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Dec 20th
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Home News Latest Hope for Konocti Harbor: Purchase said to be in process for famed resort

Hope for Konocti Harbor: Purchase said to be in process for famed resort

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County officials say they are working with prospective buyers for Konocti Harbor Resort & Spa in Kelseyville, Calif. Courtesy photo.

KELSEYVILLE, Calif. – Since it closed nearly two and a half years ago, the fate of Konocti Harbor Resort & Spa, the county’s premier resort, has been a source of near constant speculation.

For decades the resort had been a draw for county residents and visitors alike. Other resorts and businesses had benefited from the customers that came to enjoy its amenities and shows all the year round.

When it closed, hundreds of people lost their jobs, some other local resorts struggled and closed, and on an almost weekly basis there was a new story circulating the community about some well-known celebrity being at the heart of an effort to purchase it.

Now, however, there appears to be a bona fide purchase effort under way, according to county officials.

“We’re working with folks that are very interested in making it a destination resort,” said County Supervisor Rob Brown, in whose district the resort is located.

County Administrative Officer Kelly Cox also told Lake County News that he is aware that the resort is in the process of being sold.

Brown said he’s not at liberty to discuss specifics about who the buyers are, but added that the county has been working with the potential buyers for several months.
Cox said that seeing the resort reopened as a first class destination resort under new ownership has been a top priority for the county.

He and his staff have tried to be supportive of sales efforts, and have been willing to dedicate staff time to support it, including recruiting and meeting with potential buyers.

“We rolled out the red carpet to anybody we met with,” he said.

But those potential buyers didn’t seal the deal, and the resort – which Cox said had been the county’s largest generator of transient occupancy tax, or bed tax, by far – continued to sit empty on the shores of Clear Lake.

Aftermath of lawsuit

Konocti Harbor was closed “temporarily but indefinitely” in November 2009, according to the notice sent to local, state and federal officials by Boca Raton, Fla.-based WhiteStar Advisors LLC.

WhiteStar Advisors is an asset management company that was put in charge of overseeing the resort following a federal lawsuit, settled in 2007, in which the U.S. Department of Labor sued Local 38 of the United Association of Plumbers, Pipefitters and Journeymen, whose Convalescent Trust Fund, Lakeside Haven, had owned Konocti Harbor since 1959.

That suit alleged that Local 38's trustees violated federal law by diverting more than $36 million from retirement, health, scholarship, apprenticeship, and vacation and holiday funds to renovate and operate Konocti Harbor.

Department of Labor officials recently told Lake County News that the agency considered Konocti Harbor a “troubled property,” whose troubles had been exacerbated by the tough real estate market.

However, as a result of the lawsuit $3.5 million was restored to the Local 38 pension plan in September 2007 and additional money may be paid from the sale of the Konocti Harbor.

The lawsuit settlement also prohibited any further diversions of money from the employee benefit plans to Konocti Harbor, according to the Department of Labor.

Those employee benefit plans aren’t exposed to risk of loss, and if and when the property sells, “the plans have some potential for upside,” the agency said.

New concerns arise

Concerns about the resort’s future flared up last month, after a Bay Area newspaper published a story about Pacifica resident Kathleen Bernard’s plan to purchase the resort and make it into a mental health facility.

Both Brown and Cox said they were contacted by numerous county residents concerned about such a plan.

Bernard – who reportedly hosted a public meeting on the plan in San Mateo County last month – did not respond to a request for comment from Lake County News.

Additionally, statements made in the article about the “Mental Health Board of California” being aware of Bernard’s plans and her desire to use funds from Proposition 63 – the Mental Health Services Act – are in question.

When Lake County News contacted the California Department of Mental Health and the state Mental Health Services Oversight and Accountability Commission, officials stated that there was no such thing as a Mental Health Board of California, but suggested Bernard may have brought the idea to another state entity.

Bernard also had not made any contact with Lake County officials, said Cox, who surveyed departments including Community Development.

Cox said Konocti Harbor is not zoned for the use Bernard suggested.

“It’s resort property,” he said, adding that he couldn’t imagine the Board of Supervisors agreeing to a rezone.

Brown emphasized that the prospective buyers with which the county are working do not include Bernard or anyone associated with her.

Brown said the current deal that’s being worked out appears very hopeful.

He said the county wanted any prospective buyer interested in reopening the resort to know that “the county is solidly behind them.”

