Weyrich belly up, money woes widening

February 26, 2009

By KAREN VELIE

In yet another sign of mounting unpaid debts for Paso Robles businessman David Weyrich and his wife, Mary Weyrich, a local lender filed a lawsuit Tuesday alleging that the Weyrichs failed to pay back a more than $1 million loan.

“Unfortunately, The Weyrichs owe me and my partner, Jim Smith, over $1.6 million in different promissory notes,” said San Luis Obispo businessman Cliff Branch. “To date, the Weyrichs have not paid us back a penny. David and Mary gave us their personal guarantee, but apparently that does not count for much.”

Weyrich defaulted on three short-term business loans last fall that totaled $1.6 million. Weyrich offered his three billboards in the Atascadero area as collateral for one of the loans, the subject of the lawsuit, according to court documents.

“We have been trying to work something out with the Weyrichs for several months to help them; they can’t seem to keep any of the promises they have made to us,” Branch added. “They have yet to even sign over the titles in the securities they promised to us.”

Numerous lawsuits have been filed against Weyrich during the past few years that allege he has failed to pay his debts. Though he owns a large number of properties in the county, it appears – according to property profile reports — most are over-encumbered.

Even so, Weyrich is reported to have had more than $140 million in assets in 2002. By 2007, that number had shrunk to less than $70 million.

Weyrich did not respond to repeated request for comment.

During the past year, government agencies, lenders, vendors, and private citizens have filed tax liens, notices of default, mechanics liens, and judgments against the Weyrichs and their business holdings, according to county clerk-recorder records.

Weyrich got his investment capital in 1998 when he sold Martin Media for $610 million, a company previously owned by his father-in-law Edward Martin. The proceeds were divided up between family members and investors.

During the past 10 years, Weyrich dabbled in a number of risky business ventures including newspapers, the development business, wine making, hotels, and jet leasing.

In 1999, the Weyrichs founded the now-defunct Gazette Newspaper chain, an enterprise of five weekly publications that were mailed to everyone in San Luis Obispo County.

A year later, a group of 12 reporters, editors, and one publisher dissolved their bonds with the fledgling paper after discovering Weyrich was using the news outlet to promote and advocate anti-gay and ant-abortion sentiments. Long-time journalists — used to having a wall between editorial content and management– refused to break long-standing journalistic rules of ethics.

Around the same time Weyrich invested in the Carlton Hotel. The project is reported to have cost more than $20 million. Sources say it recently fell out of an $11 million escrow.

Weyrich lives on a huge estate. He has purchased million of dollars in property, jet aircrafts, and a yacht.

Nevertheless, Weyrich is behind on payments or has failed to satisfy his debts to more than 150 agencies, lenders, vendors, and individuals, according to sources.

Weyrich owes North County Watch $137,500 for a 2002 court ordered settlement. Volunteers spent years getting the first $40,500.

“We were told he has no money only property,” said North County Watch President Sue Harvey. “He just doesn’t like to pay money he owes.”







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Stefan

By: Al on 3/3/09
Joe,
Goodbye and good luck. Just wonder how you smuggled the internet connected cellphone into your cell at your career supplied hotel. If you look at the stats "Nabisco" is still one of the most desirable zip codes left. Looking forward to your replacement, glad you made bail.
By: Joe on 3/3/09
As a sidebar…

I have to mention just how hilarious it is when people start with the "Atrashcadero" "Arroyo grunge" "Pi$$ hole beach". It doesn't matter people, every town here sucks and Yes, I've thrown out more than my fair share of "San Luis Nabisco" because this place is full of nothing but crackers. The only thing you all have in common in this desolate area (all of which is less than a pee-stop on the way to somewhere else) is that you hate anyone and anything that doesn't kowtow to the same asses you do. I've lived in many places in the world and my time here… I will look back on as if it were a prison sentence for involuntary career-slaughter.

