After years of operating at a loss, Stockton Seaview Hotel and Golf Club is expected to end 2012 with a surplus for its new owner, Richard Stockton College.
College President Herman J. Saatkamp said college officials had anticipated revenue from the golf operations and the property is operating above expectations. The exact amount of the surplus is not yet known but is currently about $650,000, college officials said last week.
“I thought it would take us three years to generate a surplus,” Saatkamp said during a recent interview that included representatives of Dolce Hotels and Resorts, which manages the hotel property. “But a surplus is projected for calendar year 2012.”
Surplus funds could at some point generate a new scholarship program for students at the college. Saatkamp said the school may even begin putting a notice on resort invoices that guests charge help support students.
“The greatest challenge for state colleges is developing outside revenue sources,” Saatkamp said. “For us, Seaview will be one of them.”
The college bought the struggling resort for $20 million cash in September 2010, using money from its investment fund. The sale included the 297-room hotel and conference center and the Bay golf course. The college also took over the long-term lease of the Pines golf course, owned by Marriott. The properties remain through 2013 under management contracts with Dolce Hotels and Resorts for the hotel and Troon Golf for the golf courses.
Seaview closed from January through March 2011 for about $7 million in renovations, $5 million provided by previous owner LaSalle Properties as part of the sales agreement.
Those renovations included improved golf course drainage, landscaping and renovations to the main dining room, kitchen, lobby, meeting rooms, terrace and some guest rooms, and new windows, awnings and roofing. The hope was that restoring Seaview’s historic charm would generate business.
An additional $1.9 million has been budgeted for 2012 and 2013 that includes more work on the student residences, plus exterior paint, fitness area and pool renovations, ice machines, and roofing and ventilation projects.
The college’s 2012-13 budget shows anticipated revenue and expenses of $21.7 million, with the hotel generating the bulk of the funds, about $16.3 million. Saatkamp said that since the business operates on a calendar year and the college uses the state’s fiscal year that begins July 1, the numbers are adjusted.
While Seaview is marketed as one property, the revenue projections provided by Stockton this week show most of the projected 2012 surplus, about $900,000, coming from the golf operations, with the hotel still operating at a loss of about $230,000.
The operational turnaround comes after years of losses at the historic property, which opened in 1914. Press archives show LaSalle Properties purchased the site in 1998 from Marriott for $50 million but kept Marriott, which had managed the site since 1987, under contract. But after missing performance targets from 2004 to 2008, LaSalle replaced Marriott with Dolce and Troon in 2009.
LaSalle’s 2009 annual report said the company had made improvements to the building, furniture, fixtures and equipment, but Seaview still reported a $10 million decrease in room, food and beverage revenue largely as a result of the recession.
Stockton had considered developing a hotel and conference center as part of its long-term master plan to expand its Hospitality and Tourism Management Studies program. Those plans were put on hold during the recession, but the option to buy Seaview presented an affordable alternative, albeit at a risk.
“There were very red figures when Stockton took over,” said Richard Maxfield, chief operating officer of Dolce.
Saatkamp still considers the purchase a bargain, noting that it would have cost far more to build more housing for students.
The college has projected as many as 380 students could be housed at Seaview during the academic year, generating revenue during what is typically the slow season for the hotel. Those rooms are then available for guests during the summer.
This year, about 135 students are living in one wing at Seaview, generating about $1.3 million in revenue for 2012-13, less than the almost $1.8 million initially budgeted based on anticipated student housing needs.
Stockton and Dolce officials said several factors have contributed to the property’s improved financial status: The purchase by a college, with promises to restore the site, generated a lot of buzz in the industry, and Stockton lived up to its promises with the renovation. The improved economy also generated more business.
Saatkamp said having no mortgage on the property is also a huge advantage.
The sales staff has actively marketed the property as a destination resort, and this year will host 88 weddings, twice the number three years ago, said Stephen Bello, Dolce’s on-site general manager.
Wedding coordinator Jennifer Trass said the atmosphere, location and amenities have been selling points for many types of events, especially if guests are arriving from out of town.
Maxfield said Dolce’s strength is also in corporate meetings, and Seaview is now providing a better experience for guests. The Ladies Pro Golf tournament has returned, and the site will also host the state Special Olympics. Maxfield said businesses like the link with the college because they feel they are supporting higher education.
“The Stockton name is valuable,” he said.
The University Professional and Continuing Education Association held its Mid-Atlantic regional conference at Seaview last week. Amy Heitzman, of Washington, D.C., chief learning officer for the group, said the location was convenient for members who liked having a connection to a college.
“This is a beautiful combination of everything we might need,” she said.
The 2012 occupancy rate at the hotel was 55 percent through August, up from 40 percent when Stockton took over. Maxfield said he believes they can get the rate up to 60 percent to 65 percent. That number does not include the Stockton students.
A learning environment
Bello said another unique element is the use of the site as a learning and living environment for Stockton students. He said 18 students worked at the site over the summer. One of them, Kristen Egbert, even helped develop and organize a special event for Dolce general managers promoting Galloway Township and South Jersey.
Egbert, who is still working at Seaview as a P.M. supervisor on the front desk, called her experience as an administrative assistant to Bello “amazing.”
“I learned so much about how to work an event and get the local community involved,” she said. The event’s theme focused on the local-food movement, featuring produce, seafood and wines from local producers.
Rummy Pandit, executive director of Seaview for Stockton, said internships do not have to be just in hospitality areas. A finance major at the college will begin an internship in accounting this winter.
Two students from Cornell University’s School of Hotel Management are also interning at the college as part of a joint agreement. They are currently working at Revel and taking courses at Stockton.
Alec Sherman, 19, a Cornell junior, said Andy Dolce (founder and chairman of Dolce Hotels and Resorts) went to Cornell to promote the internship, and Sherman saw it as an opportunity to get experience with a gambling property. He is also taking a gambling management course at Stockton.
“That’s not something Cornell offers,” he said. He said he’s been getting a great inside view of operations at Revel and networking for future job opportunities.
Stockton is also holding a senior seminar in hospitality management and tourism at Seaview in a classroom intentionally designed to look like a business conference room rather than a classroom.
“It is definitely more like a work environment to be here rather than being on campus,” said professor Donna Albano. “We are not tied to the college schedule. We have toured the property and met with the GM and sales team.”
Students Keith Allen, 25, of Collingswood, Camden County, and James Updike, 27, of Jackson, Ocean County, said being on site makes it easier to link what they are learning with actual operations.
“We learned about back-of-the-house operations, and then we got to actually see them,” Allen said.
A primary drawback to the sale was the issue of property taxes. As a public college, Stockton does not pay property taxes, but officials agreed to make a payment in lieu of taxes to the township of $300,000 a year for three years.
Galloway Township Manager Arch Liston said they are in the second year now, and he is pleased the property is successful because it could mean a large payment in the future. He said LaSalle appealed to lower Seaview’s assessment, which cost the township $164,000 in property-tax revenue, and the college’s payment does not cover all of the taxes that would be due to the county and schools.
“What we are getting now is certainly better than nothing,” he said. “But it’s not everything.”
Online reviews of Stockton Seaview have generally been positive, with praise for the service and occasional complaints about the “dated” appearance of some areas. But Maxfield said Dolce likes the historic aspect of the resort, which will celebrate its 100th anniversary in 2014.
“Seaview is iconic,” he said. “There are few places like it.”
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