Regrouping Va. resort hires Alex. Brown to find investors

December 09, 1992|By Ross Hetrick | Ross Hetrick,Staff Writer

The owners of the Homestead, a prestigious resort in western Virginia, have hired the Baltimore investment banking firm of Alex. Brown & Sons Inc. to find investors for the resort's long-term improvement plan.

Daniel H. Ingalls Jr., president and chief executive of Virginia Hot Springs Inc., which owns the resort, said the company is trying to raise $30 million for a five-year, $50 million project. The remaining $20 million would be generated by the company, he said.

The search for new investors comes after three years of losses by the Hot Springs, Va.-based resort, Mr. Ingalls said. He attributed the red ink to "a loss of marketing momentum" in past years and a drop in bookings by businesses pressed by the recession.

But, he said, a new management team installed this year is turning around the business with a more aggressive marketing effort coupled with the capital improvement project. "These are all components to our plan to revitalize the Homestead," Mr. Ingalls said.

The new marketing effort would target the markets of Northern Virginia, Baltimore and Richmond, he said. "We have focused on marketing and sales, and that has made an enormous difference," Mr. Ingalls said.

The capital improvement effort, started two years ago, already includes new horse stalls, a show ring, a new shooting range and the addition of two board meeting rooms, a cocktail lounge and sports lounge, Mr. Ingalls said. Future efforts will be in the area of landscaping, architecture, interior design and improving outdoor sports facilities, he said.

The investment program might include selling a minority stake in the company, a strategic partnership or a business combination, according to a statement from the company.

"The board of directors is committed to finding investors who will help ensure that the Homestead remains a world-class resort of the highest quality," Mr. Ingalls said.

The Ingalls family has owned the Homestead since 1891 and holds a little more than 50 percent of the stock of Virginia Hot Springs. But the family is willing to dilute its holdings

below the halfway mark in return for the investment, Mr. Ingalls said.

The 15,000-acre resort in the Allegheny Mountains has been a favorite spot for business and political conferences. It has been awarded Mobil's Five-Star Award for 31 years in a row and is a charter member of the Historic Hotels of America.

Mobil will not be rating the resort this year, Mr. Ingalls said, because of the changes that are being made at the Homestead.

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