Wake-Up Call for Greenbrier
There is much to talk about when assessing what has taken place at The Greenbrier since multi-millionaire farmer, coal tycoon and girls’ basketball coach Jim Justice bought the 721-room, 6,500-acre resort for $20 million on May 7, 2009; and brought with it what had been missing for several years: a renewed sense of love and respect for this celebrated resort, without equal in heritage, tradition and influence. And, lots of money.
Already spent: $80 million for an 80,000-square-foot underground casino, Casino Club, with six restaurants and retail stores, that opened July 2. Yet to be spent: multi-millions more for a huge entertainment complex and—rumor has it—an on-grounds hospital. And, finally, currently being spent in an ongoing process: millions on the restoration of the interiors to repair the damage inflicted during a three- to five-year absentee-managed fiasco. Resort executives appointed by then owner, CSX, a Jacksonville, FL-based railroad company, awash in multi-million dollar losses, struggled with what to do with the resort, but who, in final analysis, had little notion of what to do with it.
Before Justice rescued—there is no better word—The Greenbrier, it was being subjected to a reckless makeover allegedly supported by research that might have worked on any upscale hotel that fine-tunes its business model based on marketing formulas that study fluctuations in customer demographics, but not on an historic icon many say is as distinctive to West Virginia as the White House is to Washington, DC. You do not fiddle with the character of a national treasure.
Yes, the resort had been hard hit by labor disputes forcing corporations to cancel meetings fearful there would be no one to staff their needs; yes, the country was in a ghastly recession, forcing individuals and corporations to rethink vacation and conference commitments that, on the heels of AIG’s posh getaways, might be perceived as spend thrifty. And yes, in the midst of a lousy economy and the threat of a strike, “interim” management, in an effort to stem losses, implemented a marketing dynamic it hoped would herald a new era of Greenbrier luxury that might attract a younger generation; squandered dollars and sense to revive the resort with an injection of life support that would reposition it as something other than what it had been for 230 years, but as something in synch with contemporary trends, stripped, they thought, of ceremony and pretense. Said dynamic, “If the Greenbrier is to compete with an expanding five-star universe, it must, of necessity, reinvent itself, modify its uniqueness and historical landmark status.”
Didn’t work: the resort’s P&L continued to bleed red. Losses were in the multi-millions; in 2008, reportedly in the vicinity of $40 million. In Spring 2009, it filed for bankruptcy on the heels of an announcement earlier that year by Michael Ward, president and CEO of parent CSX: “The Greenbrier is at a crossroads. While we have continued to make investments to keep the resort competitive, the market for luxury hospitality services is shrinking rapidly in this economy … It is imperative that [The Greenbrier] respond to this situation without delay. Our goal is to make The Greenbrier not only one of America’s great destinations, but also a viable business entity.”
The Greenbrier had lost its cachet and its esteem and Ward knew it; there was more than an insinuation of the inevitable in his remarks.
JUSTICE FOR GREENBRIER
Enter Jim Justice, all six foot, four and 350 pounds of him (“and not a very good-looking 350 pounds,” he says). He met with CSX officials April 29 and eight days later, following hard-nosed negotiations in bankruptcy court and out of pocket $20 million (with a multi-million dollar pro-forma assigned for renovations, additions, and expansions), he owned The Greenbrier.
“I’m an entrepreneur,” says Justice, “putting myself at risk. I don’t have a pile of money somewhere—a cushion, that if this doesn’t work, I can fall back on. I just don’t because I don’t believe in that. If I did that, then I’m not in the game. For me to be good, I’ve got to be at risk and work at this.”
He bought it out from under the collective noses of competitive bidder Marriott who, pissed at being snookered, sought to salvage something—a piece of this, a piece of that: anything, for Pete’s sake, to save face—but bankruptcy court wouldn’t hear of it.
“If The Greenbrier had been turned into a Marriott, it would’ve been like sandblasting Mt. Rushmore,” Justice says. “It would have become just another chain hotel. I wasn’t about to let that happen.”
I mention to Carleton Varney, president, Dorothy Draper Co., NYC, that Justice saved The Greenbrier and with it the Draper signature designs (for about a year or so, they were methodically being scrapped by pre-Justice administration, stripping The Greenbrier of its interior design aura that made it sui generis among resorts). “It would’ve become just another hotel,” I say. “It sure as hell wouldn’t be The Greenbrier,” says Varney. “Look, you can upgrade and change and still be appropriate, but to redesign so that it loses its historical significance? No way.”
Says Justice, “First of all, past management [CSX] has been great for this property, but it’s really hard to be a non-present manager trying to manage the daily operations here. They’re removed and it’s difficult. Then, with the previous president [i.e., a CSX surrogate] he decided, perhaps with approval from the owners, to drift away from Dorothy Draper and Carleton Varney; and, as I’ve said a thousand times, ‘That was an incredible mistake.’ There is only one Greenbrier and, for crying out loud, why in the world, if you had a Greenbrier, would you try to be like a Ritz-Carlton or something.”
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