Will Lake Berryessa’s future shine again?

Napa County’s hidden destination: Will Lake Berryessa’s future shine again?

Gary Quackenbush, North Bay Business Journal, August 4, 2020

 Stefano Gusberti, chef and owner of Cucina Italiana at Lake Berryessa since 2004, remembers the lake’s better times. Motels, cabins, several restaurants, marinas with boat slips and other amenities dotted the 28-mile long, three-mile wide lake in Napa County.

 “We once saw 1.8 to 2 million visitors a year, today only about 400,000. I had eight employees years ago, now it’s just me making pepperoni pizza and lumpia (Italian spring rolls). Demand is high. Some of our pizza orders range from 3 or 4 up to as many as 15 pies for carryout or outdoor patio dining.”

Gusberti of Cucina Italiana hopes the new county–bureau partnership will result in positive change and growth. He believes motels and cabins can increase holding time for guests, support repeat business and increase local revenue — as well as contribute to healthy year-around occupancy rates.

“Many non-campers would enjoy staying here for several days, or longer, if the right accommodations were in place,” Gusberti said.

Even though the summers remain busy - busier still as people facing pandemic times seek its 80-degree, crystal clear water and numerous islands to explore - some say there is potential for this gem of a lake to return its glory days. In June, Napa County and the lake’s owner, the U.S. Bureau of Reclamation, signed a new 55-year managing partner agreement (MPA) expected to lead to long-term business contracts for new concessions on federally-owned land within 1,000 feet from the lake. Napa County will issue bid packages to potential investors this fall.

The agreement’s first phase paves the way for the county to choose developers for three lakeside resort sites — Monticello Shores (closed) Spanish Flat (open under interim contract) and the Steele Canyon recreation area (open for day use with tent/RV campsites and boat ramp).

Under phase 2, by or before Nov. 1, 2030, the county will determine whether to take over recreation management responsibility for two other sites — Pleasure Cove and Markley Cove currently under lease agreements. In phase 3, the county may elect to assume recreation management responsibility for Berryessa Point and Putah Canyon.

“This is a huge achievement for all of us. We’re looking forward to building the partnership with Napa County and working together to deliver a thriving recreation program at Lake Berryessa for the public,” said California-Great Basin Regional Director Ernest Conant in a bureau press release.

“Now that the agreement is final, we are moving forward with the county process,” said Molly Rattigan, deputy Napa executive officer who has been managing Napa County–bureau agreement negotiations for several years. “We plan to send out bidding packages by September. We maintain a list of interested parties and will provide information and updates about these emerging business opportunities to all.” Rattigan said Napa County is also preparing to recruit a concessions manager for these projects.

“It has been too long since we experienced a thriving Lake Berryessa,” said Supervisor Diane Dillion, chair of the Napa County Board of Supervisors. ”We want to work with the community to restore economic vitality to the region surrounding one of Napa County’s most important recreational areas. We thank the Bureau of Reclamation for working with us and for providing the county the opportunity to bring back vibrant concessions at Lake Berryessa.”

Supervisor Dillion represents District 3 that includes the northern section of the lake and Supervisor Alfredo Pedroza represents District 4 that covers the southern portion of Berryessa.

Property interest grows

Lake Berryessa was formed more than six decades ago in 1957 with construction of the Monticello Dam on Putah Creek. At the time, the Bureau of Reclamation entered into a joint agreement with Napa County to manage recreational development offering 50-year leases to bidders. However, by 1975 the county notified the bureau of its intent to return lake recreation management back to the bureau. The new agreement is already spurring renewed interest in the area.

“Today property is being purchased at the lake with the intent to develop it when the time is right for a revival in concession planning activity,” said Stu Williams, a former member of the Lake Berryessa Chamber board and a past member of the Napa Berryessa Resort Improvement District (for water and sewer).

 The new agreement isn’t a clean break from the bureau deciding lease holder terms. For example, USBR is soliciting bids through an open competition described in a prospectus published June 16 — with offers due no later than Aug. 10 at 4 p.m. — for services including day use, boat launch and camping facilities at Putah Canyon Recreation Area on Lake Berryessa for a period not to exceed 10 years, according to Warren Kasper, bureau California-Great Basin regional director. This project is not part of the new Napa County–bureau agreement.

Bidding information for Putah Canyon can be found on the Bureau of Reclamation website. Kasper said Putah Canyon is currently operated by Royal Elk Park Management under an interim contract extended year to year and set to expire Dec. 31. This resort could be included in the MPA after 2030.

“We are arranging site tours, such as the one held Friday, July 10, to give interested parties a chance to see this site and ask questions so they can submit the required financial information, forms and documents,” said Kasper.

