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The board voted 4-0 for the measure after hearing from Greg Bennett, Konocti Harbor's president and general manager, that the resort faces closure if it isn't sold.
Absent from the meeting was Supervisor Rob Brown, who had championed the February 2007 resolution, which was in response to a plan being floated by Kenwood Investments that included putting the resort into federal trust in order to facilitate an Indian gaming facility.
In a letter to the board dated June 21, Bennett asked the board to pass a resolution taking a position that it would be willing to “welcome a DISCUSSION, about ANY vision, with ANY buyer, willing to purchase one of Lake County's greatest assets” (capitalization as it appeared in the letter).
Bennett told the board Tuesday that UA Local 38 Convalescent Trust Fund, which has owned the resort for a half-century, has decided – “due to recent developments” – that it's time to sell the resort.
His letter explained that those recent developments included the settlement last year of a federal suit filed by the US Department of Labor, which had cited violations of the Employee Retirement Income Security Act.
The Department of Labor had alleged that the union spent millions – estimates have stated $36 million and above – from employee benefit funds to support the resort's operation, as Lake County News has reported.
Bennett told the board Tuesday that the union is no longer willing to spend the millions of dollars necessary to run or upgrade the resort. So, for the past three years, the trust fund has been seeking a “unique” buyer that will be willing to invest the tens of millions of dollars necessary to redevelop the resort.
The trust fund is in the middle of trying to sell the resort, said Bennett, and it's of “immense importance” to have the county work with them in order to succeed.
If they can't sell the resort, Bennett said Konocti Harbor will be shut down altogether.
Last year's resolution against gaming was seen by many potential buyers as a hindrance, said Bennett.
In speaking of potential buyers he likely was referring to Kenwood, which eventually dropped its plans to purchase the resort, to be followed by Page Mill Properties of Palo Alto, which also looked at buying the resort before passing.
Bennett said he was asking the county for a more “welcoming format” in order to get potential buyers to the table – “and hopefully stop any potential ownership closure of the resort.”
The board appeared both supportive and sympathetic.
“The new information for me is that the resort closure is imminent if a buyer isn't found,” said Supervisor Denise Rushing.
County Chief Administrative Officer Kelly Cox, who drafted the resolution, said it expressed the board's willingness to consider and discuss “any reasonable proposals” in relation to the county General Plan and the Rivieras Area Plan.
“It's been such a benefit to Lake County, we'd be nuts not to support something like this,” said Supervisor Jeff Smith.
Several members of the local business community – Bill Brunetti, Nancy Ruzicka and Lakeport Regional Chamber of Commerce Chief Executive Officer Melissa Fulton among them – supported the board approving the resolution.
Brunetti called the resolution “an invitation” to anyone interested in purchasing the resort.
Fulton said Konocti Harbor employs many local residents and pays a large amount of transient occupancy tax – or “bed tax” – which benefits the community. It also draws visitors who stay at other accommodations and support local business.
“The continued existence of Konocti Harbor Resort as a viable destination resort is paramount to the future of this county,” Fulton said.
Finley resident Phil Murphy questioned if the new resolution negated the one passed in February 2007. “It seems like the wording conflicts with what you passed previously,” he said.
Cox suggested it didn't rescind the last one, but merely expressed the board's most current position.
However, County Counsel Anita Grant said Murphy made a good point, and she suggested that the new resolution should rescind the old one in order to avoid setting up a conflict. The version of the resolution the board accepted included an amendment to that effect.
Murphy further asked if the resolution might not set a precedent and invite other groups and businesses to seek similar support. He said the county should consider everything on its merits.
Board Chair Ed Robey agreed, saying the county is obligated to consider all proposals. Cox said the resolution was only coming forward because of the board's action last year.
Rushing suggested the resort – which she called “an economic engine for the community” had reached the point when it was becoming a redevelopment project.
Supervisor Anthony Farrington said he was excited about the resort's potential.
As to whether or not an actual buyer is in the wings, Bennett didn't address that issue Tuesday, and did not return a call from Lake County News following the meeting seeking comment. Calls to Jim Bishop, managing director for WhiteStar Advisors of Boca Raton, Fla. – the court-appointed independent fiduciary that is helping manage the resort – also were not returned Tuesday.
Brown says he won't support gaming
Cox told Lake County News after the meeting that the February 2007 resolution grew out of concerns “that a certain potential buyer of Konocti was not being completely candid about his future plans and that an effort might have been under way to place the resort property in federal trust status while completely bypassing county government and ignoring local concerns.”
He was referring to Darius Anderson of Kenwood Investments, who had spoken with local tribes in an effort to broker a deal to place an Indian casino there.
Jim Brown of the Elem Colony told Lake County News last year that Anderson had assured tribal representatives that, due to his contacts with the state's leading Democrats, he could get the plan fast-tracked and completed in a minimum of five years.
Cox said the resulting resolution, however, was “incorrectly interpreted by other potential investors to mean that the county was generally not supportive of Konocti and that the Board of Supervisors would be very difficult to work with.”
That wasn't the intention, he said, adding that the board wants to see the resort be as successful as possible in relation to the county's General Plan and the Rivieras Area Plan.
Cox emphasized that the resolution isn't a guarantee that the county would ultimately support any plan that a potential buyer might submit. It basically indicates a willingness to sit down at the table, which he called “a minimum basic courtesy” that he believes anyone is entitled to from their elected representatives.
No decisions would be made, he said, without first having public hearings and public input.
Brown had jury duty and so didn't attend Tuesday's meeting. He said he was unable to delay appearing for jury duty because he already had asked for leave from two previous jury summonses.
Contacted after the meeting for his reaction, Brown said he supported the resort but said he didn't want gaming there – “no matter what.”
“There are a lot of things to explore before gaming would ever be a consideration,” including different types of housing, Brown said Tuesday evening.
He said in his discussions with Bennett, no active buyer was mentioned. Brown said he and Cox had, however, met with Page Mill Properties representatives when they were considering buying the resort last year.
Cox also said Bennett didn't indicate that a sale is currently under way.
In explaining her vote for the resolution after Tuesday's meeting, Rushing said the the resort needed help being viable.
“What we knew this year that we didn't know last year is that they are at the end of their rope,” she said.
She reiterated her belief that the resort needs to be redeveloped.
Concerning redevelopment, Cox said Konocti Harbor hasn't approached the county about redevelopment help to the best of his knowledge. Even if they did, Cox said they wouldn't be eligible because they're not located in the redevelopment project area, which is on the Northshore.
Cox said when the resolution against gaming at the resort was adopted last year, the county was concerned that the process being pursued – putting the resort into federal trust – was cutting out the community and its concerns.
“It should be clear to everyone now that such an approach is unacceptable and if it were to be proposed again it would likely meet the same opposition and same result,” he said.
E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it..
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