Bank Flipping
Value Added?
WHAT A COUNTRY! Santa Barbara Bank & Trust almost dies, 300 employees lose their jobs, and loyal shareholders lose thousands and thousands of dollars.
Then Texan Gerald J. Ford rides up, buys the bank for $500 million, flips it to Japanese-owned Union Bank for $1.5 billion, and gallops off into the sunset with a $647-million profit in just a year and a half.
The Japanese take over. Watch for the SBB&T sign to come down and Union Bank’s to go up. But I have a yen to know why the Japanese didn’t buy the bank themselves 18 months earlier — and save themselves a billion dollars.
Suggests one local business-savvy guy: “No legal reason, but I can speculate as to some business reasons.” Maybe the Santa Barbara bank was seen as a fixer-upper, which Ford had to renovate “before flipping it to the commercial bank that likes to know exactly what a loan portfolio is worth.” (Okay, but a billion bucks?)
BACARA FOR SALE? Reports that Bacara Resort and Spa’s employees have been told it will be sold next month aren’t true, according to Kathleen Cochran, general manager of the Bacara. However, “People have been wanting to buy this hotel since we bought it last summer,” she told me. “Discussions are still in the works.” She declined to discuss who the possible buyers might be.
Ohana Real Estate Investors paid a reported $104 million last year for the 360-room oceanfront resort 12 miles west of Santa Barbara. There’s little doubt that the Bacara is available. Months ago, Ohana prepared a 90-some–page sales pitch highlighting the hotel features and community splendors.
Meanwhile, a former top manager at Bacara, Ann Montalvo, is suing the Bacara and Cochran, claiming she was subjected to discrimination and fired in retaliation for objecting to what she considered unlawful personnel practices. In the suit, Montalvo, who is African-American, says that she held a top human-relations post since the resort opened in 2000 but was given the ax this January by Cochran, who became GM after Ohana bought the property last summer. Cochran declined to comment, and the Bacara’s law firm could not be reached for comment.
LONGSHOT APPEAL: News-Press owner Wendy McCaw has asked the California Supreme Court to review an appeals court’s $900,000 breach-of-contract award to ex-editor Jerry Roberts.
Since the Supreme Court only accepts about 2 percent of the petitions it receives, and the McCaw-Roberts case does not appear to yield any key legal issues to be resolved, it seems unlikely that the high court will accept the appeal, attorneys say.
A decision one way or the other is not expected until June. Meanwhile, Roberts continues to earn 10-percent interest, or about $80,000 a year, according to his Santa Barbara appeals attorney, Herb Fox.
If the court accepts the appeal, the case could take another two years, Fox said. After Roberts resigned on July 6, 2006, charging that McCaw had intolerably interfered with news coverage, McCaw filed a $25-million breach-of-contract arbitration action against him. The arbitrator didn’t award damages to either party, but awarded Roberts attorney fees.
McCaw appealed that to the 2nd District California appeals court in Ventura. Last February, two weeks after hearing the case, the court affirmed the arbitrator’s decision. McCaw’s legal fees have been estimated at $2.4 million and mounting.
TAKE THE S TRAIN: When smart Santa Barbarans want to head down to Carpinteria to break bread at James Sly’s eatery but don’t want to drive, they take the Amtrak down in the afternoon, relax in the charming ambiance, then walk about a block and a half to catch the choo-choo back home.
HELLO, BABY: You didn’t hit the highway to Ventura to see Rubicon Theatre’s Tin-Pan-Alley musical comedy Hello! My Baby? Well, it’s coming to the Lobero Saturday and Sunday, May 5 and 6. Songs are by Irving Berlin, George and Ira Gershwin, Jerome Kern, and more.
OOPS: Nick Cassavetes, director of the film Alpha Dog (about the Nicholas Markowitz murder in Santa Barbara), is listed as owing $273,000 in back state taxes.
FIFTY YEARS: Planned Parenthood folks gathered the other night to honor Dick Jensen, a volunteer for nearly 50 (50!) years. The former UCSB vice chancellor got a standing ovation despite his condom jokes.
WRITE ON! Yes, there will be a Santa Barbara Writers Conference again this year, June 9-14, featuring our own Fannie Flagg (Fried Green Tomatoes at the Whistle Stop Café) as a speaker at the Hyatt. Monte Schulz, who took over as head honcho from Barnaby Conrad, just published a novel, The Big Town (Fantagraphics Books, Seattle). It’s about life in the jazz-age chaos of 1929.