Email Elizabeth Larson at [email protected] .

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Comments (20)Add Comment
written by Marzocco, April 16, 2012
Phooey on Rob Brown
written by solincobb, April 16, 2012
He had to leak this, because he's sp desparite to stay o office.

I agree with you, Smurf and Frog that this smells of "political propaganda," especially with the upcoming election. But what is wrong with it? Every politician from the presidential candidates to people running for dog catchers put out press releases to make sure the voters are aware of their accomplishments. But if Brown does it he gets pillored.

People have been wondering for months about all the rumors about the purchase of the resort, so letting them know something is the pipeline is wrong? Do you really believe if the resort was in somebody else's district that Supervisor would not take advantage of it. If you do I would like to remind you of Denise Rushing being the Booard Chair of the Oversight Board dealing with the Castle/Marimont University and all her comments.

Also, what's the difference between this "press release" and all those by Rivero?
written by anonymouse, April 16, 2012
How much work do you think there cold possibly have been for six months? Either it pencils out or it doesn't. On a related note just what do you imagine the Lae County "red carpet" looks like?
written by Marzocco, April 16, 2012
Thank you JJ for removing that racist remark and my response to it.
Phooey on Rob Brown
written by solincobb, April 16, 2012
He had to leak this, because he's sp desparite to stay o office.
guest    1
same sad California story.........George Lucas abandons Marin Project
written by a guest, April 16, 2012
the project generated strong opposition from homeowners and environmentalists who said it would increase traffic, noise and environmental damage on the pristine countryside, despite company promises to preserve open space and reduce impacts on the community.

The supervisors last week were poised to rule on the project, but held off after state and federal environmental agencies, inexplicably at the 11th hour, said they needed more to review Lucasfilm's plan to restore the creeks. The company already has said it is prepared to spend as much as $70 million on that work.

The company said it would construct new facilities elsewhere(probably out of state) and hoped to sell the historic farmland to a developer interested in building low-income housing in an area about 15 miles north of the Golden Gate Bridge
guest    1
only very deep pockets can afford to buy KHRS
written by a guest, April 16, 2012
The resort will cost millions to buy.
The resort will require millions more in renovation costs ...............and.........will the resort be able to comply with new state environmental mandates.

Michigan J. Frog
Public good
written by Michigan J. Frog, April 16, 2012
I don't understand
written by anonymouse, April 15, 2012
This is private property being sold to a private party. Why would any county employees would be involved with the process.

The county, like most others, has a marketing department, and an interest in the economics of the county.

I am not a fan of government agencies subsidizing or funding developments that benefit only a few people (like building football stadiums) but in some cases, like this resort, the county can, and should, do what it can to facilitate a new resort. That is because it will benefit a great many people in the county.

As for Rob Brown and Kelly Cox: Marz if you understood county government you would know that all Brown can offer is hot air, which is far, far less than the power of the county administrator, who holds the purse strings. Denise Rushing can be given as much credit as Brown, simply for doing her job.

You denigrate Mr. Cox by giving Mr. Brown equal credit, and that is as good a bash as any, even if it is one of omission. It's like claiming Robin is as important as Batman and not even mentioning Batman's name in your praise. I "conveniently mention only Cox" because Cox is the only one that counts. If Brown had any integrity, his public statements would be praising Kelly Cox's efforts.

So go ahead and vote for your bloated wind bag. If and when we have a decent candidate for the district, Brown will be swept away in a landslide. He has done NOTHING extra that any other supervisor would do in this circumstance. And I wouldn't be surprised if he has hampered some negotiations by sticking his face in it and demanding "what's in it for me!"
Hope for any buyer?
written by a guest, April 16, 2012
"Brown said the current deal that’s being worked out appears very hopeful."
We have been hearing this line for many months, without any details. Since this is a matter vital to the community, why can't we get more info ON THE RECORD?
"He said the county wanted any prospective buyer interested in reopening the resort to know that “the county is solidly behind them.” "Any" buyer would include a buyer who intends to open a first-class casino. right Mr. Brown?
written by Marzocco, April 16, 2012
Frog, I dare you to show me where I "bashed" Kelly Cox. Double & triple dare. I know you are famous for twisting or obfuscating the truth but I did not think you would blatantly lie.

I have nothing but respect for the hard job done by Cox and I hate to see him retiring. On the other hand I cannot use the same word when describing you.

