Stay Bar Harbor: Stephen Coston

Today I have with me in the studio Steven Coston, who is a real estate developer and investor from Bar Harbor, who's really doing a lot of interesting things with his, um, his hometown, his home area. Thank you for taking the time to drive down and be with us today. Yeah, no, thank you. So I love the fact that you grew up in Bar Harbor and you seem that there, you, you saw that there was an opportunity and you said, I think I'd like to try to kind of, um, raise, raise the bar a little bit. Mm-hmm. do things a little bit differently with regard to hospitality. So, oh, that's pretty Much exactly what happened. It was, it was kind of an accident at first. Um, I went to school for finance, um, which obviously there's a lot of finance involved in any type of business you do. But I went for like financial management, so, um, to be an investment analyst or something along those lines, which I did get into that and I, I still do it, but the, the lodging stuff kind of dominates the situation at this point. And like I said, that was kind of an accident. Um, my grandfather owned a motel for a long time. I worked there. I always liked it, but like, I didn't, I didn't necessarily think I was gonna do what I ended up doing. It wasn't like a plan. Um, and that motel got sold to a big hotel company and, um, I just kept working there. Um, and I saw the ways they did it different, but also some of the ways that I thought the old way was better. And like, I was kind of thinking about like, well, that's interesting. He does this this way, but we did it this way. But I think we were wrong in this case. But, and like then I started having my own ideas as I was working there about like, oh, well, neither one of them did this, but you could try this. And, um, a realtor came to me and was like, Hey, this 12 room motels available , the, it's like, it, it was, uh, it was in pretty tough shape. It was built in the seventies. Um, and he was like, it's available. Do you, you know, you want to give it a try? And I tried to talk my aunt into it and she, she didn't end up doing it. And so I harang my mom into doing it . And so, um, I thought it was gonna be like she was gonna primarily be running it and stuff and I was just gonna kind of help support the financial side of it and, you know, stuff like that. But I ended up being more involved in it than I anticipated, and I liked it more than I anticipated, and it did better than I anticipated and I got really interested in it. So, uh, like 11 properties later or something like that. , here we are. So what was the first property that you bought? Well, it's legacy name is the Rockhurst Motel. Everybody in Bar Harbor will kind of chuckle because it was kind of known as just not a particularly attractive motel. It kind of looked like a trailer almost . It was like L-shaped modular looking thing. And it had a, uh, really funny like horse and carriage, um, motif on the side, . Um, and then with them hotels, which is the company that bought my grandfather's motel, ironically, bought it, changed it to the Aurora Motel, and then they sold it to me. So I worked for him and he sold it to me. . And you've also, uh, bought the bar Harbor Manor, which is Yep. Which is a pretty significantly different, um, other end of the spectrum. We've got the whole thing covered. Like, um, we have everything from, I have a nine room bed and breakfast that I own myself. I have, uh, I have two adjacent bed and breakfast totaling 23 rooms that I own with four other people. I've got a 56 unit, like economy style motel that I own with another guy. Like, it's, it's, it's all sorts of different properties, ownership structure, like it's all over the place. We've got the whole spectrum . Yeah. I think I saw one of your hotels, the Anchorage. I believe I stayed there a million years ago. Yes, yes, Yes. It's been there a million years. So that's probably about right. Yeah. And it, it's kind of, uh, it's, you wouldn't necessarily know it was there. It was pretty unassuming. Yeah, That's the 56 room one, um, I was talking about, we, um, we bought that, um, me and a guy who, the guy who built one of my properties, um, he's a, he's a contractor. We bought it together and we actually bought it in April and opened it in May and we completely renovated it in a month. I still don't know how, I don't know how that happened. I'm talking about like, and when I say completely renovate, I don't mean paint it and put in new, like accent pillows. Like we ripped the carpet out, we ripped the walls down. We like, we took the toilets out, we redid the, some of the bathtubs. Um, we put in new, like some new ceiling tiles. We painted it. We did like, I, I don't know, we opened, we bought it I think exactly a month before Memorial Day weekend. And we opened and were full on Memorial Day weekend. I, I don't know, Well that's impressive cuz I stayed there when I was a college student, and I would say I would describe it as modest when I stayed there. Yeah, it still is. Yeah. I mean, it's, like I said, we kind of have something for everybody. Like we have super, so with within the group, um, this summer there will be 10 properties