Title changed - I'm still dumbfounded tho

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[h1]What is the fate of the Henderson Castle? Owners say Kalamazoo landmark may close if can't pay off $100,000 debt[/h1]Published: Sunday, December 05, 2010, 7:00 AM Simon A. Thalmann
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Gazette file photoA photo of the Henderson Castle, a Kalamazoo landmark, which could close Jan. 1 if the owners cannot raise $100,000 to pay off their debt.
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http://www.mlive.com/news/kalamazoo/index.ssf/2010/12/what_is_the_fate_of_the_hender.html#comments 30 Comments
KALAMAZOO — Henderson Castle will close after Jan. 1 if the operators can’t raise about $100,000 to pay off debt.
Proprietors Peter and Laura Livingstone-McNelis said they need to raise the money by the end of the month in order to keep the bed and breakfast and Kalamazoo landmark open through 2011.
“This is where people do their marriage proposals, this is where they have their weddings, this is where they have their retirement party or their 50th anniversary. We celebrate the most significant events in peoples’ lives,” Peter Livingstone-McNelis said of the castle, which he estimated contributes more than $25,000 a year in property taxes to Kalamazoo city coffers.
“We’ve actually had memorial services here and baptismal services here. We’ve had every major life event celebrated here multiple times.”
In purchasing the property in 2005, the Livingstone-McNelises counted on funding from family members and the refinancing of 15 rental properties. But in the first year they had nearly $180,000 in credit-card debts, Peter Livingstone-McNelis said, about $100,000 of which they have since paid off.
He said the couple bought the property and its contents at 100 Monroe St. for about $1.3 million, and have since invested about $300,000 into the operation. Community support has helped keep the business afloat, including $160,000 in public donations three years ago when they were facing similar financial problems. Most of that money was collected through the congregation of the Unitarian Universalist People’s Church in Kalamazoo, whose minister has known the family for years.
To offset some of their continuing debt, the couple sold the castle property in June to a private buyer in Kalamazoo for $600,000. Under the agreement, the Livingstone-McNelises have a first-buy option if the owner decides to sell. The contract also allows them the opportunity to buy the property back for an agreed-upon price once every five years through their 25-year lease.
“The books show that we have a four-year trend of growth, and the economy seems to be improving,” Peter Livingstone-McNelis said. “I think we’ve seen the bottom.”
Loan falls through
Livingstone-McNelis said he likely could have gotten a higher purchase price for the property if it had been put up for sale to the public. But he wanted to ensure the sale wouldn’t inhibit the mission of the business as being an agent for “positive social change.”
“What I wanted to do is continue what we were doing here at the castle, and so I didn’t want anybody to buy it and then convert it back to a private residence or turn it into a beer hall,” he said. “The only reason why I sold it is that there’s a caveat that I can buy it back.”
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Gazette file photoThe owners of Henderson Castle stand outside in the garden earlier this year. From left, Vincent, 11, Laura, Mary Lee, 15, and Peter Livingstone-McNelis.
The couple had held out hope that they could get a bank loan to help finance the operation, but despite a number of “close calls,” the loan never materialized and the property debt became too large to assume.
Livingstone-McNelis said if the money can’t be raised to keep the castle open, they will have to file for bankruptcy.
“It was a situation where I was caught between selling it and walking away, or selling it with the idea of buying it back and having the opportunity to continue,” he said. “I chose the opportunity to continue, and that was potentially a several hundred-thousand-dollar decision.”
Laura Livingstone-McNelis, who works two part-time teaching jobs, said since the couple has owned the castle they have never received a salary, living off the income from and sales of their rental properties, of which they now own five. They do not live at the castle.
The castle was closed to the public for 110 years following its construction in 1895. Laura Livingstone-McNelis fears it could return to such a state unless the money can be raised.

“The idea that the doors may close and the very children that I will continue seeing through the school year may never see the inside of that building, may never know what they missed, may never know the mission that was set forth ... by all of the friends of Henderson Castle that have been supporting this whole idea for the last five years, really would be a great loss and a great tragedy in my opinion,” she said.
Peter Livingstone-McNelis said staff — which includes a bookkeeper, housekeeper and innkeeper in addition to the Livingstone-McNelis family — were notified last Wednesday of the situation. Letters were sent out Thursday notifying guests with reservations in the future, as well as to those who have supported the castle.
 
as someone who faced foreclosure and is mid bankruptcy to save the Inn, you can do everything you think is wright and good and still be the victim of the economy
 
Livingstone-McNelis said he likely could have gotten a higher purchase price for the property if it had been put up for sale to the public. But he wanted to ensure the sale wouldn’t inhibit the mission of the business as being an agent for “positive social change.”
Excuse me? The mission of a business SHOULD BE TO MAKE A PROFIT!!! It must be nice to have been "bailed out" once already. Apparently that did not issue a wake-up call about the mission of a business.
I am not saying the economy has nothing to do with a business surviving or failing, but no one is going to bail me out if I get in over my head. I either run my business as a business or I am out of business. AGoodman, this is not meant to be a swipe at you. I am strictly referring to the article.
 
