Hard Times Put San Juan Springs Out of Business : Resort: Historic hot-water spa is no longer profitable, owner says. The county hopes to find another operator.

San Juan Hot Springs, a Southern California institution whose baths have lured thousands since the 1800s, was padlocked and closed indefinitely Friday by county officials.

The county’s action came at the reluctant request of the spa’s operator, Russ Kiessig of San Juan Capistrano, who said the 17-acre resort, where 120-degree water gushes at 50 gallons a minute, was no longer profitable.

“I feel terrible,” Kiessig said. “I feel like that wonderful area needs and should have a world-class spa.”

The springs sit among the ancient oaks and sycamores in the county’s Ronald W. Caspers Wilderness Park along California 74, also called Ortega Highway. Kiessig was only 11 years into a 30-year lease of the site and planned to build a spa akin to the Ahwanee Lodge in Yosemite National Park around the natural artesian springs.

But business had declined, and a battle with the state Department of Transportation over a nearby bridge changed the course of events.

When Caltrans in 1990 removed more than 100 trees, including 13 oaks and numerous sycamores and eucalyptus to expand a bridge over Hot Springs Creek on Ortega Highway, it destroyed the ambience of the secluded hot springs, Kiessig said.

“I feel like Caltrans stomped us into the dirt, deceived us and ignored all kinds of rational behavior and rational thought,” Kiessig said. He has sued Caltrans, seeking unspecified damages.

County officials acknowledged that the state agency infringed on park property, clearing land and trees beyond Caltrans’ right of way. But officials would not suggest what caused the spa’s demise.

“The bridge does infringe on parkland, but why has business declined? I don’t know how to quantify that,” said Robert Hamilton, a director in the County Environmental Management Agency. “There is the fact of the bridge. But there is also the fact of a recession . . . and the concern of AIDS. I don’t know which one is more significant.”

Kiessig said that on Jan. 10 of this year, the county hiked the lease payment from $642 a month plus 6% of the gross to $1,099 a month, plus 6%.

“It couldn’t have come at a worse time,” he said.

While Kiessig came along in 1981, the hot springs have a long and colorful history. Their heyday was probably the 1890s, said Pamela Hallan-Gibson, a San Juan Capistrano historian.

“It was a full-fledged resort as long ago as then,” said Hallan-Gibson. “But the springs were used by the Indians even before the Spaniards came. Then the mission settlers flocked to the site for medicinal purposes and ‘R and R.’ ”

Legendary San Juan Capistrano ranchero Don Juan Forster acquired the property as far back as 1845 as part of a larger Mexican land grant. Forster blocked development at the site to ensure access to the waters by Indians and other poor local residents.

After Forster’s death in 1882, the land was sold to the O’Neill ranch, which leased the property to a series of managers.

As early as 1888, a tourist guidebook listed the springs as a don’t-miss attraction for California visitors, and many arrived on horseback. Others came when the Central California railroad line was extended to San Juan Capistrano that same year.

In 1889, a stage line began regular trips from the railhead to the springs, and the following year a dance hall and boarding house opened. A summer visitor in 1890 wrote that the waters could remedy “violent temper, malignant disposition, fault finding, a desire for blood-letting and jealousy, and all feelings of remorse. . . .”

The dance hall and bathhouses have been preserved and moved to San Juan Capistrano. Mayor Gil Jones has one of the bathhouses on his Los Rios district property, which he has converted to an office. The dance hall now sits next to City Hall, and is used occasionally as a meeting hall.

At one point, the springs had a large swimming pool and a store that sold wine, sandwiches and candy. People came from throughout Orange County for camping vacations that included card-playing, hunting and fishing.

But in 1936, the resort was closed, apparently because it did not meet county health standards, and the resort began a steep decline. An effort to get the federal government to take over the springs for use as a polio treatment center failed, reportedly because the asking price was too high.

In the 1960s and 1970s, bikers, hippies and others used the springs, where they sometimes bathed in the nude and used drugs. At least one shooting was reported at the site.

In 1974, when the county acquired the springs as part of Caspers Park, the Board of Supervisors ordered arrests of trespassers, including a sweep the next year that netted 50 people. Officials also drained the spa’s pools, in hopes of reducing the area’s attraction.

In 1981, Kiessig and his wife transformed the natural flowing, 120-degree water into a resort with 25 hot tubs, a 100-foot swimming pool, two public restroom facilities, a caretaker’s building and a gatehouse. His plans for a world-class conference center with overnight lodging next to the springs failed to materialize, however.

“We were boot-strapping our way into that kind of situation until we received this setback” with Caltrans, Kiessig said.

The Kiessigs also operate a hot springs spa in San Luis Obispo.

Robert G. Fisher, director of the county’s division of harbors, beaches and parks, said the county will seek a new operator for the resort.

“We hope this is a temporary situation and we can find another operator. That would be our preference,” Fisher said.