STAFF REPORT
Discussion Agenda Item
DATE: June 15, 2026
TO: Honorable Mayor and Council Members
FROM: Amy Nilsen, City Manager
SUBJECT: River Lodge Lease Update and Consideration of Lease Options STAFF RECOMMENDATION:
Receive staff report and reaffirm prior City Council direction to lease the River Lodge to another public entity.
EXECUTIVE SUMMARY:
During the April 27 Fiscal Year (FY) 2026–27 Proposed Budget presentation staff shared sales tax revenues are not keeping pace with inflation, resulting in a gap of over $1,000,000; transient occupancy taxes revenues have declined by $400,000; and Liability insurance has increased by over $615,000. Therefore, staff brought several cost-saving measures to the City Council for consideration, one of which was either leasing or selling the River Lodge. City Council directed staff to not explore selling the River Lodge but instead, directed the City Manager to pursue leasing the River Lodge facility to a local public agency and return to Council to discuss the long-term viability of the River Lodge if no deal is established. Since this time the Fortuna Union High School District (FUHSD) has expressed interest in leasing the River Lodge beginning January 1, 2027.
DISCUSSION:
Surplus Land Act
The Surplus Land Act (Gov. Code § 54220 et seq.), and more specifically, under Government Code § 54221(d), a lease is only considered a “disposition” subject to the Surplus Land Act if the total lease term exceeds 15 years, inclusive of all extension or renewal options. A lease with a total possible term of 15 years or less is not a “disposition” under the statute, and therefore the Act’s notice, negotiation, and Housing and Community Development compliance requirements would not apply. Separately, the statute also provides that a lease is not a “disposition” if no development or demolition will occur on the property, regardless of the lease term.
In practical terms, the Surplus Land Act should not be triggered if the City structures the River Lodge lease with a total possible term of 15 years or less, including all extension or renewal options, or if the lease prohibits development and demolition of the property. This would allow the City to proceed without the surplus declaration, Notice of Availability, and related statutory process currently outlined in the staff report.
Discussion Agenda Item 6a
By contrast, if the City contemplates a lease exceeding 15 years, including all extension or renewal options, and allows development or demolition, the City should assume that the Surplus Land Act applies unless a specific statutory exemption is identified. Since the initial conversations between the City and FUHSD did not include a lease length of more than 15 years and substantial redevelopment of the River Lodge staff proceeded with negotiations.
Fortuna Union High School District
The City and FUHSD staff have met to discuss potential terms of a River Lodge lease and have also conducted a walkthrough of the facility. The potential lease would allow the City to retain ownership of the River Lodge while partnering with the Fortuna Union High School District to activate the facility for public-serving uses. The structure generally shifts day-to-day operational responsibility to the tenant, helping reduce the City’s ongoing costs while maintaining long-term public benefit.
The City and FUHSD will continue to negotiate a lease over the coming months with a lease commencing on January 1, 2027.
Public, Private, and Unsolicited Proposal Consideration On June 10, 2026, the City received an unsolicited proposal from Kinetic Hospitality Group Inc., submitted by Erica Thompson, requesting consideration of a five-year lease to operate and manage the River Lodge facility.
The proposal outlines a private operational model intended to transition the River Lodge from a City-operated facility to a privately managed hospitality and event venue. The proposal indicates that the operator would assume responsibility for day-to-day operations and maintenance and operate the facility through private revenue sources, with the objective of eliminating the current operational subsidy from the City’s General Fund.
The proposal includes multiple lease structure options, including market-rate and reduced-rate models, as well as provisions for an initial improvement period and private capital investment in facility upgrades. It should be noted, the entity’s mentioned in the proposal do not currently exist, and the intent of Ms. Thompson, should the City accept her proposal, is to begin the corporate entity application and apply for city business licenses. The entities mentioned in the proposal are specifically tied to the River Lodge and will not exist if this proposal is not accepted.
Because the Kinetic Hospitality Group proposal is unsolicited and has not yet been vetted, staff has not evaluated the proposer’s financial capacity, operational experience, insurance capacity, entity formation status, references, proposed maintenance obligations, or ability to satisfy applicable regulatory requirements. If Council wishes to consider a private operator model, staff recommends further due diligence before entering negotiations with any private operator.