32 days and counting…
By: Nameless on 3/3/09
I don't know this guys businesses, but as long as his assets went down because of market condition, its a real pitty. If he hasn't done what some of the North County hardmoney lenders did, he is victim of the current economy. Loosing money is not criminal. Steeling and defrauding investors is. When his business closes, how many people will be out of work?
I like the Carlton and appreciate what he did there. At least Attascadero has a classy place. Now it just needs guests with money and maybe class. Yeh, the localCity employees are spending taxpayersmoney out of the area, which is really underhanded. So, if Weyrich got some tax break from Paso Robles Airport, all the better. It remained in the area by employing so many who spent their money at the local stores (not in the unbuilt Walmart in Attascadero, congretulation for all the saint who stood in the way). So next time think twice before you throw the stone, it might just be a real bumerong and comes right at you.
By: shingh on 3/3/09
CalCoast FYI, the LA Times is reporting today in the business section, RW Hertel & Sons and Robert Fowler who have been connected to giving defaulted loan monies to Political figures, this is a local story as well, tomorrow our CPA is meeting with federal officials to discuss this very issue.
By: DashRiprock on 3/2/09
I don't live in godforsaken atascadero, thankfully, it just seems to be the most corrupt, scummiest, sleasiest, slimiest, stinkiest, city in the county, both business people and politicians alike….WAKE UP
By: mccdave on 3/2/09
Well, Booty Juice, Rush Limbaugh is heard wafting through most trailer windows, and some folks think the IRS isn't going to let Cletus Jr. inherit the doublewide and the bound volumes of O'Reilly transcripts.

Stefan

By: sunnyhaven on 3/2/09
nameless, you are so right
By: Booty_Juice on 3/2/09
Not surprising to see north of the grade morlocks complaining about a tax they are either too poor to have to pay or too stupid to avoid.
By: Paso_Guy on 3/2/09
Gosh, Mcdave..your aguement is very, very convincing. You have forced me to reconsider, given that Gates and Buffett are fot the death tax.

Based on their input and wealth I would be happy to support a tax on estates that exceed $1 billion net.
By: mccdave on 3/2/09
There are lots of smart wealthy people who have actively opposed the elimination of the estate tax. You can read Warren Buffett — the highly respected billionaire investor — on this yourself:
http://www.reuters.com/article/ousiv/idUSN1442383

"Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline," Buffett said. "A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy. In a country that prides itself on equality of opportunity, it's becoming anything but that as the gap between the super-rich and the middle class is widening."

Bill Gates' father co-wrote a book advocating the inheritance tax:
http://www.amazon.com/dp/0807047198?tag=commondre

The President of the National Farmers Union pretty well debunks the argument that the estate tax punishes small farmers:
http://www.politico.com/news/stories/1107/6856.ht

If folks here have any substantive counterargument to make, aside from accusing me of working at McDonald's (which I did do as a kid), I'd like to hear it. David Weyrich's fate may been less cruel if he hadn't inherited money.
By: Newsome on 3/2/09
mcdave:

When I get into the rare air that Buffett and Gates breathe, perhaps I will support the death tax, too.

In the meantime, my position is that it's unfair for you to demand my children's inheritance so your kids can pay less taxes.
By: Paso_Guy on 3/2/09
McDave must work at McDonalds..that would be the reasoning of his/her thoughts

Am I wrong?
By: mccdave on 3/2/09
Warren Buffett and Bill Gates are in favor of the estate tax. Inherited wealth is the dirtiest kind.

Stefan

By: Newsome on 3/2/09
Paso Guy: The death tax is a clear example of "the tyranny of the majority." Since there are only a few rich people, but there are a lot of voters, the voters can elect to shirk their duty to fund the operation of the gov't, and place that burden on "the few." Happens all the time. Sort of sucks for the minority, but it's great for the masses.
By: Paso_Guy on 3/2/09
I never thought the estate tax was a fair tax……..it never includes all segments of society, only the wealthy. Where is the fairness in taxing only the wealthy?

