Ex-Bristol, Meyer-Jabara Exec Launches Hotel Co.

NEW LONDON, CT— A former executive for Bristol Hotels and Meyer Jabara Hotels has launched his own hotel company, entering the arena with a 99-year-old grande dame property at his side. James McGrath, owner/president of McGrath Hotels L.L.C., based here, recently acquired the 52-unit Lighthouse Inn for $1.3 million and is pouring another $1 million into the venture to restore the 4.5-acre property, a member of Historic Hotels of America and a landmark on the National Register. “It’s quite different. It’s what I wanted to do. The corporate scenarios were great and I enjoyed them, but there’s nothing like the energy of getting up in the morning and working for yourself,” said McGrath. The industry veteran spent years as vp/operations for Bristol Hotels prior to its acquisition by Six Continents (Bass Hotels & Resorts), and subsequently as COO for Meyer Jabara Hotels, before making his move. Doing a search of the Internet for older properties in the New England area, McGrath reviewed several before settling on “the one.” Built in 1902 as the summer home of steel magnate Charles Guthrie, and landscaped by Frederick Law Olmstead, who designed New York’s Central Park, the one-time mansion became an inn in 1927, being held through the ensuing years by different owners. Connecticut-based Thomas H. Hamm & Co. Inc. brokered the property for seller Eldorado Hotels and Resorts, which closed with McGrath on August 30. McGrath considers the buy a value deal. Equity in the deal was $700,000; the loan component was $1.84 million. McGrath, who has 75% ownership of the L.L.C., with 25% spread among other investors said, “If you add the whole investment up [total in was $2.54 million], $2.3 million for 52 rooms [plus working capital]in a market with an average rate in excess of $100, financially this could turn out to be a complete home run.” New York-based Matryx Services International, L.L.C. secured the 25-year financing through Allied Capital and its small business loan division known as Business Loan Express. With the dropping interest rates, McGrath noted “our rates have already gone down. Obviously, it will be my goal to refinance after three years and put permanent financing on the asset.” The property, which has a tunnel to the ocean, overlooks Long Island Sound and has beach rights, “which is a tremendous draw,” said McGrath. The mansion itself has 27 guestrooms, a 90-seat English pub and a 200-seat restaurant which can be used as flexible banquet space hosting receptions up to 300 persons. There’s also a 24-room carriage house and a 1,000-square-foot watchman’s cottage that McGrath is considering turning into a day spa. The historic design and decor of the property and the grounds will be retained. Working within proscribed guidelines and with the New London Historic Society and Connecticut Historical Commission, renovations supervised by design director Marylis McGrath currently are underway to upgrade the hotel and amenities, and are slated for completion at year’s end. “The grand dame needed a facelift,” said McGrath, adding the company has applied for Federal historic tax credits, which can reach as high as 20%, and be applied to this year. The property is in an upscale residential neighborhood, “which is actually a competitive advantage,” said McGrath. “The neighborhood is incredibly supportive of our efforts, saying thank you for restoring The Lighthouse Inn to its former grandeur.” McGrath believes marketwise, the hotel is “the kind of place that can be a lot of different things to a lot of different people: resort, conference center, retreats, weekend getaway for people from Long Island who can take the ferry across from Orient Point, as well as leisure travelers from New York, Hartford and Boston. “We’re also focused on the local markets. Pfiz