PHOTO / DAVID CLOUGH
Kim Swan.
May 14, 2021
Inn transactions consolidate investments closer to home
Courtesy / Swan Agency Real Estate/Swan Hospitality Group
Smuggler’s Cove Inn in East Boothbay sold in an off-market deal to a group of partners that includes Scott Larson, owner of the Linekin Bay Resort in Boothbay Harbor and the Newagen Seaside Inn in Southport.
A Bar Harbor investor executed a series of sales and acquisitions in the lodging sector in order to consolidate her investments closer to her home base.
“It's been like playing dominos,” said the investor, Kim Swan, who owns Swan Hospitality Group and Swan Agency Real Estate, both in Bar Harbor.
Swan is a 2019 Mainebiz Women To Watch honoree.
The deals
Earlier this year, Swan sold two inns.
Smuggler’s Cove Inn, at 727 Ocean Point Road in East Boothbay, sold for $2 million in an off-market deal. Swan sold it to a group of partners that included her colleague Dana Moos, who is director of the Swan’s Agency’s lodging and hospitality brokerage.
The Captain Lindsey Inn, at 5 Lindsey St. in Rockland, sold for $750,000 to Eric and Raleigh Churchill. Moos and Swan brokered the deal.
Then Swan bought the Colony Cottages, at 20 State Highway 3 in Hulls Cove, for $3.7 million. Swan and Daniel Hickman with Exit Heritage Real Estate brokered the deal.
Hulls Cove is a village on Bar Harbor’s outskirts.
The transactions were two sides of an exchange under section 1031 of the IRS tax code. A 1031 exchange allows an investor to defer paying capital gains taxes on the sale of real estate by buying a similar property.
The sales of Smuggler’s Cove and the Captain Lindsey allowed Swan to go ahead and buy the Colony.
Swan also owns the Bayview Hotel in Bar Harbor, which she bought in 2019.
“I decided over many years of having investments all over the state that I wanted to be completely focused on MDI [Mount Desert Island],” she said.
Smuggler’s Cove
Swan bought Smuggler’s Cove with two partners around 2004, performed renovations and leased it to an outside party to operate. The property has over 50 rooms.
“It’s a beautiful property,” she said.
She decided to sell it when the most recent lease renewal expired.
Courtesy / Swan Agency Real Estate/Swan Hospitality Group
Smuggler’s Cove Inn in East Boothbay sold in an off-market deal to a group of partners that includes Scott Larson, owner of the Linekin Bay Resort in Boothbay Harbor and the Newagen Seaside Inn in Southport.
Last winter, Swan approached Moos to be on the lookout for potential buyers. Moos approached Scott Larson, who has properties in the same vicinity, as co-owner of the Linekin Bay Resort in Boothbay Harbor and owner of the Newagen Seaside Inn in Southport.
“We started looking at the asking price and how that related to dollars per unit,” said Larson. “It seemed like a good investment.”
Four additional partners were brought into the deal. Moos has maintained a hands-off involvement while Larson went ahead with renovations. Larson estimated additional investment of at least $500,000 to get the property ready to open by this coming Memorial Day weekend. He anticipated additional investment after the lodging closes for the season.
Renovations began with disposing of furniture and other items in the guestrooms and common spaces, he said.
Infrastructure improvements include restaurant upgrades; ADA-compliant upgrades to the bathrooms; new flooring, paint, furniture and, in some cases, sliding doors in the guestrooms; and new roofs and windows.
Smuggler’s Cove is set up like a motel, with 54 exterior doors. But the previous manager, he said, had built up a “fairly decent” business operating along the lines of a bed-and-breakfast format.
“We’ll try to do an elevated bed-and-breakfast format,” he said. “It’s a great piece of property. It’s got probably some of the best sunset views on the peninsula. It also has its own sandy beach, which is very unusual on the peninsula. So we’re excited.”
Given its proximity to the Linekin Bay Resort, the goal is to leverage amenities at each property, perhaps implementing a tender service to transport guests back and forth.
“It’s a great opportunity for a short boat ride,” he said. “ It would be an easy way to promote a back-and-forth between the two properties.”
Captain Lindsey
The Captain Lindsey Inn, in Rockland’s downtown, was built in 1835 as a home and was expanded into a tavern, inn and livery stables four years later, according to the property’s website.
In the 1920s the inn was damaged by a fire and the top floor was removed. Shortly after, the property was purchased by the Camden & Rockland Water Co. and primarily used as office space.
In 1994, it was renovated and reestablished as an inn.
