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August 21. 2014 8:28PM

The Farragut Hotel: A landmark to Demoulas, Market Basket conflict


The “new” Farragut Hotel, seen in 1987, was built on Ocean Boulevard in Rye to replace the original, which was torn down in 1975, but it was never occupied and stood empty for more than 20 years before being torn down in 2003. (Union Leader file)

Anyone who has been watching and wondering if the Demoulas family will let the Market Basket supermarket chain self-destruct rather than resolve a family conflict, can look toward Rye Beach and the site of the former Farragut Hotel.

Back in the early 1970s, Valley Properties — the real estate branch of the Demoulas family business — bought the Farragut with plans to replace the Seacoast landmark and Gilded Age retreat with a new hotel. But a perfect storm of family conflict and public push-back scuttled those plans. Today, Rye’s waterfront has a 14-acre rolling green lawn at the site still owned by the Demoulas family.

The Rye Historical Society is currently showing an exhibit of Farragut memorabilia. President Alex Herlihy remembers when the sale went through and the old Farragut came down in 1975.

Rye granted Valley Properties a permit to pour a foundation in November of that year. The following year, work began on a 95-unit structure.

“The new building looked somewhat like the Farragut,” said Herlihy. “One difference was it was brick and the original Farragut was a wooden structure.”

The other big difference was the original Farragut had reservations and guests.

Construction on the new Farragut ground to a halt in the early 1980s when the Demoulas family became embroiled in lawsuits over the management of its supermarket chain and other business ventures.

“It was never finished, never occupied,” Herlihy said. “It was a brick envelope that sat there for 24 years.”

William Epperson, chairman of the current town planning board, said he did not recall any problems with permits for the hotel.

“My understanding was it was because of dispute in the family that went way back,” Epperson said.

In the 1980s, the word around Rye was the new Farragut’s brick facade was just a facade, and the real intention was to eventually shift gears and turn the building into condos.

When residents added their comments to the town’s 1986 master plan, the Farragut property and over development ranked high on a list of concerns.

While the fractured Demoulas family spent the 1980s and 1990s battling one another in court, Rye changed the zoning in the area from commercial to residential.

And the building codes that were in place back in the late 1970s were all updated. Without ever being completed, the new Farragut needed to be renovated.

In 1998, a work crew showed up at the site and began sprucing up the half-built hotel.

While that small makeover was underway, a reporter from the Portsmouth Herald asked Demoulas family member Michael Kettenbach why the project was never completed. Kettenbach said indecision on the part of the town, the beach district and the owners were to blame.

Over the next five years, the new Farragut evolved from curiosity to nuisance. Birds were roosting, skateboarders were doing tricks on the bricks and at night, local teens were using the building for parties.

In 2003, Rye issued a demolition permit and the building was razed.

Herlihy said that today the site is a well-maintained lush, green carpet. And while the site is one of the most valuable pieces of land on the Seacoast, the Demoulas family has never offered even a glimmer of hope to potential buyers that the acreage is for sale.

Supermarket battle

Both sides of the family were mum Thursday on any developments in the fight for control of the Market Basket chain. Massachusetts Gov. Deval Patrick said they seem to be at a “critical point.” The parties had set a deadline of today to make a deal.

btaormina@newstote.com



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