Leasing the River Lodge to a public entity, such as the Fortuna Union High School District, may provide a higher level of institutional stability and alignment with community-serving uses, while maintaining clear public accountability. In contrast, leasing to a private operator may introduce opportunities for increased revenue generation and expanded programming, but also involves Discussion Agenda Item 6a
additional considerations related to financial risk, operator capacity, long-term oversight, and consistency with Council priorities for public use of the facility.
At this time, no analysis, vetting, or negotiation of the private proposal has been conducted by staff. Should the City Council wish to consider leasing to a private operator, further due diligence, financial analysis, and a formal procurement may be warranted to ensure fairness, transparency, and alignment with City policies. Although staff are not aware of a requirement mandating competitive bidding for a lease of City-owned real property to a private operator, a formal solicitation process may be advisable to promote transparency, compare market interest, and reduce concerns regarding preferential treatment.
Conclusion
The City Council now has two primary policy pathways to consider:
(1) Continuing with the current direction to lease the facility to a public agency; or (2) Expanding consideration to include private operational models, which would require additional analysis and direction to staff to do so.
FINANCIAL IMPACT:
The chart below summarizes River Lodge revenues and expenditures for fiscal years 2021–22 through 2025–26, along with the corresponding General Fund subsidy required to support operations. Over this five-year period, the General Fund has contributed nearly $1,000,000 to sustain the facility.
Due to ongoing declines in key General Fund revenue sources, including sales tax and transient occupancy tax, it is no longer financially sustainable for the City to continue subsidizing River Lodge operations at this level. The adopted FY 2026–27 budget includes a $180,000 reduction to River Lodge expenditures and assumes that the facility will be leased to a public or nonprofit entity effective January 1, 2027, thereby eliminating or significantly reducing the need for a General Fund subsidy.
If the City Council provides direction that alters this assumption, for example, by continuing City operation of the River Lodge beyond January 2027, additional General Fund reductions or alternative revenue sources will be necessary to offset the ongoing costs. These adjustments could include reductions to City services or staffing.
RECOMMENDED CITY COUNCIL ACTIONS:
1. Receive staff presentation and review questions with staff.
2. Open Public Comment
Discussion Agenda Item 6a
3. Close Public Comment
4. Provide direction to staff, which may include:
• Reaffirming prior direction to pursue a lease with a public entity; or • Directing staff to evaluate private lease/operator proposals • Directing staff to return with a proposed process and evaluation criteria for consideration of private operator proposals.
ALTERNATIVE TO STAFF RECOMMENDATIONS:
Each alternative presents different trade-offs related to financial impact, level of public control, operational risk, and community access.
a. Temporarily Suspend Operations (“Mothball” the Facility) - Direct staff to suspend most operations at the River Lodge on a temporary basis while preserving the asset.
This is not recommended as this would reduce operating costs in the short term but would highly likely result in deferred maintenance issues and lost community use. b. Sell the River Lodge Property - Direct staff to explore the sale of the River Lodge property. This would require further evaluation of property value, identification of potential buyers, and compliance with the Surplus Land Act and other applicable regulations. Proceeds from a sale could be used to offset the City’s structural deficit or reinvest in core services.
ATTACHMENTS:
A. Kinetic Hospitality Group Inc. Proposal (received June 10, 2026) B. Humboldt Lodging Alliance email (received June 10, 2026) KINETIC HOSPITALITY GROUP INC.
707-616-8458 | [email protected] | Fortuna, California June 10, 2026
To: City Manager & Members of the Fortuna City Council
City of Fortuna
621 11th Street
Fortuna, CA 95540
SUBJECT: SUBMISSION OF OPERATIONAL & LEASE MANAGEMENT PROPOSAL – FORTUNA RIVER LODGE Dear City Manager and Council Members,
Please accept the attached formal proposal from Kinetic Hospitality Group Inc. to assume the exclusive operational lease and management of Fortuna River Lodge under a five-year agreement. As a resident with deep personal and professional roots in Fortuna, I am intimately aware of how vital the River Lodge is to our community’s identity, and equally aware of the compounding fiscal challenges it currently presents to the City’s general fund.
