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Historic Columbia Hotel is Lost To Forever Mob!

New owners take over state park's City Hotel

Published: April 5, 2006 at Union Democrat.Com

By LENORE RUTHERFORD

After struggling financially in recent years, Columbia State Historic Park's City Hotel has a new operator.

Forever Resorts, a for-profit company which manages concessions in state and national parks throughout the U.S. and manages historic sites in other countries, will take over day-to-day operations.

The nonprofit Columbia City Hotel Corp., concessionaire since the mid-1970s, announced the transfer yesterday.

No money changed hands.

The switch was executed in an agreement between the corporation, the company and the California Parks and Recreation Department.

The concession includes the City Hotel and Restaurant, the What Cheer Saloon and the Fallon House Hotel, Ice Cream Parlor and Theatre, where some Sierra Repertory Theatre productions are performed.

Forever Resorts will take over operations Monday.

The hotel corporation announced in February that there was change ahead because of financial losses, particularly at the hotel restaurant. But no mention was made then of transferring the entire concession to a new owner.

At that time, John Flieder, a Columbia City Hotel Corp. director, said the board hoped to offer a more casual, affordable luncheon menu at the restaurant — long considered a pricey, special-occasion place to eat — to encourage families with children to eat there during daytime hours.

But the restaurant has been closed since an October kitchen fire and is not expected to open for several more weeks.

Among the Forever Resorts' concessions in California are marinas at Lake Don Pedro and Moccasin Point. Lake Don Pedro Marina Assistant Manager Dave Wood will become the new City Hotel manager.

Forever also manages a state-owned marina at Lake Oroville in Butte County and the resort and marina at Trinity Lake, said Cathryn Milner, a concession specialist with California State Parks.

"We are very pleased with their performance at our other properties," Milner said, "and anticipate the same quality here."

The transfer was initiated by the City Hotel Corporation and Forever Resorts. No other firms were considered.

"Forever Resorts came to us about their willingness to take over the concession," Flieder said. "They had heard about our financial problems."

City Hotel Corporation pays the state rent through a formula that averages about 2.5 percent of gross revenues, said Phil Reiss, another member of the board of directors. It also maintains the buildings at a cost that must average at least two percent of gross revenues, he said.

Each Columbia concessionaire negotiates its own terms, Reiss said.

City Hotel Corporation directors announced the move to employees yesterday. Flieder said workers were told Forever Resorts will retain them as long as they pass mandatory drug testing.

For now, Forever's new corporation, Columbia City Hotel LLC, will be a subconcessionaire, handling the day-to-day management of the complex, Milner said.

Flieder said the concession is being formally transferred to Forever Resorts, a process expected to take about four months. Forever also intends to compete for the concession when its long-term contract comes up for bid at the end of the year.

Corporation directors have been exploring alternatives to keep from having to close the hotel complex, said Jim Riggs, president of Columbia College and a corporation director.

The college and City Hotel have worked together since 1975 to provide a hospitality management program for college students, but the restaurant has been a constant financial drain in recent years.

Flieder said in February that the restaurant lost $75,000 in 2004 and $53,000 in 2003. The entire corporation lost $24,000 in 2004 but showed a $25,000 surplus in 2003, he said.

Riggs said the new company will continue its relationship with Columbia College and may provide an expanded college culinary program at the restaurant with the chance for summer jobs and internships at its other parks and resorts.

City Hotel Corporation Board President Tim Costello said some City Hotel patrons have been critical of changes in the restaurant in recent months. Among the changes have been temporarily moving the college culinary program to its campus, temporarily closing the kitchen and announcing plans for a casual luncheon menu.

In defense of the board's decision, Costello said that the City Hotel Corporation had no assets, so there was no way to get a loan to continue the business under its present structure.

Flieder's family loaned the corporation $20,000 two months ago to start kitchen repairs. The loan was repaid about 10 days ago, after a long-awaited insurance check arrived.

Reiss declined to say how much the insurance company has paid, saying it's the nonprofit corporation's private information.

"We feel the best way to satisfy all of the City Hotel's constituents is by giving it a fresh start under new management," Costello said.

Costello said delays getting paid by Lloyds of London's Certain Underwriters for the October loss had brought the corporation to the brink of bankruptcy.

Loans and gifts from board members helped keep the organization going, Flieder said.

Several outstanding insurance claims, also related to the fire, remain, Costello said. And the corporation has filed a complaint with the State Insurance Commissioner's Office about the poor claim handling.

Forever Resorts plans to continue with several City Hotel traditional special events, such as the annual Victorian Feast in December and Mystery Weekends in January and February.

Costello said the new organization has the "financial underpinning" needed to make the operations successful.

Forever Resorts, based in Scottsdale, Ariz., was founded by Rex Maughan in 1981.

The company and its subsidiaries owns more than 50 vacation and entertainment properties in or near national parks, recreation areas and national forests across the United States.

It also operates more than 20 properties in Europe and Africa.

The company specializes in managing and marketing lodging, marina, food service and retail businesses.

It also manufactures and rents luxury houseboats.

Contact Lenore Rutherford at lrutherford@uniondemocrat.com or 588-4526.