You can blather and bi*ch about Brown. I, on the other hand, can vote for him.
I don't understand
written by anonymouse, April 15, 2012
This is private property being sold to a private party. Why would any county employees would be involved with the process.
Michigan J. Frog
written by Michigan J. Frog, April 15, 2012
Kelly Cox is the ONLY one who counts in actually making a county agreement with any buyer of Konocti Harbor.

Rob Brown's "efforts" have for the most part been putting his face in front of a camera.

You can bash Kelly Cox all you want, but your BOS candidate is nothing more than a charlatan with jeans and a cowboy hat. All we can give him credit for is the ability to smell money.
it gets funnier...
written by smurf, April 15, 2012
the county has been working with the buyer for several months? How exactly? And since when is the government allowed to keep such information secret? Total crock on the inability to name the buyer, and is anything being promised in exchange-like a rezone to allow new construction on the parcel across Soda Bay road they own? Or a TOT refund? Or a dozen other possibilities? tell us what the county is doing and then we can DECIDE FOR OURSELVES if this is something for real or like all the other ones that fell apart.
Terrific news!
written by jjensen, April 15, 2012
I'll never forget the look on my mom's face as she watched Willie Nelson perform there and look forward to more memorable events in the future. Good luck and god speed to all involved in this very positive development and thank you for you long-standing commitment to the county.
written by BlackMagic, April 15, 2012
and attended many great Concerts there!
I hope that someone Purchases/Opens it up as soon as possible.
I for one, would LOVE to see it remodled and a Casino go in there with Concerts to boot!
written by Marzocco, April 15, 2012
As soon as Brown was mentioned you knew Smurf would open his big mouth and spew stupidity. His hate for Brown clouds the few neurons still firing in the Blue Puppet brain. So instead of being happy for the possibility of hundreds of new jobs and the influx of major tax revenues, Smurf can only think of ways to spout drivel against Brown.

This is Smurf inane and ridiculous way of thinking. The Plumbers Union cheated? Brown's fault.
The Feds forced the union to close the resort? Brown's fault.
The Feds forced the Union to pay back their pension fund? Brown's fault.
Some tribes interested in opening a casino? Brown's fault.
The possibility of a reopening of the resort? Cox's 100% effort. Nothing to do with Brown.

And Smurf's twin brother, the Green Frog, conveniently also recognizes only Cox involvement in the deal, completely forgetting Brown's efforts.

Smurf, your blind hate of Brown and your dream to see somebody else elected in Brown's place is so transparent you could start a new business to build thousand of window panes with it.
written by Overtherocks, April 15, 2012
This is wonderful news for Lake Co. The Plumbers, oops sorry, Konocti Harbor Resort and Spa, is indeed the premier resort on the lake and probably it's best known asset. I am glad the BOS is laying out the red carpet for potential investors and I hope the community totally supports their efforts. I know I sure do.
Michigan J. Frog
written by Michigan J. Frog, April 15, 2012
Yes, now it seems even if it was fraud and the union was ordered to divest to pay back the retirement fund, it seems it could have stayed open WHILE it was for sale.

This seems to have ended in a lose/lose/lose bargain.

was it really fraud that closed the resort?
written by a guest, April 15, 2012
Every time I see an article in this thread, it makes me think of the class action lawsuits that are of little benefit to me, but make lawyers rich.

Was the thriving resort a loss to the retirement fund, or was it it a good investment? Back at the time, I thought it was a petty internal disagreement. The fund would be better off today off the resort were operating.
Michigan J. Frog
written by Michigan J. Frog, April 15, 2012
Yes we can hope. And thanks once again to Kelly Cox for his efforts.
hey, thats pretty funny...
written by smurf, April 15, 2012
as just yesterday Rob was claiming that White Star management group was a behind a scam to bump-up the market value of the resort by using a scam involving a fake plan to open the resort as a casino, but now he says he's working with them and they have a deal going but its all so top secret no one can hear anything about it and OH YEAH THERE'S AN ELECTION IN SIX WEEKS! And now according to Rob it was sheer genius on his part for him to have led the effort to ban new casinos in order to kill-off the "fake" plan, which he claims to have learned about long after passing the ban (which the other four supes rescinded at the behest of Kelly Cox who apparently isn't as wise and all-know as Rob). Elections sure do prompt some funny things-don't they?

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