Billionaires Using Our Taxes to Buy Benbow Inn?

The Humboldt County Board of Supervisors is not only discussing marijuana tomorrow but today they are meeting privately with some prospective buyers of the Benbow Inn and tomorrow, to quote the Times Standard,

“the board is receiving a presentation from the Benbow Inn Resort and Spa in regards to the sale of the establishment.

According to meeting documents, the Redwood Legacy Group, L.L.C., is in the process of purchasing the inn and is requesting the county assist in obtaining bonds from the state to purchase the inn.

”Due to the economic conditions that have plagued the tourism and real estate-lending industries nationwide, this sale is unlikely to be completed using private financing,” the document said. “Because of the historic importance of the inn to the Southern Humboldt community, the purchasers have asked the county to assist in obtaining financing to acquire and renovate the property.”

UPDATE: I had put an email here from a reader.  After seeing it online, my source rethought and asked me to take down the piece.

Nonetheless, I am curious what financing deals the Supervisors could “assist” in.  According to the below ad placed in the San Franciso Examiner (It is only available in cached form so I “mirrored” it here), The Redwood Legacy Group wants to use Recovery Zone Facility Bonds (RZFB).  Those bonds are to be offered to “businesses and governments across California [in a] limited-time access to tax-exempt financing for a wide variety of projects. Interest rates on RZFBs run 20% to 40% lower than other sources of capital such as conventional bank loans …”

The RZFB’s are part of the 2009 stimulus program but I’m not sure that moneyed interests buying the Benbow Inn is the best use for stimulus money.  Maybe there is a good explanation.  I’d just like to hear it.

By the way, the only place the name  Redwood Legacy Group appears online is in the last two weeks with reference to the Benbow Inn purchase.  The link I provided above is to a business tagged “medical alarms” in the Garberville area with a very similar name but may not be the same. (Do we have a business in Garberville with that name?)

_____________________________________________

NOTICE OF PUBLIC HEARING WITH RESPECT TO THE EXECUTION AND DELIVERY OF TAX EXEMPT BONDS OR OBLIGATIONS BY THE COUNTY OF HUMBOLDT, CALIFORNIA PURSUANT TO SECTION 147(f) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, NOTICE IS HEREBY GIVEN, that at 9:00 a.m., on Tuesday, December 14, 2010, at 825 Fifth Street, Room 111, Eureka, California, the Board of Supervisors of the County of Humboldt (the “Board”) will conduct a Public Hearing (the “Public Hearing”) at which time the Board will consider information concerning a proposed plan of financing providing for the issuance by the California Statewide Communities Development Authority of Recovery Zone Facility Bonds (the “Recovery Bonds”) in one or more series issued from time to time, including bonds issued to refund such Recovery Bonds, and at no time exceeding thirteen million five hundred thousand dollars ($13,500,000) in outstanding aggregate principal amount, to finance the acquisition and renovation of historic Benbow Inn located at 445 Lake Benbow Drive in the south portion of the County, near Garberville, California (the “Project”). The Project will be owned and operated by Redwood Legacy Group LLC, including any related or successor entity (the “Legacy Group”). The proceeds of the Recovery Bonds are to be loaned to Legacy Group pursuant to a loan agreement (the “Loan Agreement”), which will be used to finance a portion of the costs with respect to the acquisition and renovation of the Project. The Recovery Bonds may be issued in one or more series. As security for the Recovery Bonds, a debt service reserve fund will be funded with Recovery Bond proceeds. The Recovery Bonds will not constitute a debt or obligation of the County, the State of California, or any other public body, or to be in any way payable from taxes or other public funds. The Public Hearing is intended to comply with the public approval requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended. The Recovery Bonds will be issued as Recovery Zone Facility Bonds under the American Recovery and Reinvestment Act of 2009. Those wishing to comment on the proposed nature and location of the Project with the proceeds of the Recovery Bonds may either appear in person at the time and place indicated above or submit written comments, which must be received prior to the Public Hearing, to the Board of Supervisors c/o the Clerk of the Board, 825 Fifth Street, Room 111, Eureka, California 95501. Dated: November 29, 2010 12/1,7

Ad Details:
Ad ID: 18097094
Created: Dec 1, 2010
Expires: Dec 7, 2010

__________________

 

Photo from the Benbow Inn website postcard site.  You can send a postcard from the Inn using this lovely page.