You are right K-we did everything in our power to keep our B & B running and it just did not work. We where fortunate to at least keep one of the houses as a residence and the property that goes with it. Someday when we get back on our feet we may turn it into a small B & B again with 4 rooms and where thinking of turning the property into a bird sanctuary or wilderness sanctuary-this is our dream or our retirement dream-who the hell knows.
Its hard to let go of something that you poor your heart,tears and blood into it, but it comes to the point of either swimm or sink-we chose to still be innkeepers but not business owners at this time and still save our house from foreclosure-you gotta do what you gotta do. I say they should just sell it to someone that wants the property to save it from a terrible fate of dissrepear.
 
OK. I read it. I still stand by what I said. It was more a statement than a criticism. I have enough problems walking in my own shoes to try to walk in someone else's.
We all have our challenges. I am not going to bore anyone with all the medicals we have gone through with DH or the challenges he went through with twins in diapers (kids # 4 & 5) while his first wife was in and out of the hospital for almost 2 years before she died - the twins were 3 when she died. We are each dealt a hand - and BTW thanks to polio and post-polio syndrome one hand is basically all DH has - one functioning leg too. well that is failing now too.
My point is we all have troubles that we deal with. We all have financial challenges. But we all also have our blessings. My question is this - if they had so much medical expense (as alluded to), how did they manage to get the loans to buy such a huge place that was so "needy" and I still maintain the mission of a business is to make a profit - not social change. That belongs to the non-profits.
 
Not everyone is in it "to make a profit" - (yes I am but struggling)
Some people at a point in there life when they have $$ may decide to do something as a philanthropic effort, or as a tax deduction, or to leave something to their families. Thank God not everyone does things for profit but again no one could have foreseen the awful economy we are in
As to how they got loans? Same way everyone else did "before the plunge". We had money, and / or we had good credit, and / or our occupancies were high, and / or our expectatations and dreams for a successful business (profit or non) were good.
I never imagined that with an affordable morgage, not only 100% paid up but overpaid, no major debts other than my home loan (NO student loan, NO medical bills, no major cc bills), 20 yrs with same bank and never bounced a check in my life, that when I asked the bank to defer 6 months of payments "in anticipation" of the worsening economy that they would tell me they "could not help me because I was not in default".
So we can't "judge" everyone's circumstances, even though they may have had medical bills before or during, those medical bills may have been "affordable" before the whole castle came tumbling down.
 
If they want it to be "For the community" why don't they turn it into a non-profit and then run it as such "for the social thing" so that children of the future can go in and know what its all about?
And I agree agoodman-we've been there and those banks that where "bailed out" could give a rats a.. about you or anyone elses home or business-
 
I guess because "not for profit" still needs operating capital and there are not many places willling to give or loan money anymore, I am sure they did everything they could, as I have to save the place
 
Did I actually read $180,000 in credit card debt? Maybe they know something I don't, or have an interest rate under 5%, but that is sheer lunacy. And refinancing properties that were maybe making money to buy this place? It's gorgeous and I can see why anyone would want to own it, but it sounds, from afar, like they weren't really thinking about it clearly.
 
I hope these struggling innkeepers find a way to make it work.
ETA: Easy for those of us who run small Inns to criticize, K. If your Inn or mine had failed, we would not be facing the same circumstances, nor were our Inns anything like the Castle, a 11,000 square foot, 25 room monstrosity that serves as one of the lynch pins of it's community.
Further, this family has had it's share of heartache, and I can only imagine the medical expenses...read this to get a fuller picture of this family's situation: http://www.mlive.com/living/kalamazoo/index.ssf/2010/11/a_teen_angel_and_her_castle_gi.html
Suellen, I hope after reading the teen angel story, you decide to change the title of this posting.
 
OK. I read it. I still stand by what I said. It was more a statement than a criticism. I have enough problems walking in my own shoes to try to walk in someone else's.
We all have our challenges. I am not going to bore anyone with all the medicals we have gone through with DH or the challenges he went through with twins in diapers (kids # 4 & 5) while his first wife was in and out of the hospital for almost 2 years before she died - the twins were 3 when she died. We are each dealt a hand - and BTW thanks to polio and post-polio syndrome one hand is basically all DH has - one functioning leg too. well that is failing now too.
My point is we all have troubles that we deal with. We all have financial challenges. But we all also have our blessings. My question is this - if they had so much medical expense (as alluded to), how did they manage to get the loans to buy such a huge place that was so "needy" and I still maintain the mission of a business is to make a profit - not social change. That belongs to the non-profits..
gillumhouse said:
I still maintain the mission of a business is to make a profit - not social change.
Oh yes, God forbid.
 