A fair tax would be a comsumption tax rather than an income tax. We all comsume, even the poor. You never know, the poor might even feel good about contributing something to society instead of just taking.
By: mccdave on 3/1/09
David Weyrich is a walking argument for keeping the estate tax — the fairest tax there is.
By: Nameless on 2/28/09
Why is everyone so happy about the riches demise? Have you ever got a job from a poor person? It just shows that when some in a better financial position gets in troule, somehow the fool is rejoicing without noticing that their own job is at stake. So go on laugh at him, but make sure you don'tstand in the food stamp line.

BTW I don't now him and don't care one way or the other. So many businesses havegone belly up in SLO county that it must be hurting everyone.
By: WiseGuy on 2/28/09
If you deal with the City of Atascadero enough, you might begin to believe that all public records are supposed to be secret.

By: shingh on 2/28/09
apparently Nosedatruth is not aware of the Law, ALL civil and Admin. Subpeona's are PUBLIC records for one, even Criminal Subpeona's can be accessed at the Court, and when some one or some record is subpeonaed you tell the person who has the records of such, go back to law school and learn the Law before you speak on matters you know ZIP about, FYI 7 Subpeonas Deuces Tectum were served locally for very Specific Financial information on Civil, Admin. & Judicial reasons and I 'm glad my broker has kept us Honest investors in the loop………….
By: sharibaby on 2/28/09
The Carlton suffers from, "Hey we're here. Now what?" Hotels, in order to be a going concern, have meeting spaces. Large ones, small ones, middle size. It is the reason you can fill a hotel is to host meetings, weddings, events and conferences of all sorts. The wine country may be appealing but come on.
By: mccdave on 2/27/09
nosedatruth: I think even Weyrich had better sense than to run a Gazette version of "Dan Blackburn's Town," which would have made the Carlton hotel look unpretentious by comparison.

Stefan

By: mccdave on 2/27/09
"Maybe without the retrofit…it could have crushed a few citizens like in Paso Robles. … I don't think the City should be anything but grateful for that retrofit at his expence [sic]"

Sure, the Carlton earthquake retrofit was necessary and I don't know what portion of the total renovation cost that was. (Do any readers have a sense of that?) Some property owners have been surprised by the difficulty of retrofits.

You just wonder how fancy the interior design needed to be. You can admire them for going fancy, but the market and economics argued for something more modest. And I've seen other renovated hotels that kept an antique, "real" vibe while probably keeping the budget reasonable.

The city should not be grateful for a white elephant that could have been both economical and more interesting.
By: DanBlackburn on 2/27/09
To Nosedatruth — You joke. Right?
By: nosedatruth on 2/27/09
Dan and Karen,

OK, you heroes of responsible journalism- here's a question for you:

Did either of you ever work for one of Weyrich's papers? If the answer is yes, that fact and the circumstances of your departure from the paper should be fully disclosed on this site. All readers need to know whether you're biased or have some kind of secret agenda.

Don't get me wrong – I'm no Weyrich apologist. I just think you need to be upfront with your readers.
By: nosedatruth on 2/27/09
Hey shingh,

If your investment broker has gotten a subpoena or search warrant he is violating the law by telling you about it, not to mention his ethical duties to his (former) clients whose records are being sought. If I were you, I'd dump that broker in a heartbeat.
By: insider on 2/27/09
Or better yet. Maybe without the retrofit and the total lack of lateral stability on the north and west face maybe it could have crushed a few citizens like in Paso Robles. Think about that one. Question his buisness sense but I don't think the City should be anything but grateful for that retrofit at his expence.
By: insider on 2/27/09
to Mccdumb

I quess we would be better off if he hadn't taken on the project. Which of course would have put it in the same possition as the Old City Hall and the Printery. Both doomed to demolition. Only of course after the City spends a few more million preparing plans.
By: mccdave on 2/27/09
"Weyrick did a beutiful job with the Carlton. That was a tremendous win for the City. Unfortunately his managment skills and investment skills are out of touch. He spent to much money on the Carlton. He had no buisness sense. It could never make money."

