Spicer Mansion owner says he's resolving foreclosure, zoning disputes

Groton — Spicer Mansion, the boutique Mystic hotel whose owner the town sued a year ago alleging zoning violations, is the subject of a foreclosure action.

Brian Gates, the owner, said Monday that legal issues plaguing the property have been or soon will be resolved and that the mansion is “doing well,” benefitting from an 80 percent occupancy rate. Gates, who sat down for an interview, said financial problems that led to the foreclosure action are in the past and that a resolution of the town’s suit is imminent.

Gates purchased the mansion, then an apartment building, in 2013 and opened it as an eight-room hotel in 2016, partnering with Ocean House Management, which runs the Ocean House in Westerly and other luxury properties. Gates severed ties with Ocean House in 2017.

He said he spent $4 million renovating Spicer Mansion, which has become popular among celebrities and other well-heeled figures who prize their privacy.

In the foreclosure complaint filed two weeks ago in New London Superior Court, Chelsea Groton Bank alleges that Gates Realty Holdings LLC defaulted on a $1.8 million mortgage the bank granted Gates in 2015. Gates had secured the loan with second, third and fourth mortgages on his family’s residence at 116 Cove Road, Stonington, and on commercial properties he owns in Plainfield and Putnam.

Gates said he has sold all of the properties.

“It’s resolved,” he said of the foreclosure action, emphasizing the present tense. His account could not be verified with an attorney for Chelsea Groton. The attorney did not respond to a phone message seeking comment.

Gates Realty Holdings also faces a breach-of-contract suit alleging Spicer Mansion canceled a July wedding rehearsal dinner for 170 guests 38 days before the dinner was to take place. The contract price for the dinner was $26,183, “towards which a $10,000 deposit was paid,” the suit says.

The suit — filed by the groom, Denis Dwyer III, and his parents, Sara and Denis Dwyer II, a prominent Washington, D.C., lobbyist — claims that finding another location for the dinner was “extremely difficult” and that the alternative arrangements cost significantly more than the family was to pay under the Spicer Mansion contract. The family further alleges they were unaware that Gates Realty was being sued by the town at the time the contract was signed.

“Essentially, all the services to be provided pursuant to the contract were prohibited by the applicable zoning regulations …,” the suit alleges. “Despite being aware of its non-compliance with the Town of Groton’s zoning regulations and the Groton Litigation, Gates Realty entered into the contract and accepted thousands of dollars in pre-payment …”

The suit alleges Gates Realty’s conduct was “immoral, unscrupulous, unfair, and deceptive.” It seeks an unspecified amount in damages. 

What the suit doesn’t mention, Gates said, is that the groom’s family wanted to increase the number of dinner guests to 225 — too many for the mansion to accommodate. That’s why, he said, the mansion canceled the dinner and suggested an alternative location.

Gates said the family did have a post-wedding party at the mansion and that the $10,000 deposit covered the cost of it. He said zoning regulations would not have prevented Spicer Mansion from providing what the rehearsal-dinner contract promised. He said a settlement of the town’s suit over zoning regulations is “90 percent there” but that he was unable to discuss it.

The town’s code enforcement officer, Thomas Zanarini, declined to comment on the town’s suit. The attorney representing the town could not be reached.

b.hallenbeck@theday.com

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