County ready to move on if Alfa Leisure deal dies because of shutdown

With the news that Alfa Leisure has shut down its operations and is unlikely to construct a new manufacturing plant near Riddle, Douglas County officials are weighing their options on the 34 acres of land the recreational vehicle manufacturer had agreed to buy and another 14 acres on which it held an option.

A $2,000 payment on the $1.02 million purchase contract with the county was due April 28 and has not been paid. Previously, the company made both of its February and March payments, although those were 10 to 15 days late, said Kathleen Johnson, an assistant county attorney.

Those were the first two payments the company made after signing its purchase deal two years ago. Alfa Leisure was not required to begin paying on the contract until certain infrastructure requirements concerning road and wetlands issues were completed in January.

“We may get a payment but we really don’t know at this point. We haven’t heard anything from them,” Johnson said.

Alfa Leisure closed its offices and manufacturing plants in Ontario, Calif., and in nearby Chino on April 30. County officials didn’t learn of the closure until Monday.

The company had planned to construct a 100,000-square-foot building next to Interstate 5 at the South Umpqua Industrial Park and to place its motor homes on display for passing freeway motorists. Johnnie Crean, the company’s owner, said he planned to employ 200 workers within five years of the plant’s opening.

Since county officials have not had any contact with Crean since the company closed its doors, they don’t know whether Alfa Leisure has gone out of business or whether the company will attempt to reorganize. As a result, it’s too early to know whether the county will attempt to reclaim the property and market it to another company.

A check Tuesday afternoon of federal bankruptcy court filings in California did not show any actions involving Alfa Leisure. No one answered the phone at the company’s headquarters in Ontario, Calif.

Helga Conrad, recruitment director for the Umpqua Economic Development Partnership, last spoke to Crean two months ago. At that time, Crean said Alfa Leisure was continuing to move forward with its plans to construct a new plant in Douglas County.

If Alfa Leisure ends up wanting to break the deal, Johnson said it would be a fairly simple process for the county to take back title to the property. If the company does not continue making payments, it could take action to foreclose on the property; however, Johnson said that would be costly and time-consuming and the county would rather arrange a voluntary relinquishment of the property.

Since the deal with Alfa Leisure was signed in April 2006, the economy has suffered a downturn, gas prices have risen to nearly $4 a gallon and RV manufacturers have seen sales decline. Many RV buyers have in the past financed their purchases using home equity loans and the crisis in that industry has also hurt RV sales, Herbert said.

Even so, Alfa Leisure had moved forward on its plans to construct a manufacturing plant in Douglas County. News of the company’s shutdown caught county officials by surprise.

In late February, a lawsuit against Alfa Leisure was filed in the Fort Myers Division of U.S. District Court in Florida by Empire Fire and Marine Insurance Co. Empire alleged Alfa Leisure was negligent in installing a power surge protector into a See Ya!-brand motor home taken in for service at a North Fort Myers repair shop in 2006.

The insurance company claims the surge protector was responsible for a fire that caused considerable damage to the motor home and to other vehicles and equipment inside the shop. The shop was insured through Empire, which is seeking at least $600,000 in damages.

Lynn Herbert, president of the Douglas County Industrial Development Board, said he was saddened to hear of Alfa Leisure’s closure.

“It’s not good news, but it’s not the end of the world, either,” Herbert said.

The parcel has a prime location next to the freeway and has the infrastructure in place, including sewer and water connections that could make it attractive to another company.

“We’re still shovel-ready for the next company,” he said.



• You can reach reporter John Sowell at 957-4209 or by e-mail at jsowell@nrtoday.com.