Inn of Seventh Ray Up for Sale at $1.2 Million

The Inn of the Seventh Ray, the ethereal creek-side restaurant in Topanga Canyon, is up for sale. The owners are asking $1.2 million, and want to sell so they can follow their controversial guru to Montana.

The three-quarter-acre restaurant was founded in 1975 in and around a converted Foursquare Gospel Church, and since then has become something of an institution for its picturesque outdoor dining areas, its natural foods, and its menu, which lists dinner entrees “in order of their esoteric vibrational value.”

“People come from all over the place,” said Bob Bates, chairman of the Topanga Assn. for Scenic Community, a residents group. He noted that it is one of only about half a dozen eateries in the canyon.

The Inn of the Seventh Ray was started by Ralph and Lucille Yaney, psychotherapists and disciples of Elizabeth Clare Prophet, known to her followers as Guru Ma. Lucille Yaney, 48, said the couple wants to sell so they can follow Guru Ma to a remote ranch in Montana, where she has relocated her Church Universal and Triumphant.

The restaurant had revenue of $1.2 million in 1986, and $1.05 million the year before, Lucille Yaney said, adding that the business earns pretax profits of about 10% a year. But she acknowledged that the restaurant’s books for 1982, 1983 and 1984 are not in perfect order.

Indeed, at various times in recent years the inn has had liens filed against it for back taxes by the Internal Revenue Service, the state Board of Equalization and Los Angeles County. Those liens apparently have been paid.

The restaurant can accommodate perhaps 300 diners, but never seats more than half that number because there is only parking for 70 cars. Lucille Yaney said the $1.2-million asking price is based on $600,000 each for the business and the real estate.

“I don’t know the value of the real estate, but I would never pay that kind of bill,” said E. R. Wilson, president of the Calabasas-based Good Earth Restaurant chain. He said restaurant sales prices vary, but excluding real estate they typically sell for three or four times operating profit. At that profit multiple, the Inn would sell for $360,000 to $480,000.

Lucille Yaney contends that another common restaurant valuation is to price a business at 50% of total revenue. Using that formula, the Inn’s asking price is in line.

Wilson noted that the restaurant’s parking constraints and inconvenient location would make it difficult to expand.

Zoned Commercial

Potential purchasers probably cannot develop the site, either. Pamela Holt, supervising regional planner with the Los Angeles County Regional Planning Commission, said the property is zoned commercial, but any use must be consistent with the official Malibu Local Coastal Plan which designates the site for “rural business.”

Located at the intersection of Topanga Canyon Boulevard and Old Topanga Canyon Road, the restaurant property includes two buildings, one housing the dining rooms and kitchen, and the other containing the inn bookstore and restrooms.

The bookstore features such volumes as “The Lost Years of Jesus,” which purports to be an account of Christ’s years in Tibet, and “Pinstripe Prayers,” which includes prayers for dismissing an employee, asking for a raise and driving a rented car.

Written by Guru Ma

“The Lost Years of Jesus” was written by Guru Ma, who has taught that she is in direct contact with Jesus and Buddha, and was Queen Guinevere in a former life.

Lucille Yaney said the restaurant has only been on the market for a couple of months, and that she hopes its future owners will maintain it as the Inn of the Seventh Ray.

“It’s kind of like placing your baby up for adoption,” she said.

But selling the Inn doesn’t mean the Yaneys will be leaving the restaurant business. In fact, the couple plans to open another natural foods restaurant somewhere in the area of Bozeman, Montana, near where Guru Ma’s church is relocating.

Mrs. Yaney noted that she and her husband started construction on the Inn of the Seventh Ray--it had been a garage and junkyard--around April or May of 1975.

“I suspect we’ll have an offer” by April or May she said. “I believe in 12-year cycles.”