Business / Economy

Friday, September 27, 2019

Benbow Inn Files for Bankruptcy Protection, Blames U.S. Bank

Posted By on Fri, Sep 27, 2019 at 10:12 AM

The Benbow Inn's owners have filed for Chapter 11 bankruptcy protection. - FILE
  • File
  • The Benbow Inn's owners have filed for Chapter 11 bankruptcy protection.
The Benbow Historic Inn filed for a Chapter 11 bankruptcy protection yesterday after going into debt to bring the Humboldt County landmark up to meet federal Americans with Disability Act standards, according to John Porter, managing partner for Benbow Valley Investments.

“We just filed for reorganization,” he said, characterizing the situation as a large national financial institution bullying a local business. “It is kind of the beginning of the end of fighting with US Bank – with them acting in an uncooperative and unethical way… The only mechanism we have to keep them from beating us up is the Chapter 11 laws. ... There’s going to be a fight involved but we feel we’re going to come out on top.”

He explained, “We are going to federal court and we think we have a pretty good chance… We don’t feel happy we are in this position but we feel the outcome is going to be positive for us and for our employees. … This filing will stop the process of the them setting up a receiver to run the property.”

In 2016, Benbow Valley Investments began the $8.5 million renovation that not only upgraded the Inn with an elevator to meet ADA requirements but added new kitchens, new restrooms and 10 new rooms for guests — all but one of them decorated in honor of each of the nine original Benbow brothers and sisters.

However, according to Porter, the construction loan, which began with a local branch of the US Bank, was moved to a succession of different bank employees located all over the country. “Every time they moved it around, we had to get [the new loan officer] to understand what we were doing,” Porter said.

Porter insisted, “We made every payment on time – never missed a payment,” but US Bank didn’t want to roll over the construction loan to a longer term business loan. They stopped accepting payments from Porter in February, after the construction loan time ran out, he said. However, Porter insisted he has continued to set aside the money owed every month in an account and is prepared to pay it.

Normally, he said, a business would “get a construction loan [and] part of the loan is an agreement they will convert this to a term loan under certain conditions.”

This loan would normally be a 25 to 30 year loan and Porter thought that he would get such a loan from US Bank for the Benbow Inn.

“Now most banks would work with you,” Porter said. But he didn’t feel that US Bank was being flexible in setting the terms.

“We started to look at other banks,” he told us.

“They [US Bank] did everything they could possibly do to prevent us from getting another loan,” he said. “Then US Bank files a notice of default.”

This, he said made it difficult to get other banks to provide favorable terms that made financial sense to the inn's owners.

According to Porter, “US Bank then filed a notice of sale that is set for Oct. 10…Our way of stopping this is reorganization."

“I think they thought they could bully me,” Porter said. “I’ve just never been treated like this. … They are a big bank. They don’t care about us. They don’t care about the community. They don’t have any emotional attachment to this property.”

Porter said he's looking for a seven-year loan, which would allow them to refinance.

“We fixed the inn so that people are now going to be able to enjoy it for 100 years," he said. "We did the right thing… We’re not failing… We have money in the bank. We’ve been setting that money aside for the payments… We only have one secured creditor–U.S. Bank… The courts are going to look at this historic property that is an economic driver and aren’t going to ignore that.

“We’ll get through this and move on," Porter continued. "We’re not going anywhere and we’re not selling.”

Efforts to reach US Bank for comment before posting were unsuccessful.

