Town Reaches Deal To Buy Former Lifesaving Station Property From Blue Flag For $6 Million

The town has reached a deal to buy the former Surfside lifesaving station and Star of the Sea Hostel property for $6 million from Blue Flag Partners.

A purchase and sale agreement for the property at 31 Western Avenue has been signed by the Select Board and Blue Flag representatives following an executive session on Dec. 7.  The acquisition and funding will require approval from island voters at Town Meeting and on the ballot.

For the town, the goal would be to utilize the former hostel and other buildings on the property for seasonal lifeguard housing and the creation of additional year-round housing units for municipal employees.

"The owners approached us through their broker to see whether the town had a particular interest in acquiring it," said Tucker Holland, the town's housing director who was involved in the negotiations. "It’s a very unique property and it has served as lifeguard housing when we rented it (from Blue Flag) a few years ago. While the buildings need reconditioning and so forth, it worked well for that purpose and could additionally, potentially, provide three or maybe four year-round living situations in addition to the seasonal lifeguard housing."

Back in June, the town submitted a formal multi-million offer to Blue Flag Partners for the former lifesaving station and hostel property, according to a town government source and internal documents reviewed by the Current. Negotiations have proceeded since then behind closed doors during executive sessions of the Select Board.

Blue Flag Partners announced its intention to sell the former lifesaving station back in February 2023 with an asking price of $7.9 million, more than double the price it paid for it in 2020. The property was never formally listed on the market, as Blue Flag wanted to allow island organizations and other parties that were interested in buying it back in 2020 to “get a first shot at it," listing agent Carl Lindvall said at the time. 

The formal announcement of the purchase and sale agreement will occur at next Wednesday's Select Board meeting. Town officials declined to release the purchase and sale document on Friday.

"We received outreach from the public saying 'hey, this is a pretty special thing and we think the town should consider acquiring it'," Holland added. "I don't want to speak for the Select Board, but I think if I were to describe the view point, they see value in the possibilities there. There are also concerns about what it will cost to renovate the property for those purposes. So it’s not a slam dunk and a lot of work will be going on between now and Town Meeting to see if there are sources in the preservation world that would contribute to those costs, the renovation and preservation of those buildings. By the time Town Meeting is here, I expect that the voters are going to have a fairly complete package to consider. But we felt there’s enough merit and interest here to put this before the voters and allow them to decide whether they feel this is where the town should be investing some of its resources."

The property at 31 Western Avenue near Surfside Beach was purchased by Blue Flag in September 2020 for $3.55 million from Hostelling International. But two years later, Blue Flag Partners decided to sell the property, abandoning its original plan to convert the hostel into a hotel. The $7.9 million asking price, according to sources, reflects both the escalation of the real estate market since 2020, as well as Blue Flag’s investment of more than $1 million in design and permitting work for the hotel and a septic system.

“Blue Flag brought the project to a shovel-ready status for a full restoration and continued hospitality use,” Blue Flag co-founder Terry Sanford said in a prepared statement back in February. “Ultimately, we aren't going to be able to give the Star of the Sea the level of attention that we believe it deserves at this time so we are seeking a new steward who will carry forward our vision to back the grandeur of this one-of-a-kind property."

The property includes the last remaining U.S. Life Saving Service building on the island, which dates back to 1874 and served as a lifesaving station through 1921. According to the Nantucket Preservation Trust, “the federal government retained ownership of the site until 1962, when Lilye Mason, a longtime housemother for American Youth Hostels, Inc. successfully bid to purchase the property and convert it for use into a hostel. In 1963, Ms. Mason sold the property to American Youth Hostels, Inc., now known as Hostelling International.”

It was then known as the “Star of the Sea” youth hostel for decades until the property was put on the market by the Hostelling International organization in the fall of 2020. Five bids were received, including one from the Egan Maritime Institute, but it was ultimately Blue Flag’s $3.5 million offer that was accepted.

In the aftermath of the sale in 2020, the Select Board voted to transfer an existing preservation restriction on the property - which prevents any alterations to the exterior of the original lifesaving building - from the Nantucket Historic District Commission to the Nantucket Preservation Trust.

“A preservation easement is an excellent preservation tool, as the restriction runs with the deed, regardless of who the owner of the protected building is,” Nantucket Preservation Trust executive director Mary Bergman told the Current back in February. “The preservation easement on the Star of the Sea Lifesaving Station and historic buildings at 31 Western Ave ensures there will be no changes to the exterior appearance of these important buildings without approval of NPT and the Historic District Commission. We look forward to working with the next steward of these structures significant to Nantucket’s history."