HARPERS FERRY, W.Va. — Calendar pages keep flying by for Hill Top House, the dream hospitality project on a majestic overlook of the Potomac River.
Fred and Karen Schaufeld and their SWaN Investors company purchased the historic hotel property in 2007, closed it and announced intentions to rebuild Hilltop as an upper-echelon hotel.
The years rolled past without much progress.
Rather than sparkling, the original Hill Top House Hotel is deteriorating. Visitors to the promontory overlook may stand in awe of the choppy waters of the Potomac, the sheer hillside across the valley and the historic sweep of Harpers Ferry — and then pivot to see a fenced in hotel with rain and wind blowing through its crumbled walls.
Some of the original investors have passed away. And the small town’s politics are so uncertain that a dispute over local election results is destined for state Supreme Court review sometime in the coming year.
“I’m getting old,” a frustrated Fred Schaufeld, 60, said at the start of a telephone interview this week. “We’ve been at this for more than a decade. We are attempting to build something that is at the level of what this hotel was.”
But over that time, the hotel developers and town leaders haven’t seen eye to eye enough to move the project forward. Both sides say a hotel would be an asset to the historic community, but agreeing on details about how the hotel would blend into the surrounding residential neighborhood has been elusive.
“Our commitment was to stay with it until the end of 2018, and we’re sitting here at the end of 2019,” Schaufeld said.
Nevertheless, the $139 million hotel project still remains a possibility entering 2020.
With a solid permitting agreement, Schaufeld said, “it’s possible we could be putting shovels in the ground by the end of 2020. We could be on the way during 2020.”
Not that Schaufeld feels confident that will be the case.
“This is something we really want to do, but by the same token this is going to play out and we’re either going to be moving forward or we’re going to be wrapping up,” he said.
“It’s kind of enough is enough. That’s where we’re at.”
Hill Top House
The hotel has been a centerpiece of Harpers Ferry since it opened in 1889. For the time, it was considered luxurious with electric lights, bath tubs with hot and cold running water, a dance pavilion and 4,000-square-foot dining room. Steam heat kept guests warm in the winter.
Thomas Lovett, an African-American businessman, built and operated the hotel, even as it burned down and was rebuilt in 1912 and again in 1919. The hotel’s charm and proximity to awe-inspiring views attracted U.S. presidents Woodrow Wilson and Bill Clinton and American notables such as Alexander Graham Bell, Mark Twain and W.E.B. DuBois.
Hotel ownership changed several times until 2007 when SWaN bought it and closed it because of poor structural integrity. In 2009, the SWaN investors announced intention of rebuilding and reopening the hotel.
Now, that was more than a decade ago. The project has progressed only on paper.
In 2017, a new zoning overlay district was created by Harpers Ferry elected officials. The Promontory Overlay District Ordinance is the existing legal guide for how Hill Top House would exist within the residential neighborhoods of Harpers Ferry.
“Most people agree that’s the guideline, and that’s the law, and that’s the ordinance for our town,” Harpers Ferry Mayor Wayne Bishop said during an interview at Town Hall.
But after that, SWaN provided more detailed plans for what would be required to make the development and its financing work. Those revised plans were presented in 2018 and remain the subject of debate.
“It was our frustration around this process” that prompted that, said Karen Schaufeld. “The mayor had asked, ‘What are your asks?’ We said, ‘Here they are.”
Those details are, well, details. They’re the kinds of mundane matters that make projects go or collapse. They’re not as exciting or as simple as embracing a splashy hotel project. Do you want a beautiful hotel? Yes. Can we work out the specific issues that would pave the way? Well, let’s take time for a closer look here.
They include matters like water rates, sewer rates, building permit fees, review fees and a number of other issues such as whether the town of Harpers Ferry would give up the right to stop work orders or noise ordinances.
“What they’re asking for, for the most part, is not in compliance with our ordinance,” Bishop said. “I want everyone to know that. I want the state to know that. I want the press to know that.
“We welcome this project with open arms, but there are things that are going to have to be ironed out an negotiated that are not in compliance with our ordinance at this time.”
The biggest issue right now is the streets around the hotel. The developers propose using not only the land where the hotel now sits but surrounding properties also under their ownership too. Doing so would make the development a cohesive hospitality destination.
But because Hill Top House is in a residential area, the streets surrounding it are public property.
