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A group of San Diego and outside investors is attempting to purchase Borrego Ranch Resort & Spa, formerly La Casa del Zorro, but is running into multiple snarls. The deal went into escrow and has fallen out, but the investors are still working on the purchase. "We are still interested but not under contract," says McGrory, who was San Diego city manager in the 1991-1997 period. Borrego Springs, which has experienced deep difficulties in recent years, desperately wants the deal to come together. "They [the potential owners] came in here, their backgrounds are perfect, they are the ones we want to have owning the casa," says Linda Haddock, who runs the local chamber of commerce.

In September, McGrory, who is now in the real estate business in La Jolla, was agent of service as CBJM LLC registered with the secretary of state. That entity wants to purchase the resort. Casey Brown, partner of BCL, Inc., and McGrory are among the top investors, according to documents, along with Jack Giacomini, chairman of San Diego's Hotel Managers Group. Some investors in CBJM had been sniffing around the property separately. "We have come together to form one purchase entity," says Giacomini. He knows of no other serious bidders that are familiar with the market. He says there are several clouds hanging over part of the deal. They will have to be cleaned up before title passes.

The seller would be LCDZ Investors LLC, an investor group out of Sherman Oaks that bought the resort from Copley Newspapers in late 2007 but closed it down in early 2010. It has always been stated that this group bought the property from Copley for $4.5 million. But I have come across an appraisal from 2008 indicating that the Sherman Oaks group actually paid only $2 million. Giacomini believes the number may have been $2.2 million and McGrory thinks it was between $2 million and $3 million. The sale was one of the early indications that Copley was unloading its newspaper empire, and the sale for less than $3 million suggests there was an urgency that was not widely known at that time. The appraisal report noted that the resort had "large negative cash flow" under Copley ownership.

Gregory Perlman, head of the LCDZ group, told me that the resort was losing $5 million a year under David Copley. "It was never operated for profit under the Copleys," says Brown, "although extremely well maintained." Perlman's group then used the resort as a tool for marketing the adjacent Rams Hill housing/golf course development, which has been through bankruptcy twice and is on the market once again, although having water problems. Brown would love to see the golf course back up and running for use of resort customers, if deals for both the resort and Rams Hill go through.

Another resort, Palm Canyon Resort, went into foreclosure recently, but is staying open during the process. It will be auctioned December 29. Giacomini says Borrego's nagging woes, such as Rams Hill and Palm Canyon, are not a deterrent. "We would like to restore the theme and character of the place," he says. Brown says the Internet makes the booking process more efficient. McGrory, Brown and Giacomini will not reveal the price the CBJM group is offering, but, says Giacomini, the offer "is nowhere near close" to what LCDZ was originally asking. The LCDZ investors may have put as much as $6 million to $10 million into the resort.

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Comments

SurfPuppy619 Dec. 17, 2012 @ 3:57 p.m.

"They [the potential owners] came in here, their backgrounds are perfect, they are the ones we want to have owning the casa," says Linda Haddock, who runs the local chamber of commerce.

LOL..McGrory is the one most responsible for B King the entire city an she thinks he has a "perfect" background?? She is either on the crack pipe or an idiot.

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Don Bauder Dec. 17, 2012 @ 4:09 p.m.

SurfPup: McGrory made many mistakes, but no one person was responsible for SD's economic problems. Remember, Golding was telling McGrory to rob the pension fund to pay for the Republican convention. He was in the forefront of the Jack Murphy stadium teardown that led to the Petco fiasco, but somebody with a knife was behind him. Best, Don Bauder

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SurfPuppy619 Dec. 18, 2012 @ 12:32 p.m.

McGrory made many mistakes, but no one person was responsible for SD's economic problems.

My comment was that McGrory was the "one most responsible, for this city's budget problems, as he was the fool that devised MPI and II, shorting the pension funds while RAISING the pensions sky high. McGrory was SOLEY the one responsible for conning the City Clowncil into doing those crazy deals that made NO economic sense whatsoever. I stand by my comment. If it were up to me I would have sued him personally and tried to take every penny he owned for defrauding the SD taxpayers.

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Visduh Dec. 17, 2012 @ 7:34 p.m.

