Last Tuesday, the Board of Supervisors gave Mental Health Director Kristy Kelly approval to begin exploring the purchase of a commercial resort property in Clearlake, which would be used for temporary and transitional housing for clients, as well as a center for services to the Clearlake community.
The Lake Escape Resort, located at 13885 Lakeshore Drive in Clearlake, was the subject of a foreclosure action in June.
County records show that the resort has an assessed value of $1.8 million, and was purchased by Sterling Savings Bank in care of Sonoma National Bank of Spokane, Wash., for just over $1.5 million. Over $1.6 million had been owed on the resort's loan, records show.
Kelly said she became aware that the property was available just after her department received approval for capital facilities and information technology funding from the state totaling about $759,000.
The county also has nearly $1 million in Mental Health Services Act money, which can only be used to purchase or development permanent housing for mental health system clients, Kelly explained.
Kelly said she visited the 2.1-acre property, featuring 18 cottages and a two-story owner's residence on the site, which is compliant with Americans with Disabilities Act accessibility requirements.
The county couldn't build a similar facility for the asking price, which Kelly didn't state, but which was stated to be about $1.5 million during the meeting.
“I can't imagine a better property,” she said.
But there's competition for the resort, which Kelly said is being looked at by another nonprofit from Vallejo.
The resort's zoning would allow for a variety of uses, including care facilities. But Kelly said they may not have complete control of the discussion, since it's in the city of Clearlake.
Kelly said she felt she would fail her duty to her clients and the board if she didn't tell them about the opportunity.
She asked the board for the opportunity to sit down and talk about potential terms and conditions with a view to making an offer.
Kelly said she's already met with Clearlake City Administrator Dale Neiman, who is concerned about the potential loss of $30,000 of transient occupancy tax (TOT), or bed tax, each year.
Supervisor Jeff Smith said that, from Kelly's standpoint, it would be a dream come true. For the city, it was in the top three TOT producers annually before going into foreclosure.
He said it would be a perfect opportunity for Mental Health, and he suggested the county could purchase the land and eventually flip it once the market recovers.
“It would certainly be an asset for the county,” said Kelly.
Board Chair Denise Rushing asked if there was any likelihood that the resort would begin generating TOT within the next few years. Smith said it could generate TOT immediately if the right person purchased it.
He said the county needed to buy it ahead of the outside group considering it. Smith added that if he currently was on the Clearlake City Council he likely would be against it.
Supervisor Anthony Farrington said that Clearlake has the highest population density in the county, and thinks they should explore the opportunity, as it would be good to offer transitional services there.
“I think this is a ripe opportunity for your department and the county,” he said, suggesting the services they could provide and the savings to the county will be substantial.
Farrington mentioned the value of having the Bevins Court Apartments, which serve Mental Health clients, in Lakeport.
Kelly's report to the board stated that the Mental Health Department pays $95,000 annually for rents at the Lighthouse center, which offers drop-in services and transitional housing.
“I think it's a good idea to pursue it,” said Supervisor Rob Brown.
Brown said the Bevins Court Apartments have been a model of operation. Farrington added that he's received no complaints about the complex in the nine years it has been there.
The board agreed, by consensus, to designate Kelly as the county's negotiator to explore purchasing the property.
E-mail Elizabeth Larson at
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