Our proposal outlines a comprehensive, market-grounded operational shift designed to transition the River Lodge from a passive space-rental entity into an active, multi-tiered hospitality asset. By introducing an expert, private-sector corporate framework, we intend to accomplish three immediate objectives for our city:
● Eliminate the Operational Deficit permanently: Kinetic Hospitality Group Inc. will operate entirely on private commercial revenues, completely removing the building’s overhead and maintenance burdens from municipal tax dollars.
● Drive Significant Local Economic Revitalization: Through direct cross-promotional booking strategies, we will funnel multi-day corporate symposiums and destination weddings straight into Fortuna's local hotel pipeline, dramatically boosting Transient Occupancy Tax (TOT) yields and downtown merchant foot traffic. ● Protect and Carry Forward the Civic Legacy: We remain fiercely committed to our community. Our model will feature a "Facility-Only" tier to preserve open-door access for local small-business vendors, handles the regulatory risks of bar operations for local non-profits while returning 100% of net beverage proceeds directly to their fundraisers, and ensures the City retains unfettered, high-service access for public functions.
Furthermore, I want to emphasize that our proposal explicitly addresses the critical timeline currently facing the facility.
Because booking intake has been paused, Fortuna is actively losing ground on the upcoming winter and holiday scheduling windows. Corporate holiday banquets, winter destination weddings, and seasonal community events plan and allocate their budgets months in advance. Securing the lease immediately allows KHG to launch an aggressive localized marketing campaign, reopen the calendar, and aggressively rescue the winter booking season before regional organizers commit to alternative spaces out of town.
Most of you know me, my family, my work ethic, and my heart for this city. I have done my homework, the financial models are fully vetted for our local market, and we bring the unique combination of logistical oversight and structural asset preservation required to make this transition a definitive success. I am eager to stand beside you, and our community, and partner with the City to steward the future of the River Lodge.
I kindly request that this proposal be included in the upcoming agenda packet for formal review at the regular City Council meeting this Monday. Thank you for your time, your consideration, and your continued service to the City of Fortuna.
Sincerely,
Erica Thompson
President, Kinetic Hospitality Group Inc.
Enclosure: Operational & Lease Management Proposal Packet
OPERATIONAL & LEASE MANAGEMENT PROPOSAL
Fortuna River Lodge
Submitted to the Fortuna City Council by Kinetic Hospitality Group Inc.
I. Executive Summary
The Fortuna River Lodge is one of this community’s most valued public assets — and one of its greatest untapped opportunities. Today, the Lodge generates roughly $219,000 in annual revenue against approximately $470,000 in operating costs, a structural deficit carried by the City’s general fund. That gap is not a reflection of the building or the community; it is a reflection of a business model limited to passive room rental.
Kinetic Hospitality Group Inc. (KHG) proposes to assume the exclusive lease and management of the River Lodge under a 5-year agreement that accomplishes three things for the City of Fortuna:
1. Eliminates the operational deficit permanently. KHG operates entirely on private commercial revenue, with no draw on city tax dollars or public funding.
2. Generates new city revenue beyond the lease. The four hotels adjacent to the Lodge hold 210 rooms built to serve this venue. At just 50% event-driven occupancy, the Lodge can generate an estimated $40,950 per month in Transient Occupancy Tax for the City — revenue that exists only when the venue is busy.
3. Preserves the Lodge’s community character. Local vendors keep full access through a Facility-Only rental tier, non-profits keep their bar fundraising proceeds, and the building remains available to the City for its own public functions.
KHG will operate a community-first, dual-brand model: KHG serves as master operator — responsible for logistics, disciplined budgeting, venue marketing, and physical asset preservation — while Hearth & Harvest Co., our event planning and catering division, offers full turnkey packages for clients who want an all-inclusive experience. The result is a complete, end-to-end event ecosystem under a single contract, restoring the River Lodge as the premier event and conference center in the region.
