By Elliott Bochstein, RCAC staff writer
About three hours north of San Francisco along California’s salt-misted, serpentine Highway One lies Point Arena, a Mendocino County town of 500 that is among the smallest incorporated communities in the state. Surrounded by blooming coastal prairies, towering bluffs and ancient Douglas fir, cypress and redwood groves, the town contains some of the most breathtaking natural beauty in the American West. Its nearly 1,700 acres of rugged, pristine coastline includes four state Marine Protected Areas (MPAs) and the Point Arena-Stornetta Unit, the only land-based portion of the California Coastal National Monument.
A little over two centuries ago, the Pomo Indigenous people held stewardship over the land even as European colonial missions, outposts and settlements had just begun to emerge. The 1848 U.S. annexation of Mexico’s northern territories and discovery of gold at Sutter’s Mill brought a tsunami of change as settlers, prospectors and profiteers flooded westward. Point Arena’s iconic lighthouse recalls its history as a key port during California’s early industrialization, when local logging operations fueled the building of cities across the West Coast.
Today, Point Arena is a lodging, hospitality and tourism hub featuring farm-to-fork delicacies, local wine, artisanal goods and a vibrant arts community. The town is a veritable paradise for hikers, anglers, whale watchers, kayakers and anyone seeking recreation and retreat in a serene environment. There’s even some gambling available at the Native American-owned Garcia River Casino for those who wish to try their luck. However, a general shortage of local jobs means a higher-than-average number of residents live below the poverty line.
It was Point Arena’s blend of coastal charm and rustic splendor that drew Jeff Hansen and his wife Laura Cover from their hometown of Salt Lake City, Utah. He was a third-generation construction contractor who had bought and rehabbed properties since 1980, while she was a social worker who always dreamed of living by the sea. About 10 years ago, they searched for a coastal property they could renovate and convert into a boutique motel. After three years they found the Seashell Inn, a roadside motel built in the 1960s that had since devolved into a blighted eyesore. Yet its location directly on Highway 1, just minutes from the ocean in the small business district, made it ideal for a new project. A combination of grant funding, private investments and savings enabled the Hansens to acquire the property for $345,000 in 2015, along with an adjacent building for $100,000.
“It may have been a little naive on our part,” Hansen concedes, “but we purchased it, sold everything we owned, threw everything else in a U-Haul, rolled up our sleeves and hoped to rebuild it with my crew.”
The Hansens secured several loans throughout the construction phase to keep up with unplanned costs, setbacks and delays. Relatives pooled their funds, confident of the family venture’s eventual success. Local independent contractors and workers in the building trades also contributed to the project. To pay tribute to the Mendocino coast’s native plants, the Hansens decided to name their new inn the Wildflower Boutique Motel.
However, the couple had difficulty obtaining traditional bank financing. Hansen sought out other forms of assistance and eventually learned about Rural Community Assistance Corporation’s (RCAC) services. As a nonprofit Community Development Financial Institution (CDFI), RCAC’s Loan Fund provides low-interest loans and technical assistance to small businesses to create jobs and improve economic conditions in underserved communities across the rural West. RCAC loans through the U.S. Department of Agriculture Rural Development (USDA RD) Business and Industry (B&I) Guaranteed Loan Program are guaranteed for between 60 to 80 percent, depending on the loan amount.
RCAC connected the Hansens with Senior Loan Officer Bill Reynolds and Credit Manager Robert Longman, who began guiding them through the often-complex process of complying with USDA terms and conditions to secure a loan to refinance existing loans. Motel construction had been ongoing for five years already, but it still wasn’t ready to be financed.
“He still needed to do so much work, but we stayed in touch and worked through the process,” Reynolds said. “That’s what a loan officer will do; even if the project’s not quite ready, we offer any advice we can for them to succeed.”
The Hansens provided Reynolds and Longman with financial reporting and other updates as the loan officers helped them work through a list of USDA RD loan requirements, such as providing a feasibility study, an appraisal and an environmental report.