I hope these struggling innkeepers find a way to make it work.
ETA: Easy for those of us who run small Inns to criticize, K. If your Inn or mine had failed, we would not be facing the same circumstances, nor were our Inns anything like the Castle, a 11,000 square foot, 25 room monstrosity that serves as one of the lynch pins of it's community.
Further, this family has had it's share of heartache, and I can only imagine the medical expenses...read this to get a fuller picture of this family's situation: http://www.mlive.com/living/kalamazoo/index.ssf/2010/11/a_teen_angel_and_her_castle_gi.html
Suellen, I hope after reading the teen angel story, you decide to change the title of this posting..
I applaud their idea of being community oriented, but I question their thinking. The place is beautiful, and it is in an area where it could/should be able to work. Why do they think they are the only ones who can do it? There are other people out there, even in these tough times, who might have the money and be able to do a better job. That said, I don't think the area would suffer if it were to return to a private residence. Much better than being torn down.
 
Don't get me wrong - I feel for those who are struggling in this economy, but I bet they don't own 5 other properties, live off site, or have a bookkeeper, housekeeper and Innkeeper. It's called trimming the fat and working your business if you want to keep it. This place only has 6 rentable rooms. They obviously bit off a little more than they could chew! They bought it, put a whole lot of $ into it (that they didn't really have) and thought they'd be rolling in the dough? Did anyone do the math first? Bought it for 1.3 and then "sold" it for $600,000 - so what is it really worth? Like I said - there are too many wrong things...and to quote a neighbor "these folks have lived beyond their means for years and people have always bailed them out."
 
I really don't think it's up to us to say what they did wrong, they may have only had 6 rooms but I can tell you that 6 "Ritz Carlton" rooms take longer to clean than 6 "motel 6" rooms, and I know I have been a housekeeper manager in major hotels, they may have had more land etc
Maybe they had other jobs outside the Inn that generated more than hiring help, maybe they had disabilities that prevented them from doing some of the work. WE DON'T KNOW
So please lets stop saying what they could have should have would have done, we don't know, we are not in their shoes, and lets just give some sympathy to those in OUR INDUSTRY that are having a tough time.
 
I really don't think it's up to us to say what they did wrong, they may have only had 6 rooms but I can tell you that 6 "Ritz Carlton" rooms take longer to clean than 6 "motel 6" rooms, and I know I have been a housekeeper manager in major hotels, they may have had more land etc
Maybe they had other jobs outside the Inn that generated more than hiring help, maybe they had disabilities that prevented them from doing some of the work. WE DON'T KNOW
So please lets stop saying what they could have should have would have done, we don't know, we are not in their shoes, and lets just give some sympathy to those in OUR INDUSTRY that are having a tough time..
agoodman said:
So please lets stop saying what they could have should have would have done, we don't know, we are not in their shoes, and lets just give some sympathy to those in OUR INDUSTRY that are having a tough time.
Or, conversely, let's discuss how starting a new business requires a lot of thought and a lot of self-knowledge. With no other details than what are portrayed in this article (which is probably wrong about 50% of what is going on if you've ever read about yourself in the news as I have!) it is great to discuss the what ifs and whys of the situation.
All of us have a sense of how things could go horribly wrong for us at any turning.
  • A medical situation with no insurance to pay for it. And no one to cover for us while ill.
  • A death in the family
  • A really, really bad financial year.
  • A bad investment in something other than the business that draws our attention too long from the business.
  • An emergency in the town in which our business is located- flood, fire, road closing, someone on here had a road collapse, I think
  • A long-term problem such as 100's of hotel rooms opening up in the same town
  • A closing of a major local business we relied on for repeat guests
  • Being sued by a guest (worse by far than a bad review!)
  • Opening the wrong business in the wrong place at the wrong time
  • Not paying attention when things were getting worse
All of these are topics to think about and this article certainly brings a lot of discussion to the table. It makes good sense to discuss it, to pick it apart, if only to make our own business plans stronger by seeing a real-life situation gone very wrong.
Maybe they are wonderful people who had a run of bad luck. Maybe they are poor managers and gave everything away instead of protecting their investment. None of us will ever know the truth, even if the owners came on here and told their story. Because no one tells the complete truth, ever. They can only tell their version of the truth.
 
