Manager ditches Holbrooke, leaves workers unpaid
A beleaguered local landmark is struggling once again after a New Jersey-based property management firm defaulted on its contract.
Atlantic First Holdings Inc., incorporated in New Jersey, had been leasing the historic Holbrooke Hotel in downtown Grass Valley with an option to buy it.
But on Tuesday, the group of Nevada County investors who own the property took the hotel back.
Atlantic Chairman and CEO Randolph Hudson “was called back to New York” last Thursday, said Jim O’Brien. He owns the hotel with a group of partners that includes Mike Nudelman and local Realtor Cheryl Rellstab.
But Hudson already was in default of his contract and had not been paying his monthly lease fees, O’Brien said. Hudson also had not paid the hotel’s employees, possibly for as long as two weeks.
Hudson could not be reached for comment.
Atlantic’s contract with the property owners meant they were responsible for running the business and paying all expenses and payroll, O’Brien said. In return, he said, “they, of course, got all the income.”
The investors had been negotiating with Hudson so he could continue to operate the business, but he was not able to come up with the capital to continue, O’Brien added.
“There was a family illness, and he decided suddenly he would leave and go back” to New York, O’Brien said. “It kind of blindsided everybody.”
The local investors have resumed control of the property and the business, O’Brien said, adding, “We’re stepping back in. There’s an absence of management, and someone needs to take charge.”
But the staff might find it difficult to get any back pay from Atlantic.
“We’re doing whatever we can to help them get paid, to exert whatever pressure we can, but our hands are pretty much tied,” O’Brien said. “I don’t know he’s not going to pay (them), but he hasn’t, and its been a hardship for the employees.”
The local investment group bought the property in 2005 from DMW Hospitality Group, owned by former automobile dealership co-owner Matt Weaver and his wife Donna Weaver, formerly of Grass Valley.
The Holbrooke Hotel LLC paid close to $2.8 million for the property as a passive investment that was to be managed professionally, O’Brien has said. But that goal eluded the investors.
In late February 2009, O’Brien and Nudelman announced they would close the hotel if no buyer were found.
Toni Johnson and Gareth Atkinson of Salt Lake City signed a letter of intent to operate the historic hotel, restaurant and saloon with an option to buy in March 2009. But they later backed out of their commitment because of difficulties raising capital.
Atlantic First Holdings signed a similar lease agreement with first right of refusal and an option to buy, and had been operating the business since August 2009.
While the Holbrooke Hotel’s future is far from clear, the investors are not about to shutter its doors immediately, O’Brien said.
“We’re always looking for investors,” he said. “But as to whether we’ll keep it open, it’s surely our intention to do that. We’re not planning to close it.
“There are other irons in the fire, people who have expressed an interest, so we’ll pursue those,” O’Brien added. “For the present, we want to stabilize things and make sure the employees know someone is going to pay them when they work.”
To contact Staff Writer Liz Kellar, e-mail email@example.com or call (530) 477-4229.
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