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44 comments

  • sigh
    shakes head
    This feels real snarky to me.

  • K at the bookstore

    I did a quick search to see if I could find out who the Redwood Legacy group is; couldn’t find anything. Anyone know who the actual people behind this are?

  • the only place the name Redwood Legacy Group appears online is in the last two weeks with reference to the Benbow Inn purchase. The link I provided above is to a business tagged “medical alarms” in the Garberville area with a very similar name but may not be the same. (Do we have a business in Garberville with that name?)

  • Someone can ask John Porter. He’s been pretty open about the sale.

  • Kym Thanks for posting this. “Ah the tangled webs…”

  • As I read it, this is a subsidized loan, from a fund(?) and does not obligate any public money. Sounds more like an encouragement than a hand-out… but I admit to being naive. mark

  • It sounds fishy, but maybe not. This is Tj this time. LOL

  • Here’s a link to the Benbow Inn sale ad. http://www.luxist.com/2009/01/14/benbow-inn-for-sale/

    Sure is a beautiful place.

  • I heard Richard Lee and Steve DeAngelo are going to move in and turn it into the world’s biggest bud ‘n’ breakfast. From there they’ll send out Ed Rosenthal to patrol Humboldt, making sure everyone harvests by August 15th and converts their outdoor straight into industrial hash. And they’ve got a deal to fund it with taxpayer money.

  • Discouraged Democrat

    The rumor I heard was that this investment group is some guys from somewhere between here and SF who had been trying for months to put together the last piece of their financing. Some local golfers are encouraged by the fact that on one trip up, the potential buyers brought along a golf-course architect and they all golfed a round, leading to hopes that the course will get better attention than has been the case lately. ….No comments on the perceived character of these guys, but if they’re golfers, how bad can they be? ;}

  • If they are golfers, how bad can they be?
    Ask Elin Nordegren.

  • their address is available…right there in garberville. Anybody could have gone and talked to them by now.

  • I have been the manager of the BBI massage department for three years. In general I am for this proposal, and I will tell you why.

    The Inn has been for sale for a long time; it even made the cover of the S.F. Chronicle Real estate Section two or three years ago. No one has been able to procure financing over these past few years.

    The Inn is badly in need of serious renovation. I walk the halls weekly; some of it is visible. This costs big money.

    Let’s face facts: big money is how money gets drawn anywhere. For now that’s how money works. I think any millions of stimulus dollars into So Hum is a good thing.

    I have just written a report on how badly under-utilized the massage department is, and how we could draw in $70,00 to $140,000 more just by promoting this one department, one room. I want to see a real spa setting, something with old-world charm and modern, refined service.

    Perhaps we should consider supporting this, and start making our list of demands: local contractors, living wage, available to communicate with community, work with schools and provide hotel management courses maybe with CR, transportation hook-ups with bus service in town, things like that with foresight and integrity in the mix.

    Who knows these buyers by name? John and Teresa Porter, our local Chamber’s Citizens of the Year. Perhaps they’ll show their faces at the CofC party on Jan. 29. Likely Cliff Clendenen knows them, too. Maybe have them talk to us on a radio show? Perhaps Dennis could talk to them on Monday Morning Magazine? And Women’s Radio Collectively in the evening; it is primarily women employees.

    So let us participate instead of withholding, and make it a win-win-win for our local area, shall we?

    Thank you for your consideration.

    • Please allow me to clarify the remark that got me fired yesterday. Apparently it was presented to the Porters as an insult, when it was simply a statement of fact. The statement is, “The Inn is badly in need of serious renovation. I walk the halls weekly, some of it is visible.” To this paragraph please add: “We all know the economic downturn of the past two years likely shattered many of the Porters’ plans for repairs and renovation. An infusion of money is exactly what is needed.”