operating, and then we're building one right now. So there will be 11 by, I don't know, sometime later this year or early next year. Um, but between those 10 properties, like they, they couldn't be more different. But that's by design, you know, because different people need have different needs. Some people don't care about a fancy breakfast and they don't care about, um, uh, you know, a fancy furnishings and fixtures. They just want it to be clean, comfortable. And we still, like, even at the Anchorage, like when we redesigned it, um, we were thoughtful about, you know, it all, it looks good. Like I'm not, I'm not like knocking, uh, the, the place. It just, it's not the same as like Sandbar Cottage, which has, is full of gorgeous artwork and you know, antique, you know, furniture and, um, just stuff that you're not gonna be able to provide in a, in a motel where you want to try to help people out on the price point because you can't make those kind of investments and then not charge anything for it. So like, we have something and like our staff is really good about trying to help the person. Some people will call one of the bed and breakfast and they'll be like, well, I have a family. And you know, I want to say, uh, like, thank you for calling, but th this like, if you're willing to just trust me, th this is not the property like this, this doesn't meet any of the criteria you're looking for, but we have one that does. And usually they really appreciate that and they're like, oh yeah, actually this is much better. Thank you . So you brought up something that I wanna make sure that we talk about because it's really why we were interested in having you here. And that is that you really have done a wonderful job bringing Maine art, um, into, or art mm-hmm. , Maine connected art. Yeah. In some cases into the properties. Yeah. But you've also said in some of the things that I've read about you, that you're not, you're not claiming to be someone with an expertise in art architecture design. No, I have no zero formal training, uh, beyond some high school art classes. I have zero formal training in, um, art or design or architecture. Um, it, it's all just come about naturally, I guess. So why was this important to you? Well, when we did, so after, after we did the little 12 room motel that I mentioned, um, we redeveloped that property. I thought it was gonna take probably 10 years, but like I said, it did a lot better than we anticipated. So we ended up doing it. We bought it in 2015 and after the first season we immediately started working on, um, getting the, the permits and stuff. And it took two years to get the permits, but we did it in 2018. And so, I don't know why, I can't tell you, I mean, this sounds goofy in retrospect, but like at the time I never thought of it. I never even thought of hiring a designer. I never thought of it. I just kind of was, I had some ideas about what I thought it should look like. And then, you know, um, uh, like, like I said, my mom was involved in that one. She had some ideas and uh, you know, some of our friends had some ideas and stuff. And, um, I just started going on Google and looking at ideas, inspiration, paint, colors, carpets. And we decided to go with like, can nautical motif in that one. And I don't know, it just, we never hired any designer consultant, nothing. We did have an architect on that project, but, um, that was the last time that we've employed an architect. Um, the building that we're building right now on Cottage Street, one of my business partners actually made a scale whiteboard model of the, each footprint of each floor. And I drew what I thought the place should look like, like layout wise on a whiteboard. And, um, we had a draftsman, um, like clean it up, professionalize it, and we designed the outs, you know, the outside where the windows were and stuff to meet the needs. And like if you look at the whiteboard model, there's almost no changes to the, what it turned out to be. Because once you've done it once, like the hallway width is the hallway width, an elevator is an elevator, a staircase is a staircase. Egress is egress. Like, and there are, they're again, like, I'm not, I'm not an expert. So there are some things like I still need that draftsman to go in there and clean it up cuz there are a few things. But like I know how thick a wall is. I know they're all the , like they're all the same. Um, and you know, it works cuz you like and you know what didn't work, like things you would've done different cuz you did it. So, I don't know, it just never really occurred to me too that you, the information was all just kind of available and I don't know, it never occurred to me to hire people. . I was like, in business, you know, I thought I was supposed to do it myself. . Well, I mean, it's, it seems like it's worked. So at the end of the day it seems like, you know, yeah, The first project I did by myself was, uh, primroses Inn. I bought it and completely redesigned it in 2000. I bought it in 2019 and opened it in 2020. That was fun. Um, . Uh, but that one, like when I look back at it, I, I worked with Ethan Allen on that one. Like, they, uh, provided the