Meanwhile, Hansen worked tirelessly to make the Wildflower a truly exceptional destination. Solar panels covered the rooftops, redwood salvaged from the old Seashell Inn comprised the new ceiling, and the parking lot included both Tesla and universal charging stations. Cover decorated the rooms with beautiful, framed images of the region’s native plants, including several she had taken herself. Each detail – from the natural stone floors to the handmade linens and reclaimed cypress furnishings – was thoughtfully curated to ensure a memorable and elegant stay.
“He was putting in these way over-the-top amenities which were beautiful, and he kept wanting to do more, but you also have to keep the business side in mind,” Reynolds said. “The reality is that failure is not at all unusual for new businesses.” Yet Hansen knew these generous offerings would distinguish him from the competition.
“When an owner gets involved in the construction phase, they fall in love with their project. From our standpoint as lenders, you sometimes don’t want that; you’ve got to stick to your budget,” Reynolds said. “More conservative lenders would advise them to set up something barebones and charge the same. What determines the value is the number of rooms, the profits they generate and the overhead. As lenders, we can’t sugarcoat things. We’re not cheerleaders; we have to be the devil’s advocate and we want to challenge you.”
The Hansens welcomed the RCAC loan officers’ blunt advice. “I can’t say enough about the high regard we hold for Longman and Bill,” Hansen said. “They weren’t just loan officers—they were mentors.”
As the Wildflower Boutique Motel was about to receive its first guests, COVID-19 struck, further complicating the project. Pressing ahead, it opened in August 2020 with the necessary safety measures like limiting occupancy to 75 percent and waiting 24 hours before cleaning vacant rooms.
The Wildflower enjoyed moderate success in its first two months. Still, there was no escape from the bruising contradiction of operating a high-end lodging facility during the acute phase of the pandemic. “COVID essentially cut us off at the knees,” Hansen said. “There were some nights when I told dozens of people, with a half-empty parking lot, that I can’t rent to them because of regulations.” By November, a new surge in infections and accompanying shelter-in-place orders caused occupancy to plummet.
Despite these difficulties, a stream of 5-star reviews started to flow in through TripAdvisor, Booking.com and Yelp that praised the Wildflower’s amenities, ambiance and service. The regional press showcased the inn and eventually, platforms with a national reach like AARP’s travel blog took notice. The Wildflower Boutique Motel was fast en route to becoming a must-stay in one of California’s most coveted tourist destinations. With the 2021 vaccine rollout, occupancy rates swiftly rebounded.
“Many folks just wanted to get up and out, and that’s when everything started to click,” Reynolds said. “The dream finally started to come true.”
By June, the $2.2 million loan was closed, allowing the Hansens to qualify for a 30-year mortgage with enviably low-interest rates.
“Jeff provided us with four months’ worth of profit and loss statements from the worst period of 2020, and RCAC stepped right up and approved the loan; so did the USDA,” Reynolds said. “If you can learn to survive during hard times, that’s a great sign that you’re going to make it.”
The Hansens are expanding their operations to a property across the street, which will be a revived version of the old Seashell Inn. Their adjoining property now houses Izakaya Gama, a very popular Japanese eatery RCAC also financed. The Wildflower Boutique Motel currently maintains near-perfect ratings across the web and raised $120,000 in tourism tax revenue for the city. By all accounts, their labor-of-love business has been a success.
“I’m very happy with what we’ve done, our business is strong and we employ a lot of people,” Hansen said. “This would have never happened without RCAC.”
Izakaya Gama: How RCAC helped a pop-up blossom into one of Northern California’s top destination eateries
Wildflower Boutique Motel owner Jeff Hansen was so pleased with Rural Community Assistance Corporation’s (RCAC) financial assistance that he recommended it to Elyse and David Hopps, owners of an up-and-coming startup restaurant in Point Arena named Izakaya Gama. The couple both earned their culinary stripes as sushi apprentices around 2005. Read more