Courtesy / Swan Agency Real Estate/Swan Hospitality Group
Downtown Rockland’s Captain Lindsey Inn, now called the Lindsey Guest House, sold to a couple eager to leave San Francisco to be part of New England community.
Swan bought it in 2014 and executed a redesign to reflect a “new nautical” theme beyond lobster buoys and anchors.
“We had so much fun with that,” she said.
Now the new owners are Raleigh and Eric Churchill, who renamed it the Lindsey Guest House.
“It’s a unique space. That’s part of the draw,” said Raleigh Churchill.
Raleigh was born and raised in Ocala, Fla., and Eric is from Indianapolis.
The couple met in the Peace Corps in 2013 during a posting to Senegal. Raleigh was an agroforestry volunteer and Eric was an economic development volunteer.
Afterward, they moved to San Francisco, where Raleigh was a data analyst and Eric a software developer.
Courtesy / Churchill Family
Eric and Raleigh Churchill are the new owners of the Lindsey Guest House in Rockland. They’re seen here in California, where they had tech careers.
They also traveled to Greece, Nepal and a lot in the U.S.
After several years in San Francisco, they wanted to leave.
“We were very much part of the 9-to-5 grind, probably more than 9-to-5,” she said. “We were thinking, ‘Is this what we want for the next 30 years?’”
Remote work during the pandemic opened their horizons.
“We started to have conversations about where we wanted to move, more than what we wanted to do when we got there,” she said.
The path to Maine involved a patchwork of ideas, she said. They loved the outdoors and wanted to have a sense of community. Eric was into sailing as a kid and wanted to get back to it. Raleigh has an undergraduate degree in history and liked New England’s “quaint” feel.
Their travels and the importance of lodging brought them to the idea of buying a bed-and-breakfast.
“When we look back at travel, we thought about were we stayed and who we talked to and how we became part of the community,” she said.
They were particularly interested in older properties. Raleigh loved the Lindsey’s architectural details, such as its wide plank floors and molding.
Some renovations are in the works, including an update to the dining room, where the palette will be lightened and some furnishings will be swapped out.
“The approach has been one room at a time,” she said. “We’ll try to bring in experiences from our travels.”
That includes incorporating colorful Senegalese fabric into the décor.
They also launched a new website and did a brand redesign, such as changing the property’s anchor logo to a sextant.
They financed the purchase through a loan with Machias Savings Bank and their own savings. Eric will continue to work remotely in software development.
The plan is to open May 21. Operations will be seasonal to start, but they’re looking into winter use of the property, such as offering it for artist retreats and winter holiday rentals.
The Colony
Back in Bar Harbor, Swan wanted another project in her neck of the woods, so she began looking at the Colony Cottages.
“The Colony had been on the market for years,” she said. “I hadn’t paid any attention to it. But last fall I started looking at it and thinking, ‘This is a really cool property.’ So I talked with the broker.”
The property has 30 cottages and a 10-unit motel on 15 acres, with about six acres that haven’t been developed. The structures date back at least 60 years.
“With the pandemic, people love individual cottages,” she said. “That has skyrocketed as a top priority for people.”
Courtesy / Kim Swan
Demand for individual units, like those at the Colony Cottages, in the Bar Harbor village of Hull’s Cove, has “skyrocketed,” said the property’s buyer.
The property also includes 210 feet of beach across the street.
“So it’s actually an oceanfront property,” she said.
Plans include a substantial amount of structural work and a redesign with a rustic “national park vibe,” she said.
Food service will be added.
“We’ll focus on making the Colony family- and pet-friendly,” she said.
Swan expected to begin renovations this year with an initial $600,000 investment. The property will remain closed for 2021. All together, she expected total investment, including the purchase price, to be $5 million.
The Colony is the closest lodging facility to the entrance to Acadia National Park’s Hulls Cove visitor center, she said.
The Colony sits to the north of the visitors center. Swan’s other Bar Harbor property, the Bayview, is also on the water and is a mile to the south of the center. Swan reopened the Bayview in May 2019 after initial renovations. Those were followed during the off-season with additional upgrades that this spring included redoing 16 bathrooms and adding a gift shop and concierge-level pantry. Plans were in the works for a new landscape design around the entry.
Swan introduced a plant-based menu at the Bayview that she’ll carry over to the Colony.
“We’re trying to go completely vegan,” she said. “But I’m not militant about it.”
‘Insane’ bookings
Demand at the Bayview has been high. Bookings in August, September and October of 2020 surpassed the same months of 2019.
And this year is in full swing.
“It looks like we are going to open for the 2021 season with as many reservations already on the books than we had when we finished 2019, and I was thrilled with 2019 results,” she said.
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