furniture and I didn't even know this when I called 'em, I thought I was just gonna order some beds and stuff. But they're like, no, we, we come, we measure, we do. So I did collaborate with them on that one. I already kind of mostly had it locked in cuz like I said, I thought I was just ordering a bed. So it was kind of more like they came in and they, they made some really helpful tweaks and um, they, um, helped me fill in the blanks and stuff. And I, I, I really enjoyed that project and I think I learned a lot from that project. And then I worked with them again on my next project. And I feel like doing those two projects, uh, with, with that um, like connection, uh, helped me learn a lot of things. Uh, and do some of the other projects just completely by myself and have them come out, you know, up to standard. So knowing this and knowing that you, I'm sure you were working with a specific budget mm-hmm. , um, you could have chosen to just do some sort of generic stock photos Yeah. On your walls mm-hmm. , but clearly you didn't, you you spent, you really invested in some and, and it's wonderful art and art connect Yeah. From Maine, it's Get, it gets more and more every time I do one, honestly. So in On Mount Dessert, uh, was the first time I ever had any experience buying any art. And, um, there was a woman who does watercolors. Her name's Beth Whitney, um, I can't remember where in Maine she lives, but, uh, she paints watercolors and she offers prints. And I, like I said, I found it on Google. Um, and I felt like it was reasonable and she was willing to meet the timeframe and um, uh, you know, provide the prints. And then I framed them myself. She gave me advice on like how to, oh, and a woman at a local frame shop actually helped me a lot. I went in there and I was like, Hey, can I frame these? And she's like, well, you know, it's gonna cost you a fortune if I do this for you, cuz it's like a hundred whatever. But, um, you know, let me tell you where you can order 'em and you know, you need this, this, this and this kind of tape. And I've, I've used her store to frame tons of stuff since then. But when I have like a mass project that's not really, so I, that was my first experience with it. And again, like I just found it on Google. And then when I did Primroses, I went over to Artemis Gallery in Northeast Harbor and uh, I was like, Hey, can, can we either work together in some sort of like, you display the art in my place, or I just work with you to source art that. And so I ended up going the direction to just buying the art. I always buy the art. Um, and um, that was the first experience I had with a local gallery. And I have tons of stuff from Artemis. And then I met the woman who owns Gallery at Psel Sound, uh, Tierra. And we became friends. And I have a lot of paintings. I've gotten through her too. And then I met Emma at Portland Art Gallery because I was on Instagram and I saw a painting that she had and I just messaged her. I was like, can you send that to Bar Harbor? Thanks . So, um, it just kind of happened over time. And each property I do, I feel like I try to push it further and, um, the customers enjoy it. Like they think it's awesome because I'm not just selling a bed. Like it's an experience. You're, you're not coming to Maine to go to a business meeting. You're, you're doing more than just sleeping. Like you're, you're here because you have this idea about what you want your experience in Maine to be. And you have an idea about Maine and coastal Maine and Bar Harbor and Acadia, and you have certain like, values attached to it, you know, that you want to feel reflected in the offering. You want to feel like you made a good choice. Like you have good taste, so you chose a tasteful place. And so, um, honestly, um, I feel like I, I feel like I get a return on it. I mean, part of the reason why I do it is because I just like art. I've always liked art even when I was a kid, I like to draw, you know, but I do feel like I get a return on it. The customers appreciate it and it becomes part of the experience. They say, oh wow, I love this painting. We say, oh, the gallery's 10 minutes that way. Go talk to Tiara. She'll tell you all about it and she'll sell you one or whatever. And people are like, that was the highlight of, you know, so they don't, it's not, it's not, I'm not like catering to like, some unknown group of art fanatics that's out there somewhere. It's, they're just regular people like you and I, you know, they're, they're not like some sort of like art savant or something, but they just, people just like it. If I'm understanding this correctly, one of the pieces that you bought from the Portland Art Gallery is, um, from one of our painters, uh, Carlos. Oh yeah. I have I think three paintings from Carlos. Okay. Two huge ones and a small one. And he is, I mean, he is wonderful and also he's got a very specific look to his paintings. Yep. So, yeah. So tell me what it is about his work that you, So yeah, I can tell you exactly what, what happened. So, um, I was opening this hotel. I'd bought it, it used to be called the Quimby House, and we were completely redesigning it. And uh, we came up with