II. Business Model & Financial Projections
The current shortfall exists because an 11,000-square-foot regional venue is operating as a basic room rental. KHG will convert the Lodge from a passive space-rental entity into an active, multi-tiered hospitality asset with four revenue streams: venue rental, in-house catering and event planning, commercial beverage service, and vendor/facility fees.
How the Growth Trajectory Is Achieved
Our projections are deliberately conservative: initial three-year revenue targets were scaled back 15% to reflect realistic, localized demand for the Fortuna market. Each stage of growth is tied to specific operational actions rather than assumptions:
• Year 1 (Ramp-Up): Re-launch marketing, professional kitchen inspections, cosmetic upgrades, and onboarding of the first wave of recurring corporate and community bookings. • Year 2 (Growth): Full activation of in-house catering and bar service, mid-week corporate symposium packages, and coordinated booking programs with adjacent hotels.
• Year 3 (Stabilization): Mature event calendar with established repeat clients, destination weddings, and regional trade shows operating at full capacity.
• Years 4–5 (Maturity): Modest, sustainable growth of approximately 5% annually — no aggressive expansion assumptions.
Revenue Category Year 1
(Ramp-Up)
Year 2
(Growth)
Year 3
(Stabilized) Year 4 Year 5
Venue Rental Fees $206,125 $263,500 $329,800 $346,300 $363,600 In-House Catering & Event Planning $80,750 $127,500 $178,500 $187,400 $196,800 Commercial Beverage / Bar Service $51,000 $80,750 $110,500 $116,000 $121,800 Vendor / Facility Maintenance Fees $12,750 $18,700 $25,500 $26,800 $28,100
TOTAL ESTIMATED GROSS
REVENUE $350,625 $490,450 $644,300 $676,500 $710,300
Note: As a private operator, KHG’s overhead is structurally leaner than municipal personnel and pension cost structures. These targets represent a sustainable, self-funding model that permanently removes the operational liability from the City’s general fund.
III. Lease Framework & Initial Capital Investment
Asset Condition & Maintenance Boundaries
The River Lodge is a well-built, nearly 30-year-old asset in good working order and ready for immediate events. The house audio-visual systems are new and fully functional, and existing tables, chairs, and dishware are sufficient for any event appropriately sized for the building. To bring the facility to a premier, turnkey standard, KHG will fund the following immediately upon lease commencement, at its own cost:
• Professional inspections of all commercial kitchen equipment; • Cosmetic updates throughout guest-facing areas; and
• Dedicated maintenance contracts with independent local professionals for routine structural repairs and grounds upkeep.
Landlord / Tenant Responsibility Split
The City of Fortuna retains traditional property-owner responsibility for major structural capital improvements (e.g., roof or foundation replacement). KHG assumes full financial and operational responsibility for all preventative, routine, and operational building maintenance — protecting the asset and reducing baseline structural depreciation at no cost to the City.
Three Lease Options for Council Consideration
The City’s market analysis values the 11,000-square-foot structure at $1.00–$1.25 per square foot, or $11,000–$13,750 per month. Recognizing the Council has previously considered rate reductions for public-benefit entities, KHG proposes three options:
1. Option A — Non-Profit Equalization Rate: A stable, reduced monthly rate comparable to what is being offered to non-profit entities for the full 5-year term, reflecting the civic programming, non-profit partnerships, and small-business incubation commitments KHG is preserving (detailed in Section IV).
2. Option B — Market Rate with 6-Month Improvement Period: A standard 5-year lease at the City’s marketanalysis rate, with the first six months structured as a non-payment period, allowing KHG to direct that capital immediately into the inspections, cosmetic improvements, and maintenance contracts described above.
3. Option C — Blended Ramp-to-Market Structure: A 5-year lease that pairs the improvement period with a stepped path to full market rent. Months 1–6 are structured as a non-payment period, directing KHG’s capital into the initial inspections, cosmetic improvements, and maintenance contracts. Months 7–24 carry a reduced rate of $8,500 per month while the venue completes its revenue ramp-up. Beginning in Month 25, rent steps up to the City’s full market-analysis rate for the remainder of the term. This structure aligns the City’s rental income with the Lodge’s actual revenue trajectory — the City receives below-market rent only while the business is being rebuilt, and full market rent once operations stabilize in Year 3.
