Glenelly Inn sale in escrow
Sale price $1.365 million
A buyer for the Glenelly Inn, seized by Sonoma County last November for non-payment of taxes, was revealed on Thursday, along with the selling price of $1.365 million. The county had been in escrow with the buyer, Frederick and Patel, LLC, for more than two weeks, but refused to identify the buyer’s name because of what assistant County Counsel Jackie Bird described as an effort to “protect the public interest.” An earlier Index-Tribune report that the property had been sold was in error, since escrow is not expected to close until as late as June 11, according to the county’s Public Information Officer Jim Leddy.
The county did say that all contingencies on the sale were lifted as of Thursday, meaning that if the deal falls through the buyer will forfeit substantial escrow funds.
No information about Frederick and Patel was immediately available, but county officials acknowledged that the sale price will not cover all the outstanding debt, taxes and liens owed on the property.
Former owner Kristi Jeppesen had failed to fully pay Transient Occupancy Taxes (TOT) and property taxes since 2004. She also managed a large number of vacation rental homes for which she collected TOT and rental payments but did not forward the payments to the county or the property owners she represented.
Sonoma County Auditor/Controller/Tax Collector Rod Dole worked with Jeppesen over the years to resolve the back tax payments, but finally concluded last year that she would not be capable of successfully covering her debt.
Property owners did not learn about the unpaid taxes on their properties until last year and some of them were told they owned tens of thousands of dollars. That does not include the money Jeppesen collected as rents on their properties but did not pay them.
The owners of one property alone - the Chauvet Hotel in Glen Ellen - said Jeppesen collected nearly $40,000 last year that they never received and have questioned why she has not been charged with embezzlement or fraud.
County officials, meanwhile, say they continue to negotiate with lien holders so that the debts can be reduced and the sale money fairly distributed to all concerned.
"We are negotiating with every one," said Jonathan Kadlec, revenue and debt division manager for Dole's office, "even ourselves."
Major lien holders on the property include Westamerica Bank, which inherited loans made by the former Sonoma Valley Bank when it bought that failed institution and holds notes for loans totaling about $1.1 million. Next in line is the county, which is owed secured property taxes of $60,000 and TOT revenue of $380,000. The IRS is owed $90,000, and a Jeppesen family relative is owed $24,000. Also in line is the employment Development Division, which is owed some $7,000 and there are individual liens totaling more than $50,000.
Some of the money owed is includes interest and penalties and Kadlec said dropping those charges in the interests of victimized private property owners "is certainly a consideration," but indicated it is too early for the county to make such a commitment.
Asked to reveal the county's appraised value of the property, Bird said that information was "confidential."
But Windsor Realtor Susan Degive, who represented the property before the county seized it, said while she never had it appraised, she would have placed the Glenelly Inn's value, before the seizure, at about $1.5 million, and after the seizure "at about a million."