the name Little Fig Hotel. And it was supposed to be sort of eccentric, but not too much like, like eccentric, but still classic in a lot of ways. Um, I, I don't like to be weird just for the sake of it. Like I, I like to be eccentric, but within the confines of taste , like, I'm not just trying to be weird to try to push the envelope. You know, like I, I want it to be interesting but not like, wow, that's just out there. Um, and I felt like, um, we, we were doing a lot of like, uh, stuff inspired by I to, to supply that hotel, which it's only 23 rooms, so it's not a huge one. I can't, I don't know how many truckloads of stuff I bought from antique stores all over the state. I mean, that's how I decorated it. Just one piece at a time. I mean, it must have been a hundred trips to different antique stores. Every piece of furniture was just, we didn't do any mass ordering. It was all just, I want this bed, I want that chair, I want this mirror. Like, and it all, um, and, and we kind of went with the color scheme of a fig. We painted the doors bright red. The accent walls are like plumbing blue colored, there's some like light greens in there. And um, um, so I felt like Carlos's paintings were again, like eccentric but classic. Like they have that, they have the old school look, but they're also modern. It kind of blends the two. It's like transitional, I guess you could call it. Um, I know that's more of a furniture style than an art thing, but I think, yeah. Yeah. So that, that's, it just popped right off the page because I couldn't find the right painting. I wanted a really big painting and I just couldn't find one that was right. And then one morning I woke up and I went on Instagram and uh, I think the painting's called Golden Age and it's like six feet tall and it popped up on Portland Art Galleries page. And I, I'm, I just DMed him. I was like, I want it. I didn't even think about it. I don't even think I asked what the price was, . It was perfect. Like, it was no question about it. I mean, that's actually a, that's really amazing that somehow, so when I asked you how should I introduce you, you said, well, I'm an investor in real estate developer, but you are incredibly hands on in the work that you do. And you must have some very interesting visual sense to be able to kind of pull all of this stuff together and say, yes, that's gonna work here. This isn't gonna work here. I want this here. Yeah. I, I, I, I think, um, like I said, I've always enjoyed art. I've always enjoyed design. When I was a kid, I had a period of time where I thought I wanted to be a fashion designer. Um, and I've always been super into, uh, um, pretty much anything. I like clothing, I like cars, I like watches, I like, I just like things that look good. I like things that are, that I feel like are art, you know, like I feel like art is more than just what you would call art. Like I feel like certain cars are art, certain watches or works of art. Certain clothing is a work of art sneakers. I used to collect sports cards when I was a kid. I liked the, I liked sports, but I also enjoyed the design, like the graphic design aspect. I tried designing my own sports cards at one point, like in Photoshop. Um, I did a lot of graphic design. I used to have a blog and I did all my own banners and my own little ads and stuff. So, um, it, again, I, I just, I guess, I guess it's just something that even though I have no formal training, like I've thought about it a lot and I've practiced it a lot. And I think if you spend a lot of time on something, you eventually kind of, you know, you, you make a few mistakes, but you figure it out . So, So how did you end up with this strong interest in this kind of budding knowledge? And on the topic, how did you end up going off and getting an education in fi finance? Well, so, uh, I was, I had a blog about N B A basketball when I was young. And I was ultimately trying to parlay it into some sort of career as a writer or sports writer, sports journalist, something like that. But after I did it for like four or five years. And if I do something, I do it hard. Like, I was blogging for probably 10 or 12 hours a day for like three years. I mean, like, I was completely nutty about it. Cause I, whatever I do, I do it. So I just, eventually it occurred to me one day, I was like, this isn't a, it's not working . Like, you're not, you haven't, this isn't working. Uh, you're, you're living in your parents' basement cuz this thing's not cutting the mustard here. And, um, uh, also, you're, you don't even like it. You're just at this point, you're just forcing yourself to do this every day. So one day I just wrote a post. I was like, I, I had, I appreciate the people who read it and everything. Like I'm not trying to downplay it. I had several hundred regular readers like it, it was cool to connect with those people, but it just, it wasn't enough. Like you need thousands and thousands of people. So I just, you know, I said I'm done. I apologize. You know, I, I appreciate you guys, but I'm going a different direction. And I called my dad who is a CPA and he always tried to encourage me to get into either finance or accounting business