And other developers who looked at the Carlton and passed on renovating it may have had more sense. It's interesting to wonder what sort of cost-effective renovation could have been done. Could they have left it more funky and made it both more viable as a business and more fun?

Stefan

By: insider on 2/27/09
To FracturedFunckyTales

Weyrick did a beutiful job with the Carlton. That was a tremendous win for the City. Unfortunately his managment skills and investment skills are out of touch. He spent to much money on the Carlton. He had no buisness sense. It could never make money. He did do a first class job however and when it ends up on the auction block and somebody gets it that lets the rooms out at a reasonable rate and the restaurant is leased to a well known propriortor like AJ's or Outback or the like. And when it becomes an asset to the ajoining buisnesses instead of his little kingdom the City will benefit. He's just not a good buisnessman. He wanted to be Donald Trump and he's not.
By: shingh on 2/27/09
I would NOT want to be in the shoes of many of these guys you have uncovered and reported on in the past few months. This morning my Investment Broker tells me his firm and two others have been contacted to start preparing to gather documents on a vast investigation, into investments, off shore mostly and the infamous money trail. I'm told a Multi Agency task force is gathering the records on at least 4 local firms. All developers HUM !!!
By: FRACTUREDFAIRIETALES on 2/27/09
Wiseguy: the only reason they ran the AIDS awareness is that it is a MEDICAL concern, and they didn't have to deal with the homosexuality issue. Alot of straight (and I use the term loosely) have AIDS also. Therefore, they could justify this article to those homo-phobs out there.
By: FRACTUREDFAIRIETALES on 2/27/09
Almost always, I do NOT agree with Booty Juice's comments (particularly the nasty, inbred garbage he morphs into any conversation). However, this time I have to say, that his opinion is right on!! The Carlton Hotel was supposed to be the end-all to Atascadero's problems. Oh wait, it was going to be the downtown revitalization. Oh wait, it's the Super Walmart. Yikes, I'm getting dizzy from all the blue air blown out by the current CC. Can't they just finish a project???!!!
By: WiseGuy on 2/27/09
Good point Insider! I never thought of it that way. Anyone know what's going on with the psychology of someone who acts that way?

I also suspect Mr. Weyrich had someone at his side encouraging him into that type of behavior (and profiting from it heavily on the side.) I think Mr. Weyrich was fleeced by someone very slick. I've got my suspicions, but will leave it at that, other than to say that Mr. Weyrich never seemed to be the "brains" behind his operation.

Funny to say that it looks like someone noticed that Mr. Weyrich, with his sudden multi-million dollar boon, was "ripe for the picking." Weyrich, was wooed, cajoled, his desires and appetites and greed and ego appealed to and flattered, but ended up squeezed like the grapes in his vineyards by someone far brighter and slicker than himself.

Yes, it looks like Mr. Weyrich was just another one of the suckers caught up in the age of gross excess and unbridled desires. He is really not that much different than so many people around here. So many suckers. He just happens to be a bigger, more extreme example. But our county is full of them, though it seems north county attracted the most.
By: Paso_Guy on 2/27/09
Read somewhere that people with high intelligence talk about ideas and that people with low intelligence talk about people.

What do we have here?

Stefan

By: insider on 2/27/09
You just don't get it. Weyrick had an obsession with cutting out the middle man. If he ate a meal he had to own the restaurant. If he read a paper he had to own the paper. If he wanted to furnish his house he bought the furniture company. If he needed to fly he bought the airlines. If he needed to construct something he started a construction company. If he bought a hotel he needed to be the managment. If he drank wine he needed the winery and the vineyards. Unfortunately for him and his family the only thing he knew how to do was run the books for a billboard company. He's lost more money in a few years then all of us could ever earn in a lifetime. I would rather be the guy that starts with nothing and ends up with everything than the guy who starts with everything and ends up with nothing. To bad for his family.
By: mccdave on 2/27/09
Folks can Google "Weyrich Gazette." Wiseguy would do better to concisely say that Gazette staff did good work and when Weyrich tried to impose an editorial slant they had the integrity to resign en masse.
By: WiseGuy on 2/27/09
The point I'm making is that Weyrich had his hands so full at the time, and knew nothing about the news business, that he never got around to controlling the content of his five separate papers. Each had their own individual staffs, style and content.