Maybe not an idiot, but definitely uninformed about his dismal history.

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Don Bauder Dec. 18, 2012 @ 7:14 a.m.

Visduh: After leaving the City, McGrory got very rich working with Sol Price. In 1999-2000 he was chief operating officer of the Padres, and president of the subsidiary that that built Petco Park and nearby facilities. That raised some eyebows. Best, Don Bauder

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Visduh Dec. 18, 2012 @ 10:52 a.m.

Doubtless, he got rich, but did he do it honestly, or was it on the backs of others, usually the taxpayers? If he's successful with the former CdZ, will it be because of business acumen, or something more sinister?

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Don Bauder Dec. 18, 2012 @ 2:29 p.m.

Visduh: McGrory served as president and CEO of Price Enterprises, manager of the Price Group (specializing in residential development), and, of course, was the guy who spearheaded the building of Petco and development of surrounding real estate which allegedly put up to $1 billion in John Moores's pocket before he rode off to Texas, grinning all the way. Best, Don Bauder

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SurfPuppy619 Dec. 17, 2012 @ 3:59 p.m.

Brown says the Internet makes the booking process more efficient.

Brown is nothing more than an ex commercial RE broker form CB Commerical who does not have a clue about running a real business.................

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Don Bauder Dec. 17, 2012 @ 4:12 p.m.

SurfPup: I knew nothing about Brown until talking to him today. In any case, it appears that Giacomini will be responsible for running the resort. He has experience there. Best, Don Bauder

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SurfPuppy619 Dec. 18, 2012 @ 12:36 p.m.

A man has to know his limitations.

Every commercial broker there is wants to really be a developer, not a broker, and many do get into development if they get some $$$ backing.

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Visduh Dec. 17, 2012 @ 7:54 p.m.

It would be a great thing if these turkeys could reopen the Casa and make it a success. It will take a great deal of talent to get it on the path to recovery. If they paid more than a token sum for the place, they paid too much. I'd suggest they change the name back to Casa del Zorro. That has some uniqueness, whereas the more recent name was far too interchangeable and bland.

But those "snags" are many and most difficult to overcome. The place is just asleep, as the bankruptcy of the Palm Canyon Resort illustrates. Not even the blue-hair RV'ers could keep Borrego Springs going. "Fine" restaurants come and go. The only eateries that persist are taco joints and one respectable coffee shop. The one going concern, the Borrego Springs Resort and Spa, is an uninspired operation. I'd guess that there is potential for that property to do good things, but the management is stuck in the mire of old thinking. Beyond that, the area is jammed in reverse. It had so much potential, or so it seemed, a couple decades back. Now it is part of the county's version of Appalachia.

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Don Bauder Dec. 18, 2012 @ 7:17 a.m.

Visduh: It appears the price the investors pay for the resort will be quite low if the deal goes through. A big problem for Borrego is water. Giacomini is convinced there will be water availability through 2050, although the price will rise. Best, Don Bauder

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Javajoe25 Dec. 17, 2012 @ 9:53 p.m.

Was just out there this past week. Rigor mortis is definitely setting in. The only grocery store in town is boarded up. The big action is at the grapefruit stand at Christmas Circle. The RVer's are so desperate for something to do they're going to "the movies" at Anza Borrego State Park's Visitors Center (A Desert Year...18 minutes long). The restaurant that was next to the police station has closed. The other place, a coffee/sandwich shop a few doors away didn't even have the chili that was listed on the menu.

McGrory & Co. are going to have to do a lot more than cranking up the golf course if they expect people to come here more than once. If things keep going the way they are, the only reason people will come out to Borrego Springs is to see California's newest ghost town.

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Don Bauder Dec. 18, 2012 @ 7:21 a.m.

JavaJoe: There is no question that Borrego Springs has difficult problems. That's why officials there are so anxious to get the resort up and running, and Rams Hill straightened out. One problem has always been that it is not close to an expressway. Lack of water could one day make it a ghost town, but that is far off in the future. Best, Don Bauder

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GlennS1 Dec. 18, 2012 @ 4:34 p.m.