Some, like a proposed realignment of Columbia Street, are actual roads used by pedestrians and vehicles. The others, like a portion of East Ridge Street, are “paper streets,” meaning they were mapped out on a town grid in the 1800s but have not been built. The imaginary end of East Ridge Street actually goes off a cliff.
The Hill Top House developers want to buy the streets, saying there is some precedent for doing so. Town leaders prefer long-term leasing, maybe 50 or 100 years.
Fred Schaufeld says the certainty of owning the full, connected property around the hotel may mean the difference between being able to make the investment or not. He likened the deal to a mortgage where a bank would be asked to loan money for rented property.
“You can’t build that home on rented land and expect the mortgage company to grant you a mortgage,” he said.
Mayor Bishop counters that there’s no grassroots movement to sell off public property.
“I’m not hearing from our community, ‘Wayne, sell this land.'”
Harpers Ferry
Bishop, 62, is a longtime professional construction project manager who was first elected to a two-year term as mayor in 2017 and then was re-elected last year.
He hikes and bikes all over the town of almost 300 people, and along his route he can’t help but see blue and white yard signs everywhere: “Make it happen! Hill Top House.”
The signs, which are like ones that would sprout in other communities during an election, are meant to sway the court of public opinion.
“I support it. I think it’s a great idea,” Bishop said.
But: “We take a pounding about how we’re holding up this project.”
Even so, the mayor suggests that issue is just one of many in this town at the eastern tip of West Virginia. And despite the controversy over the hotel, other aspects of Harpers Ferry are going quite well.
“We have a lot of projects we’re currently working on. Our financial status is good in Harpers Ferry. Tourism is up. We have new people moving into town. Our budgets are balanced, and we’ll be here 300 years from now,” Bishop said, ticking off accomplishments that shouldn’t be taken for granted in a small West Virginia town.
The mayor concluded an interview at Town Hall with a drive up to Hill Top House. This was just a couple of days after Christmas, and the scenic promenade drew a steady flow of visitors and residents who were gazing out at the Potomac while an American flag flapped in the winter wind.
As those same visitors finished reveling in nature’s grandeur, they could turn around and examine Hill Top House through the metal triangles of its fencing. The roof is caving in, back and front.
“It’s an eyesore,” Bishop bluntly assessed.
Visions of restoration
Fred and Karen Schaufeld are residents of Leesburg, Virginia, about 23 miles away from Harpers Ferry. They are philanthropists and investors on a big scale.
Fred, a co-founder of SWaN Investors, where the partners have raised more than $5 billion of institutional financing and participated in more than 150 private investments. He is part owner of the Washington Capitals hockey franchise, the Washington Wizards pro basketball team and the Washington Nationals, the most recent World Series baseball champions.
Karen Schaufeld is a success too, as a philanthropist, children’s book author and lawyer. She is the co-founder of Altor Locks, which boasts of “the world’s lightest, strongest bike lock.” She is the chief executive officer of SWaN Hill Top.
The Schaufelds have wanted to restore Hill Top House to its previous luster. They envision around 120 rooms, a spa and infinity pool, chef’s garden, bowling lanes and conference rooms. Last spring, the developers announced a partnership with the company run by star chef Jose Andres to provide food services.
But that’s nowhere near reality yet.
“It’s been a tough, frustrating project from our perspective when it is a labor of love,” Fred Schaufeld said over the telephone.
To state the obvious, getting on track would improve matters.
An economic impact report produced for SWaN last year suggests 239 jobs would be produced by the two-year construction of the hotel along with $105 million in economic output during the construction period.
When the hotel begins full operation, the report suggests, there would be 129 jobs on site along with total economic impact for Harpers Ferry of $26.8 million a year.
A separate report was produced for the town of Harpers Ferry a month later, assessing the economic impact study. This one concluded that the hotel would almost certainly be a benefit to the town, but it questioned some conclusions and methods — for example, asking what the costs to the town might be.
State officials recently gave the project a stamp of approval of sorts, approving Hill Top House for $48.6 million in tourism tax credits.
The tax credit law provides a tax break worth up to 25 percent of the cost of building new facilities but only in certain conditions. Businesses that qualify can only collect the credit if tax revenues grow.
In other words, the development would have to pay off for the tax credit to pay off.