IV. Booking Transition & Winter Calendar Urgency
A critical element of a successful management handover is the protection of active clients and the capitalization of immediate seasonal demand.
● Seamless Contract Handover: Kinetic Hospitality Group Inc. will completely honor and seamlessly execute all open event contracts and bookings currently held by the City of Fortuna. We will absorb these clients into our corporate scheduling matrix with zero disruption to their selected dates, baseline pricing, or logistical expectations, ensuring a professional transition that protects the city's community relationships. ● Winter and Holiday Scheduling Urgency: Making a swift decision on this lease proposal is imperative for the near-term commercial viability of the venue. Because the city has recently passed on accepting new reservations at the River Lodge, we are losing precious time to fill the upcoming winter and holiday calendar. Corporate holiday banquets, winter destination weddings, and seasonal community events plan and allocate their budgets months in advance. Securing the lease immediately allows KHG to launch an aggressive localized marketing campaign, reopen the calendar, and aggressively rescue the winter booking season before regional organizers commit to alternative spaces out of town.
V. Leadership, Transparency & Fiscal Separation
KHG is led by Erica Thompson, a Fortuna resident with deep roots in this community. In the interest of full transparency, we disclose the following directly to the Council:
• Independent ownership. Kinetic Hospitality Group Inc. and Thompson Squared Inc. (dba Plumb Construction) are entirely separate corporations with distinct, standalone ownership. KHG holds no affiliation with the construction firm.
• Advisory role only. Plumb Construction’s 20 years of structural expertise and professional contractor network will benefit this project solely in an advisory capacity, strengthening KHG’s preventative maintenance protocols at no cost to the City.
• No public funding. KHG will operate entirely on private commercial revenue and will not receive City tax revenue or public funding for its operations at the River Lodge. • City use of the facility. When the City wishes to use the Lodge for its own public events — such as a Town Hall workshop or the annual State of the City Breakfast — the City will receive the highest tier of service the same as any client, billed only for the direct event and hospitality services used, pursuant to the non-profit rate tier established by KHG.
This structure ensures a complete, clean financial break for the City’s general fund while keeping the River Lodge fully available for local government functions.
VI. Community Partnerships & Economic Revitalization
1. The Local Hotel Pipeline — Driving TOT Revenue. Four hotels adjacent to the River Lodge, with a combined capacity of 210 rooms, were built specifically to serve this venue. By driving mid-week corporate symposiums, trade shows, and weekend destination weddings, KHG intends to fill those rooms. At Fortuna’s 12% Transient Occupancy Tax rate (10% net yield to the City) and a conservative off-season average daily rate of $130, the City’s direct tax benefit scales as follows:
Occupancy Tier Rooms Filled / Night Nightly Hotel Revenue Est. Monthly City TOT Lift (10%)
50% Occupancy 105 rooms $13,650 $40,950
75% Occupancy 158 rooms $20,540 $61,620
100% Occupancy 210 rooms $27,300 $81,900
To sustain this engine, KHG will host quarterly hotel-partner meetings to share calendar data, coordinate booking packages, and maximize out-of-town foot traffic for downtown shops and restaurants.
2. Local Advisory Board. KHG will establish an Advisory Board of regional industry experts and local business owners, meeting regularly to guide the Lodge’s long-term direction and ensure it serves the evolving economic needs of the city as a whole.
3. Protecting the Pro-Vendor Legacy. The City built this Lodge to give local small businesses a place to profit, and KHG will honor that. Clients remain completely free to bring their own local caterer, decorator, or planner. A “Facility-Only” rental tier will be maintained to keep the space accessible to everyone.
