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Originally published October 31, 2012 at 9:19 PM | Page modified November 1, 2012 at 2:55 PM

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Semiahmoo hotel's closing is a blow to border economy

Ripples from closure of the resort hotel in Blaine will be felt by other businesses near the Canadian border and by local taxpayers.

Seattle Times staff reporter

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For 25 years the sprawling resort hotel on a narrow finger of land near the Canadian border has been the setting for destination weddings, business conferences and gubernatorial debates.

But operators of the 198-room Semiahmoo hotel in Blaine said Wednesday it will close on Dec. 1 and lay off 224 workers, dealing a harsh blow to the economy of Whatcom County.

Elsewhere in the state's tourism and hospitality industry there's been a strong rebound from the recession's lows. But Harold Chesnin, an attorney for the Upper Skagit Indian Tribe, which is the majority owner of the resort, said Semiahmoo hasn't recovered from a sharp plunge in bookings during the recession.

The tribe has searched for a buyer to take over the secluded hotel, he said, but hasn't had any takers.

"It's just gotten to the point that that's not going to allow us to continue the operation of the hotel," Chesnin said Wednesday. The two nearby golf courses will continue operations under the hotel's current owner, Semiahmoo Resort Co.

Because the Semiahmoo Resort is the largest employer in this seaside town of 4,760 residents, the hotel's closure is expected to have ripple effects on other businesses, local government and possibly taxpayers.

Blaine City Manager Gary Tomsic heard the news Tuesday after a long meeting about next year's budget gap. The Semiahmoo hotel produces roughly $1 million a year for the city in taxes and fees for utilities, he said.

"We feel very, very bad about the loss of jobs, but it's having a direct impact on our organization, which could also lose jobs," Tomsic said.

Darrell Bernard, a retiree from California who bought a house on the Semiahmoo Spit in 2006, suspects the city will make up the shortfall by shifting the tax burden onto property owners.

Bernard, who dines at the hotel's restaurants and belongs to its gym, said he can't believe the hotel's owners couldn't make it profitable.

"It just seems crazy," he said.

The resort, a perennial favorite of Seattle Bride magazine for destination weddings, has been contacting people who had scheduled events past the end of this month.

"I can't imagine being on the receiving end of that," said Merry Beth Turpin, a wedding planner at Aisle of View in Issaquah. "The water, the view, the destination hotel, several different locations for weddings on the property, the pool, the spa — it was beautiful."

The loss of 224 jobs is a big hit in such a small town, said Ken Peck, owner of Dakota Creek Winery and vice president of the Blaine Chamber of Commerce.

When Peck opened his winery in 2005, Semiahmoo gave him a boost by featuring local wines in its upscale restaurants.

The winery also benefitted from hotel guests paying a visit.

This past summer, the winery made 17 cases of a Semiahmoo 25th-anniversary blend for the golf resort and sold out, he said.

"They've been a good partner for us and we're going to miss that," Peck said.

Located about 100 miles north of Seattle and seemingly within earshot of the Canadian border, the hotel sits on a spit that divides Drayton Harbor from Semiahmoo Bay.

From 1890 to the 1960s, the spit was a major hub for salmon canneries, including the Alaska Packers Association, which packed salmon there until 1965 and shut down for good in 1981.

Developer David Syre, chairman of Bellingham-based Trillium, turned the former fish-canning site into the 1,110-acre Semiahmoo Resort, which includes a marina, homes and condominiums.

The hotel opened in 1987. The Upper Skagit Indian Tribe, operating as Skagit Valley Casino Resort, took control in 2003, according to the resort's website.

The tribe is still the majority owner of the partnership with Syre that owns the resort today. The partnership and Syre have heavy debts that appear to have contributed to the decision to close the hotel.

Syre's ongoing personal-bankruptcy case complicated Semiahmoo Resort's financial condition, Chesnin said.

While tourist visits rebounded in the last couple of years, that wasn't enough to offset the downturn in business from meetings and groups, he said.

The hotel said Wednesday its workers will receive pay and benefits through Dec. 31.

The hotel's closure could mean more business for Seattle getaway resorts like Salish Lodge in Snoqualmie, Willows Lodge in Woodinville, and Kiana Lodge in Poulsbo, said Monica Newby, president of the Seattle chapter of the National Association for Catering & Events.

Loni Rahm, president of the Bellingham Whatcom County Tourism business association, said she's optimistic Semiahmoo's closure will prove temporary.

"I'm hopeful that there will be quick and positive momentum towards reopening," she said.

Sanjay Bhatt: 206-464-3103 or sbhatt@seattletimes.com

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