A new deal, new hope

For those doing business around the lake, the new agreement is an opportunity to hope.

“We want things to change for the better. Lake Berryessa is a diamond in the rough with potential for profitability,” said Peter Kilkus, president of the local chamber of commerce and publisher of the Lake Berryessa News.

“When the county takes over, we believe this will help make resorts profitable, or at least break even. There was no transient occupancy tax (TOT) in the past, but this could be possible in the future to help with marketing the lake and local attractions.”

A 20-year resident at Berryessa, Kilkus is finishing a book describing what he believes are the policy mistakes, bad decisions and political battles that have kept this lake from realizing its true potential in the past.

All Lake Berryessa area resorts are concessions run by the Bureau of Reclamation on its land. People can have businesses on the lake on private land (including resort-type operations) if they meet Napa County zoning requirements.

“Developers in the past were the concession owners,” Kilkus said. “The seven resorts were more like mom-and-pop businesses and six were family-owned. These owners wanted to run their businesses profitably, but USBR controlled all prices — as they still do — along with all launch fees, camping fees, etc., based on surveys of similar facilities in Northern California.”

He said resort owners chafed at these restrictions.

“Owners faced significant difficulties in upgrading or building existing or new facilities. They were confronted with complex, and sometimes very expensive, government environmental and historical preservation regulations,” Kilkus said.

All that became moot, he said, when the bureau announced its visitor services plan in 2000 followed by its 2006 record of decision on future recreational use and operations of Lake Berryessa. Under terms of the decision, the bureau’s main focus was the development of new facilities and programs to serve the short-term visitor. Meaning that all long-term trailers and mobile homes would be removed from Federal property at the lake and replaced with short-term use facilities. At one point there were some 1,300 trailers and mobile homes on public land by the lake.

“With this decision, it was clear rather quickly that USBR had decided on an outcome they preferred and did everything possible to guarantee that outcome,” Kilkus said

In his opinion, the bureau had two main goals. The first was to remove mobile homes dotting public land at any cost. The second was to remove all of the existing concession resort owners with whom they had had so much alleged “trouble” over the years. He said at its peak visitors were spending $13 million in total gross revenue at seven resorts each year, while concession operators were paying a 3% concession fee to the bureau. This level of overall spending has fallen off.

Polluting homes?

Trailers, mobile and manufactured homes — representing 30% to 40% of annual concession rental income — have been regular source of lake conflict. Critics said mobile homes were polluting the lake, which Kilkus said is not true. He admitted that there were a few instances of people in “dry sites,” locations with no plumbing or external restrooms, who were running pipes underground to discharge grey wastewater, and in a couple of criminal cases, were running buried leach lines from toilets. These sites were removed as soon as discovered and the trailers were demolished.

“The Bureau of Reclamation’s tactic was to promulgate what I call ‘The Big Lie’: That Lake Berryessa resorts (especially mobile homes in the resorts), discouraged the general public from accessing the lake, and prevented the public from using the best parts of the shoreline,” Kilkus said

According to him, mobile and manufactured homes were privately-owned units that leased space from the concessionaires and paid rent on a monthly basis. He said some were “very nice,” especially at Steele Park. Although they all met basic standards, some people considered them to be a visual eyesore, especially travel trailers installed at Spanish Flat.

This controversy ended in 2009 when concession leases expired and USBR no longer allowed new private mobile and manufactured homes within 1,000 feet of the lake. The Bureau of Reclamation ordered the removal of existing units. Some units on wheels were relocated and the rest were demolished. Kilkus estimates the value of these units in hundreds of million dollars. However, concession operators were allowed provide rental cabin units.

“There also were environmental protection issues, such as proposals from those desiring to eliminate internal combustion engines and jet skis, as well as alleged pollution concerns along with not having adequate police enforcement,” Kilkus said.

More recently, a potential barrier to development arose around the bureau’s insistence on sticking to the maximum 30-year lease policy even with extensions, which some thought was not long enough to recoup their investments. Kilkus said Napa County, under the new agreement, does not have to follow federal rules limiting contracts to three decades and could extend the lease period up to 55 years.

“When you extend the lease term this long, big businesses are more willing to bid. We want to see firms get involved by the summer of 2021,” he said.

The new agreement, allows subcontractors to provide services within concession areas. Prior concession lease holders had to provide all services through their employees and could not bring in subcontractors. A $5 million fund has been established that will be allocated over five years to cover transition costs associated with the agreement. Funding may also be available for services provided by the county sheriff at the lake, said Kilkus.

A busy summer

A handful of resort operators within the Bureau of Reclamation’s jurisdiction continue to provide services on the west side of Berryessa including Markley Cove, run by Linda Frazier and her husband, as well as Pleasure Cove managed by Terry Sparkman.

