Tuesday, May 31, 2011 • City wants answers about historic hotel building

Publisher’s note: This story originally appeared in the Tuesday, May 31, 2011 edition of the Lassen County Times.

It’s been more than a year and a half since the Hotel Mt. Lassen has had a customer walk through its door, a fact the city of Susanville would like addressed.

City councilmember Cheryl McDonald asked  at the council’s May 18 meeting if there was anything the city could do with the Hotel Mt. Lassen.

City Planner Jared Hancock said he and City Attorney Peter Talia had been trying to get in contact with current owner Ray Michaels, whom Hancock said was currently residing in Hawaii.

According to Fire Chief Ted Friedline, the building has been closed since roughly the beginning of December in 2009.

“It is in bankruptcy,” said Talia. “Frankly, from my limited bankruptcy experience, I don’t see a bright future for that owner in bringing back that hotel right now.”

Talia and Hancock both confirmed Michaels has a debt of just over $1 million.

“In its present state, I can’t imagine that hotel being worth more than $300,000,” Talia said. “That thing is upside down and deeply underwater, financially.”

Hancock said the building has been in disrepair for a long time now, bankruptcy had to be declared because the owner was defaulting on notes.

“They listed the value of the building at over $4 million,” Hancock said. “Which a lot of times the courts will see that as potential to restructure (during Chapter 11 bankruptcy), but being that the real value is much less than that, it just gets caught up in chapter 11 until it becomes a real bankruptcy and liquidation, which is a chapter 7.”

Hancock said one of the reasons why the city had continued looking into what was happening with the building was because of the reports of items being stolen out of the building.

“Copper piping from the water pipes and stuff like that was being taken and recycled to generate some cash.”

Hancock said the city had left multiple messages for the property owner, and he has been in contact with a caretaker for the building. He said one of the only positive issues was the paper put up in the windows facing the street to prevent people from looking in. Hancock said the local caretaker wasn’t going to work on anything until money became available, since he wasn’t currently receiving any payment.

Mayor Lino Callegari wanted to know if Friedline could do any kind of inspection on the building to see if it there was a safety or hazard violation.

“There’s really no reason for us to go inside the building at this point,” Friedline said. “It’s not being used for the public. The sprinkler system inside is down, I wrote them a letter saying if they have a fire, they will be billed for suppression cost.”

Talia said the most likely scenario would be that creditors would eventually go after the building.

“The creditors are going to finally apply to the court probably to convert it or to get leave so they could foreclose,” Talia said. “It’s almost laughable that it’s listed as a $4 million building, but it’s like (Hancock) said, the court sees that. It’s not worth a tenth of that.”