SWaN developer stresses pluses of hotel project

But after months of slow but steady progress with the town’s planning commissioners, the project has come to a standstill over whether the Hill Top will have needed access to streets planned on paper but never built.

Frustrated supporters of the hotel say the on-paper-only streets are a phony issue trumped up by Hill Top opponents to ensure the Hill Top remains on paper only. But in an interview on Friday at SWaN’s headquarters in the circa-1760 Norris House in Leesburg, Va., both Schaufeld, SWaN’s managing director, and Karen Schaufeld, his wife and the Hill Top project director, said the initial project greeted with criticism from some in Harpers Ferry as too big nearly a decade ago has evolved.

“We’ve taken to heart what we heard from the town,” Fred Schaufeld said. “We came down on the size of the hotel, increased the amount of green space, adjusted the parking plans. We have not looked at compromise as a dirty word.

“Our plan is to create a hotel that’s appealing on every level.”

SWaN will partner with Virginia-based Interstate Hotels & Resorts to make the Hill Top a destination for think tank-style conferences with national and even world leaders. It also will highlight the Hill Top’s origin story, a post-Civil War success story made great by Thomas S. Lovett, the 1876 Storer College graduate and African-American entrepreneur.

It turns out, the Schaufelds’ first experiences with the Hill Top were not as developers or investors but as customers. In the early 1990s when they’d first moved to Loudoun County, Va., they’d hire a sitter for their three children and make the 40-minute drive to the Hill Top for a date night or come for Sunday brunch.

“This is a passion project for us – it’s absolutely a labor of love to do this,” said Karen Schaufeld, who met her husband they were undergrads at Lehigh University in east-central Pennsylvania between New York City and Philadelphia, in the late 1970s and earned a law degree before joining him at SWaN. “We’ve heard what town residents have been concerned about and we think we can thread that needle and build a smaller hotel that still provides that quality experience Hill Top guests will be looking for and still make enough money to make it worthwhile to our investors.”

Some in the county have been caught off guard to see the Hill Top again stuck in a holding pattern, this time over the paper street debate as well as a just-introduced permit fee structure that is asking SWaN pay $285,000 for a project that would incur only about $75,000 in such fees were it being built elsewhere in Jefferson County.

Didn’t all the wrangling over the Hill Top finally get put to rest back in 2017, they ask. That spring, town officials wrapped up years of scorching debate by passing, 7-0, an ordinance spelling out the groundwork for the East Ridge Street site, nailing down details on utility infrastructure, the height of the hotel, setbacks, landscaping, parking spaces, green space, architectural colors, materials and more.

SWaN soon drew up a Hill Top that aligns with the Historic Promontory Overlay ordinance and also meets the requirements of Harpers Ferry’s comprehensive plan.

But now the target opening date already has been pushed back by at least a year, and many in Harpers Ferry and elsewhere are becoming alarmed that Mayor Wayne Bishop and other town leaders – “obstructionists” is the term Town Recorder Kevin Carder recently used in a Town Council meting – want to so delay the process that SWaN will opt to wash its hands of Harpers Ferry.

“We’ve been so careful as we put this together – and that’s what helps us stay motivated,” Karen Schaufeld explains. “We don’t want to give up because we can see how this will provide what the town’s said is right for Harpers Ferry and at the same time create a world-class retreat.”

A different ‘Kind’ of venture capitalist

In a short tour of SWaN’s offices, several walls boast images and objects tied to Fred Schaufeld’s enterprises. There’s memorabilia from “Spotlight,” the Academy Award winner for Best Picture in 2015 that was produced by SWaN’s Anonymous Content. The same film, TV and entertainment management company also produced the Leonardo DiCaprio film, “The Revenant,” which also won an Oscar nomination for Best Picture in 2015.

A framed Washington Nationals jersey from the 2008 season stands out at the foot of a staircase. Fred Schaufeld is a partner in the Major League team and SWaN is an investor in Monumental Sports & Entertainment, the group that owns the Washington Capitals, the Washington Wizards, the Washington Mystics of the Women’s National Basketball Association and other sports entities.

There are rows of framed black and white drawings representing other SWaN widely diversified investments, from chef Jose Andres’ Think Food Group to the McLean, Va.-based CustomInk to KIND, the company launched in 2004 by Daniel Lubetzk that makes health-minded snacks and granola bars under the motto, “We believe that kindness can change the world.”

At the top of the staircase leading to Fred Schaufeld’s office is a small color portrait of Fred Rogers, the late television icon who spent 33 years reminding preschoolers, “I like you just the way you are.” Where does gentle Mr. Rogers fit in with a venture capitalist company?

“That’s out of, you know, just the respect we have for the man,” Fred Schaufeld explains. “For the kind of person he was, the way he conducted his life.”

Later Schaufeld explains how he views the Hill Top project and his other investments not only as money-making propositions but with a “double bottom line,” a consideration of the positive social impact to be had – literally the goal of making the world a better place.