4. The Non-Profit Beverage Partnership. Bar sales are a vital fundraising tool for local non-profits, and KHG will protect that. For registered 501(c)(3) galas, Hearth & Harvest will manage permitting, liquor liability, inventory procurement, and professional staffing — and donate 100% of net bar proceeds back to the hosting non-profit, less only a 5% facility administration fee. The non-profit keeps the money; KHG absorbs the regulatory risk.
VII. Insurance & Risk Management
KHG will carry commercial general liability, liquor liability, property, and workers’ compensation coverage at limits acceptable to the City, naming the City of Fortuna as an additional insured, with full indemnification provisions to be set forth in the final lease agreement.
VIII. Conclusion
Kinetic Hospitality Group Inc. offers the City of Fortuna a clean, well-planned exit from an ongoing financial deficit — without the community losing control of one of its favorite assets. We have done our homework, the numbers are grounded in the Fortuna market, and we bring both personal dedication and operational discipline to keep this building safe, beautiful, and busy.
We respectfully ask the Council to direct staff to enter lease negotiations with KHG under one of the three frameworks proposed in Section III. Let us take the financial weight off the City’s shoulders and put the River Lodge back where it belongs — at the center of Fortuna’s economic growth.
Respectfully submitted,
Erica Thompson, President
Kinetic Hospitality Group Inc.
C: 707-616-8458
E: [email protected]
You don't often get email from [email protected]. Learn why this is important From: Siana Emmons
To: Amy Nilsen
Subject: FW: Preserving the River Lodge as a Community and Tourism Asset Date: Wednesday, June 10, 2026 11:39:22 AM
Attachments: ATT00001.png
I didn’t respond, however I’m happy to let her know it will be distributed to Council, but wanted you to review first.
Thanks!
Siana L. Emmons, CMC
City Clerk/Human Resources Director
City of Fortuna
Phone: (707) 725-1409
621 11th Street, Fortuna, CA 95540
http://www.friendlyfortuna.com
***City of Fortuna Administrative Offices are Closed on Friday.
From: Meredith Matthews <[email protected]> Sent: Wednesday, June 10, 2026 11:30 AM
To: Siana Emmons <[email protected]>
Subject: Preserving the River Lodge as a Community and Tourism Asset Please forward to the City Manager and City Council
Dear City Manager Nilsen and Members of the Fortuna City Council, On behalf of the Fortuna Lodging Alliance, I am writing to express our concern regarding discussions about leasing the Fortuna River Lodge in a manner that would eliminate or significantly reduce its availability for events, conferences, weddings, and other visitorserving activities.
The Fortuna Lodging Alliance has long recognized the River Lodge as an important community asset and a driver of overnight visitation. In fact, the Alliance invested $25,000 toward upgrades to the facility's sound system because of the value it provides to the local hospitality industry and the broader Fortuna economy.
While we understand and appreciate the City's need to address ongoing budget challenges, we urge the Council to carefully consider the economic impact of removing the River Lodge from the visitor economy. Unlike many city facilities, the River Lodge serves as a destination venue that attracts guests from outside the area for weddings, meetings, tournaments, reunions, trainings, and special events. These visitors stay in local hotels, dine in local restaurants, purchase fuel and supplies, and support businesses throughout the community.
At a time when the City has reported a decline in Transient Occupancy Tax revenues, preserving assets that generate overnight stays should be an important consideration.
Decisions regarding the future use of the River Lodge should include an evaluation of the facility's contribution to local lodging demand and its role in supporting tourism-related economic activity.
The Fortuna Lodging Alliance would be concerned about any long-term lease arrangement that removes the River Lodge from public event use or significantly limits its ability to host activities that generate visitor spending and hotel occupancy. While partnerships with public agencies and nonprofit organizations may offer opportunities to reduce operating costs, we encourage the City to prioritize models that maintain the facility's role as an event venue and visitor-serving asset.
We respectfully request that the City engage local lodging stakeholders as discussions continue and that any evaluation of future River Lodge operations include consideration of the economic benefits generated through tourism, overnight visitation, and local business activity.
The River Lodge is more than a building. It is an important piece of Fortuna's visitor infrastructure and a valuable contributor to the local economy. We hope the City will pursue solutions that preserve and strengthen that role for years to come.
