- The Washington Times - Wednesday, November 11, 2009

Between the private beach and the butler service, a new resort on Rhode Island’s shore promises to be among New England’s most luxurious when it opens in June.

The original Ocean House was a post-Civil War resort destination for the rich. The 1916 silent movie “American Aristocracy” with Douglas Fairbanks was filmed at the towering Victorian hotel, known for its yellow facade and striking ocean views. But the 135-year-old hotel, needing extensive repairs and upgrades, was closed in 2003 and razed.

Now a group of sentimentally attached investors — led by mutual-fund magnate Charles M. Royce — is taking a $140 million gamble, building an upscale replica of the hotel in the seaside enclave of Watch Hill. They want the new Ocean House — with its 49 rooms and 23 condos — to compete with rival destinations in places like Newport, R.I., Nantucket, Mass., and the Hamptons in New York.

Mr. Royce, who owns a summer home in Watch Hill, said he was dismayed by the prospect of losing the hotel, where guests, socialites and local residents converged for grand celebrations or simply drinks at the bar.

He bought the property from a developer who planned to build large homes on the site.

“The world doesn’t need more McMansions, especially in [place of] something that was such an important part of the community,” Mr. Royce said. “The sole purpose was to make certain that this very important community asset could be preserved.”

Of course, it’s a risky time to open a luxury boutique hotel with $600-a-night rooms, especially in Rhode Island. The state has among the highest unemployment and foreclosure rates in the country. The local economy has been hammered by the credit crisis and vanishing manufacturing jobs. Ocean House also will be competing for visitors against East Coast destinations with instant name recognition.

The project’s investors say they’re unfazed by the state’s sputtering economy and expect the hotel’s amenities and proximity to New York and Boston to be prime selling points. They also point to the success of the original Ocean House, which, despite falling into disrepair and lacking air conditioning, still offered rooms for about $250 a night before it closed.

“People still, even in this economy, if not more in this economy, are looking for luxury. They’re looking for shorter getaways, where instead of going for a week, they’ll go for two or three days,” said project managing director Daniel Hostettler.

If interest in Ocean House’s condos is any sign, he may be right. Despite prices ranging from $1.5 million for a studio to a $7 million penthouse, 10 are under contract, he said.

The project generally has been well-received, said Jack Felber, a restaurateur and Westerly Town Council member, though there were some objections from preservation-oriented town residents who were determined to see the original building saved.

Mr. Royce initially planned to renovate the building but ultimately concluded that structural problems and severe wear and tear made it impossible. It was torn down and rebuilt to its original design. About 5,000 artifacts from the original building were saved, including a fireplace that was rebuilt stone by stone and the check-in desk.

“We want to make sure that Ocean House is here for our children, our grandchildren and our great-grandchildren,” said Donna Simmons, one of the investors who lives in Greenwich, Conn., and has been visiting Watch Hill for about 20 years.

Backgammon and croquet will be offered to lend an old-time feel, but modern touches abound, including a 12,000-square-foot spa with seven treatment rooms. An on-site “food forager” will seek out local products for the hotel’s restaurants, and guests will have access to a floor butler and 650 feet of private beach.

“I don’t think there is anything that has ever been built on the Eastern Seaboard that has been built to this standard or will be in the foreseeable future,” Mr. Hostettler said. “It’s all based on the history of the original building, but inside, it’s an absolute gem.”

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