      • Please tell me you did not get fired for a comment like that. I’ve always heard the Porters were good employers. That is not a reasonable response.

        • Like I said, it “apparently was presented” in a twisted light, and they went for it, hook, line and sinker. I myself thought they were smarter than that. I’m just trying to figure out how to get word to them about it being an unfinished statement that got twisted. My intent was extremely mis-understood and taken as an insult. Yes they did “terminate our relationship”, as I am/was an independent contractor.
          This is the reason I have been a failure at tolerating corporate games for the past twenty years. This is what I was escaping when I moved to Humboldt.
          Well, three years was a good run! I’m sure my BS and MA will be of actual value to some employer.

          • If they fired you without actually looking at the comment themselves, than that just makes it more irresponsible!

            Lightbird, is there something I can do to help? I would gladly post a resume for you, etc.

            • Hey, thanks!
              I wondered if they had checked in here at the blog to put everything in context. I notified their assistant that the comments here are ongoing. I have nothing to hide, no problem I haven’t tried to get solved through normal channels.
              Where should I send my resume for you to post?
              Thanks again. Who could’ve guessed?
              Peace and Fun,
              Lightbird

          • lighbird, I don’t get it, I read your comments as entirely favorable of the inn’s establishment, and fully supportive of their decisions. More like you want people to recognize the benefits and embrace the change in ownership, not believe the bogus billionaire baloney.

            • The Porters did give me a chance to explain myself by putting me on the spot. Since I had the same read of it you did, it took me nearly 24 hours to figure out how they felt insulted and what I had omitted in the explanation I posted. My chance to explain face-to-face had long passed by the time I figured out what had happened.
              I just hope they get the correct message about what I was saying, that it was an ongoing economic downturn that put a strain on getting repairs done. I respect the amount of energy and love they have put into the Inn.
              What I don’t understand is why they are so suspicious of me in the first place. I drove in from a dog-sit out in the hills on a Saturday evening in the fog to accommodate a late-check-in guest needing bodywork. This was just last Saturday, December 13th. So I really don’t get why they have suspicions about me to begin with.
              That is what I mean when I refer to a “corporate” atmosphere – paranoia and half-truths. I really do not have time for such a tiny mindset; I have a healing focus.
              I really did think the Porters were smarter than that. Likely they are just stressed out and cannot wait to be relieved from their duties as soon as they can get away.
              My sympathies and best wishes to them in their new adventure, which could turn out to be just another drama for them, unless they change their mindsets.

              • If this is true (ya never can tell with the internets) then it’s their loss. Not only was the headline unfavorable of the change, but so were all the comments other than yours. To fire an employee who, under know obligation of their own, and for no personal benefit, speaks favorably of his employer’s worthiness to conduct private business is fishy. This is nothing to say of the fact that somebody was fired just for speaking their peace on the internet. The genuine reverberation is bad for them, and they did it to themselves. Whoever they are. Unless this is all a total LIE!

                • We can meet anytime, I live in Garberville. When was your last bodywork? Who do you know that needs a session as a holiday gift?

                  My article about Chava Vital Chocolate appeared in the most recent Chamber newsletter. All the way in the back.

                  You could also try calling the Inn and asking about a session with me, and see what they say. 707/923-2124.

                • Name is Robin.

  • Right on, Lightbird.

    The Planning Commission has just announced hearings on January 6th for a dispensary applying to locate in the old health club behind Renner. The applicants are named Redwood Legacy.

    Anyone know anything? Or care to make anything up? On the face of it it’s all the more intriguing . . .

