SHIFTING GEARS
Chauvet goes rental
Glen Ellen hotel conversion to condominiums becomes 'victim of bad timing, bad market'
Christine Hansson, managing partner of Chauvet Hotel in Glen Ellen, says the downturn in the housing market has forced the property's investors to rent out the luxury condominiums in the converted landmark.
JEFF KAN LEE / The Press DemocratPublished: Friday, February 29, 2008 at 3:29 a.m.
Last Modified: Friday, February 29, 2008 at 4:52 a.m.
The restored Chauvet Hotel is returning to its roots as a destination for Wine Country travelers.
Unable to sell the luxury condominiums it built within the century-old Glen Ellen landmark, an investment group has turned the condos into rentals for well-heeled vacationers.
The housing market's sharp downturn left investors with little choice, said Christine Hansson, a managing partner for the ownership group.
"This is a total fallback to keep the project out of foreclosure. They are going to be used as vacation rentals until the market improves and we can sell them," she said.
For $595 per night or $3,200 a week, travelers can stay in one of the six units beginning in mid-March.
Reservations are being made, mostly for summer and early fall so far. The owners should expect 50 percent occupancy on average, said Kristi Jeppesen, a Glen Ellen vacation rental property manager marketing the Chauvet Hotel.
"I think that would be a reasonable goal in the first year. There's definitely interest," Jeppesen said. "There's nothing out there like this."
Tourism traffic has remained steady despite the struggling local economy, with hotel occupancy up and room rates rising.
Even with the addition of several hotels the past several years, the county's hotel occupancy rate was 64 percent in 2007, up 3.2 percent from 2005, according to the latest Smith Travel Research report. The typical traveler paid $122 a night for a room, up 11.9 percent from two years ago, according to the report.
"It means there's enough demand in the market to satisfy a higher rate. It seems travel remains strong," said Tim Zahner, spokesman for the Sonoma County Tourism Bureau.
Chauvet's owners are banking on vacation rentals to keep the property afloat financially in a turbulent housing market.
"To finish it, given the market, was really a labor of love on our part," Hansson said.
The owners faced a number of challenges keeping the 11-year project alive until its completion last spring. Setbacks included a roof cave-in, and the declining real estate market ended hopes of selling the units anytime soon.
There was little demand for condominiums priced from $1.15 million to $1.37 million, even at nearly 2,000-square-feet each with three bedrooms, well-appointed kitchens and bathrooms, and a heated pool out back.
Prices were cut several times, reaching the $850,000 to $995,000 range. The owners called off an auction last year after few prospective bidders turned up.
"The auction didn't work; nothing worked," Hansson said. "We're holding it until we can get to a better market."
The five available condominiums have been taken off the market. Hansson and her husband own the sixth unit.
The ownership group for the other five units has changed. Larry Paul, a San Francisco architect and original managing partner with Hansson, and a handful of other investors no longer have an ownership interest, Paul and Hansson said.
The remaining owners are Hansson, her husband, Hans, and Mike Allen, the Fair Oaks general contractor for the project.
"I ran out of time and money. We couldn't hang on for the next two or three years," Paul said. "Everybody, I think, will be losing money."
Yet, Paul remains optimistic the vacation rental plan should work and the condominiums will someday sell.
"I think we had a great project and they were worth what we were asking," he said. "We were a victim of bad timing and a bad market."
That the three-story, yellow brick building is still standing reflects unyielding optimism in the potential for the county historic landmark, which is also listed on the National Register of Historic Places.
There are many vacation rentals in Sonoma County aimed at travelers who don't want to stay at a hotel, ranging from private homes and cottages to large estates. But none is quite like this.
Built in 1906, the Chauvet was a destination for travelers and a local meeting place. It was a restaurant, pool hall and arcade before closing in 1987.
The new owners originally planned condominiums and then explored converting the Chauvet into a luxury boutique inn and spa. They dropped those plans after struggling to find an interested hotel developer and facing community opposition.
Making the units vacation rentals is not the same as operating the property as an inn, Hansson said. The owners are leasing each condominium as a homeowner would rent out an investment property offered for short-term stays, she said.
You can reach Staff Writer Michael Coit at 521-5470 or mike.coit@pressdemocrat.com.
CHANGING STRATEGY
Unable to sell condos at Chauvet Hotel in Glen Ellen, the owners have decided to rent out the 6 units and expect 50 percent occupancy.
Condo prices: $1.15 million to $1.37 million
Amenities: Three bedrooms, designer kitchens and bathrooms, and shared heated pool
Rental prices:
$595 a night, $3,200
a week, starting
in March.
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