Last song for Konocti Harbor resort

KELSEYVILLE - The Konocti Harbor Resort and Spa in Lake County will close its doors Nov. 11 after years of financial and legal upheaval, wiping out hundreds of jobs and shuttering the largest concert venue on the North Coast.

The resort's court-appointed management company, WhiteStar Advisors, disclosed its plans to shutter the resort in a letter Tuesday to Lake County authorities.

The letter called the closure "temporary" but also "indefinite."

The troubled resort is one of the county's premier tourism attractions and largest private employers. Its Florida-based management company estimated 700 employees would lose their jobs when Konocti Harbor closes, according to the letter sent to the county. The local manager identified 559 workers in a separate list provided to the county. All but 100 jobs are temporary, according to a 2008 county survey.

County officials and business leaders fear the closure will send waves through the Lake County economy, where unemployment stood at 15.4 percent in July, one of the highest jobless rates in the state.

"The impact of the closure of the resort will be felt not only by the employees and their families but by all of us in the community. These are our friends, colleagues and neighbors," Lake County Supervisor Rob Brown said.

The resort, located on the shores of Clear Lake outside Kelseyville, has been listed for sale for the past two years. Currently, the asking price is $15 million.

"We need somebody to buy it," said Lake County Administrative Officer Kelly Cox.

WhiteStar officials did not return phone calls and the resort's owner - Local 38 of the United Association of Plumbers, Pipefitters and Journeymen - referred calls back to the management company.

Its letter did not cite a reason for the closure but local officials said the poor economy likely had an effect on the 58-acre resort, which features a 5,000-seat outdoor amphitheater, a 1,000-seat indoor concert hall that attracts major acts, 20,000 square feet of meeting space, and 19,000-square-foot spa.

It also includes boat docks and 255 guest rooms.

The resort, which sits at the base of Mt. Konocti, has a troubled financial history which for years fueled rumors of an impending closure and sale.

A high-powered Sacramento lobbyist and developer sought to purchase the resort in 2006 for an undisclosed amount but the deal fell through.

The resort was placed on the market following a 2007 federal lawsuit settlement, which ordered the sale. The Labor Department lawsuit claimed the union mishandled members' benefit plans by diverting an estimated $36 million into renovating and operating Konocti Harbor.

Loss of the resort will impact the county's tax revenue base and local businesses that cater to Konocti Harbor visitors.

"It will definitely impact our business," said Carol Thompson, office manager at Riviera Foods, located a few miles up Soda Bay Road from the resort.

"This is where they stop" to buy groceries, she said.

Creekside Lodge, located on Highway 29 at Soda Bay Road, also will feel the pinch. The motel is usually booked solid on concert nights, said Pamela Dias, the motel's bookkeeper.

"It's going to affect our business badly," Dias said.

But neither she nor the motel's manager were shocked by the closure because they'd heard the rumors and seen signs of trouble.

This year's concert acts didn't have the same draw as in past years and they were fewer in number, said Stacie Rose, manager of the Creekside Lodge. Some customers cancelled their motel reservations because they didn't like the available acts enough to spend the time and money to see them, she said.

The resort also is showing signs of age and disrepair. Its boat docks are warped and missing boards and old cars sit alongside the boat launch.

Rose said some of her customers had complained the resort's rooms were shabby and unkempt.

Not all area businesses are expected to suffer a significant financial hit and less competition might even benefit some restaurants.

"It might be good" for business, said Joelle Hebert, owner of the Grapevine Cafe, located up the road from the resort.

County officials on Wednesday had not yet calculated the potential loss of tax revenue. They have formed a task force to work on ways to help resort workers find new jobs and will be exploring possible options for keeping the resort open, officials said.

"We recognize the important role this facility has in the county's economy," Cox said.