Stew Lilker’s

Columbia County Observer

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Lake City News

The Blanche Group Bailout
Who are they? Where are they?

Tonight, March 1, 2010, at City Hall, the saga of the Blanche Hotel continues with the City Council scheduled to vote on whether or not to approve a structural engineering study of the Blanche Hotel.

An investor interview about the Blanche can be found • here.

In October of 2009, the Blanche surfaced when Stephen Smith of the Blanche Group offered to sell the Blanche for a million and a half dollars to the city or the county or anyone who would buy it.

Numerous times Mr. Smith said the building, except for the carpet and some paint, was in move in condition. That was not true.

Mr. Smith didn't say that the Blanche was in a horrible state.

About 150 fire, safety and healthy violations were found in the Blanche Hotel

The building ultimately had approximately 150 health, safety and fire violations, which only came to light after the Observer explained to the Lake City Fire Chief that he had photos of the inside of the building and it wasn't pretty.

These were not just minor violations. The walls of the Blanche were filled with rodent feces; the fire escape was visibly falling off the building; fire exit doors were wired and screwed shut for years; and the sprinkler system was out of code compliance. There was black mold on some of the walls.

No one from the city has explained how these violations were allowed to accumulate for years, putting the health and safety of the occupants of the building and the public at risk.

Ever since the conversation began about the Blanche, the Investor Group, through its spokesman, has claimed that that they never bought the Blanche to make a profit, but to help the downtown of Lake City. They have also claimed that all the money that was taken in, after expenses, was reinvested back into the Blanche.

The facts do not to support the Blanche Group's claims.

It appears from the public record that the Blanche was purchased in 1988 for $268,500. The prime investors at the time appear to be Richard Cole and Daniel Crapps.

Today, the investment group owes about a million dollars, can only afford to pay the interest on their note and is looking for a public bailout, after deceiving both the city and the county about the condition of the building.

In November of 2009, the Observer spoke with one of the original investors in the Blanche Trust under the condition of anonymity.

Read the complete interview • here.

This investor explained how they could not get the facts, were constantly asked for money and were sold a bill of goods.

It is unknown if anyone from the Blanche Investment Trust is going to show their face in City Hall this evening, as the City Council decides whether or not to commit to investing $19,500 to look into the mess the Blanche Group has made.

It is surely time the Group members came clean and the public finds out who they are and for whom they are being asked to invest from the public treasury.

That is the least that is owed to the anonymous investor who told the Observer when asked, "After all you've been through and all the money you've lost, do you think the City should get involved with this thing?"

The answer, "I'm all for it. If they can salvage it, they should do it. But they [the City] should know what they are getting into. Especially if that's TIF money and we only have so much TIF money to spend on other projects downtown. I think they just need to be smart about it. It would be terrible for a whole city block to go down."

Lake City's community roots run deep and as the Blanche Group stands in front of the City Council with their hands out it would be nice to see the Blanche Group say they were sorry for the mess they have caused.

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