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The Journal-News, Ron Agnir, Associated Press
A Saturday Oct. 15, 2011 photo, of the front of the Hilltop Hotel in Harpers Ferry, W.Va., shows a partial collapse of the front wall and floors which occurred on March 17, 2010. Hilltop Hotel has been closed since 2008 after it was deemed structurally unsafe because of rotting wood, cracked walls and a deteriorating foundation. The first hotel was built on the property overlooking the confluence of the Shenandoah and Potomac rivers in 1888, and it's been rebuilt twice. Two earlier incarnations were destroyed by fire in 1912 and 1919.

CHARLESTON, W.Va. — On a cliff overlooking spectacular views of two joining rivers, a boarded-up and crumbling hotel in Harpers Ferry could offer an opportunity for the small West Virginia community to promote its historic heritage while giving the local economy a much-needed lift.

But instead the Hilltop House sits empty, shut down last year by an investment group that shelved plans for a posh resort because of pushback from local residents who were upset about the size and scope of plans to rebuild the hotel.

Today, there may not be a consensus on how to proceed, but officials, town merchants and investors say it's worth another try.

Eventually, the investors want a hotel-spa that would cater to groups from Washington, D.C., and beyond.

"There are lessons you can learn from successful places like Colonial Williamsburg that could really make this a worldwide destination," said Mike Miller, principal investor in SWaN Investors of Leesburg, Va. "But you have to have all the major stakeholders, and that's the town of Harpers Ferry, the merchants association, CSX railway, the National Park Service. Everybody's got to be on board and want to make this happen.

"We really think this could turn the town around."

But Miller said SWaN can't do it alone.

SWaN, which also is a partner in professional baseball, hockey and basketball teams in Washington, bought the hotel and several adjoining properties for $10 million in 2008.

The 76-room hotel and lodge, which overlooks the confluence of the Shenandoah and Potomac Rivers, offers stunning views of fall foliage and trains chugging across bridges. The first hotel was built there in 1888. It was rebuilt each time after fires in 1912 and 1919. The guest list has included Mark Twain, Alexander Graham Bell and Presidents Woodrow Wilson and Bill Clinton.

"There is no finer view between here and the Adirondacks," said local business owner Rich Schaffer.

It's a historic hotel in a town steeped in history.

Settled in 1732, the town near West Virginia's borders with Maryland and Virginia was the site of a failed raid by abolitionist John Brown that helped propel the nation into the Civil War. It changed hands eight times between 1861 and 1865. In 1944 most of the town became part of the National Park Service. The Appalachian Trail passes through it.

SWaN had big plans to erect a 179-room hotel and nearby guest houses at a cost of $75 million. Amid the souring economy, the investment group anticipated overwhelming community support.

But some of Harpers Ferry's 287 residents found those plans out of proportion with the town's persona.

Within two years, the plans unraveled. A facilitator hired by the town quit, citing a small group that he said blocked the project's progress.

In September 2010, SWaN managing director Fred Schaufeld wrote then-Mayor James Addy that the project was being shelved, saying the developers didn't expect a "political firestorm."

"There's some people in this town that don't want the hotel under any circumstances unless it's a small hotel," Addy said.

Like others in town, Elayne Edel moved to Harpers Ferry from out of state because of its 19-century village atmosphere.

Edel, a former town council member who owns a bed and breakfast near Hilltop House, wants Harpers Ferry to maintain its identity as a sleepy bedroom community. She embraces the idea of a luxury hotel but said one on a large scale would overburden taxpayers with the costs of upgrading infrastructure and potentially overrun the town with tourists.

"The historic nature of the town would not survive as proposed," Edel said.

Miller recently met with town officials in an attempt to get the project back on track. He said some undisclosed issues need to be resolved.

"You can't get financing on a mortgage if there's an outstanding dispute," he said.

David Beniameno, the town's new facilitator, is aware of the issues that derailed the project earlier. He's looking ahead at gathering information so that the community is aware of the facts.

There's optimism that SWaN will resurrect the project, Beniameno said. In the meantime, he said the town should focus on planning efforts and determine what it wants from a hotel.

"They have the time to sit back and look at planning as opposed to just arguing about what was submitted before," he said.

Dick Cunningham is part of a small, informal advocacy group that formed a few years ago because of the confusion, misinformation and ill will surrounding the hotel. He said town officials left community members out of earlier discussions.

The group wrote letters and held forums to try to get the facts to the community, but Cunningham said the effort "was not entirely appreciated by the people that wanted to control the hotel planning and size and shape and number of rooms."

"We want the smallest hotel that can be largely successful," he said.

Cunningham said community meetings are planned for early November.

With every passing month, merchants say Harpers Ferry is missing out on the business and tax proceeds that the hotel would provide.

"This is killing the town," Schaffer said.

Merchants believe the Hilltop Hotel should be included in future economic development discussions because Harpers Ferry could use the business, especially during the slow months of January and February.

"If you have a resort hotel that did conferences, a lot of those are in the wintertime," said Gary DuBrueler, president of the 25-member Harpers Ferry Merchants Association.

DuBrueler said the hotel would draw people to other parts of the town. Plans already are under way to renovate a street that welcomes visitors coming to the town by train.

First, there must be a top-to-bottom makeover of the hotel. Structural engineers determined its foundation was unsafe and part of the building collapsed. There were water leaks, mold, rotting wood and cracked walls.

Mayor Joe Anderson is confident the hotel will be rebuilt eventually.

"It's just a matter of time, just like the rest of our economy," Anderson said