|By Rachel Pritchett, Kitsap Sun,
Bremerton, Wash.McClatchy-Tribune Regional News
May 21, 2010 --BREMERTON -- The Oyster Bay Inn and Restaurant is in foreclosure and scheduled to go to auction June 11.
According to a notice of trustee's sale filed with the Kitsap County Auditor's Office, hotel owner MS & SK, Inc., owes $288,423 for four unpaid mortgage payments, along with late charges and interest fees.
It also is behind on its taxes, owing about $38,000 in 2009, according to the foreclosure papers. According to the Auditor's Office, the total taxes past due including the first half of 2010 taxes totals $70,503.
Numerous attempts to reach Chong Suk Gibbs, president of MS & SK, were unsuccessful.
Dana Kercher, front-desk manager of the Oyster Bay Inn, hinted the recession hasn't spared the hotel, but said it remains open for business.
"At this point, we are up and running," Kercher said.
Only a handful of vehicles were in the hotel's parking lot during a visit this week. The premises appeared somewhat worn compared to 1984, when it began operating as an elegant new hotel with rooms slung over the hillside overlooking Oyster Bay. Then, the restaurant's new decor featured nature scenes exquisitely etched into glass room separators, stunning lighting and excellent food.
An earlier motel on the premises opened in 1973, according to Kitsap Sun archives. Today, the establishment has 77 units in three buildings on about 2.4 acres, according to Kitsap County Assessor records.
About $4.7 million is owed on the Oyster Bay Inn mortgage, first with failed City Bank of Lynnwood and now with Whidbey Island Bank.
The property has had a series of sales transactions over the years that ranged from $2.1 million in 1994 to $5.4 million in 2008, according to assessor records. The current value of the property is about $4.2 million.
Prior owners since 2000 included Lee and Joung Corp., which purchased the hotel in 2006. Jin Soon Lee was that company's president. Two years before, it was purchased by Kyung Kyu and Minja Kim.
In spite of the down economy, hotels have been coming online at a fast clip in Kitsap County. Newcomers include two large ones not far from the Oyster Bay Inn on the redeveloped Bremerton waterfront, the Fairfield Inn and Suites and the Hampton Inn and Suites. They may have been among those siphoning off business from smaller hotels.
"I know that some of the small hotels have all been struggling," said Patricia Graf-Hoke, executive director of the Kitsap Peninsula Visitor and Convention Bureau.
Graf-Hoke and visitor bureau board member Jack Edwards estimate that business at local hotels is down by an average of 25 percent in the first quarter of 2010 compared to the same period of 2009.
A few of the smaller hotels have found niches to weather the new competition and recession, Graf-Hoke said. The Midway Inn in Bremerton, for example, goes after clients coming to town for sports tournaments, she said.
Edwards, who also is director of sales and marketing for Comfort Inn and Suites in Bremerton, said the first quarter of 2010 was disappointing for almost everyone in the local hotel industry.
"I can say recently everyone's probably seen a downturn," he said.
Properties in foreclosure proceedings sometimes don't make it all the way to the auction block. The debt can be satisfied.
But if they do go that far and there is no successful buyer, the properties go to the banks. Often banks then attempt to sell them to recoup losses. Sometimes in the case of hotels, banks continue to operate them to generate income.
The auction of the Oyster Bay Inn is scheduled for 10 a.m. at the Kitsap County Courthouse.
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