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Tuesday, June 10, 2008 

At Berryessa, resorts begin to close, owners angry, future uncertain

By JENNIFER HUFFMAN, Register Business Writer

Normally by this time of year, Rancho Monticello Resort at Lake Berryessa would be gearing up for months of family fun. Instead, owner Bob White is packing up and preparing to close shop. His contract to run the facility expires June 15.

White is one of four lake concessionaires given deadlines from the U.S. Bureau of Reclamation to end operations and move out over the next three months. Lake Berryessa, which hosts an estimated 1.5 million visitors each year for boating, water skiing, camping and more, is in for a very different kind of summer.

“The whole lake is in limbo,” said White.

click for larger map

The closures stem from a June 2006 decision by the Bureau ordering the removal of approximately 1,300 privately owned trailers from the seven lakeside resorts. All of the contracts to run the resorts, 50-year deals between the federal government and the concessionaires that expire over the next several months, were put up for bid.

In April, federal authorities awarded Arizona-based Pensus Group the contracts to operate five concessions at the lakeshore. But as of this week, Pensus hasn’t signed any contracts, leaving many resort owners wondering when, or if, new facilities will open.

“Not only are we in limbo, so is the public,” said White.

Bureau of Reclamation officials are confident the deal with Pensus will be struck soon, and the lake will begin to take on new life with updated facilities and operations.

“We’re working very hard with Pensus to get a contract signed as soon as possible,” said Pete Lucero, acting public affairs officer for the Bureau of Reclamation in the mid-Pacific region. But Lucero was not optimistic about completing one by June 15.

“The next (deadline) is July 13,” he said. “We are hoping to hit that date to have a contract in place. We are trying to make this as smooth a transition as possible, but there are a lot of issues to deal with in a contract like this.”

Lucero said the Bureau sees a “bright future” for the lake, with a wider range of overnight amenities, access to the lakeshore and recreational opportunities.

Jeremy Crotts, vice president with the Pensus Group in Arizona, said, “We are currently in negotiations with the BOR on that project and as a result are unable to comment on anything. We’re hoping to have a contract settled as soon as possible.”

Uncertainty at the shore

While the timing of the deal is uncertain, one thing is clear. Between the time when each resort closes and the new vendor takes over, “There will be no recreation within those concession areas,” said Lucero. “If we don’t have a contract in place there will be no one to operate the resorts.”

Without new contracts, visitors are unable to make reservations beyond the end dates of the present contracts for four out of the seven area resorts: Putah Creek, Rancho Monticello, Spanish Flat and the Berryessa Marina.

“There may be some reduced level of overnight camping and RV sites because of the potential closure of the four westside resorts,” said Lucero.

“However, Reclamation is working on a plan to provide some expanded amenities at their own managed facilities at Oak Shores and Camp Berryessa as well as working with the three existing contractors (with) contracts that don’t expire this summer “Steele Park Resort, Markley Cove Resort and Pleasure Cove Resort” to provide additional overnight recreational opportunities,” he said.

“We’re really working to try and minimize the disruption by trying to provide additional services at other locations.”

At Rancho Monticello, by this time of the year White would have normally booked 12,000 visitor days or two-thirds of his summer season. But with his June 15 closure date, “We were only able to book a couple hundred,” said White.

White’s afraid the new Pensus concessions will take years to develop. In the meantime, his resort is empty, “And it looks like a war zone,” he said.

Forced to remove the longstanding trailers and other improvements, only concrete pads, posts, stairs and patios leading to nowhere remain.

“There are a lot of unanswered questions” about the handover, said White.

He’d like to know who will pay for security for the property to prevent vandalism of his employee housing and other improvements after he moves out. Pensus was awarded the bid, he said, “but until they sign a contract with the Bureau they have no obligations.”

Lucero responded, “We are working on a strategy to provide some level of security for the property. It could include patrols, working with the existing concessionaires to provide their own security, or providing a security service. We need to determine what will fit best.”

White also expressed concern about his workers.

“In the record of decision the Bureau promised preferences for current employees to be hired by the new (operators). But I have to remove all the employee housing,” said White. “Which means the employees will go away.”

His biggest question is “When is (Pensus) going to sign?”

White is also concerned that Pensus may delay signing a contract due to a lawsuit filed in federal court on behalf of four current concessionaires.

“We would like a smooth transition and are not getting one,” said White.

Lucero said unsigned contracts have “nothing to do” with the current resort owners’ lawsuit in Washington, D.C., said Lucero.

‘People were not prepared’

Rich Delaney, partner at Spanish Flat Resort, must shut down operations by July 13 and remove all his permanent facilities.

“That is a monumental job,” he said, referring to buildings, roads, parking lots and a sewer treatment plant. “We’re scrambling around trying to answer the request,” he said.

Delaney was also wishing for a smoother handover. “I’ve never seen anything quite as unorganized,” he said. “I would like to find our employees a job but at this point we don’t even know there will be a new operator.”

Delaney, a partner in the resort since 1989, said normally by this time most summer reservations would have been booked, especially in the resort’s travel trailer park.

“But we’ve had to tell everyone to remove their trailers. It’s pretty much a ghost town.”

Heavy moving equipment has displaced the trailers, many now in Dumpsters or carted away.

“People were not prepared. Maybe they didn’t really think it would come to this,” said Delaney.

“It’s a fiasco,” said Spanish Flat Resort partner Jim Kenney. “The deal with the new concession owner should have been resolved a year ago. These negotiations should have been done prior to the fact, not after the termination date of the lease,” he said.

A summer closure “screwed us,” he said. With a number of new cabins — now 23 total — and 24 fishing tournaments planned, “This year would have been our best year,” said Kenney. Instead, “We are down to 30 trailers, from 200 and a waiting list.”

If he hadn’t faced closure, Kenney estimated $2.2 million in gross revenue for the year.

Instead, the resort has cut off reservations as of July 13. After that, “We don’t know what’s going to go on.”

“Where else have you got a lake where you can go fishing, boating and camping, that’s within 90 minutes of the Bay Area?” asked Kenney. “A lot of this is just an absolute waste.”

Lucero said the bureau is working to handle all the concerns of the departing concessionaires, while also setting the stage for a revitalized lakeshore. Things will come into focus, he said, when the contract with the new operator is signed.

“Contractor-designees are coming in to make some major capital improvements and provide an expanded level of service and an unprecedented level of access to the general public,” said Lucero. “That development will take place over the course of the next few years with development beginning almost as soon as we have contracts signed.”