KELSEYVILLE – Lake County's premier entertainment venue is closing its doors.
Konocti Harbor Resort & Spa will shut down temporarily but indefinitely on Nov. 11, with an estimated 700 employees to be affected by layoff, according to a notification the resort gave local officials.
The resort also has been listed with a local real estate broker for $15 million.
The Tuesday announcement was greeted with concern by local business and government leaders.
“It's a shock but we've known for a long time that it was a tremendous possibility,” said Lake County Chamber of Commerce Chief Executive Officer Melissa Fulton.
Upon receiving the news Tuesday county officials immediately swung into action, holding an afternoon meeting to discuss how to respond to the closure of the resort, which has been a significant employer and tourism draw over the years.
Reasons for the closure so far have not been publicly disclosed. A public announcement is expected some time on Wednesday.
Greg Bennett, the resort's president and general manager, said he had no comment on the closure.
Bennett referred inquiries to Jim Bishop, managing director of the Boca Raton, Fla.-based WhiteStar Advisors LLC, an asset management company that was put in charge of overseeing the resort following a federal lawsuit that was settled in 2007.
Bishop could not be reached for comment on Tuesday.
Because of the resort's large number of employees it was required under state and federal Worker Adjustment and Retraining Notification (WARN) law requirements to notify local officials about the layoffs.
The California Employment Development Department reported that WARN laws require employers to give 60 days advance notice to state and local officials about a mass layoff.
In the letter issued to local officials on Tuesday, Bishop said the resort's closure was temporary, but also indefinite, and outlined the hundreds of anticipated layoffs.
“We recognize the important role this facility has in the county’s economy,” said County Administrative Officer Kelly Cox, who confirmed the resort is one of the county’s major employers and one of its largest tax-revenue generators.
District 5 Supervisor Supervisor Rob Brown, whose district includes the resort, said county officials are in communication with Bennett and WhiteStar Advisors in an effort to come up with alternatives to see that the resort remains in operation.
“The impact of a closure of the resort will be felt not only by the employees and their families, but by all of us in the community,” Brown said. “These are our friends, colleagues and neighbors.”
Fulton noted that losing the significant amount of transient occupancy tax – or bed tax – revenue the resort generates will be a major hit to the county.
Joey Luiz, president of the Clear Lake Chamber of Commerce and a former resort employee himself, said he's deeply concerned about the closure and the impact it will have on the county's business climate.
“I do not believe any sector of our local economy will go unaffected by the closure,” he said, noting that in these already hard times, the loss of the resort's jobs will be “disastrous” for the county.
The county has formed a working group of local officials and community leaders to help facilitate a transition for the resort’s employees to be able to easily connect with all available resources and services to find new employment during this temporary transition.
Concerns for employees, economy
Based on a comparison of estimated unemployment numbers for July, the addition of 700 unemployed workers could raise the county's unemployment rate from 15 percent to 18 percent in the short-term.
The impact of the resort's closing on the local business community is expected to be substantial and long-term.
While many concert-goers stay at the resort itself, others stay at many of the area’s smaller resorts, motels, vacation rentals and inns around the county, officials reported. These visitors shop in local stores, eat in local restaurants, buy wine at local tasting rooms, rent boats from local marine businesses, and buy fuel from local gas stations.
WhiteStar listed the resort with Marsha Holder of Coldwell Banker Towne & Country about two weeks ago, after a year of working on the listing, she said Tuesday.
Holder said the asking price for the resort is $15 million, about $10 million less than a sales price mentioned for the resort in federal court documents in 2007.
The $15 million price tag includes the entire entertainment, resort and spa businesses on 90 acres, said Holder, noting that an additional 12 acres was donated for Camp Konocti, a children's camp that has bee operated for the children of union employees for decades.
The listing is good for a year, and Holder is optimistic it will sell in that time.
“We've currently got several interested parties so it should sell right away,” said Holder.
Holder said that interested buyers from around the world are looking at the lakeside resort. “It's been fascinating the interest we've had,” said Holder.
Resort has faced challenges
For years Konocti Harbor Resort & Spa – the only full-service lakefront resort in Lake County – has drawn thousands of visitors who came to enjoy headline concerts featuring top-name entertainers in both its outdoor amphitheater and indoor showroom.
However, in recent years, the resort also faced challenges.
In 2004, the US Department of Labor filed a lawsuit against Local 38 of the United Association of Plumbers, Pipefitters and Journeymen, whose Convalescent Trust Fund, Lakeside Haven, has owned Konocti Harbor since 1959.
The Department of Labor suit alleged that Local 38's current and former 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, as Lake County News has reported.
The suit, which settled in 2007, ordered the union to repay the trust funds through proceeds earned from selling the resort. At that time, Page Mill Properties of Palo Alto had been involved in a possible purchase for $25 million, but the sale fell through.
Previous to that, developer Darius Anderson of Kenwood Investments had considered purchasing the property and had approached several local Indian tribes over a proposal to operate the resort as an Indian casino.
However, Brown led an effort to have the Board of Supervisors pass an anti-gaming resolution related to the resort in February of 2007, with Anderson pulling out of the deal after that resolution was passed.
The board rescinded that resolution in July of 2008 – Brown was absent for the vote – at the request of Bennett, who asked them to be open to any and all potential buyers for the resort, which Bennett called one of the county's greatest assets.
Holder said the resort has no liens on it, and has to be purchased outright, as the owners can't carry it because of the terms of the settlement with the Department of Labor.
Fulton said many people are hoping there is a way to resolve the situation to keep the resort open.
With the price lowered, it's now crunch time, said Fulton, noting it will take several million dollars to make the resort viable again. But she wants to see it continue to bring shows and major entertainers to the area, which she said has been a saving grace for Lake County.
She added, “If people are honest with themselves, it's up to everybody in this county to figure out a way to keep that place open.”
E-mail Elizabeth Larson at
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