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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.”
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.
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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.”
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.