California Vacation Haven Goes to Auction Today
At River Grove RV Resort on Highway 9, near Felton, Calif., RV owners find peace and quiet in the redwoods but the financially troubled park is slated for a foreclosure sale at the County Governmental Center this afternoon (July 1), according to the Santa Cruz Sentinel.
"So far it hasn't affected us," said San Jose retiree Al Hartmann, who has been coming to the park for three years in a 22-footer with his wife, Nancy. "People who own it are trying to keep it going and doing the best they can under the circumstances."
As members, the Hartmanns made an upfront investment and now pay $5 per night, a sharp discount from the going rate for the public, $45 night.
Another RV owner, a retired teacher planning a weekend reunion with his five sons, said he is paying $10 a night as a member of the Coast to Coast network, which discounts stays at hundreds of RV resorts.
For two decades, River Grove has been a haven for vacationers. For the owners, there have been headaches.
Two years ago, the eight-acre park with 200 members and 65 RV sites on the San Lorenzo River was for sale for $2.5 million, according to John Grant of Park Brokerage in San Diego.
"I have interested buyers," said Grant. "It's a great property, but it could be so much better."
The RV park's financial difficulties go back more than a decade.
In 1997, then-owner Quality Resorts of California got a $1.1 million loan from the U.S. Small Business Administration for improvements. Two years later, the SBA granted another $205,000.
Early in 2005, the company fell behind on payments and a notice of default was filed.
Later that year, the property was sold to River Grove Resort, based in Lake Elizabeth, for $2.75 million.
River Grove Resort financed the purchase with $2 million from Sonoma National Bank and $600,000 from Cedar Funding, a lender in Monterey.
Cedar Funding bought the property at a foreclosure sale for $1.3 million in 2007, a year when gas prices rose and the RV industry went into a slump and has yet to rebound.
Now Sterling Savings Bank, which acquired Sonoma National Bank in 2007, is foreclosing on Cedar Funding, which filed for bankruptcy last year.
The bankruptcy judge took the property out of bankruptcy, according to Grant, who said the foreclosure auction will wipe out the investors in second position.
"To protect their position, they would have had to make payments," he said.
Hartmann said River Grove is a bargain compared to KOA campgrounds, which charge $80 for an overnight in Watsonville and $66.50 for the Moss Landing location.
He's seen the management remove outdated cabin trailers and repave the road through the park.
"We sure do like it," he said, enjoying a view of the San Lorenzo River where his RV is dwarfed by towering redwoods. "We're hoping it stays together."