TWAIN HARTE -- After several years on the market and defaulting on its bank loans, Wildwood Inn has been sold to owners of the nearby El Dorado Motel.
Chhater and Veena Jain purchased the 21-room inn this month for $485,000. That's a bargain compared with the $1.39 million the previous owners had been asking for the modest, Bavarian-looking lodge on Meadow Drive.
Back in 2005 at the peak of the real estate market, the Wildwood sold for $890,000. The buyer then, Rock Solid Enterprises LLC, had financed that deal with loans from Delta Bank and $300,000 from the U.S. Small Business Administration.
Delta repossessed the property in June, citing $548,357 in unpaid debt.
Taxpayer-financed SBA loans typically are in "second position," which means that when a deal goes bad, the bank that made the primary loan gets paid before the government collects. Because Delta resold the inn for less than it was owed, there likely wasn't much left for taxpayers.
The Bee has requested SBA records for government-backed loans that have gone bad in this region, but that information hasn't arrived.
The SBA frequently finances motel deals in the Northern San Joaquin Valley and Sierra foothills.
During the past year, for example, the SBA approved $1.14 million for the Hotel Charlotte in Groveland and $775,000 for the Stanislaus River Inn in Strawberry, both of which are in Tuolumne County.
The government recently approved $3.2 million for Courtyard Merced and $1.3 million for Varkings Hotels in Merced County, and $4.4 million for the Sierra Hotel Group and $2.6 million for Hampton Inn and Suites, both in San Joaquin County.
The Jain family that purchased the Wildwood this month already had been managing the property. It borrowed funds from Delta Bank to finance the deal. The inn, which is several decades old, has slightly more than 7,000 square feet of motel rooms on less than a half-acre. Its rooms typically are listed for $80 to $90 per night.
NAI Benchmark commercial real estate service in Modesto brokered the Wildwood sale.
The Jains' El Dorado Motel is about a half-mile away near Black Hawk and Twain Harte drives. The family purchased that 15-room, 4,000-square-foot motel in early 2010 for $380,000. That, too, was a bargain compared with the $550,000 the motel had sold for in 2005.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or (209) 578-2196.