  • The deal is explained at length and accurately in the Times-Standard article yesterday (12/16) except some things could be expounded on. RLC is Joe Wolosz from Passport Hotel Group along with his PHG partner Jeff Durham. They own the Holiday inn Express in Fortuna and some other stuff, but they are not billionaires–thus their need to raise capital from other private investors. They have a few, but not enough. Paul Oseoe is another partner. He owned a small hotel down south for a while and has worked in the industry for a long time.
    They (passporthotelgroup.com) originally were going to list Benbow for sale, but came to view it as a jewel that was not being used to its potential. They feel they could renovate and remake Benbow into something far superior. Their numbers show that the $28m investment will pay off well. They have huge plans for all aspects of the property and have been working hard for a long time to raise capital to move on this. They will improve the golf course along with everything else.
    Best of all, they appreciate the potential of catering not only to destination tourists, but to embrace the local customer base and take advantage of the opportunities the local festivals provide. Something we haven’t seen for a while. I remember having brunch on Sundays there wearing jeans or camos and never getting a raised eye. I’m pulling for this one.

  • The deal is explained at length and accurately in the Times-Standard article yesterday (12/16) except some things could be expounded on. RLC is Joe Wolosz from Passport Hotel Group along with his PHG partner Jeff Durham. They own the Holiday inn Express in Fortuna and some other stuff, but they are not billionaires–thus their need to raise capital from other private investors. They have a few, but not enough. Paul Oseoe is another partner. He owned a small hotel down south for a while and has worked in the industry for a long time.
    They (passporthotelgroup.com) originally were going to list Benbow for sale, but came to view it as a jewel that was not being used to its potential. They feel they could renovate and remake Benbow into something far superior. Their numbers show that the $28m investment will pay off well. They have huge plans for all aspects of the property and have been working hard for a long time to raise capital to move on this. They will improve the golf course along with everything else.
    Best of all, they appreciate the potential of catering not only to destination tourists, but to embrace the local customer base and take advantage of the opportunities the local festivals provide. Something we haven’t seen for a while. I remember having brunch on Sundays there wearing jeans or camos and never getting a raised eye. I’m pulling for this one.

  • BTW Lightbird, phase 3, the aquisition and development of the Julia Morgan Estate, is to turn that property into a spa . Exclusively and only for spa services. Thought you might like that.

  • Tax free loans are a public subsidy. Less interest is charged only because they are used as tax shelters for the wealthy, which means more of the tax burden falls on others. There are of course much worse subsidies, in amount and effect.
    If it gets paid back and puts people to work renovating, then it would certainly be economically stimulating. If most of the funds go to the Porters (capitalize the sale), then it is as stimulating as they are. Either way, I’ll still enjoy my visits, and wish them luck.

  • Tax free loans are a public subsidy. Less interest is charged only because they are used as tax shelters for the wealthy, which means more of the tax burden falls on others. There are of course much worse subsidies, in amount and effect.
    If it gets paid back and puts people to work renovating, then it would certainly be economically stimulating. If most of the funds go to the Porters (capitalize the sale), then it is as stimulating as they are. Either way, I’ll still enjoy my visits, and wish them luck.

  • Here’s the site for the local Times-Standard article describing the purchase, plans, and phases more thoroughly. Take a look, I was impressed. It states that they intend to use local souorces whenever possible, which I appreciated. I was at the Board of Supervisors meeting and met the fellow; nice guy, smart, interested in the community, has the ability to see this through. He made a point that was reiterated by Supervisor Duffy and the CAO that the bonds are of a private equity of investors, not public bonds,; and Humboldt County is not liable or on the fiscal hook in any way:

    http://www.times-standard.com/localnews/ci_16872768

  • Here’s the site for the local Times-Standard article describing the purchase, plans, and phases more thoroughly. Take a look, I was impressed. It states that they intend to use local souorces whenever possible, which I appreciated. I was at the Board of Supervisors meeting and met the fellow; nice guy, smart, interested in the community, has the ability to see this through. He made a point that was reiterated by Supervisor Duffy and the CAO that the bonds are of a private equity of investors, not public bonds,; and Humboldt County is not liable or on the fiscal hook in any way:

    http://www.times-standard.com/localnews/ci_16872768

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