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The Point.
The Point.

Luxury Adirondack retreat in foreclosure

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One of the Adirondacks' most luxurious resorts is in foreclosure. The owners of The Point on Upper Saranac Lake defaulted on a multi-million dollar loan they used to buy the property.

A court appointed official is running the resort while the foreclosure proceedings are pending. And The Point's manager says the resort will continue to operate as normal, for now.

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Reported by

Chris Knight
Adirondack Correspondent

Susan Carusi lives on Long Island. She said she and her husband have been coming to The Point two or three times a year since they first discovered it in 2001. “It’s really been a home away from home. The staff is always so welcoming, warm. Obviously, the service is spectacular. But it’s just such a comfortable environment.”

Carusi and her husband loved The Point so much that they joined a 20-member investor group that purchased the resort in 2007.

To do so, they took out a $12.5 million loan through Lehman Brothers Holdings to cover part of the purchase price.

Earlier this year, however, the owners defaulted on the mortgage. Documents filed in Franklin County State Supreme Court show they owe $11.7 million in principal and interest. On March 11, attorneys for Lehman began foreclosure proceedings.

Carusi said there were some “hard times” at the resort triggered by a drop-off in the luxury travel market that followed the recession that began in 2008.

Nevertheless, she said the owners strived to keep it operating at the same standards its guests had come to expect. “We said all along to Lehman we want to keep The Point up and running,” she said. “We think it’s important, not only from an investment perspective, but it’s just an important property for the area, for its guests.”

In the last few years, however, the owners had been looking for someone to buy them out. Julian Hutton is the head of Merlin Hospitality Management, which managed The Point until it was ousted last week.“They were willing to forego all of their equity investment, if they could find somebody who would just buy out the Lehman loan. But they were unable to find anyone willing to pay $12.5 million. They had someone who was going to pay $9 million for the Lehman loan, but Lehman was unwilling to discuss it.”

With no buyer on the horizon and a deferred interest payment of more than $500,000 due in February, Carusi said the owners weren't willing to sink any more money into it. They defaulted on the loan."Basically the amount that was due was beyond the ability of any of the investors to step up and do it," she said.

Last month, a judge appointed a "receiver" to oversee the property until the foreclosure process is complete.

If the foreclosure moves ahead, Hutton said he’s worried about what could happen to the property. “Anything could happen. Someone could buy it at the public auction and do something different with it. Lehman could hold on to it, or what they have said is they may just simply sell it as a private home.”

The attorney representing Lehman in the foreclosure proceedings didn't return messages left at his office last week. However, The Point's general manager, Cameron Karger, said the resort won't be auctioned off and that it will continue to operate as normal until a new owner can be found.

He said Lehman wants to keep the property – quote –  “running as usual until the value increases to the point where they can sell it when the economy turns around.”

Susan Carusi said her first concern is for the resort’s roughly 40 full time employees who live in the local area."I just hope that Lehman will continue to be good to them and keep them employed," Carusi said. "As a guest, I want to make sure The Point still exists in the way it has. It's very special. There's nowhere else quite like it in the United States."

The Point was originally built as a private retreat for William Avery Rockefeller in the early 1930s. It has 11 rooms that rent for between $2,000 and $3,800 per night.

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