A press release from the Benbow Inn is copied below:

Benbow Historic Inn Files for Reorganization

Benbow, CA (September 27, 2019) - Benbow Valley Investments, dba Benbow Historic Inn, owner of the premier historical hotel in Humboldt County since 1994, announced today that it has initiated proceedings for reorganization under Chapter 11 protection to preserve value and continue to serve its loyal guests with the best accommodations and cuisine in Southern Humboldt County.
In 2016 the Benbow Historic Inn commenced an inspiring update of the hotel, in part to meet the goals of the Americans with Disabilities Act, and to improve its capacity to serve the needs of its guests and develop group business. The construction project included a major expansion of the hotel, adding a new east wing that had been envisioned by the Benbow Family when the hotel opened in 1926.
“We knew we needed to make the Inn ADA-compliant and the best way to accomplish this was to install a 5-stop elevator”, said John Porter, the Managing Partner of Benbow Valley Investments.
The expansion plans not only included the spacious elevator but also a ground-level check-in/out lobby, two new meeting rooms, four public ADA restrooms, three ADA guest rooms, seven new guest rooms on the fourth floor, two new state of the art kitchens, a new cocktail lounge, and new state-of-the-art heating and air condition systems.
Despite its faithful and timely performance during the course of construction, Benbow Valley Investments was informed that the bank which financed the construction would not fund a permanent loan, and in February of this year it began foreclosure proceedings. The time it is taking to find a permanent replacement lender, has led the Inn to filing for reorganization protection. The filing will ensure the continued operations of the Inn, preserve the jobs of our dedicated employees and protect the value of the Inn for all stakeholders. “We will continue to operate the Inn as normal, as we have in the past and emerge from the reorganization process that will treat all creditors, fair and equitable under the law”, Porter said.
“This is not an issue where the Inn is failing. Occupancy and room revenue at the Inn have been on budget and our plan to build group business is working,” continued Porter. “We plan on coming out with a resolution that will work for us financially and continue to provide an exceptional, world class travel experience for our guests.”
Benbow Historic Inn was opened in 1926 by the nine brothers and sisters of the Benbow Family, each of whom had their own exceptional skill set. Benbow Valley Investments is the fifth owner including the Benbow Family.


Editor's note: This story was first published at www.kymkemp.com and is reposted here with permission.
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Friday, September 13, 2019

KEKA Pulls Out of Truckers Parade, Asks Others to Step Up

Posted By on Fri, Sep 13, 2019 at 1:09 PM

KEKA has announced the radio station will no longer present the annual Truckers Christmas Parade and is encouraging another business or community organization to take up the mantle.

A release states that issues, including rising costs, declining participation and increased liability, led to the “difficult decision.”
A flatbed went full Rudolph during a past parade. - PHOTO BY MARK MCKENNA
  • Photo by Mark McKenna
  • A flatbed went full Rudolph during a past parade.
“While our family has put on the parade for decades, it’s become apparent that the additional challenges which have had to be met in the past few years have made this event too overwhelming for us to continue putting on,” KEKA owner Brian Papstein says in the release, which also gives a nod of appreciation to Dale Bridge, who has coordinated the parade for decades.

Read the KEKA release below:


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Tuesday, August 27, 2019

Best Of Buyer Beware

Posted By on Tue, Aug 27, 2019 at 1:04 PM

It has come to our attention that someone is making the rounds, calling winners of our Best of Humboldt contest and trying to sell them pricey plaques celebrating the victory. We want you all to know that someone is not us.

We’ve received a handful of phone calls from folks reporting that they’ve received congratulatory calls that quickly devolve into a sales pitch, urging them to commemorate the victory with a plaque ($170 for a small, $230 for a large). We have no idea whether the telemarketers make good on the promised plaques or this is some kind of phishing scam. Either way, we’d urge caution to anyone considering giving a credit card number over the phone. And again, that friendly/demanding voice over the phone is not ours.
SONNY WONG
  • Sonny Wong
Other papers have reported similar doings with similar contests. Buyer beware.
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Monday, August 19, 2019

'The Bay is Back in Business' After Dredging

Posted By on Mon, Aug 19, 2019 at 1:38 PM

The Humboldt Bay Harbor, Conservation and Recreation District announced today that shipping restrictions have been lifted after roughly 1.1 million cubic yards of sediment were removed from the Humboldt Bay entrance channel.

During the winter, “significant sediment deposits” accumulated near buoy No. 9, which caused “extremely dangerous shoaling conditions" and the closure of Humboldt Bay to commercial shipping, according to the district.

