Rosario Resort sells fast for $5.45 million; will remain open as a resort
October 1, 2008 · Updated 5:05 PM
At 1:45 p.m., only 45 minutes after bidding began, the gavel came down and Rosario Resort was sold at auction for $5.45 million, plus the buyers' fee.
Laurie Cameron, executive director of the seller, Olympus Real Estate Partners, would not divulge the buyer's name, but did say that the successful bidder is from the area, though not the islands, and loves Rosario.
Deborah Hansen, niece of former owner Sarah Geiser, said the new buyer told her aunt that he thought of himself as the caretaker of Rosario, not the owner.
A source close to Rosario management who spoke in confidentiality said the purchase is a "very good thing" for Rosario. It is expected to remain open as a resort.
A total of 10 bidders, with at least one online, took part in the auction, which was held today in the music room of the mansion. Attendance at the event was limited to "serious bidders" who put up a refundable $250,000 deposit to gain admittance.
Rosario Resort’s 98 full-time and 98 part-time employees were given 60 days’ notice last month. Olympus Partners, owner of the resort since 1998, said the resort has lost money since it acquired it, despite affiliation with the RockResort name and, lastly, as a Gemstone Resort.
Cameron said the layoffs were intended to provide any future owner or owners with a “clean slate.”
“We have to give a potential buyer some breathing room.”
The 60 days’ notice period, which ends on Oct. 20, complies with the federal Warren Act requirement that required employers of 100 or more people to give at least 60 days’ notification that their jobs will end.
In an earlier story, Cameron said Olympus believed the resort could be financially viable only if developed as a mixed-use residential resort, and that approval by San Juan County to develop it along those lines would make it more desirable to prospective buyers and help ensure its existence.
“Getting the plan approved took so long and cost so much and then the economy took a downturn,” Cameron said. “Although there have been several interested prospective buyers, no one has stepped up to the plate. Now we have no choice” but to auction the resort.
Dan Dohner, general manager of Rosario Resort, said in that story that Olympus loses about $1 million a year on Rosario. He blamed the losses on the expense of operating during the off-season.
“In August, our occupancy is in the low 90 percent. We run full most nights,” he said. “In the winter, it can be the complete opposite. It’s completely dependent upon the groups we bring here. It varies from time to time.”
Dohner said the master-planning process took too long. “The property went through the master planning process over many years. That plan needed to happen and it was approved last June. Unfortunately, the market has slowed a bit.”
Gemstone Resorts, a management company hired by Olympus to oversee Rosario for the last 15 months, will be helping employees with the transition, Cameron said. “We want to make it the least impactful possible for the employees.”
Despite the seriousness of the layoffs and impending auction, Christopher Peacock, Rosario’s historian and author of “Rosario Yesterdays,” is optimistic about the resort’s future. He noted that the resort was auctioned in 1984.
“Rosario needs a change, and this is just the beginning of the process of that change,” Peacock said in the earlier story. “It’s disheartening that it happened this way for the employees, but I’m optimistic for the future.”
Second auction in its history
Rosario was first developed by Robert Moran, the former Seattle mayor and shipbuilder, who built the mansion in 1906-09 and retired to a life of leisure and philanthropy; his greatest gift to the state of Washington became Moran State Park.
In 1938, at age 75, Moran sold the mansion and 1,339 acres to Donald Rheem of Rheem Manufacturing Co. for $50,000 — a relatively paltry sum considering he had invested, according to Peacock’s book, $1.5 million in developing Rosario.
“He wanted someone to be able to afford it through the Depression,” Peacock said of Moran.
Rheem owned Rosario until 1958 — his wife, incidentally, did not die from a fall from the music room balcony, as rumored, Peacock said. Rheem sold Rosario to Ralph Curton of the Falcon Corporation in Waco, Texas for $455,000. Curton first envisioned developing Rosario into a resort, but was forced to sell after two years when his oil wells dried up, Peacock said.
In 1960, Curton sold Rosario for $225,000 to Gilbert Geiser, former mayor of Mountlake Terrace. That year, Geiser first offered rooms as overnight accommodations in the mansion and a “boatel.”
Geiser sold Rosario for $5.5 million in 1980, to three investors from Seattle — Manfred Cieslik, Gerta Faust and Jim Roberts. They went bankrupt in 1984 and Geiser got Rosario back. He died in 1987 and his wife, Sarah, owned Rosario until 1994, when she sold it to Red Rock Resorts of Arizona.
Red Rock Resorts investor Jessica Cato bought Rosario in 1996, then sold it in 1998 to Olympus Real Estate of Dallas, Texas, the current owner.
Today, Rosario Resort consists of the mansion and museum, Mansion Dining Room, the Cascade Bay Grill, Dockside General Store, The Spa at Rosario, three swimming pools, outdoor games, and 122 guest rooms spread throughout the hillside overlooking Cascade Bay. The guest rooms include new two-bedroom condominiums.
Rosario Resort also has a marina with more than 30 slips and numerous mooring buoys. The resort provides access to kayak tours, sailing and whale watching/wildlife cruises.
All told, the resort is 74 acres.
“Seasonality is difficult,” Peacock said. “There are some operational issues in terms of the layout of the property, which the master plan corrects — making better use of the mansion, preserving it, keeping it open to the public, rebuilding the kitchen and dining room and spa.”
Peacock said guest lodging is located away from the services offered in the mansion, which has proven difficult. He said the master plan includes a wing of guest rooms connected to the mansion to bring guests closer to those services.
“I predict that in the auction, the person who wins the bid will be someone who has a passion for the resort,” Peacock said. “It’s going to take someone with quite a bit of money to follow through with the master plan.”