Thank you for your consideration and for your continued service to the Fortuna community.
Sincerely,
Meredith Matthews
Executive Director
Humboldt Lodging Alliance
Meredith Matthews
Executive Director
Humboldt Lodging Alliance
(707)499.0809
From: Ash Goyal
To: Siana Emmons; Amy Nilsen; Mike Johnson; Tami Trent; Kyle Conley; Abe Stevens; Carlos Diaz Subject: Best Western Fortuna: Request to Preserve River Lodge Conference Center as a Community Event Venue Date: Friday, June 12, 2026 8:00:54 AM
You don't often get email from [email protected]. Learn why this is important Dear Mayor and City Council Members,
I hope you are doing well.
I am writing as the owner of the Best Western Country Inn in Fortuna regarding the potential lease of the River Lodge Conference Center to a school district.
While I understand the City's desire to find a productive long-term use for the facility, I respectfully ask the Council to carefully consider the economic impact that such a decision may have on Fortuna's hospitality industry and local businesses.
The River Lodge Conference Center has historically served as an important venue for weddings, corporate meetings, conferences, social gatherings, and community events. These events bring visitors into Fortuna who utilize local hotels, restaurants, retail businesses, and other services. As a result, they generate significant economic activity and valuable Transient Occupancy Tax (TOT) revenue for the City.
If the facility is leased exclusively to a school district and becomes unavailable for public and private events, much of this visitor traffic will disappear. This would likely reduce hotel occupancy, event-related lodging revenue, restaurant spending, and overall tourism activity in Fortuna. At a time when operating costs for hotels and local businesses have increased substantially, the loss of this important demand generator would have a significant negative impact on the city’s hotels, Transient Occupancy Tax (TOT), and local economy.
I respectfully encourage the Council to consider alternative options, including leasing the facility to a qualified third-party operator who would continue to manage and promote the venue as an event center. Such an arrangement could preserve the facility's role as a destination for weddings, corporate functions, community celebrations, and other events while continuing to generate economic benefits for local businesses and tax revenue for the City.
My intention is not to oppose the school district's needs, but rather to ensure that the broader economic interests of Fortuna's hotels, businesses, employees, and residents are fully considered before a final decision is made.
Thank you for your time, consideration, and service to our community. I would be happy to discuss this matter further if it would be helpful.
Sincerely,
Ash Goyal
Owner
Best Western Country Inn
Fortuna, California
408-431-8613
From: Super 8 Fortuna
To: Siana Emmons; Amy Nilsen; Mike Johnson; Tami Trent; Kyle Conley; Abe Stevens; Carlos Diaz Subject: Fortuna River lodge
Date: Monday, June 15, 2026 10:00:35 AM
You don't often get email from [email protected]. Learn why this is important Dear Mayor and City Council Members,
My name is CJ Patel and I own the Super 8 by Wyndham here in Fortuna. I have been in the hotel business in this community since 1993 and I felt I needed to write to you about the River Lodge because this decision matters a lot to those of us who depend on Fortuna being a place people want to visit and stay.
I want to be honest with you. When I heard the River Lodge might be leased to a school district I got concerned. Not because I have anything against the school district but because I know firsthand what happens to hotel occupancy when there are no events bringing outside visitors to town. You feel it immediately. Rooms sit empty, staff hours get cut, and the whole corridor gets quiet.
The River Lodge at its best is not just a building. It is the reason people drive to Fortuna from Redding or Sacramento or the Bay Area for a wedding weekend. It is the reason a company books 15 to 20 rooms at my property for a two day training. It is the reason a family reunion fills up half the hotels on the strip. That is the kind of business that does not just help me. It helps every restaurant, every gas station, every shop downtown.
Fortuna's TOT is already down $400,000 according to the staff report. I see that in my numbers too. The River Lodge operated by the right private operator is one of the few real tools this city has to turn that around. A good hospitality operator is going to go out and actively sell that venue to corporate groups, wedding planners, and regional organizations.
