Carefree Resort bankruptcy bad timing for Carefree
By Curtis Riggs | May 20, 2009
Concerned about loss of sales-tax revenue
CAREFREE – As owners of the bankrupt Carefree Resort & Villas haggle with owners of villas on the property over unpaid rental-pool income, Carefree officials worry about how the town will be affected by reorganization of the resort, which has been a community landmark since 1963 when it was still the Carefree Inn.
Carefree Mule Train Ventures, which owns and operates the resort, filed for Chapter 11 bankruptcy protection in November.
“The bankruptcy is a Chapter 11 so it has no impact on operations,” new Carefree Town Administrator Gary Neiss said about the bankruptcy allowing a reorganization of the holding company, which owns the 20-acre property.
“The resort is in Chapter 11 so they will most likely sell the business,” Neiss said. The Carefree Resort is the only profitable property of the three owned by the San Francisco-based Tiburon Capital Corp.
Neiss acknowledges the resort is a major-contributor to the town’s sales-tax base. He said the town will try to ensure the resort’s viability during the transition from bankruptcy reorganization while making sure any future renovations fit into surrounding neighborhoods well.
While the focus of the resort has been holding business conferences for years, a new niche developed after the Sept. 11, 2001 terrorist attacks because many people opted not to fly anymore. Many Californians now visit the resort because it is in driving distance of major cities.
Marcus & Millichap, a real-estate investment firm, was recently hired to find buyers for an upcoming auction of the 146-room property. Richard Ehmer, a company vice president, expects the resort to continue catering to business groups. The Governor’s Rural Economic Development Conference was held there last year.
Owners of villas claim they are owed hundreds of thousands in unpaid rental-pool income. Attorneys representing the villa owners claim the parent company failed to set aside $382,151 in rental-pool income this year.
Carefree Resort & Villas officials were unavailable for comment.