The North Jetty. - USCG
  • USCG
  • The North Jetty.
With breaking waves inside the bay in an area dubbed “Rock and Roll Alley” by local fishermen due to the often rough conditions, boats became susceptible to tipping over and an emergency was declared on the local and state level.

Harbor district Executive Director Larry Oetker says it’s very fortunate that no one was injured.

“We owe the U.S. Army Corps of Engineers, Congressman Jared Huffman and Leroy Zerlang a debt of gratitude for all the extra effort they put into removing the hazardous conditions,” he says in the release. “The bay is back in business.”

Read the harbor district release below:


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Saturday, August 10, 2019

Coastal Commission: If Trinidad Rancheria Can Find Water, it Can Build its Hotel

Posted By on Sat, Aug 10, 2019 at 8:29 AM

The California Coastal Commission went against the recommendation of its staff Thursday and gave the Trinidad Rancheria the go-ahead — or a “conditional concurrence” — to build a five-story hotel on its property off Scenic Drive south of the city.

This means that the Coastal Commission, which is tasked by law with protecting the California coastline, will not stand in the way of the Bureau of Indian Affairs granting the Rancheria a lease and a loan guarantee so that the project can start. The “conditional” part of the concurrence means the commission is giving the Rancheria six months to come up with a reliable water source — either through an agreement with the city of Trinidad or by proving its newly drilled well has the capability to provide the 14,000 gallons of of potable water per day that the hotel will require without draining neighboring wells. According to Trinidad Rancheria CEO Jacque Hostler-Carmesin, the well can produce 8,040 gallons per day.

An artistic rendering created by the Trinidad Rancheria of what its proposed Scenic Drive hotel project would look like from Trinidad Bay. - TRINIDAD RANCHERIA
  • Trinidad Rancheria
  • An artistic rendering created by the Trinidad Rancheria of what its proposed Scenic Drive hotel project would look like from Trinidad Bay.
The decision came at the very end of an eight-hour meeting, much of which was devoted to the problems of other communities along California’s long coastline. By the time the hotel project was heard, the audience, which earlier in the day had overflowed the Wharfinger building’s main hall, had largely thinned out. Nonetheless, enough members of the public stayed to fill an hour with comments praising or criticizing the project.

The commission had also previously received about 190 public weighing in an all sides of the hotel.

This is the third time the hotel proposal has appeared before the commission. The previous two times, the commission objected to the proposal, effectively blocking it. Like all federally recognized tribes, the Trinidad Rancheria has the legal status of a sovereign nation, meaning it is not subject to state or local authority, which includes the California Coastal Commission. However, it is subject to the authority of the Bureau of Indian Affairs (BIA). In order to approve a project, the BIA has to affirm that the project will not conflict with any state laws, hence the need for the Coastal Commission’s “concurrence.”

An artistic rendering of the proposed hotel project at Cher-Ae Heights Casino off Scenic Drive south of Trinidad. - SUBMITTED
  • SUBMITTED
  • An artistic rendering of the proposed hotel project at Cher-Ae Heights Casino off Scenic Drive south of Trinidad.
The issue that has drawn the most public attention has been the hotel’s size and corporate appearance. Many residents — and some who live outside the area but vacation here — feel the hotel would clash with the serene forested look of the Trinidad Bay coastline.

The issue of most concern to the commission, however, was not the building’s appearance but the lack of a confirmed water source for the project.

The Rancheria hopes to be able to hook up to the city of Trinidad’s municipal water system but the city is unsure of its ability to meet the future needs of its own residents. It has commissioned a series of studies that will not be completed until December and the city has said it will not make any commitments to other entities before that time.

The amount of water reportedly needed by the hotel seems to be a moving target, decreasing each time it comes before a public body. The draft Environmental Assessment for the hotel stated that 18,860 gallons per day would be required. This later went down to 14,184 gallons per day. On July 26, a letter from the Rancheria said that a more accurate figure would be 9,000 gallons per day, although this low figure only reflected 60 percent occupancy, obviously a less-than-desirable outcome for the hotel’s backers.

