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Luxury vs. Gentility

By Thomas Heath
Washington Post Staff Writer
Monday, July 30, 2007

If everything goes according to plan, late this fall billionaire entrepreneur Sheila Johnson will launch a legion of earthmovers and dump trucks into the heart of Virginia horse country to begin building a $130 million resort on a meadow where Pamela Harriman and Jackie Onassis once rode.

Johnson's 168-room Salamander Resort & Spa, which has ruffled some feathers among Middleburg's wealthy set, is the latest addition to the sprawling, luxury-lifestyle company that the Black Entertainment Network co-founder has cobbled together up and down the East Coast.

The Johnson empire, under the name Salamander Hospitality, includes Market Salamander, a gourmet food and catering operation in Middleburg and Palm Beach, Fla. There's the five-star, 19-room inn in Summerville, S.C., known as Woodlands, which Johnson bought last year. She formed a luxury hotel management company and has projects underway in New Orleans and at Virginia Techin Blacksburg, Va. This month, Salamander Hospitality bought the Innisbrook golf and tennis resort in Palm Harbor, Fla., near Tampa, for $35 million.

"What the whole thing is in a nutshell is celebrating hospitality," said Johnson, 58, who lives on a 200-acre Middleburg farm minutes from the proposed spa. "Not only am I trying to create synergies between food and accommodations, I'm really trying to bring a level of excellence that I think we are losing. . . . I want [people] to leave any of my properties and even Market Salamander thinking, 'My God, there's nothing like this.' "

That sort of talk hasn't exactly comforted opponents of the Middleburg project.

"I'm worried about the Aspenization of this town," said Catherine Murdock, a member of the Middleburg Town Council. "If you have a five-star resort here, these little mom-and-pop businesses won't be able to keep up. You have name-brand shops that are in every other posh town like Aspen, Southampton, Greenwich, Beverly Hills. It's going to ruin Middleburg."

Several environmental and conservation groups have opposed the development of the property. Opponents said Salamander will lead to more development.

It will definitely change the town but not necessarily ruin it, others said. Some used the example of the Inn at Little Washington, the world-famous restaurant and inn that brought upscale development to Washington, Va.

"There's lots of neighborhoods where things like this have happened," said Washington architect David M. Schwarz, who has built luxury homes, baseball stadiums and town centers. "If [the resort] is high-quality development, it will probably be good for the area. Will citizens of Middleburg like it? Probably not."

"In the perfect world, everybody would love to have your pristine countryside," said Middleburg Mayor Betsy Davis. "But in the real world, there is an economy and a basis the town needs to continue to thrive. I call it gentle growth. We don't want to change it, but there has to be some change or you're going to die."

Loudoun County, where Middlburg is located, was the nation's fourth-fastest-growing county from 2000 to 2006, according to the Census Bureau. Thousands of people who work in Washington live in Loudoun and commute.

If approved, the Middleburg resort would be built on a 340-acre rolling meadow and forest populated with deer and other wildlife. Johnson bought the property for $7 million in 2001 from the Harriman estate with a plan to build a 40-room inn. The inn has grown to a resort and spa, featuring riding and hiking trails through the Virginia countryside, a horse barn, wine tours and ultra-posh spa facilities, including a treehouse with treatment rooms at the edge of the woods.

The end of the tract closest to town would include a town green with office space. Johnson plans to sell about 50 homes on the property and has agreed to build a $5 million sewer system. She has also agreed to place about 255 of the 340 acres in a conservation easement, which would prevent further development. Even "the Hunt," as the various equestrian clubs are known, will be able to use the land. Town officials said the proposal is expected to pass at a meeting of the Middleburg Town Council next month, ending a years-long controversy.

The project would be the flagship of Johnson's luxury empire. The part-owner of the Washington Mystics basketball team said she has invested more than $150 million of the $1 billion or so she has from her share of the sale of BET to Viacom in 2001. Johnson said her company is profitable on an operating basis, which doesn't include the debt she has taken on and her own cash invested in the company. She did not disclose her actual earnings. The firm, which was formed in 2004, is run from an office on Main Street in Middleburg.

Johnson said her business plan is simple: Create a Salamander brand that serves high-end and corporate clients across a number of platforms, including corporate conferences, catering, golf, horseback riding and intimate family getaways. As Johnson and her Salamander president, Prem Devadas, see it, if the 20 or 40 Wall Street investment bankers who use Innisbrook and its four golf courses and 65,000 square feet of meeting space leave with a good feeling, they may bring their families to Woodlands. Or they may recommend Salamander Spa in Middleburg to friends or colleagues, or visit there for a holiday.

Success is not a given.

"The hospitality business is very competitive," said James Angel, associate professor of finance at the McDonough School of Business at Georgetown University. "You have to execute very carefully, or the competitors will eat your lunch and dinner. You have customers who expect to be pampered, expect everything to work flawlessly and expect all the facilities to be first rate. And if they are not, they don't come back."

Johnson has said she named her businesses after the salamander because in mythology, it has the power to withstand fire. Besides, she said, she plans to play a hands-on role throughout the enterprise. She talks about selecting fabric and cocktails at Woodlands, going over the menu and furniture choices at the Salamander Spa, and making sure Sheila's Select specialty coffee is available at Market Salamander.

"We're building a brand, the Salamander Brand, on my name because I stand for . . . excellence, integrity, fine taste," Johnson said.

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