Private Financing Completes Wheeler Hot Springs Sale

The long-pending sale of Wheeler Hot Springs, the historic spa and restaurant complex north of Ojai, has finally gone through, but the $4.8-million purchase was made with private financing, not by public stock sale, as originally envisioned.

Thomas L. Marshall, president of Wheeler Hot Springs Resorts Inc., the facility’s new owner, won’t comment on the prospects for the stock issue, but he still hopes to transform Wheeler into a destination resort with dozens of new guest units, expanded hot-tub facilities and new banquet and meeting rooms.

He also hopes to go ahead with a plan to bottle and market the sparkling mineral water that comes from natural springs lying beneath the property on Maricopa Highway.

Escrow on Marshall’s purchase of the century-old resort from Evelyn Landucci, its owner since 1968, opened in September, 1991. The sale was completed early this month, Marshall said.

Frank Landucci, Evelyn’s husband, confirmed that escrow finally closed.

“We’re relieved,” he said. “It’s been a long time.”

The deal ran into roadblocks as the stock sale failed to materialize, in part because questions were raised about whether an expanded Wheeler would damage its wooded surroundings.

Marshall won’t comment on his prospects for eventually taking Wheeler public, but the Red Bank, N.J., firm that is underwriting the offering says it’s still in the works. It originally hoped to raise $3.3 million in the public stock sale.

“First, though, we plan to help them get some more private financing, so they can start some of their improvements right away,” said Richard W. Hunt, chief executive officer of the underwriter, Network 1 Financial Securities. “That should make the offering more viable when we go ahead with it.”

Hunt wouldn’t speculate on how long it might be before stock is offered to the public. He added, however, that Network 1 helped Marshall get in touch with the lenders who financed the purchase from Landucci.

No one involved would provide details of how the sale was structured. The original deal called for Evelyn Landucci to receive $1.5 million in cash, a trust deed for $1.5 million and 14% of Wheeler Hot Springs Resorts’ stock with a paper value of $1.8 million.

Marshall said he has completed all environmental reports required before the expansion of Wheeler can begin.

“We’re now addressing deficiencies that were cited by the county,” he said.

Environmentalists have expressed concern that an expansion of the resort would bring too much traffic and create other problems in the area.

Public hearings would be held before a go-ahead is given, officials have said.

Marshall said Evelyn Landucci is continuing as an unpaid adviser and that her son, Lanny Kaufer, remains on the payroll in a management capacity.

“Business is good, and we’re excited about the future,” Marshall said.