Annette Gavin, director of the Jefferson County Convention and Visitors Bureau, said she would like to add a reconstructed Hill Top House to the many reasons people already want to spend time in the area.
“It’s a great project, and we’re thrilled and excited about it,” Gavin said. “We need to get that moving forward.”
What that is depends on perspective.
Councilwoman Barbara Humes discussed the project from the living room of her home, which is just up the street from the Hill Top House site.
She envisions a “boutique hotel,” which is usually between 10 and 100 rooms — smaller than how Hill Top House is described — with upscale accommodations catering to individual experiences.
“I’ve always been in support of a hotel. I think everyone in town has wanted a hotel,” she said. “What we want, though, is a hotel that is going to be reflective of our historic character and to be sensitive to the location of the site where it has always sat for 120-some years.”
Achieving that would likely require more time and more negotiation, Humes said.
“Is that possible? Well, with negotiations it could be,” Humes said, “and it depends on how willing the town is to hold out for a hotel that meets those criteria.”
Karen Schaufeld said the project is a point of pride.
“This is historic. It does represent the ideals of what the Hill Top and Harpers Ferry have represented in history,” she said. “We’re not looking to build a Fairfield Inn.”
Fred Schaufeld said that when some people say they support the hotel, they don’t necessarily mean it.
“There are people who say they’re in favor of the hotel who really aren’t. There’s what people say and what people do.”
Trust has deteriorated just like the hotel.
“Clearly, there is some talking past. That clearly is occurring,” Fred Schaufeld said. “It is extremely frustrating.”
The Election
The real twist in this saga is the town’s election, which is still being settled.
“Having almost a shadow town council being seated right now, there’s not an immediate end in sight,” Fred Schaufeld said.
When citizens voted last summer, five council seats were up for grabs.
Initially, the results showed five incumbents were the top vote getters. The top candidate, Barbara Humes, got 91 votes. The fourth and fifth place candidates, Charlotte Thompson and Christian Pechuekonis, got 84.
The candidates initially in sixth and seventh place, Nancy Case and Deborah McGee, got 82 and 81 votes. Another candidate, Marjorie Yost, also got 81 votes.
Case and McGee have been challenging rulings that four provisional ballots would not be counted. That’s enough to swing the election.
Four residents registered to vote through the state Division of Motor Vehicles, which mistakenly placed their home addresses just outside the municipality.
Harpers Ferry Town Council examined the ballots as an election tribunal, meaning two of the incumbents who could lose their seats heard the appeal. The Council voted to leave the disputed ballots uncounted.
The case then was heard by Jefferson Circuit Judge Judge Debra McLaughlin, who ordered a recount, including the disputed ballots.
The same day her decision was reached, lawyers for the majority of council members filed notice of appeal to the state Supreme Court. So Judge McLaughlin ordered a temporary stay.
And that has halted any resolution about who really should serve on Council.
Mayor Bishop suggested Hill Top House was only one of many factors for voters. His own re-election, he said, is proof of that.
But the outcome could sway whether most council members embrace the hotel project or whether they take a more skeptical view.
“We believe that when those votes are counted, we think members of the town council are going to change,” Schaufeld said. “So it puts us in a pretty weird position to get anything done right now. We are completely stuck.”
Make or break year for Hill Top House
Mayor Bishop says the whole town supports a rebuilt Hill Top House. That includes the mayor himself.
“The town of Harpers Ferry wants a hotel here,” he said.
But the mayor advocates for continued, close examination of the concept’s specifics.
“The drama puts some people in a negative light, I don’t feel for a very good reason,” Bishop said. “Everyone in town isn’t going to be happy, right?”
Fred Schaufeld is not particularly happy. He is tired of waiting.
“We’ve been involved with high-profile projects around the country,’ Schaufeld said. “But we’re at the back end of our cycle with our desire to get this done.”
What’s necessary to get moving, he said, is a solid development agreement on paper, signed in ink by the respective parties, laying out a clear plan for what is necessary, allowed and expected.
Without that, he said, the trust on this project is paper thin.
“You have to know you can trust a party, that you have a development agreement that’s enforceable,” Schaufeld said. “When you have an election that swings by one vote and you know you might have an ordinance passed that takes all the value out of it, it gives somebody like us pause.
“We need a strong agreement where there is one bite at the apple, where we have what we need.”