Lake Berryessa has a number of bureau recreation areas along its 165 miles of shoreline offering visitors day use (for $5) and lakeside campgrounds dominated by tent campers, self-contained RVs and trailers.

On July 17, most of these facilities were full to overflowing. Local eateries were packed with weekend warriors seeking outdoor experiences following months of shelter-in-place confinement. This year-round destination is known for its water sports, fishing and beautiful, national park-like vistas.

However, locals and most business owners say additional amenities and accommodations are sorely needed. Unlike the past, today there are no motels and cabins. The wish list also includes electric vehicle charging facilities, fire stations, non-grocery retail shops, schools, libraries and gas stations. Today, the nearest filling stations are 22 miles away in Napa and 30 miles in Winters. The nearest fire stations are in Pope Valley and in the Steele Canyon area.

There are only two housing developments near the lake, one at Berryessa Pines near Putah Creek, and the other at Berryessa Highlands. Some 1,500 permanent residents live in the lake region.

When concession lease holders within the bureau’s jurisdiction boundary have left, or when leases expired, buildings were demolished along with related infrastructure facilities. Beyond the bureau boundary, property is available for private development and ownership.

One enduring business, the Turtle Rock Bar & Café operated by Pete Leung for 40 years on land he owns, regularly sees his parking lot packed with 30 cars, trucks and boat trailers at the southern end of the lake.

“The future is promising with opportunities for development, and property prices are going up,” said Leung, known for his famous egg rolls. “There is money to be made here if the county is willing to entertain new ideas, but we need to get resorts developed, new lodging, more restaurants, shower facilities as well as water and sewer infrastructure to support them.”

Marcia Ritz, proprietor of the Spanish Flat General Store, has been struggling to keep her business open for the past 13 years, she recalled that back then the bureau closed the lake to former lease holders, dissolved concession contracts and reduced new lease periods to 30 years with the possibility of extensions.

 “Prior to that we had cabins,” Ritz said. “Today our summer business is brisk but declines in fall and winter except for fishing. People tired of sheltering in place have been coming here in numbers since March — our best year so far in over a decade. Typically, our season is from June to Labor Day, yet people say they would be willing to rent cabins just to get away, even in cooler months.”

Lake Berryessa Boat and Jet Ski Rentals and Repair owner Marty Rodden hopes to see Spanish Flat, Monticello Shores and Steele Canyon redeveloped.

 “A number of good companies plan to bid on one or more of these properties,” Rodden said. “I go to all of the prospective investor walk-throughs of designated resort sites. In the past, when developers found what it takes to rebuild facilities in California previously torn down, some had second thoughts.”

He observed that 30-year leases, even with extensions, have been a limiting factor by not giving developers adequate time to be compensated for money put in. With the new agreement, these leases can be extended to half a century.

“We are booked up solid through August for our wakeboard, ski and pontoon boat rentals as well as for jet skis, fishing boats, kayaks and paddle board reservations,” Rodden said.

Jerry Remke, a local resident, is one of four partners who took over the interim management contract at the Spanish Flat Recreation Area six years ago. He is the managing partner of this bureau concession area and also a painting contractor.

“It’s not profitable to operate for only one or two years. Everyone here is looking forward to new concession activity getting started,” Remke said. “We’re waiting for the USBR and Napa County to sign papers with a new entity for Spanish Flat that would have a 40-to-50-year lease. Visitors are being turned away for lack of camping space.”

Glamping (glamour camping) and cabins could be options down the road along with enhanced dock and boat launch facilities if long-term leases attract more investors. There has also been talk of creating more marinas along with the possibility of a seaplane base.

“Investors need more say in what they want to do and have the ability to offer their own ideas — not be micromanaged and just told where and how they can build a restaurant or other features,” Remke said. “At this point we don’t know what Napa County intends to do to sweeten the pot when it comes to concession negotiations.”

The Pridmore family came to the Berryessa Valley in the 1920s providing a number of business services including real estate development, construction and storage. Gil Pridmore’s father helped build the lake resorts in the area, including Steele Park and Oak Shores Recreation Areas, as well as parts of the Berryessa Highlands development. The family also operates a storage rental facility for boats, RVs and other dry storage and once owned a gas station.

“Without clear direction in the past from the Bureau of Reclamation on future resort contracts, the lake has been in a bit of a recession,” said Pridmore. “A lot of long-term residents sold and moved out because they thought they were going to have to tear down their trailers. With the price of property rising and Napa becoming a destination, we feel there will be a renaissance and people will start rebuilding. This part of the county has a lot to offer. I feel it’s going to be a place people want to be.”

 


pKilkus@gmail.com                       © Peter Kilkus 2020