The historic Harbor View and Kelley House hotels in Edgartown were sold at public auction this week to First Winthrop Corp., a Boston real estate company which owns 160 commercial properties on Nantucket. Purchase price was $12,305,000.

The sale closes another chapter in the long history of the landmark Edgartown hotels, a chapter marked by foreclosure, bankruptcy, numerous lawsuits and a crumbling business empire. The hotels were owned by former state Sen. Allan F. (Chappy) Jones of Osterville, his son Stephen Jones, a Hyannis attorney, and Robert F. Welch of Barnstable. The hotels have been under the control of the U.S. Bankruptcy Court since early September of last year.

The public auction was conducted Tuesday afternoon by Jerome J. Manning, who owns a realty auction firm in Yarmouth Port. A small crowd of Vineyard businessmen, including many real estate brokers and attorneys, gathered in the music room at the Harbor View for the event. Also in the crowd was Robert J. Carrol, a prominent Edgartown businessman and former owner of the hotels. Inside, the room was cold and bare save for the tables and chairs set up for the auction. Outside a bright April sun sparkled on the outer Edgartown harbor.

“Take a moment to look out the windows. It’s a great view, and that’s part of what you are buying,” declared auctioneer Jerome Manning at the outset.

Then it all began. In singsong tones, the auctioneer invited bids. The properties were offered for sale first separately and then as a package. The sole bid for the Harbor View came from the National Home Life Assurance Company, the Kentucky-based holding company which holds an $11.5 million mortgage on the two hotels. National Home bid $7.7 million for the Harbor View.

The auction then moved to the Kelley House in the heart of downtown Edgartown. There were no bidders on the Kelley House, and the auctioneer opened bidding on the two hotels as a package. Mr. Manning started the bidding at $15 million and worked backwards. National Home put in a bid for $12.3 million, and after a brief and silent pause, First Winthrop bid $12,305,000 for the two hotels. There were no other bids.

John Flatley, son of South Shore real estate developer Thomas Flatley, registered at the auction but never submitted a bid.

Also on Tuesday First Winthrop was high bidder in a separate auction of a Fuller street duplex and a parking lot on Winter street. First Winthrop paid $535,000 for the Fuller street house and $135,000 for the Winter street parking lot, bringing the total paid for the properties to $12,975,000.

“We’re very excited to be acquiring two such spectacular hotels and look forward to restoring them to preserve their historic tradition,” said Arthur J. Halleran Jr., chairman of the board for First Winthrop. Two years ago First Winthrop bought 160 commercial properties on Nantucket for $55 million from Walter Beinecke. The properties include The White Elephant Hotel, The Breakers, The Harbor House Hotel and the Nantucket Boat Basin.

Based in Boston, First Winthrop is one of the country’s largest real estate firms, with holdings of $6 billion.

“This transaction is in keeping with Winthrop’s philosophy of acquiring quality, one-of-a-kind properties,” Mr. Halleran said. “Our strategy has been to buy well-located properties, and traditionally we have put a lot of money into those properties. That is our global intent with both the Harbor View and the Kelley House.”

Under the terms of the auction, the title transfer to First Winthrop will occur within 30 days. Until title is transferred, the properties will continue to be operated by The Hospitality Group, hired by the National Home Life Assurance company to open the hotels for the summer season.

Mr. Halleran declined to discuss specific plans for the hotels until the title is transferred. But he said: “We recognize that the community is extremely important.”

Mr. Halleran has Vineyard ties which go back 20 years, when he spent a summer working at the Colonial Inn in Edgartown. More recently he has rented a home and spent summers on the Island with his family. He said: “I think Edgartown is one of the most charming towns in all of New England. And we intend, in whatever we do with the hotels, to do it within the character of the town.”

In June of 1988 National Home began foreclosure proceedings against the owners of the Harbor View and Kelley House when they defaulted on an $11.5 million mortgage. On August 2, 1988, hours before the properties were first slated for sale at public auction, owners filed for bankruptcy.

The Jones family empire once included The Regency chain of hotels on Cape Cod and in Westford, Taunton and Portland, Me., as well as Gull Air commuter airline, a golf course and a marina in Hyannis. Gull Air folded in 1987 and the downfall of the Jones family holdings soon followed. Last month the Hyannis Regency Inn and Conference Center in Hyannis were sold at auction for $9.5 million.

In February this year a U.S. Bankruptcy Court judge denied a proposal for National Home to buy the Harbor View and Kelley House for $13 million. Objections to the sale were filed by Robert J. Carroll and the Edgartown National Bank. Mr. Carroll holds a $1.6 million second mortgage on the hotels and the Edgartown National Bank holds a $300,000 note on the hotels. Unpaid property taxes owed the town of Edgartown total over $200,000.

With the $12.3 million sale to First Winthrop, Mr. Carroll and Edgartown National will not be paid.

But following the auction Mr. Carroll expressed pleasure at the outcome. “I am pleased, because I think he [Mr. Halleran] will do a good job.” Mr. Carroll retains a lifetime lease on his penthouse suite atop the Harbor View Hotel.

The Harbor View Hotel, once considered the grande dame of Vineyard hotels, was built in 1891. The Harbor View is located at Starbuck’s Neck with sweeping views of the outer Edgartown harbor. The hotel has 127 rooms, two tennis courts and a swimming pool. The Kelley House was built in 1742 and is one of the oldest Island inns. The Kelley House has 60 rooms, a swimming pool and a restaurant.