boulder city:

Historic hotel falls short in $135,000 bailout bid

City Council member abstains during 2-2 vote because of conflict

By Jean Reid Norman (contact)

Monday, July 6, 2009 | 8:51 p.m.

Boulder Dam Hotel

You need to upgrade your Flash Player

City money could rescue historic Boulder Dam Hotel (6-30-2009)
Visitor slowdown has historic Boulder City hotel needing money (6-29-2009)
How many walk LV Strip? Mobile message deliverer now knows the answer (6-26-2009)
McCarran passenger declines running parallel to capacity cuts (6-26-2009)
Six questions for Rossi Ralenkotter (6-25-2009)
Visitor volume still down - but only by 2.9% (6-12-2009)

Map of Boulder Dam Hotel

1305 Arizona Street, Boulder City

Boulder Dam Hotel

The Boulder Dam Hotel failed in its attempt to get a bailout from the Boulder City Redevelopment Agency on Monday after one of the RDA board members abstained because of his past involvement with the hotel.

The vote to provide the historic Boulder Dam Hotel a loan to keep it afloat through the summer was 2-2, a vote short of a majority. Mayor Roger Tobler and Councilman Cam Walker supported the motion, and Councilman Travis Chandler and Councilwoman Linda Strickland opposed it. The City Council members sit as the RDA board.

The request was for a gift of $135,000, but Walker moved that the RDA start with a $40,000 loan at 5 percent interest.

The board of the nonprofit Boulder City Museum and Historical Association, which owns the hotel, will meet Wednesday to determine what to do next, General Manager Roger Shoaff said after the meeting.

City Councilman Duncan McCoy disclosed that he is a former board member for both the Boulder City Museum and Historical Association and the Boulder Dam Hotel Association, which raised money for the hotel’s renovation. He continues as a dues-paying member of the historical association, he said, and he recently donated money during the hotel’s emergency fundraising drive, which brought in $15,000.

City Attorney Dave Olsen advised McCoy to withdraw from the discussion and abstain from the vote, saying state law requires it when an official’s past involvement in a group is likely to affect an ordinary person in a decision.

McCoy said after the meeting that he feels strongly the RDA should support the hotel, built in 1934 and host during its heyday in the 1930s and 1940s to movie stars, millionaires and heads of state.

“It is a cultural icon second only to the dam,” he said. “It has got to be healthy for local businesses to thrive. It has got to be healthy for the residents of Boulder City to enjoy the culture of this town.”

The hotel sank into financial crisis this year, when the recession pulled occupancy rates from above 68 percent to 57 percent this year, Shoaff said.

He expects occupancy to fall below 50 percent in July and August. The hotel has missed two mortgage payments and has insurance and utility payments due, Shoaff told the RDA members. It needs $30,000 immediately to catch up on bills, he said.

The $135,000 would ensure the hotel’s viability until next June, he said.

The historical association had asked for a disbursement from RDA funds that would not have to be repaid, but Community Development Director Brok Armantrout suggested instead the RDA offer a no interest or low-interest loan with repayment deferred for five years.

A third option, Armantrout said, would be for the city to buy the hotel.

However, he noted, the city was a part-owner of the hotel until 2005, when it sold its share to the historical association. The City Council first had to lift a deed restriction on property the association owned to allow its sale to the Boulder Dam Credit Union.

“At that time, we were viewed as the money tree. Whenever the hotel needed money, it came to the city,” Armantrout said. “The city is not in the position nor do we have the desire to be the money tree.”

Chandler and Strickland questioned whether the state law governing redevelopment authorities allows the RDA to provide money for operations and mortgage payments.

City Manager Vicki Mayes said the way the city’s RDA is structured allows it through the special projects account, which has also provided money for the Boulder City Tourism Commission, but both council members maintained that they did not think it was legal.

Strickland also asked whether the Boulder Dam Credit Union, which holds both the first and second mortgages for a total of $914,000, had been approached about restructuring the loan.

Bill Ferrence, the credit union’s manager, is also president of the historical association’s board of directors. He has offered his resignation to the historical association board because of the conflict, board member Rod Woodbury said, but the association board asked him to remain in the position until the credit union faces the decision of whether to foreclose.

At that point, he will have no choice, Woodbury said. Ferrence is also related to hotel managers Roger and Roseann Shoaff. Woodbury said the board hired them to manage the hotel before Ferrence rejoined the board.

Ferrence has said he has no say on whether to restructure the loan: That decision is in the loan department’s hands and he will not get involved, Woodbury said. It is hard to get lenders to renegotiate terms until a notice of default has been issued, he said.