The Schaufelds envision the Hill Top as a getaway akin to The Aspen Institute where Palestinians and Israelis have negotiated and New Hampshire’s Mount Washington Hotel where at the Bretton Woods Conference in in 1944, plans were laid for the World Bank and other initiatives that helped to bring peace and stability to Europe after centuries of conflict.

“We think this will be a great place for people to come and go to the spa and go to cooking schools and relax but we also see this is a place for ideas – where experts from all over the country, all over the world will come to work through to solutions,” Fred Schaufeld said.

Finding a way to do good has been a long-held practice for Fred Schaufield,  columnist Thomas Heath detailed in a 2016 Washington Post piece. The writer called the story of Schaufeld’s rise starting in a middle-class Long Island, N.Y., family “unusually compelling.”

His trajectory first changed when his father’s died unexpectedly when he was 20 and a junior studying government at the private college in Bethlehem, Pa. His family immediately began to struggle financially and he had to seek scholarships and other aid.

He soon decided to run for election as “concert chairman,” a new job for the university where he’d select acts and produce concerts at the school’s new 6,800-seat arena. Schaufeld told Heath the job running for office wasn’t something he would have considered before his father’s death. “He won,” Heath wrote. “And became a businessman overnight.”

Another turning point for Schaufeld came after he’d graduated and moved to D.C. where Karen had begun law school.

He got a job selling extended car warranties to dealers in the region and quickly “saw how some warranty companies made money by underpaying the claims and pocketing the rest of the money,” Heath wrote. “He also realized there was a good business behind warranties if you wanted to take the time to do it honestly and efficiently, without pressuring the customer.”

The business that would make Schaufeld a big success came when he decided to begin offering full warranty coverage for consumer electronics, everything from Nintendo Game Boys to power drills, TV and microwaves.

“We covered anything that could go possibly wrong,” Schaufeld told the Washington Post. “It was a novel concept. If it was done right, you create a lot of happy customers.”

“And happy investors,” wrote Heath. “At just 23, he incorporated in 1983 under the name N.E.W., for National Electronics Warranty Corp. The company eventually became the biggest independent provider of extended-service warranties for thousands of consumer products, backing sales at giants such as Walmart and Best Buy.”

Fred Schaufeld would go on to found the Service Contract Industry Council while Karen Schaufeld authored its first model law, one that most states have now adopted in some form.

Heath’s column goes on: “A Boston private-equity firm took notice and bought a big chunk of N.E.W. Customer Service Cos. in 2006 for $1.2 billion — making Schaufeld wealthy enough to invest in sports teams and Hollywood blockbusters.”

The Schaufelds feel sure that the one-of-a-kind retreat they envision for the bluff overlooking the Shenandoah and Potomac rivers will bring much good to Harpers Ferry.

There will be 150 new jobs plus millions of dollars in tax revenue every year from tourists, many of whom will journey to Harpers Ferry from Union Station in D.C.

From the moment last April when Schaufeld unveiled the latest Hill Top plan at a special community get-together at The Barn of Harpers Ferry, Harpers Ferry residents and business owners as well as their counterparts throughout Jefferson County have voiced enthusiasm for the proposal.

One of the lingering sticking points has to do with on-paper-only streets that date back to the town’s earliest days, two-dimensional renderings of the three-dimensional town drawn decades before Lovett opened the Hill Top in 1888.

Now SWaN officials hope Town Council grants the needed access and rights of way by Feb. 28 – or the project would be halted, perhaps permanently.

Even with the paper street questions, the project also could be jeopardized by a recently slew of questions about project application fees the town would require SWaN to pay.

Steve Ramberg, the former Harpers Ferry Planning Commissioner who is urging Town Council to address what he considers to be a “pattern of abuse” by Mayor Wayne Bishop on the Hill Top, said he hopes the roadblocks to the project will be removed.

“I want to give council an opportunity to clean up any misbehavior going forward since they are in the best position to know what has transpired and can readily find out more and prevent more,” Ramberg said. “That’s their job as the town’s governing body.

“It troubles me that I have heard the mayor and several others say repeatedly that they are not opposed to a hotel, but their actions say otherwise. This could cause us to lose the hotel project simply because SWaN seems to be very accommodating and patient, but there are limits and they might simply walk away or go dormant.”

He goes on: “When we were upgrading all of our ordinances a few years back, many of us were concerned that, absent solid ordinances, SWaN – or anyone – could just run over us and the town would have little to defend its interests,” Ramberg said. “But with the passage of time and obviously sincere efforts by SWaN to accommodate town concerns, I have concluded our fears back then were wholly unfounded. SWaN has been extraordinarily patient and accommodating while we have been anything but.

“The cadre of hotel opponents now appear to be trying to circumvent the ordinances – and West Virginia law – to achieve what they could not in a solid comprise among town factions made two years ago.”