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The Struggling Daufuskie Island Resort and Breathe Spa Lays Off Almost All Employees;
Owners Bill and Gayle Dixon Trying to Sell Parts of the Sprawling Resort
By Michael Welles Shapiro, The Island Packet, Hilton Head Island, S.C.McClatchy-Tribune Regional News

Dec. 17, 2008 - The struggling Daufuskie Island Resort and Breathe Spa has laid off almost all its employees in the past three weeks, according to fired workers. In addition, a hotel owned by the resort's owners in Arizona has filed for bankruptcy.

Edward Douglas, a longtime employee and Daufuskie resident, said all but eight hourly staffers were fired from the resort, which employed more than 100 people.

The former employees also say they have not received compensation for working extra days for which they accrued compensation time. Because they never took the comp time, they say they should be paid for those hours.

"A lot of us have mortgages to pay, rent to pay, bills to pay, and they're saying they don't have enough money to pay us," said Douglas, who had worked at the resort since 2002, when Bill and Gayle Dixon of San Francisco bought it.

Officials with Atlanta-based West Paces Hotel Group, the resort's management company, didn't return phone calls seeking comment Tuesday. The resort's personnel manager said he couldn't comment because of legal issues and referred questions to the Dixons' asset manager, who also didn't return calls. The Dixons didn't respond to e-mails sent Tuesday.

S.C. Department of Labor, Licensing and Regulation spokesman Jim Knight said the agency has received complaints from resort employees regarding compensation pay. Knight said the state is investigating West Paces over the workers' claims.

"It's not fair. This is Christmas and these people are not getting their money, and it's criminal," said Douglas, who managed Jack's, a restaurant and bar at the resort that has closed down.

With most employees gone, remaining resort officials have closed down the Melrose Inn and the spa, according to employees. The resort still is accepting guests at vacation cottages, but the reservation work has been contracted out to Hilton Head Rentals & Golf.

The Dixons have been trying to sell parts of the sprawling resort for months, including the inn and the ferry service, arguing that the sales would allow them to turn around the unprofitable resort. In October, resort members sued the Dixons, saying members should be involved in any attempt to sell all or parts of the resort.

Members pay yearly fees in exchange for privileges, including access to golf, tennis and a beach club as well as ferry rides and restaurant discounts.

Alexander Beard, a Mount Pleasant attorney representing the members, said Tuesday that "what we're doing is simply protecting the members' rights and benefits."

He said the lawsuit did not cause the firings.

Nick Piccola, a Hilton Head Island resident who worked as a bus driver at the resort before being fired, said the economy contributed to the tough times at the resort, but workers still felt like "we were caught in the middle of the dispute."

"Normally we'd have a bad three weeks in January," he said. "But this year, with the economy and everything else, different companies canceled their group bookings, and we weren't doing any weddings."

The Dixons also own two other resorts, both managed by West Paces, that have run into financial troubles.

Carefree Resort & Villas in the Sonoran Desert of Arizona declared bankruptcy in November. Court documents show that West Paces is the second-largest creditor in that case.

The Dixons also are part-owners of the Ocean Place Resort & Spa in Long Branch, N.J. The city of Long Branch is suing over missed payments on a $1.3 million loan for a redevelopment project that would have upgraded the hotel and the city-owned pier.

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To see more of The Island Packet, or to subscribe to the newspaper, go to http://www.islandpacket.com.

Copyright (c) 2008, The Island Packet, Hilton Head Island, S.C.

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