Investors spending millions to develop Calistoga resorts
CALISTOGA - On ground once owned by millionaire pioneer Sam Brannan and former governor Leland Stanford, John Merchant highlights both the history of his family’s Indian Springs Resort and the 75 new lodging units that his family just opened near the heart of Calistoga.
Part of what links those bygone leaders with the new Mission Revival rooms and cottages are the property’s age-old geothermal features, including a geyser that Merchant estimates could continuously shoot a five-inch column of scalding water 50 feet into the air.
“It’s the mother lode of water,” said Merchant. He pipes and captures that unending, mineral-tinged flow to fill the resort’s Olympic-sized pool and to supply its spa and mud baths.
Indian Springs’ $23 million expansion is the latest milestone in the efforts of Calistoga’s civic and business leaders to bring in more visitors willing to pay $300 to $1,200 a night in a town where Wine Country and spa culture intermingle. On the drawing board are two luxury resorts, one that the Four Seasons hotel chain reportedly will manage, and a second that was recently purchased by one of Hong Kong’s wealthiest families with a history in lodging properties.
“We’re shifting to more emphasis on the high-end, luxury tourists,” said Calistoga’s City Manager Richard Spitler.
The new direction was hammered out in familiar small-town fashion, with contentious civic meetings and two separate ballot measures in which Calistoga voters approved the two upcoming projects.
But the genesis of the efforts is ascribed partly to desperation and a widespread belief that the town of 5,200 could no longer muster the money needed to pave roads, replace aging sewer lines and pay police and other city workers.
What’s unique about Calistoga, a town with about 17 spas, is that slightly more than half the city government’s general revenues come from lodging taxes. That amounted to about $4.75 million last year.
But in the Great Recession the bed taxes plunged, dropping to $2.75 million in 2009.
Four years ago Calistoga’s general fund reserves contained barely more than $17,000, officials said. In the worst of the downturn, the city laid off more than a dozen workers as part of painful budget cuts.
“Our town was headed toward bankruptcy,” recalled City Councilman Jim Barnes.
In contrast, this year the reserves are expected in July to contain $4.3 million. Some of those funds came from $3.2 million that the two proposed resorts already have prepaid in development impact fees.
Even more striking, Spitler estimated that in five years the total of new taxes from Indian Springs and the two resort developments could amount to $7.6 million a year - roughly doubling the current general fund budget.
“The resorts really represent long-term security and some degree of peace of mind,” said Michael Dunsford, a council member and owner with his mother Rosie Dunsford of the Calistoga Inn. As a business owner, he said, the extra bed taxes and visitors will provide “some confidence that our local economy is going to remain strong looking forward.”
Calistogans seem to relish certain off-kilter aspects of their heritage. It’s not every civic booster who calls his town’s first citizen a “drunken, thieving” founder. But that’s how Chris Canning, both the town’s mayor and the head of its chamber of commerce, described the mercurial Brannan.
Similarly, Canning happily noted that the town’s name may be unique among American cities because “it means absolutely nothing.” History says that an inebriated Brannan once tried to declare that he wanted to make the town the Sarasota Springs of California, but instead it came out “the Calistoga of Sarafornia.” The name stuck, and today the town even boasts a Cafe Sarafornia.
But residents took seriously the debate about Calistoga’s future, including how to best pay for an estimated $60 million in long-deferred maintenance projects that need to be addressed in the next decade.
Some called for diversification and the attraction of new businesses, perhaps manufacturing. But Canning, the former manager of the shuttered Calistoga Mineral Water plant on Silverado Trail, said manufacturers would be hard to bring in because of the relatively high cost of production there.
Instead, he and other civic leaders favored sticking with the sector that the town was founded upon: lodging and resorts.
“This is our industry,” he declared.
A little more than four years ago the council hired Spitler as city manager. He has lived in Calistoga over a quarter century but for most of those years he worked for other small cities in Sonoma County. Among them was Healdsburg, where as a planning and redevelopment official he helped bring to completion the Hotel Healdsburg, a key ingredient in the makeover of that town’s square and environs.