and, um, to go to college and whatever. And so I called him, I said, recommend me a book. And I, I think he was kind of like, are you serious? Like, cuz I had kind of shoved it aside for so long. And I was like, yeah, yeah, recommend me a book. Just, he's like, well, what kind of book? I was like, a book about the stock market, something business, gimme something. And he recommended me a book and I drove to the bookstore and bought it. And then from that day, like immediately I just applied all of the, you know, the 10, 12 hours a day went from blogging about basketball to reading about business. And then I think that same day I started the process of enrolling at us in university in the finance program. And I remember, I, I told my dad, I was like, I'm gonna graduate with a 4.0. And he is like, he laughed at me and I did . So like I just get really into stuff and I like to set goals. So what was the book? Uh, random Walk Down Wall Street by Burton Mal Keel, which whose philosophy I now completely disagree with. And I, and I think is, um, uh, so the Random Walk theory is basically the idea that all relevant information is priced in to stock prices and therefore you can't beat the market. So you should just buy an index fund. I mean, that's a really like, simplified view of it, but that, that's completely bunk. Um, like Warren Buffett's not a, you know, he's, he's a real person. He exists. Um, and so do others like him. It's very hard to do. It's one of those ideas that's roughly correct, but precisely wrong. You told me, um, earlier that you used to not like to read, But I hated reading. There was nothing I hated more than reading. And now you like to read quite a bit. I hated reading right up until I told my dad to recommend me a book. And I was like, I don't think I'm gonna be able, I didn't even honestly, like, I can't blame anybody for being skeptical when I first went down that path cuz I didn't, I wasn't sure if I believed that I was gonna even be able to do it, but I wanted to try. But right, like immediately I just, I had no problem with it all of a sudden. And I think what happened was I started to like reading when I was actually in high school, because I was always on the internet on message boards. I was making thousands of posts on basketball message boards, sneaker message boards and like long posts, not just like, oh, neat period. Like I was like having big arguments with people. Like it, it was, I spent a lot of time doing that. And that's reading you, you like, you're, you're reading the posts, you're writing, it's reading and writing. And so I think I finally realized like, oh, you came to like reading that way. So I, I think that's what happened. I can't, obviously, I don't know for sure, but that seems logical. So it wasn't that you disliked reading, you disliked reading in the format it had been offered to you. I, I think I was a little bit stubborn and a little bit close-minded and I didn't realize how much material is out there on how many different things. And you're not just, you don't have to just be pigeonholed into the things that, um, like I'm not knocking what they, you know, ask you to read in school. But those things, for whatever reason didn't generally resonate with me. And I didn't stop to think about, well it's not the reading that's the problem, it's just you're not interested. And so I don't know why that didn't occur to me. But How did you end up going towards politics? You were on the Bar Harbor Town Council for three years. Yeah, I Would describe that as another accident. Um, so when I did, um, the, the, the little 12 room motel and redeveloped it, I, so it was a realtor that introduced me to the idea. And he was like, well you should buy this one because you know, you can fix it up and do it and then there's also development potential. I was like, no, they're not. Uh, no there isn't. Um, hotels and motels aren't in allowed use in this district. This one's only here. Cause his grandfather. And the, that was all I knew about zoning at that time because I had looked at that property and been like, oh, could we rebuild it? I didn't know anything. I was in my mid twenties. I was like, oh, we could do, and so my dad, I think, or somebody had told me like, no, that zoning got changed years ago. You can't build a hotel or motel there so you're stuck with the 12 rooms. But this realtor came to me, he is like, no, um, you can build a bed and breakfast. And in Bar Harbor in 2010, they changed the rules and they allowed bed and breakfast. There's five bed and breakfast definitions in Bar Harbor. Bar Harbor has the world's most confusing land use ordinance. I swear it's probably worse than like Manhattan. I don't, it's the craziest document anybody's ever seen. Like it's ridiculous. There's five different bed and breakfast definitions. I think there's like 20 total different lodging uses. It's crazy. And nobody knows like which one is which. There's like transient accommodation, which can be a hotel or a motel. There's hotel, there's motel, there's campground cabin, like so bed and breakfast, three and five can be new construction. So that was number one. And then number two, they don't