February 3, 2009 - The Columbia Gorge Hotel, fully booked for Valentine's Day and set to host more than a dozen wedding parties, has closed abruptly as foreclosure proceedings begin.

The romantic Hood River hotel hosted presidents and stars ranging from Shirley Temple to Burt Reynolds. Timber tycoon Simon Benson built it in 1921 as the "Waldorf of the West," with European-style elegance and sweeping river views.

The gorge landmark, rescued from its fate as a retirement home and restored by current owners Boyd and Halla Graves of Hood River, is for sale at $5.9 million. The couple say two sales have fallen through and financing has run out.

About 130 employees are out of work.

"Outside of losing a loved one, this is probably the most inconceivable loss of our lives," Halla Graves said Monday. "The hotel became our child, and all of our family members are wound around that property."

Graves, with a mortgage exceeding $4 million, portrays the 39-room hotel as a casualty of the global financial crisis, which has frozen credit. But bank officials say it's not that simple. A hotel that once stood on an isolated bluff as a destination property now needs more rooms to support itself, said David Williams, ShoreBank Pacific chief executive.

"Done the right way, and with probably more rooms, it would be possible to make a go of it," Williams said.

The last guests stayed Sunday, Jan. 25. The hoteliers say they scrambled to arrange financing until last Friday, when they shut the doors. Sale negotiations with the Lumiere Hotel Group of Coronado, Calif., had already fallen through for the historic property.

"The grand old dame has a lot to offer," said Matthew Nuss, Lumiere president. "I don't think I can go into detail about what the roadblocks were."

For decades, day-trippers from Portland and around the region drove up the gorge for the hotel's Sunday brunch. Guests reclined in grand wrought-iron, brass or four-poster beds. They sat in garden swing benches, sipped complimentary champagne and strolled by the top of a 208-foot-tall waterfall that cascades into the gorge.

Movie idol Rudolph Valentino stayed there, Graves said, as did silent-film actress Clara Bow. Presidents Franklin Roosevelt and Calvin Coolidge sampled the hospitality.

"One of our boys ran through the dining room naked when he was 4," Graves said.

"One year we were throwing the New Year's Eve gala, with black ties and fancy dresses," she said, "and our oldest son came to us and said, 'I was just downstairs and there's water up to my ankles.' We were calling everybody we knew to bring a pump."

Twice awarded best romantic hotel in the nation, the Columbia Gorge Hotel was named 19th best hotel in North America by Travel + Leisure magazine as recently as 18 months ago. Rooms ranged from about $159 to $350. An independently owned condominium complex next door, the Columbia Cliff Villas, echoes the hotel's stucco exterior and red tile roofs.

Joe Kennedy, Crystal Investment Property president and owner in Portland, said the economy hasn't helped with sale of the hotel, originally listed at $10 million. Kennedy says he has "quite a few interested parties" inquiring about the hotel, which needs some upgrades.

Marketing literature says the sale is forced by illness of the owner. Graves said her husband, Boyd, who bought the hotel out of receivership in 1982, had nine cardiac procedures in 2007. The couple live close by the hotel.

"We're penniless, and my husband's 73 years old," said Graves, who maintains she's old enough not to reveal her age. "I've got to go to work. It's daunting."

Yet Graves keeps laughing, saying she must remain philosophical to survive. "This is just a speed bump," she said, adding, "I wish I believed that."

The hotel, which employed 30 recently and would hire up to 130 workers during the May-through-December high season, served as an economic engine for Hood River. The tourist town has also lost another couple of nice restaurants, Graves said, in the past couple of months.

"We've owned and operated the hotel longer than any of its earlier owners," she said. "It's probably the most meaningful thing we've done in our lives."

Graves said former guests are calling from across the country to express concern. She hopes to open the hotel one more day next week for a scheduled wedding, but won't reveal the day to protect the couple's privacy.

"The hotel will rise," Graves said. "Somebody will reopen it.

"It is too well-loved by the people who have been there, and it's too beautiful a property not to."

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