The association also has approached some wealthy members of the community for help, Shoaff said, but those people said it was a difficult time for them to help, because they were not sure, given current economic conditions, how much they were worth.

The entire operation, which includes hotel, restaurant, office leases and museum, brings in gross monthly revenue of $55,000 to $70,000, depending on the month, Shoaff said. The association has seen its annual grants from the county reduced from $80,000 in 2005 to $27,000 last year. The county has said there may be no grant money available this year, Shoaff said.

Chandler asked whether a bankruptcy reorganization would be possible. Shoaff said it is difficult for a nonprofit group. Mimi Rodden, former state historic preservation officer who worked on the hotel renovation before moving here 15 years ago, said the hotel has been through many owners, none of whom had workable business plans for a historic hotel.

“I have worked on the hotel, gave a great amount of time, energy and money, and I have not seen it improve very much,” she said. “We need a business plan that is well understood — and by professionals, not just a group of friends.”

Resident Goldie Begley said she would hate to see the hotel close and return to its disheveled state before the current renovation.

“Many times we’ve gone back to zero with the hotel, with the downtown area,” she said. “I think we’ve backslidden again, but I hate to see us go back to zero. The merchants downtown need it.”

CORRECTION: This story was updated to clarify the terms of the proposed RDA assistance. | (July 9, 2009)

Discussion: 10 comments so far…

By bdover

7/6/09 at 9:50 p.m.

Suggest removal

There's a great article in the Arizona Republic about how 70% of the hotels in the Phoenix area are in trouble. Way behind on mortgages and expenses. The point is that people are not traveling and they're not spending. So of course now a Boulder City hotel is hurting, and the thought that public money should be expended to get the hotel through next June is very questionable. Do we really think that the economy will be improved by then? If so, give your own money to the hotel. Look at Lake Las Vegas-the City of Henderson foreclosure disaster. They wasted 33 Mil developing it-do you want to bet they'll ever get back all the money? No way...
By rejco100

7/6/09 at 11:32 p.m.

Suggest removal

The ONLY THING HISTORIC about this hotel is its HISTORIC FAILURE as a hotel!
By rejco100

7/6/09 at 11:33 p.m.

Suggest removal

Turn it into a "Ranch" and the money will be flowing in no time.
By neiman1

7/6/09 at 11:58 p.m.

Suggest removal

Raise taxes and give the money away. That always helps.
By cpo

7/7/09 at 7:45 a.m.

Suggest removal

Okay lets review. The manager of the local Credit Union that owned the hotel, now owns it through a so called non profit. The First and Second mortgage were made from his Credit Union. The managers are his relation. One of the councilmen Cam Walker's election campaign was ran by the manager of the Credit Unions son, yet he didn't abstain. Hello ! There is something wrong here....
By shreklover

7/7/09 at 1:56 p.m.

Suggest removal

The hotel is owned by a non-profit group, we're not talking about Motel 6 here folks. Did you ever see it when it was run down?
Is there anything in Boulder City that we can ALL support?
By simplyhadenough

7/8/09 at 3:14 p.m.

Suggest removal

hmmm...let's see... if you put some idea forward and it could help Boulder City or the city's image or otherwise be productive or positive in the grand scheme of things, you can be completely assured that Council members Strickland and Chandler will do something to either end it, change it, debate it, or argue against it, ending any chance of it working. I just wish they (Chandler and Strickland) were better at their real occupations (lawyer/attorney) so they had something else to do with their time than to continue to screw up our town. Any idea why voters hear their names mentioned and instantly the word "RECALL" appears in their mind?
By simplyhadenough

7/8/09 at 3:23 p.m.

Suggest removal

hey cpo,

don't you know about the 80/20 rule? 80% of the good around our town comes from 20% of the people, while the other 80% contribute VERY, VERY LITTLE, including only a few of which even vote. hence the 40% voter turnout recently.

oh yeah, except for the 80% of the most useless whining that comes from the most useless 20% of the population...
By simplyhadenough

7/8/09 at 8:33 p.m.

Suggest removal

hey mormonssuck,
if you actually paid taxes, you might have something to complain about. once again, your idea of railing on religion instead of being constructive and rational, just goes to show your lack of intelligence. It does, however, show that if you're going to be an idiot, at least you might as well be consistent.

« Previous Ten Next Ten »

Live chat: Tuesday, noon PST; Chat with Krista Creelman; Problem Gambling Center executive director Krista Creelman will answer questions about gambling addiction from Las Vegas Sun readers from noon to 1 p.m. Tuesday, Nov. ... Submit question