|The Boston Globe|
Knight Ridder/Tribune Business News
June 17, 2004 - Developer Stephen R. Karp said yesterday that he plans to buy the Jared Coffin House, perhaps Nantucket's most historic inn, for $11 million.
"The Jared Coffin House has great historical significance on Nantucket," Karp said. "We are going to respect its traditions, but at the same time, we will always be looking at ways to make improvements."
When the sale is completed, a place where many a New Englander has enjoyed a romantic evening -- or a bowl of world-class chowder -- will be added to the string of luxury inns Karp already owns on the island.
In 1998, Karp became Nantucket's biggest hotelier when he made a $40 million purchase that included such lodging establishments as Harbor House Village and the White Elephant. That transaction also gave Karp the right of first refusal on a sale of the 1845 Jared Coffin House, said Phil Read, who with his wife, Peg, has owned the establishment since 1976.
The Reads want to sell the inn so they can retire, said Phil Read, 67.
In April, Read said he had reached an agreement to sell the 60-room inn for $11 million to Noble House Hotels & Resorts of Kirkland, Wash., which owns or operates about a dozen hotels around the country, including the Hotel Viking in Newport, R.I.
Read said he alerted Karp to the offer. After several weeks of doing due diligence, Karp last week informed Read that he wanted to exercise his right and match the Noble House offer to buy the Jared Coffin House, Read said.
"We anticipate a closing on or before June 30," Read said.
A Noble House spokeswoman said a confidentiality agreement prevented her from commenting.
Coincidentally, the $11 million price matches what Karp received last month when he sold the Breakers, a Nantucket inn with about 25 rooms, to buyers who plan to turn it into one or more waterfront homes. The Breakers was sold because it wasn't a neat fit with Karp's other lodging properties, a spokeswoman for Karp said at the time.
Mary Malavase, head of the Nantucket Lodging Association, said the Jared Coffin House is one of only a handful of island inns that stay open year round. It's important for Nantucket that Karp continue that tradition, she added. Karp said he's exploring the possibility.
Malavase said she was heartened that the Jared Coffin House will be purchased by someone with ties to the island.
"Karp did a wonderful restoration on the Wauwinet," she said, referring to another inn he owns.
A purchase of the Jared Coffin House would ensure that Karp is as dominant in Nantucket lodging as he once was in the shopping mall business. In 1999, Karp's company agreed to sell 14 regional malls, including Liberty Tree Mall in Danvers, Northshore Mall in Peabody, and Square One Mall in Saugus, for $1.725 billion.
Karp is part of the development team for a Westin Hotel that is to open in 2006 next to the Boston Convention & Exhibition Center in South Boston. In addition, he has an option on nearby Pier 4, where he could build about one million square feet of retail, office, hotel, and residential space.
By Karp's count, his Nantucket inns collectively have about 300 rooms. According to the Nantucket Lodging Association, there are roughly 1,000 rooms on the island in various inns, hotels, and bed-and-breakfasts.
Karp's purchase would continue a trend toward consolidation at the high end of Nantucket's luxury hotel market. This year, Danielle deBenedictis and her husband, Peter Karlson, bought their fourth inn on the island, the Pineapple Inn. A key to their business, she said, is spreading costs over multiple properties. "We would have been interested in purchasing the Jared Coffin House," she said. "Obviously, that wasn't in the cards."
Nantucket has slowly lost inns in recent years. Real estate prices are so high that it's hard for a young couple to buy a bed-and-breakfast and operate it; they can't generate enough room revenue to cover mortgage payments.
Consumer tastes have changed since 1976, when Read and his wife purchased the Jared Coffin House, which was much smaller then. People didn't mind a small room 30 years ago. Now they want all the amenities.
Room prices at the Jared Coffin House can range seasonally from $125 to $375 a night based on double occupancy, according to the website. At Karp's Wauwinet, the summer room rate can run $500 to $700 a night, according to Wauwinet's website.
The Jared Coffin House has not had a major renovation in about 20 years. Other innkeepers expect Karp to update the home built by a shipowner named Jared Coffin. Karp said it was too early to get into specifics about possible changes.
By Chris Reidy and Carol Beggy
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