(The water-related material sent to the Coastal Commission can be found online here; scroll to Item 12b and click on Appendix C).

At the Aug. 8 hearing, the project was first reviewed in depth by the commission staff; then project proponents and opponents each got to have their say; and last, the long-suffering members of the public each got their two or three minutes to speak. Amy Deutschke, the BIA official in charge of the project, started the debate by insisting that the only things being considered were a loan guarantee and a lease — the actual building was immaterial. The Coastal Commission disagreed with her.

Trinidad Rancheria Chair Garth Sundberg then said that the Rancheria had listened to everybody’s concerns about the view and tried to address them.

“We love the view from here,” he said. “We need economic development on the Rancheria. … It will create jobs, benefit the health and welfare of our members ... I want you to know that although we want the permits, we are going to go forward anyway.”

Hostler-Carmesin then gave the 100-year-old history of the Trinidad Rancheria, described a 10-year planning process for the tribe’s commercial development and emphasized the many contributions the Rancheria had made to the greater community. She then announced that the Rancheria had successfully drilled for water on its own land, and estimated that “our pumping capacity is at 8,640 and it is indicating that we have an adequate supply of water for peak usage.”

Then, Trinidad resident Richard Johnson spoke representing Humboldt Alliance for Responsible Planning (HARP), a grassroots group opposed to the project.

“We may have differences of opinion but we are all in this together and we all share the same limited resources,” he said, adding that while his group supports the Rancheria’s efforts to improve its economic status, approval of the project as it was presented would violate federal and state laws.

There was not yet enough evidence, he said, to determine whether or not the Rancheria’s new well could provide enough water to serve the hotel on a long-term sustainable basis.

“We all live in the Luffenholtz watershed and we have a finite amount of water,” Johnson continued. “Development of any well, whether on the Rancheria property or in other areas of our watershed, could affect other nearby wells by increased water withdrawal. It’s important to recognize that there is development planned for the future based on the Rancheria’s comprehensive community-based plan … Likely, the water requirements for the Rancheria will increase due to that development.”

For the next hour, members of the public spoke, some stalwartly defending the Rancheria’s right as a sovereign nation to do whatever it pleased with its land and others criticizing the project’s design and the perceived inadequacy of information about water.

Eventually, public comment closed, and the members of the commission got down to the gritty task of coming to some sort of conclusion.

The commission was clearly conflicted, with some members resonating more to the theme of past racial injustices inflicted upon Native Americans and others more concerned with the apparent inconsistencies with the Coastal Act pointed out by the commission’s staff. Motions were made, amended and withdrawn. Some commissioners worried that if a decision was made in favor of the Rancheria that it would set a precedent allowing other projects of questionable legality to be approved.

The question of what will happen if the city does not provide water and the well water is not potable, or reliable — or for that matter, how the hotel will make up the difference between the estimated water from the well and its projected needs — was an item of strong concern to most commission members.

During one emotional exchange with the commission, Hostler-Carmensin insisted vehemently that enough water would somehow be found, that the tribe intended to move ahead and added that the tribe had already sunk more than $5 million into the project.

“Passion does not equal water,” Commission Chair Dayna Bochco retorted. “What happens if you build the hotel and there is no water?”

Hostler-Carmesin said in that case, the hotel would be unable to open. That final decision, she said, would be up to the Trinidad Rancheria Tribal Council.

Speaking to her fellow commissioners, Bochco described the visuals of the project as “disappointing” and said that she understood why the community was not happy.

Nonetheless, the commission eventually voted 6 to 3 to grant a conditional concurrence to the BIA. The passed motion specifies that “prior to commencement of construction,” the BIA shall provide commission staff that either the city of Trinidad has agreed to provide water to the project or that the Rancheria has found an alternative source and conducted an analysis on its effects on coastal resources pursuant to the California Coastal Act.

Newly seated Commissioner Mike Wilson, Humboldt’s Third District County Supervisor, voted with the majority to approve the conditional concurrence.

