What's Next For Capistrano Seaside Inn: Eyesore And Historic Fail

DANA POINT, CA — For three years, the failed historic motor lodge known as the Capistrano Seaside Inn has sat abandoned and waiting for the California Receivership Group and the city of Dana Point's next move as they play a game of stalemate with the property's owner.

The historical society of Dana Point aims to see the property restored to its original quaint beauty, a goal that is mirrored by the receivership's president, Mark Adams. His group located a buyer willing to pay for that historical renovation, but then, the building's owner decided not to move forward.

In the time since the receivership took over, the property's owner—Sunshine Group LLC, owned by Dr. Ramosh Machanda of Fullerton—has run the gamut. He first wanted to demolish the Inn and build a ground-up elegant hotel with a bridge over Coast Highway in its place, according to Adams. When that idea stalled, the LLC filed for bankruptcy in 2019, court records show. The case was eventually tossed out of court. Patch has reached out to Machanda through his attorneys, and will update with their response when it is received.

Meanwhile, the receivership mitigated the worst of the issues: the failing hill behind the Inn that needed immediate work. They built a retaining wall behind the motel — to the tune of $400,000, according to Adams.

The group also worked on rehabilitation construction plans, he told Patch. They've already spent $2.5 million, leaving the unpaid bill for Sunshine Group LLC at $2.9 million.

Requests for payment have fallen on deaf ears, signaling the receivership to file for a potential foreclosure, according to Adams.

Still, the building sits.

As of 2020, the Capistrano Seaside Inn has vacant window frames, surrounding fences are toppled, and balcony lattice has been kicked out. It is in worse shape than ever, according to neighbors. Graffiti covers most walls within reach of taggers who trespass.

According to the Orange County Sheriff's Department, only one vandalism call has been made about the Inn since last year.

The Inn's tattered husk and fallen fence are a testament that few who drive by the dilapidated structure care what goes on inside.

"It's heartbreaking that the property is in the condition it's in today," Adams told Patch, adding that what's become of the Inn is a travesty.

According to Adams, the role of receivership is to guide dilapidated properties back into good shape, at the owner's expense, rather than that of the community. Unfortunately, the problem of building owners being unwilling to pay is not unique.

"His property is now protected better, as are the homeowners up above," Adams told Patch. "You can't take the benefit of someone's work and benefit from it."

Adams and the City of Dana Point have planned a hearing for the Sunshine Group LLC, for March 13.

Neighbor and community activist Toni Nelson, founder of the Capo Cares Facebook Group, has watched the project for years. She, and other residents in the area, see a bad situation getting worse.

How did it get to this point?

Built in the 1930s in the heyday of the road trip, the Capistrano Seaside Inn was once a lauded seaside drive-up motel. The 28-room property was inexpensive to visitors and attainable for those in search of a Southern California ocean-view experience.

Over the years, the coast highway widened. Trains continued to rumble through. Newer, fancier, and more costly hotels with easy beach access were built further up the coast.

The Capistrano Seaside Inn, with its affordable rooms and idyllic fireplaces, suffered from mismanagement and fell into disrepair.

Purchased for just over $2.3 million by the Sunshine Group LLC, the hotel continued to flounder. Ultimately, the Capistrano Seaside Inn earned the dubious honor of being voted one of the 10 Dirtiest Motels in America, according to TripAdvisor. Yelp placed it on its 10 Worst Motels In America. Shortly after its last reviewer complained of filth in every room, the City of Dana Point red-tagged the property. In 2017 the Orange County Fire Authority, Orange County Health Care Agency, and the Orange County Sheriff's Department deemed the inn unfit for entry until repairs were made.

The Seaside Inn eventually found its way into the care of the California Receivership Group, by means of court appointment, Adams said. The property was surrounded with a chain link fence, windows were boarded up, and "No Trespassing" signs were posted.

Fast forward to February 2020.

On just this Thursday, a section of that fencing designed to keep people out was kicked down.

Capistrano Beach resident Toni Nelson said she's concerned homeless people are trying to live on the site. She said she thinks that no matter who is responsible for paying for the structure, the building should at least be held to basic health and safety standards by Dana Point Code Enforcement.

"What if someone started a cooking fire in there? The whole place could go up!" she said.

Adams has said that if the owner of a building in receivership chooses not to pay for necessary repairs, the receivership group then has the choice to sell the repaired property to a new buyer. With the Architectural Resources Group ready to go to work as soon as possible, he remains hopeful. They are prepared to pay for the renovations that would bring the historic drive-up motel back to its original flavor, he said.

But, after three years of being boarded up and ignored, has the city of Dana Point and the California Receivership Group waited too long to fix the property?

Time will tell.