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At last night’s meeting, the Fortuna City Council voted unanimously to lease the River Lodge to the Fortuna Chamber of Commerce & Visitors Center to keep the venue open to the community and create new opportunities for economic growth in the city.

The vote, which was supported by the vast majority of people in attendance, went against staff’s recommendation to lease the River Lodge to the Fortuna Union High School District, which had planned to turn the venue into a conference center. CalFire had also submitted an application to lease the building for public safety training.

After issuing a request for proposals (RFP) in June, the city contracted with the Redwood Region Economic Development Commission (RREDC) to review and rank the three applications submitted to the city. City Manager Amy Nilsen said the school district’s application was selected because it was considered to be the “strongest and most complete proposal from a financial standpoint.”

Nilsen | Screenshot

“[RREDC] reviewed the proposals for financial capacity and reasonableness of multi-year financial planning and financial impact to the city,” Nilsen continued. “RREDC noted that CalFire had the highest annual lease payment, but there was some detail lacking on operating expenses and financial obligations. RREDC noted that the chamber had limited reserves and uncertainty about ongoing outside funding. Currently, the chamber has a one-time $100,000 commitment from the Humboldt Lodging Alliance [HLA], and without that one-time commitment, the chamber would be operating at a deficit.”

The chamber’s proposal — linked here — asks the city for a phased lease payment schedule that would start at $1 annually for the two-year start-up period. The annual payment would ramp up to $24,000 in the third year and $36,000 in the fourth. Once it’s up and running, the chamber expects to generate $388,000 in annual revenue through the River Lodge, the proposal states.

During the last discussion on the matter, the council asked how often the River Lodge was used and for what purposes. Nilsen shared the following graphic, noting that the venue was rented by community organizations and agencies across the county for a variety of uses.

Speaking during public comment, Chamber CEO and President Felicia Thomsson underscored the organization’s mission to “reserve and enhance the River Lodge for its intended purpose” and offered a vision of what that might look like.

“The chamber of commerce would occupy the existing River Lodge office,” she said. “The gift shop would transition into a visitors center. … The remainder of the building [would] continue to operate as an event venue and conference center. This approach ensures the continuation of the annual events our community cherishes and protects the livelihoods of the independent contractors … that many local businesses rely upon.”

Thomsson acknowledged Nilsen’s previous point about the one-time funding from the HLA, but said the chamber is “currently in discussions with community investors to cover additional startup and operational costs.”

“Furthermore, we have assembled a dedicated staff prepared to assume these responsibilities immediately upon approval of our proposal,” she continued. “Our goal is to promote our city and local businesses effectively, foster collaborations to drive economic development, and establish Fortuna as a premier visitor destination.”

HLA Executive Director Meredith Matthews also spoke in favor of the chamber’s proposal, emphasizing the River Lodge’s value to the “visitor economy,” and its potential to attract conferences, events and overnight guests to the Friendly City.

“The chamber’s proposal presents a thoughtful vision that integrates the River Lodge, the visitors center and destination marketing into a unified tourism strategy designed to increase hotel occupancy, strengthen Fortuna’s regional visibility and create measurable economic benefits for the city,” Matthews said. “The proposal specifically identifies partnerships with local hotels, expanded event programming, and the development of lodging packages as strategies for increasing overnight stays.”

Other speakers warned the council about unintended consequences of renting to someone else and taking away one of the city’s only event venues.

“I’m only one vendor who caters there, and I will stand to lose tens of thousands of dollars if the River Lodge is shut down for events,” said Julie Green-Winburn, owner of Moonlight Catering. “I think last year my sales tax to the city was over $15,000. … I understand [the other proposals would be] bringing in money [to the city] to pay a monthly fee, but you’re not going to have the sales tax, and that’s going to hurt. You’re not going to have people shopping in town, and that’s going to hurt.”

Second District Supervisor Michelle Bushnell also spoke in favor of the chamber’s application, noting that the River Lodge serves Eel River Valley and Southern Humboldt communities, not just Fortuna.

School district Superintendent Clint Duey and Jennifer Scales, unit chief for CalFire’s Humboldt-Del Norte Unit, were the only people who spoke against leasing to the River Lodge, and instead advocated for their own proposals.

Duey | Screenshot

Duey acknowledged the difficult decision before the council and emphasized the district’s role as a community partner “no matter what decision the council makes tonight.” Still, he warned against investing solely in the tourism sector.

“Tourism is an important spoke in the economic wheel of things, but please, as a council, do not hang your hat just on tourism,” he said. “In 1968, [we were told that] the creation of Redwood National Park to the north of us was going to bring thousands and thousands of tourists and save the economy. And the two hubs in the Northern California region that were going to benefit the most, were the economies of Orick and Crescent City. By all means … have tourism as an important piece, but let’s develop the mill site and bring some industry where families come in and actually stay and work in this community.”

Scales asked the council to reconsider CalFire’s proposal, emphasizing that the regional training facility would generate $50,000 in annual revenue for the city. She noted that CalFire would offer “continued community access” to “qualifying organizations,” seemingly referring to public safety agencies. 

Following public comment, Mayor Pro Tem Tammy Trent read a prepared statement in favor of the chamber’s application and made a motion to approve it, which was seconded by Councilmember Carlos Diaz. 

Diaz acknowledged that the proposals from CalFire and the school district would give the city “some immediate income and patch our holes,” but he felt the chamber’s vision would have a greater long-term impact.

The rest of the council agreed, with Councilmember Abe Stevens noting that it’s “kind of healthy” to disagree with staff’s recommendations from time to time. 

The motion passed 4-0, with Councilmember Kyle Conley absent.

Sales Tax Increase for Essential Services

Earlier in the meeting, the council received a report on Measure D, the ¾-cent sales tax hike that’s slated for the November ballot. If passed, the ballot measure would raise Fortuna’s sales tax to 1.5 cents — the same rate as Arcata and Eureka — to fund essential services, increasing city revenue by $1.8 million annually.

Nilsen provided an overview of cost-saving measures staff has already taken to address Fortuna’s ongoing budget woes.

“City revenues have not kept pace with inflation and rising costs, sales tax and transit occupancy tax [TOT] revenues have declined by $483,000 since Fiscal Year 2021-22, and are more than $1.4 million below inflation-adjusted projections,” she said. “Liability insurance costs alone are projected to increase by more than $615,000 between Fiscal Year 21-22 and Fiscal Year 26-27.”

The city has already cut $600,000 from the current budget, Nilsen said, adding that further reductions could result in the loss of nearly 10 staff positions, as seen in the graphic below.

“Without Measure D, it will be difficult — if not impossible — to maintain the police, streets, and park services to the high standard that the city is accustomed to currently,” Nilsen added.

Speaking during public comment, Fortuna Police Chief Matt Eberhardt acknowledged that his department has struggled to retain employees in recent years, but said further cuts would have a detrimental impact on the department.

Eberhardt

“I’m concerned that if we continue down our path, we’re going to lose more employees,” Eberhardt continued. “After years of cutting, I don’t see a way that we can continue reducing essential city services without eventually changing the quality of life in our community that we’ve grown to expect here.”

“Restoring funding and staffing is extremely important to our community and those of us who work here,” he continued. “Through my career, I’ve seen our community come together when those are in need. Right now, that’s us.”

The council agreed to receive the report but didn’t take any action on the item. More information about Measure D can be found here.