Editor's note: This story has been updated from a previous version to correct an editing error regarding the commission's discussion of the project's visual impacts, and to correct the spelling of Jacque Hoster-Carmesin's name. The Journal regrets the errors.
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Tuesday, July 30, 2019

Trinidad Rancheria Believes it May Have Found Water Source for Hotel Project; Sundberg May Have Violated State Lobbying Law

Posted By on Tue, Jul 30, 2019 at 12:46 PM

At the 11th hour, with a hearing looming before the California Coastal Commission next week, the Trinidad Rancheria believes it may have found a water source for its proposed hotel development on Scenic Drive.

The commission is set to meet Aug. 8 in Eureka, two months after a divided commission voted 6-3 in San Diego to object to the Bureau of Indian Affairs’ determination that the project was consistent with the protections laid out in the California Coastal Act. Specifically, commissioners repeatedly voiced concerns over the Rancheria’s ability to find a water source for the 100-room hotel, noting that the city of Trinidad had not yet committed to supplying water from its system as it conducts a number of studies to determine whether its capacity can meet current and future needs for the city and its service area.

An artistic rendering created by the Trinidad Rancheria of what its proposed Scenic Drive hotel project would look like from Trinidad Bay. - TRINIDAD RANCHERIA
  • Trinidad Rancheria
  • An artistic rendering created by the Trinidad Rancheria of what its proposed Scenic Drive hotel project would look like from Trinidad Bay.

Word that the Rancheria may have found a different water source first surfaced when commission staff posted an ex parte communication disclosure form from Commission Chair Dayna Bochco, who reported that she’d received a text message at 9:25 p.m. on July 23 from former Coastal Commissioner and Humboldt County Supervisor Ryan Sundberg, who currently works as the interim general manager of the Rancheria’s Cher-Ae Heights Casino.

“Hi Dayna, we have had a (drilling) rig looking for well water so we don’t have to depend on the city of Trinidad,” Sundberg wrote. “Today was very exciting. We hit water today and will be able to have well water treated and used for the hotel. Can’t wait to see you all when you come up next month!”

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Saturday, July 27, 2019

Rita's Restaurants Hit with ABC Fines; One Liquor License Sold at Auction

Posted By on Sat, Jul 27, 2019 at 3:27 PM

rita_s_magnum.jpg

The state of California seized a local restaurant’s liquor license and auctioned it off this month, an action that came amid a flurry of local activity from the department of Alcohol and Beverage Control.

With a bill of more than $500,000 in delinquent taxes and penalties owed to the state, Rita’s Margaritas and Mexican Grill, located on Fifth Street in Eureka, surrendered the liquor license to the state that owner Rita Pimentel held for the restaurant’s now long defunct location on Harris Street. The California Department of Tax and Fee Administration then seized the license from ABC and put it up for auction, where it fetched $80,000 from Debbi Chisum, who owns Double D Steak in Fortuna.

Meanwhile, ABC took action against the two other Rita’s establishments locally — the one in Eureka owned by Pimentel and Rita’s Arcata, which is owned by Edward Fregoso — based on allegations that both had illegally purchased liquor to sell at the restaurants.

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Wednesday, July 24, 2019

No Service: The Removal of a Long-Unpopular Cell Tower on Trinidad Head Poses Connectivity Issues

Posted By on Wed, Jul 24, 2019 at 9:37 AM

Trinidad Head - DREW HYLAND
  • Drew Hyland
  • Trinidad Head

For decades a large cell tower has dominated the top of scenic Trinidad Head, providing service to users of Verizon, AT&T and Sprint, but also creating much displeasure among some local residents. While most people have and use cellphones, many local residents wished the communications companies could find a less conspicuous location for their infrastructure.

Trinidad city officials have traditionally responded that the tower was necessary for the three companies to provide service, that they were bound by a long-term lease and that the tower provided about $50,000 in annual revenue to the city budget.