RE Javajoe25 eyewitness account. The grocery store is in The Center, has a new owner, and has been fixed up and modernized with 21st century equipment. The former grocery store on Christmas Circle has been renovated inside and out to become a new Art Institute and its mid-century architecture is beautiful. The town has planted desert plants in public areas along the main road. There are ample places to stay and eat. The Borrego Springs Country Club is renovated and it's new Spa is lovely. OK, maybe everyone does not like going back in time to enjoy a little nostalgia to experience a bit of what Palm Springs was like. But not that nostalgic: you can get free WIFI in Christmas Circle and at the County Library and at the Chamber of Commerce office, Cell and internet service providers have communications in the area and can keep you connected. For accurate and up to date truthful information about Borrego Springs just visit the Chamber's Web Site at: www.borregospringschamber.com And as far as hard times go, they make Borrego Springs one of the best real estate buys. Once the golf course and former La Casa are back in business you will kick yourself for not buying in when the prices were low low low.

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SurfPuppy619 Dec. 18, 2012 @ 6:41 p.m.

Once the golf course and former La Casa are back in business you will kick yourself for not buying in when the prices were low low low.

Yes that is the exact same thing RE brokers were saying from 2000-2007, get in now before it is too late :)

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Don Bauder Dec. 18, 2012 @ 10:02 p.m.

SP: But suppose you are not interested in playing golf at a championship course or in eating occasionally at a refurbished resort? You can get some good housing bargains. Borrego is a good place to live, at least part of the year. But commercial real estate is shaky and there is a long-term water problem. Best, Don Bauder

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SurfPuppy619 Dec. 19, 2012 @ 4:39 a.m.

It is out in the boonies, no one is going there, or not enough people needed to make the numbers work. It is simply a bad location at a worse time. If it didn't work during the free spending 2000-2007 years it won't work now. I don't know what the deal will go down at-I guess if it is rock bottom then maybe, but I doubt they will get the property at a price that can make it work financially. Just an opinion.

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Don Bauder Dec. 19, 2012 @ 6:50 a.m.

SP: We are talking about two different things. Borrego may have too many strikes against it to succeed as a resort location. But as a residence location, it is perfect for many people, partly because it IS in the boonies. (And prices are low.) Best, Don Bauder

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Don Bauder Dec. 18, 2012 @ 9:58 p.m.

GlennS1: JavaJoe is free to defend himself. This blog item was about commercial real estate. Actually, I believe there are very good bargains in residential real estate in Borrego. You just have to watch out for con artists and asset flippers, who have dominated Borrego real estate for far too long. Best, Don Bauder

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Javajoe25 Dec. 19, 2012 @ 9:10 p.m.

Well, the way I see it, Borrego Springs is like the "Little Engine that could," except this little engine just can't seem to quite make it over the mountain. I've seen some real huff and puff and running starts aimed at bringing Borrego Springs back to life, but it's always up, up, and....down. I think Don hit on it when he pointed out that it's a long way from a main highway. That means mostly "destination traffic." For anyone other than desert rats like myself, there just is nothing there.

The golf set prefers not to get their shoes dirty, so they are not interested in seeing the mountain sheep up in Palm Canyon. And those metal statues out on the mesas are great for a quick photo op, but once people get on the road, they liable to shoot out to the Salton Sea and that will be the end of anyone thinking there's a great future in desert real estate.

I don't know how I missed those grocery stores. Maybe better signage would help. Believe me, I'd love to see Borrego Springs experience a big economic bounce but there just has to be more and better reasons to go there.

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Don Bauder Dec. 20, 2012 @ 7:23 a.m.

JavaJoe: Without question, Borrego has had its fits and starts in development. Rams Hill has been in bankruptcy twice. The old Casa del Zorro is now closed. Perlman's investment group lost a bundle and left a mess behind. But Borrego Springs is charming. I, for one, like its remoteness, but that doesn't mean I would invest in a luxury resort there. Best, Don Bauder

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Dan Dec. 21, 2012 @ 2:54 p.m.

Its true that Borrego Springs is a very difficult place to do business, mostly because of the very seasonal nature of the place. Its very warm here in the summer so many people plan to be elsewhere from about June through September.

