The deal was made in less than 15 minutes at a coffee shop in Stone Harbor, N.J.
It was 2008 and Ed Breen, then chairman and CEO of Tyco, had just attended a potential investors meeting for a boutique hotel in the heart of the quaint South Jersey shore town. Dr. John Sprandio, who had called the meeting, was the owner of the land on which the hotel would be built. After the 30 or so other potential investors left, Breen and Sprandio ordered coffee across the street. They discussed the business plan for the hotel and their goals for the future of the property; then they shook on a commitment to become 50-50 partners after just a few sips of their drinks.
Considering Breen’s success in the business world, the speed and ease at which this deal was done isn’t surprising. Breen became chairman and CEO of Tyco in 2002 after the previous CEO was ousted for stealing more than $150 million from the company. During the subsequent 10 years that Breen was at the helm, he not only restored the struggling company that few people thought would last, but he also transformed it into an even more profitable conglomerate than it was before the spending scandal.
But there was another reason the two men clicked quickly enough to inspire Breen to sign on as the sole investor on the project that night: They both have vacation homes in Stone Harbor, and they’ve spent happy times with their wives and children in the beach community for the past 30 years.
“John and I care so much about this hotel because we consider Stone Harbor our home,” says Breen. “When we talked about our goals for the property, we didn’t want to just get involved and flip it. Our visions were aligned.”
Fast forward five years and Breen, now retired as CEO from Tyco but still the non-executive chairman of the Tyco board of directors, and Sprandio, who practices oncology in the Philadelphia area, have opened The Reeds at Shelter Haven, a luxury boutique hotel with 37 rooms and an already-thriving private events business.
How to lure an investor
Every time Breen drove past the property when he came into town, he says he became more and more intrigued by the project. “I knew John had the property and wanted to make it a hotel,” says Breen. “And a few big things made the project really appealing.” For starters, the hotel is in the center of the town. In fact, 100 years ago it was the site of The Shelter Haven Hotel, which was “the heart and soul of the area back then,” says Sprandio. The property is also right on the bay. “I’m a big believer in ‘location, location, location,’” says Breen. “And I don’t think there’s a better location on the whole of the Jersey shore.” When you check into The Reeds at Shelter Haven, the valet takes your car and you don’t need it again unless you’d like it, says Breen. You can walk to town, the ocean is two blocks away, and sports facilities like tennis and basketball courts are one block away.
Of course, in an East Coast beach town, location is key particularly during the summer months. That’s why Sprandio knew he’d have to create a business plan that would make the hotel thrive during shoulder season if it was truly going to succeed. “We knew we’d have the crowds in the summer, but we needed to figure out how to keep people coming before and after the high season,” says Sprandio. “The critics of putting a hotel in Stone Harbor said the same thing: This town is the most seasonal of the shore towns. The place dies after Labor Day,” adds Ron Gorodesky, managing director of The Reeds at Shelter Haven. “That’s why we came up with the plan to have a private events business drive the room sales.”