Why Did Town Meeting Pass On The Opportunity To Buy The Surfside Lifesaving Station?

Nantucket voters had the opportunity during last week's Annual Town Meeting to acquire and preserve a historic building that would have been used to help alleviate the housing crisis for seasonal lifeguards and year-round municipal employees.

But Article 12, a proposed $6 million appropriation to buy the former Surfside Lifesaving Station property on Western Avenue, was soundly defeated. When the votes were tallied, only 100 people were in favor of the purchase, while 350 island voters opposed the acquisition. What had seemed like a potential win-win went down in flames by a huge margin. But why?

"Did the town find a money tree somewhere that I don't know about?" former Select Board member Bob DeCosta said on Town Meeting floor. "This is ridiculous. Every time I come up here it's $5 million for this, $3 million for that. We don't need this building. It is a historic building. Let somebody else buy it."

DeCosta's objections to the cost were just part of the opposition that mounted to the proposed acquisition of the property.

The Surfside Lifesaving Station property had been operated for decades as the Star of the Sea Hostel before it was sold by Hostelling International to the Boston-based real estate firm Blue Flag Partners in the fall of 2020 for $3.5 million. But less than three years later, Blue Flag announced that it had abandoned its plans to convert the former lifesaving station and youth hostel into a hotel, and intended to sell the property with an asking price of $7.9 million, more than double the price it paid for it in 2020. Before putting it on the open market, however, Blue Flag stated it would give some island-based entities the first crack at it.

But when Egan Maritime bowed out of any potential acquisition, the town stepped up to explore a purchase of the property given its historical significance. Members of the Select Board and town administration met in numerous closed-door executive sessions to discuss buying the former lifesaving station, and in December 2023 they secured a $6 million purchase and sale agreement with Blue Flag that was contingent upon a vote at Town Meeting.

Last Tuesday night, Select Board chair Dawn Hill Holdgate took the mic in an attempt to explain why she and her fellow board members had brought it before voters to consider, and also disclosed the significant renovation costs the town would incur should it pursue a plan to convert it to seasonal and year-round housing.

"It's clearly an important historic asset to the island and we know that people wanted us to look into purchasing it," Hill Holdgate said. "It does have the ability to provide seasonal housing for 32 lifeguards and there are two other parts of the property that could be renovated to be year-round housing. As we went through our due diligence, the cost estimates that we've received to date totaled over $5.6 million in renovations to just get it up to the standard for those two small year-round cottages and the seasonal ability to house the lifeguards. When we brought all of these figures to the Finance Committee, that is when they made the determination that being into this for about $12 million might not be the best way to gain the housing that we're looking for."

The Finance Committee indeed recommended against the purchase, and even Hill-Holdgate sounded unconvinced that the acquisition would be a prudent use of taxpayer funds.

"To be fair, money would probably be better spent building a new structure on property we own on Waitt Drive that could house more people in a dormitory style," Hill Holdgate said. "It's a question of do you want to spend the money in the most efficient way to acquire the housing, or does this rise above that by it being the asset and the location that it is?"

For many who spoke out and voted at Town Meeting, the answers to those questions were an emphatic "Yes" to the former, and "No" to the latter.

"That's a lot of money to get sunk into a property with a historic preservation restriction on it that is going to require a lot of upgrades in a way that has to be sensitive to the building," said Erika Mooney, the town's operations administrator. "The current owners have been poor stewards of this historic property. It’s falling into disrepair and it’s a real shame we’re being asked to take over a building that’s falling apart."

Sharon Ames, who owns a property next to the former lifesaving station, was another voice in opposition to the town's acquisition. She stated the building was falling into disrepair well before it was purchased by Blue Flag.

"For the money that you're buying, the lifeguards are there how many weeks of the year?" Ames asked. "Your $5 million (for renovations) is conservative. I'm the wife of a contractor. Especially with the price of construction now. I don't mean to sound negative. it's a beautiful building when it's beautiful. But as their abutters, we really hope you do not accept this property."

What happens now? Blue Flag's real estate broker for the property, Carl Lindvall, declined to comment on the situation and whether Blue Flag still intends to pursue a private sale of the former lifesaving station.

"We received multiple offers in and about the price we negotiated with the town," Lindvall stated on Town Meeting floor. "During negotiations with the town we actually fended off other offers, because we felt it was important the town received this property and felt they were the better steward than someone else wanting to make it a hotel."

The previous $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.

In the interim, the town has signed a lease with Blue Flag to rent the property for the summer to use it as housing for lifeguards, so the closing of any sale would have to wait until the fall.

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."