“At this point it needs people to come in and start taking things out,” Hammond said. “It’s doable ... it’s just a big cleanup job.”
Anyone who wishes to reopen the inn, which is on the National Register of Historic Places, likely will have to spend millions of dollars.
But a new owner will have options, Hammond said, and may decide that residential housing — a use allowed in the residentially zoned area — is the way to go.
Either way, an “as is” sale at auction puts the burden of future development squarely on the new owner.
Councilor Don Venditto, chairman of the Economic Development Committee, said the auction seems a feasible way get the property out of city hands, return it to the tax rolls and relieve the city of security and maintenance costs.
“At this point, I’m convinced it’s the way to go,” Venditto said of the auction. “From a business standpoint, this process weeds out tire-kickers.”
Because an auction takes negotiation out of the mix, he said, it will block interested developers from “throwing numbers around” and force them to come to the table with a bank-certified check.
In a typical auction, the buyer must provide 10 percent of the purchase price within three days of the sale and the full amount within 45 days.
The new buyer would assume all taxes on the property, which are around $64,000 a year, Hammond said.
Cost estimates for a professional auction service were not immediately available.
Past auctions have failed, Hammond said, because of conditions of the sale or minimum bids that had curbed developers’ interest.
“If we go this route with the auction or even hire a broker, we are selling it as is . ... The buyer takes that risk,” Hammond said. “Our goal is to have a fair process that gets it into private hands and back on the tax rolls as quickly as possible.”
During the years the inn has sat vacant, some have expressed hope that the city would restore the inn to its former glory, remembered by many as a place for weddings, anniversaries and other special events.
But the inn, built in 1902, continues to deteriorate, Hammond said, and the city will only have to spend more and more to maintain and secure the property as years go by.
The city has to this point used funds sparingly to maintain the property. It spent just under $3,000 on roof repairs earlier this year to contain the water damage that has led to peeling paint and compromised walls and ceilings, mostly on the third floor.
Councilor John Satti, owner of Satti’s Lawn Care, following a bid process this year, entered into a contract with the city for mowing and weed maintenance at $150 a cut.
Hammond said Satti so far has gone above and beyond what was expected of him, cutting and clearing significantly more than what the city had expected.
Hammond was out at the site last week using a battery-powered hedge trimmer to tackle the overgrown shrubs around a fountain when nearby resident Reid Burdick stopped over to lend a hand.
“I saw Ned working his butt off. He’s doing the right thing. I figured I’d help him out. It’s kind of a neighborhood thing,” Burdick said, adding that he holds many fond memories of the inn and is as sentimental about it as everyone else.
However, he said, based on the condition it is in, his suggestion is to “tear it down.”
Whether there will be any takers at the auction remains to be seen.
The Lighthouse Inn closed in 2008 when the former owners went to federal prison on unrelated fraud charges.
The city took ownership in 2013, when a tax auction — with a minimum bid of $577,000 needed to pay off taxes and fees — did not attract any buyers.
The City Council in 2014, following an auction, rejected an offer of $100,000 for the property from a New Haven developer with a questionable business background.
Last year, the city solicited offers from developers and chose Michael Dattilo, principal of Water’s Edge in Westbrook. But Dattilo walked away, citing his inability to work out a deal for beach rights at the nearby Guthrie Beach, an essential element of his $10 million redevelopment plan that had included a 30-unit residential component.
A June 6 letter from Guthrie Beach attorney Patricia H. Modzelweski obtained by The Day indicates that the beach association was considering offering a 10-year license agreement for $15,000 a year, limited to 30 guests of the inn a day, with a host of other conditions, such as termination of the license agreement with one year’s written notice and no access to the beach for owners of any residential units on the property.
The beach rights were forfeited while the property was in the hands of one of its former owners, the Business Loan Center, Hammond said.
More recently, interested developers made an offer to the city to buy the property outright, with conditions that had included tax abatements.
The council has indicated it would let the process play out before negotiating offers.
Any decision made by the Economic Development Committee at Monday’s meeting will go to the full council for final approval.