I really don't think it's up to us to say what they did wrong, they may have only had 6 rooms but I can tell you that 6 "Ritz Carlton" rooms take longer to clean than 6 "motel 6" rooms, and I know I have been a housekeeper manager in major hotels, they may have had more land etc
Maybe they had other jobs outside the Inn that generated more than hiring help, maybe they had disabilities that prevented them from doing some of the work. WE DON'T KNOW
So please lets stop saying what they could have should have would have done, we don't know, we are not in their shoes, and lets just give some sympathy to those in OUR INDUSTRY that are having a tough time..
agoodman said:
So please lets stop saying what they could have should have would have done, we don't know, we are not in their shoes, and lets just give some sympathy to those in OUR INDUSTRY that are having a tough time.
Or, conversely, let's discuss how starting a new business requires a lot of thought and a lot of self-knowledge. With no other details than what are portrayed in this article (which is probably wrong about 50% of what is going on if you've ever read about yourself in the news as I have!) it is great to discuss the what ifs and whys of the situation.
All of us have a sense of how things could go horribly wrong for us at any turning.
  • A medical situation with no insurance to pay for it. And no one to cover for us while ill.
  • A death in the family
  • A really, really bad financial year.
  • A bad investment in something other than the business that draws our attention too long from the business.
  • An emergency in the town in which our business is located- flood, fire, road closing, someone on here had a road collapse, I think
  • A long-term problem such as 100's of hotel rooms opening up in the same town
  • A closing of a major local business we relied on for repeat guests
  • Being sued by a guest (worse by far than a bad review!)
  • Opening the wrong business in the wrong place at the wrong time
  • Not paying attention when things were getting worse
All of these are topics to think about and this article certainly brings a lot of discussion to the table. It makes good sense to discuss it, to pick it apart, if only to make our own business plans stronger by seeing a real-life situation gone very wrong.
Maybe they are wonderful people who had a run of bad luck. Maybe they are poor managers and gave everything away instead of protecting their investment. None of us will ever know the truth, even if the owners came on here and told their story. Because no one tells the complete truth, ever. They can only tell their version of the truth.
.
I agree with your thoughts A I. We don't know them from Adam and we really shouldn't be conjecturing about them. It is their business problem....not ours. Just your words to the wise is caution for any aspiring reading here. Thanks!
 
The reason it is "up for discussion" is that some people found it necessary to perhaps criticize the Inns circumsyances and that is really unfair, I see this way too often on the forum.
How do you think I felt when someone posted about my foreclosure? Did anyone know I had perfect credit? That my "other job" had cut my pay over 2 years by 35%? That when I asked the bank for help it was even before I was one penny behind (in fact I was overpaid)
If someone asks for advice or comment then yes I think we are here to offer it, but to post about how they should have would have could have and what they did wrong - KNOWING how the press loves to embellish is just not acceptable.
Go ahead and sling mud and critcism at other industries but we are too small an industry to create these types of divisions
 
I sincerely apologize to anyone who has taken offense. It was in the news, it is a B&B and I posted it mainly as a "how not to run this kind of business". I know the back story - this is my neighborhood - people talk. This family came in to "save" the Castle. Yes, it was for sale for a very long time, but the owner didn't need saving. He was a very eccentric gentleman who had great ideas (and started the "tree floor" mentioned in the other article about why we should help) - he just had too much money and kept starting projects without finishing them. These new owners have no liquid money evidently and expect the community to bail them out everytime. I find it tragic on many levels.
 
The reason it is "up for discussion" is that some people found it necessary to perhaps criticize the Inns circumsyances and that is really unfair, I see this way too often on the forum.
How do you think I felt when someone posted about my foreclosure? Did anyone know I had perfect credit? That my "other job" had cut my pay over 2 years by 35%? That when I asked the bank for help it was even before I was one penny behind (in fact I was overpaid)
If someone asks for advice or comment then yes I think we are here to offer it, but to post about how they should have would have could have and what they did wrong - KNOWING how the press loves to embellish is just not acceptable.
Go ahead and sling mud and critcism at other industries but we are too small an industry to create these types of divisions.
agoodman said:
Go ahead and sling mud and critcism at other industries but we are too small an industry to create these types of divisions
I'm again going to say that no business is unreservedly 'pure' and closed to discussion. Every business group is open to change and improvement. It is not divisive to discuss what we see and read and try to uncover where we can avoid the mistakes others make. If, with no other info than what we read, we can call an idea 'brilliant' we can also call it other way- 'lame'.
And from what was posted in the article (with 50% of it probably being wrong) it does seem these folks bit off way more than they could chew and made some horribly mis-informed decisions. That their town bailed them out once and yet they are back with hat in hand says a lot about them in particular, even if nothing about why they are in such dire need. (It is great info for aspirings to note that this ain't gonna happen elsewhere unless the town has known you since an infant and your inn is the center of all of their family events- as this place seems to be.)
I know what it is like to be on the slippery slope to overextending myself on credit in order to make it clear to the next busy season. I am nowhere near out of the hole that last year's precipitous decline in travel put me in. A year like that next year and I will be looking at second and third jobs. But I won't be asking my townspeople to help me out of the hole with donations. Food shelf maybe, but not cash to pay down my debt.
 
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