Less than a year after opening, the luxury El Colibri Hotel on Moonstone Beach Drive in Cambria has gone into bankruptcy protection. It remains open for business.
The 34-room hotel is listed for sale for $8.6 million. El Colibri, developed starting in 2005, replaced a long-closed 280-seat Chuck Wagon restaurant on the Cambria property.
Its lender, Temecula Valley Bank in the Riverside County city of Temecula, was taken over by the Federal Deposit Insurance Corp. in April 2009.
First Citizens Bank and Trust—based in North Carolina— assumed the bank’s assets, according to the FDIC. San Luis Obispo hoteliers Pragna Patel and her husband, Robert Mueller, built the inn. They could not be reached for comment.
Patel’s father, J.P. Patel of San Jose, told The Cambrian the bank showed no interest in working with them on the loan.
“The property is doing quite well, and she can make the payments easily, but the bank is unwilling to cooperate, so they had no choice but to file for bankruptcy,” he said.
At the time Temecula Valley Bank foundered, Pragna Patel and Mueller had the unfinished hotel listed for sale at $13 million. But they found no buyers. The cost of the hotel was about $5 million, according to earlier reports by The Tribune.
Pragna Patel and Mueller also own the Days Inn and Donnington Inn in San Luis Obispo off upper Monterey Street and the White Oaks Hotel in Lompoc.
They had plans to develop a 16-room hotel north of Pier Avenue in Oceano. Construction was slated to start in late 2008.
But the deed for the undeveloped property has since been transferred to Prakash Patel, Pragna Patel’s brother, according to county records.
Pragna Patel has been president of the board of the county’s Visitors and Conference Bureau and chairwoman of the San Luis Obispo Workforce Investment board.
According to bankruptcy court records, Pragna Patel and Mueller’s hotel partnership shows about $9.6 million in assets. That includes the real estate valued at $8.5 million and property in the hotel at $1.6 million. The partnership claims $9.5 million in liabilities.
Some of the creditors include the couple, who claims to have advanced the hotel $1.2 million as an unsecured loan. They also have management fees of about $120,000 owed to them, according to filings. Stated gross income on the hotel for the previous 12 months was about $122,000.
Patel and Mueller showed earlier signs of financial difficulty when they failed to pay about $69,000 in hotel bed taxes and a tax owed to a countywide district that funds tourism promotion.