LAKE COUNTY — Konocti Harbor Resort and Spa is on the market for the third time in the past year, and a buyer will be selected from a pool of more than 50 proposals in the next few weeks, according to the agency that has listed the property. The cutoff date for bids is next Friday.
Twice last year, escrow was dropped by potential buyers. The latest listing was announced in December and is the first time the property has been publicly listed, a move the hotel-sales brokerage firm Atlas Hospitality Group says helped attract more inquiries.
The absence of a price tag for the property is a strategy the firm says worked to help the market determine the worth of the 56-acres and hotel, according to Atlas Hospitality President Alan Reay.
He said the hotel, marina, amphitheater and additional land gives the property value for a variety of developers in both hotel and marina markets.
But so far, all interested buyers are from the hotel industry, and are “looking to continue operating it as a hotel,” Reay said.
The firm is representing WhiteStar Advisors of Florida, asset managers hired by the owners, Local 38, a union representing plumbers, pipefitters and journeymen. The union was under investigation by the U.S. Department of Labor for using members” benefits to support the money-losing resort. The federal lawsuit was settled early last year.
Local 38 has owned the resort for about 50 years as part of its Convalescent Trust Fund, a retirement fund for the union that allows members to visit the property, which includes a children”s camp, at a discount. According to the U.S. Department of Labor, about $36 million in member benefits were funneled into the Konocti facility. As part of the federal settlement, Local 38 hired WhiteStar Advisors to oversee operations and the sale of Konocti Harbor Resort and Spa.
Reay said he is confident a sale of the property will go through.
“After next Friday, we”re going to narrow it down to a short list of buyers, and we”ll select one in the following two weeks. By the end of March we will designate a buyer,” Reay said.
He said considering a “market that”s slowing down” the number of interested buyers is “somewhat unusual.”
“In this market we”re seeing the buying volume dropping down. But obviously this is irreplaceable real estate, which is the difference of this hotel verses a lot of other properties on the market,” Reay said.
He said the agency cannot reveal the amount of offers until escrow on the property closes.
And although no price tag was listed for the property, a past bid was for $25 million, but for a different package that may have included the entire property. The 56 acres currently listed is actually just half of the entire land.
Local 38 maintains the additional 50 acres as a summer camp, called “Camp Konocti” for its union members” children. It is a collection of cabins with lake access and instruction in sailing and water sports in its 45th year of operation, according to the Local 38 Web site.
WhiteStar has been trying to sell the property for two years. A year ago, Kenwood Investments dropped its bid and escrow failed to close after a proposed Indian casino on the property sparked controversy in the community. Page Mill Properties of Palo Alto also considered purchasing the property for $25 million, but decided against it.
The listing states the resort will be sold without management or franchise agreements, meaning the new owner would not have to retain management staff. The property includes 255 guest units, a 100-boat slip marina, a 5,000-seat amphitheater, 20,000 square feet of meeting space, a 1,000-seat indoor showroom and a 19,000-square-foot spa.
Contact Elizabeth Wilson at ewilson@record-bee.com