They are going to put together packages that make people want to come to Fortuna and stay for multiple nights. At 10% TOT every one of those overnight stays puts money back in the City's pocket.
I just ask that the Council takes a serious look at private operator options before making a final call. The River Lodge has so much potential and it would be a shame to see it go in a direction that takes it off the map as an event destination.
Thank you for your time and service to our community.
Sincerely,
CJ Patel
Super 8 Fortuna
1805 Alamar Way
Fortuna, CA 95540
P: (707) 725-2888
F: (707) 725-1895
[email protected]
From: Comfort Inn & Suites
To: Siana Emmons; Amy Nilsen; Mike Johnson; Tami Trent; Kyle Conley; Abe Stevens; Carlos Diaz Subject: River Lodge conference center
Date: Monday, June 15, 2026 10:22:12 AM
You don't often get email from [email protected]. Learn why this is important Dear Mayor and City Council Members,
My name is Jay Patel and I am a co-owner of the Comfort Inn & Suites here in Fortuna. I have been running hotels in this community for many years and I care deeply about what happens here. I wanted to share my thoughts on the River Lodge before the Council makes a final decision because I think it is important you hear from local business owners who see the economic impact of this venue firsthand every single day.
I want to start with a real example from just last month. The weekend of May 15th and 16th our hotel was already busy from Cal Poly Humboldt graduation overflow. Normally the following Sunday would be a slow day for us. Instead we stayed busy because SERCAL, the California Society for Ecological Restoration, had booked the River Lodge for their statewide annual conference running May 18, 19, and 20. These were scientists, biologists, ecologists, and environmental professionals traveling from all over California. They filled hotel rooms across Fortuna, they ate at our restaurants, they stopped at local shops, and many of them took time to explore Ferndale and the Avenue of the Giants. What could have been a quiet stretch between the graduation weekend and the Memorial Day holiday turned into a solid week of business for Fortuna. That is exactly what the River Lodge can do when it is being used the right way.
And that is just one recent example. Chevron has hosted large corporate events at the River Lodge. Cal Fire holds training programs and meetings here throughout the year that bring close to 100 room nights per day of training. State agencies, government departments, and professional organizations book the River Lodge for multi day conferences on a regular basis.
Weddings bring families from all over California for full weekends. Class reunions, sports groups, and corporate retreats fill our rooms on nights that would otherwise be empty. The River Lodge is the only facility in Fortuna that can accommodate this kind of event and there is nothing else in the area that comes close.
Our hotels were already operating in this corridor when the City built the River Lodge. It was built to bring visitors to Fortuna and to give people a reason to stay overnight. That vision was right then and it is still right today. When people come to Fortuna for an event they do not just show up and leave. They discover this area. They visit the Avenue of the Giants and drive through Ferndale. They take photos and post them online. They tell their friends and family about Fortuna. Some of them come back on their own. That kind of word of mouth and organic exposure for our community is something you simply cannot put a price on.
Fortuna's TOT revenue is already down $400,000 and I feel that in my own business every single month. The River Lodge with the right private operator actively going out and selling it to groups, organizations, and companies from outside the area is one of the most powerful tools this city has to turn that around. At Fortuna's 10% TOT rate the room nights generated by events like SERCAL or a multi day Cal Fire training translate into thousands of dollars going straight into the City's general fund at zero additional cost to the City.
I have a lot of respect for the Fortuna Union High School District and everything they do for our kids and our community. My concern is not with them. My concern is that if the River Lodge is no longer available for the kinds of events that bring overnight visitors to Fortuna that business will go to Eureka or Arcata and it will be very hard to get back once it is gone.
I respectfully ask the Council to give private operator proposals a serious and fair look before making a final decision. The right operator at the River Lodge will go out and sell it aggressively, bring people to Fortuna, fill hotel rooms, support local restaurants and shops, and generate real TOT revenue for the City. That is the highest and best use of that building for our community and for Fortuna's economic future.
Thank you for your time and for everything you do for this city. Please feel free to call me anytime.
Sincerely,
Jay Patel
Co-Owner
Comfort Inn & Suites Fortuna
707-725-7025