Last year, however, the Trinidad City Council gave in to pressure from the citizenry. The lease to Verizon, the main tenant, was finally up and the city decided not to renew it. Verizon and the other two companies that rent space on the tower — AT&T and Sprint — had one year to vacate the premises. They are supposed to be out by Sept. 1 but have the option of staying until the end of the year if they pay the city 150 percent of the normal rent for each month they delay.

Verizon built a replacement tower in a nearby quarry owned by Mercer-Fraser but has warned it will provide only minimal coverage to the Trinidad area. Nobody seems to know what Sprint will do and AT&T came up with a temporary solution that got squashed by the Trinidad Planning Commission at its July 17 meeting.

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Friday, July 19, 2019

Huffman Helps Pass Minimum Wage Bill; Legislation DOA in Republican Senate

Posted By on Fri, Jul 19, 2019 at 1:49 PM

North Coast Congressman Jared Huffman joined a majority of his House colleagues this morning in voting to gradually increase the federal minimum wage from $7.25 an to $15 an hour over the next six years.

If approved by the Senate and signed by the president (both of which seem unlikely), the legislation would increase wages for as many as 27 million Americans and potentially lift 1.3 million families out of poverty, according to a report from the Congressional Budget Office. Known as the Raise the Wage Act, the bill has been priority for the Democratic Caucus and passed the House on a 231-199 vote with just three Republicans supporting it and now heads to the Senate, where Majority Leader Mitch McConnell (R-Kentucky) has said he will not take it up.

Jared Huffman. - CONGRESS
  • Congress
  • Jared Huffman.
McConnell and other Republicans have referred to the bill as a "job killer" that would depress the economy. The CBO report did find that the bill could lead to a "decline in employment of as many as 1.3 million people."

The Economic Policy Institute, a nonprofit, nonpartisan think tank, recently released a report noting that the United States is in the longest period in its history without a minimum wage hike since the earnings floor was created. The report notes that the spending power of a minimum wage worker is 17 percent less today than a decade ago, and 31 percent less than it was in 1968.

California's minimum wage is currently $12 an hour for businesses with 26 or more employees and $11 an hour for those with 25 or fewer workers. It will reach $15 an hour for employees of larger companies in 2022 and for those of smaller ones the following year. That means the legislation would have no direct impact in Huffman's district. In the press release, he explained that he's supporting the measure because he thinks it would give minimum wage workers a "fair shake" and be good for the economy.

“Americans who are paid the federal minimum wage, even those who are employed full-time, are not making enough money to pay rent or to support themselves or their families,” he said in the release. “That’s unacceptable and it’s unsustainable for families who are struggling to afford the basic essentials, and it’s bad for the economy. I’m glad to support the Raise the Wage Act to finally raise the federal minimum wage and give a fair shake to millions of hard-working Americans.”

Read the full press release from Huffman's office copied below and find past Journal coverage of local efforts to increase the minimum wage here.


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Coastal Commission to Re-hear Trinidad Hotel Project in August

Posted By on Fri, Jul 19, 2019 at 9:38 AM

The California Coastal Commission will again consider whether the hotel development proposed by the Trinidad Rancheria on the bluffs above Scenic Drive is consistent with state coastal protections when the commission meets in Eureka next month.

On June 12, an obviously conflicted commission voted 6-3 to object to the Bureau of Indian Affairs’ determination that the project is consistent with the California Coastal Act, largely due to questions surrounding where the hotel will get its water from. The rancheria has asked that the city of Trinidad supply water for the proposed 100-room hotel adjacent to Cher-Ae Heights Casino but the city has not yet committed and has several studies underway to determine whether the city’s water source — Luffenholtz Creek — has sufficient capacity to meet the city’s current and future needs along with those of the hotel.

An artistic rendering created by the Trinidad Rancheria of what its proposed Scenic Drive hotel project would look like from Trinidad Bay. - TRINIDAD RANCHERIA
  • Trinidad Rancheria
  • An artistic rendering created by the Trinidad Rancheria of what its proposed Scenic Drive hotel project would look like from Trinidad Bay.


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