put a room or size limit on the building. And all it says is that you have to serve breakfast and a designated employee, not necessarily the owner has to live there. And I said, well that's a hotel. And he was like, yeah, but according to the town of Bar Harbor, it's a bed and breakfast. Like, read it. It's the plain language. And I read it and I was like, well you're . I mean, yeah, like seems right to me. So, uh, we did it and I thought nothing of it. I went down to I'm, I'm, like I said, I'm in my mid twenties, I've never done this before. I hire this, this engineer, he draws out the site plan. I go down to planning board, I'm like, this is gonna be one meeting. Like boom bang, like it's plain language. And then all of a sudden everybody started asking all these questions about um, you know, well I don't feel like it meets the spirit of the ordinance or like, it doesn't meet the definition of, you know, this particular term in the use or whatever, whatever. And I was like, oh God, this is bad . Cuz we'd already spent a decent amount of money hiring the engineer and stuff. And we ended up spending six figures before we ever got anywhere. And I mean, I'm in my mid twenties, I got my mom hared into this. Like it was, it was not great. And it went, had to go through design, review, planning board and appeals board. And each time it, um, if one vote had gone differently, it was done. And I still feel to this day pretty strongly that if you just read the plain language, like it's clearly, hey, I didn't make these rules. Like I get it. I don't, it's weird to me that a bed and breakfast could be 30 or 40 rums. Like I get it. I understand. But I didn't write these rules. Like I was 21 years old in 2010. I was at the Y M C A shooting baskets. I didn't know what a land use ordinance was. So like people, there's a lot of people unfortunately, um, believe that I pulled one over and now I've done it twice cuz I've done two of these new build bed and breakfast things and they feel like I've like pulled one over or you know, like cheated the spirit of the ordinance or whatever. But the whole point of an ordinance is that it doesn't have a spirit like it's words so that it's fair and everyone can understand it. So that, or at least that was my impression. So I'm just reading the plain language and it's like, okay, if somebody lives here and you serve breakfast, then you're good. And I went down there and I was shocked to find that it was not an open and shut case. Um, if there was one thing I wish people could understand about my business in Bar Harbor, Maine, cuz this has become a very public topic of discussion for years and it's generated a lot of animosity. We've had our properties get vandalized. I stopped at a stop sign last summer and I looked up in the stop sign and said, Stephen Coston sucks on it. And I was like, and then I realized there was like a dozen more stop signs in town that said that. And there was a, somebody hung a giant banner off the side of one of my motels that said, build homes, not hotels, labor rights, bar harbor, like all this. And it was all related back to this idea that like, we pulled this fast one, but I just wish people could understand, like, I understand the rules are weird. I'm, I'm on your team. I'll tell you how to go petition the town office to change 'em if you think that it's bad. I don't think it's necessarily bad. I think these are positive developments in my opinion, but you don't have to agree with that. But like, I just wish people understood that I went in there in my mid twenties with no understanding of anything. I couldn't have pulled a fast one if I wanted to. I learned all this stuff through the process. No anything. I almost fired my attorney because I was so dumb. Like I didn't know anything cuz he was trying to explain something to me. And I thought he was just like being stubborn and being a jerk and trying to like, get it off his desk. But this attorney ended up being like one of the heroes of the whole thing. Like he figured out some of the basic ways to demonstrate like how to explain, uh, how this met the definition and stuff like that in a way that resonated that I wouldn't have been able to figure out on my own. And I was like, one, I was one phone call from firing that dude. I called the engineer. I was like, I'm, I'm so mad at this guy, I wanna fire him. And he was like, Steven, do not like, I forbid you put your phone down, don't do that. So like that, I just wish people understood that it's, it's not a straight line . So with all that animosity, the fact that you continue to purchase properties and try to develop them and bring people to Bar Harbor Yeah. Where you're from Yeah. Which was theoretically the idea of building the economy. Yeah. Um, that's a, that's an interesting kind of conflict I would think. Yeah. I mean, um, uh, I, I love it. I mean, I love the business and, and I'm not, I'm not gonna sit here and complain like hotels, lodging, it's a very public facing business. You're buying these big structures, they're on main roads, everybody sees 'em. Um, you know, so I understand that I'm, I'm not like, I, I get it. Like I made my bed, I'll sleep in it. Um,