Those who drive through and don't take the time to see what's really here are doing themselves and our town a disservice. Located as it is in the largest contiguous state park in the nation (Anza-Borrego Desert State Park), it is and will remain a remote location. But that is part of the charm for those love to be close to nature and dislike traffic, crowded cities and polluted air.

The State Park Visitor Center is a must-see attraction, with a wonderful natural history museum and a fascinating botanical garden.

The Anza-Borrego Foundation advocates for the State Park, and also sponsors hikes, seminars, lectures and workshops, and also operates their "State Park Store" where all things Anza-Borrego can be found.

Our town has a thriving community of artists and art galleries. Check out the newly remodeled Borrego Art Institute, Liesels Art Studio, The Matson Gallery, and The Galleria at The Palms at Indian Head Hotel among others.

We have an amazing Performing Arts Center with a full slate of plays, concerts and lectures each season. The Anza-Borrego Desert Natural History Association (ABDNHA) has a wonderful Nature Center and also sponsors hikes, lectures and programs for visitors and residents alike.

And while its true that some of our lodging purveyors and residential developments have struggled, isn't that the case with most all localities during the last few years? Some other tourist-based businesses are thriving, such as the Borrego Valley Inn, The Palms at Indian Head, and California Overland Desert Excursions.

Borrego is also home to one of the finest RV resorts in North America, The Springs at Borrego RV Resort. It was named National Small Park of the year for 2009-2010, and just this year expanded with 53 new sites.

So if you come to Borrego, please take a little time to get to know our town. Don't dismiss us as having nothing to offer because you drove through at 45 miles per hour and didn't see much.

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SurfPuppy619 Dec. 22, 2012 @ 12:31 a.m.

And while its true that some of our lodging purveyors and residential developments have struggled, isn't that the case with most all localities during the last few years?

No, that is not the case, Borrego has ALWAYS been a white elephant..........and it won't change for at leats 15-20 years

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Dan Dec. 22, 2012 @ 2:12 p.m.

Borrego is not for everyone. We kind of like it that way.

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pjp Jan. 30, 2013 @ 3:19 p.m.

Mr. Bauder, I was wondering if you knew about the current developer's plan to "resurrect" Rams Hill and its golf course? Mr. Berkley recently made a presentation to the Rams Hill HOA in a bid to get the homeowners to - literally - buy into his plan.

It is yet another in a long line of grandiose schemes, which I believe has the potential to impact Rams Hill residents negatively in the long run. I hope that Rams Hill owners will not vote for this proposal because they buy into his claims that his project "will double the value of home prices within 6 months of the golf course opening."

This claim is highly suspect and doubtful, and there are many pitfalls to his proposal that need to be thoroughly examined by the Rams Hill homeowners. In my opinion this developer is another carbon copy of Perlman - big on talk. The danger this time - is that the residents will be liable financially if he doesn't succeed.

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GlennS1 Feb. 6, 2013 @ 9:29 a.m.

The homes, and neighborhoods are very well kept still.

One pretty much needs to own property there because it is where you want to be, part or full time, not for real estate investment.

Rams Hill is pretty much like The Best Exotic Magnolia Hotel movie. Rams Hill has it's own cast of unique characters who come and go, and some who stick with it against all odds. You buy more than property when you become an owner at Rams Hill; you become part of a small unique community, with all the dimensions of a small town.

From the movie:

Evelyn: Nothing here has worked out quite as I expected. Muriel: Most things don't. But sometimes what happens instead is the good stuff.

Evelyn: There is no past that we can bring back by longing for it. Only a present that builds and creates itself as the past withdraws.

Or as re-quoted by "Sonny" in the movie:

“Everything works out in the end. if it hasn't worked out yet, then it's not the end.” ― Tracy McMillan, I Love You And I'm Leaving You Anyway

Rams Hill will endure because the current and future cast (owners) will stay, pass on, or leave, just like in any town. It's smallness, relative isolation, and incomparable location are what make it irresistible to some, and impossible to others.

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GlennS1 Feb. 6, 2013 @ 9:35 a.m.

Update. The Casa La Zorro escrow has closed. There is a new owner that has money and is going to invest in that property and re-open it under it's original La Casa name this Spring (2013). If Borrego Springs were to change its community name, it might be changed to "Hope Springs", for hope springs eternal there.

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