It ended up that the editors at the papers had pretty much free rein to do as they pleased, except for "not promoting homosexuality" whatever that means.

As a practical matter, that controversial policy did not affect the typical news gathering, reporting and editorial writing at the papers. There was no "anti-gay" content or propaganda. Maybe Weyrich simply never got to that stage. But in the mean time, Weyrich or his henchmen did not interfere with the editorial content of the papers. They were "hands-off" in that area, even more so than is the case with publishers in most newspapers.

The editorial staffs at the papers did their jobs honorably and, as far as I know, never published any anti-gay propaganda. The reporters and editors were put in an awkward position, but ended up handling it well. It is those people I'm defending.

I'm most familiar with the Five Cities Gazette, of which I read each weekly issue. It was a good little paper that got better each week. It broke stories and scooped the competition on several occasions, and ran a really good "police blotter."

One memorable Five Cities Gazette story, ignored by The Tribune and Five Cities Time Press Recorder, brought to light that a child molester had been hired to run the local Boys and Girls club. Another major story had to do with the plight of local farm workers.

It was the kind of newspaper that, as far as reporting goes, would have pleased people who enjoy Cal Coast News. But it could not survive Weyrich's foolishness, and probably rightly so. Oh, well.

By: mccdave on 2/27/09
Wiseguy seems deeply confused. If the Gazette had refused to run an ad by the NAACP, what would be the reasonable conclusion to draw? You don't need to run editorials by Anita Bryant to open yourself to obvious conclusions.
By: mccdave on 2/27/09
I move that Booty Juice be given his own column on CalCoastNews. But the Carlton is actually 300 feet from the 101, so the doppler shift of passing trucks is attenuated somewhat. The smell of french fries that permeated the hotel sort of killed the luxury ambiance.

Stefan

By: mccdave on 2/27/09
"Weyrich got his investment capital in 1998 when he sold Martin Media for $610 million, a company previously owned by his father-in-law Edward Martin."

One of the lowest species in SLO county are folks who inherit businesses. I've dealt with a few sons of local magnates and they all disappoint.
By: insider on 2/27/09
Belly up. Thats pretty funny Karen. I don't think you could lay him down any other way.
By: insider on 2/27/09
A big dumb fat fool and his money is soon parted. Wow that could go for Gearhart too.
By: WiseGuy on 2/27/09
CORRECTION:

Contrary to what Karen Veilie's story here says, the Gazette Newspapers were not "anti-Gay". Editors at the papers were told (after the papers were started and staff was hired) not to publish anything that "promotes homosexuality." There is a BIG difference there.

What it came down to was that the Weyrich's forbid the publishing of an advertisement for a homosexual advocacy organization. As far as I know there was NOTHING ever published in the papers (other than perhaps some letters to the editor) that was "anti-gay" or criticized homosexuality.

I happened to have been involved when the Five Cities Gazette did a large, front page story (all positive coverage, including photos ) on the AIDS awareness bike ride. It was covered in the same manner you would expect the Tribune to cover it (better, in fact. Including photos of "flamboyantly" costumed riders. The story was detailed and respectful.

Personally, I disagreed with the decision not to run the pro-gay ad. I am not anti-gay, but I feel it is important to get the facts correct on this. Even at the time, the "do not promote homosexualty" policy was badly mischaracterized by competing media outlets, again suggesting, unfairly, that the papers were publishing "anti-gay" propaganda. Absolutely NOT TRUE.

Refusing to publish homosexual advocacy messages is significantly different than publishing "anti-gay" messages.

I live in the south county. The Five Cities Gazette, during its short life, was a VERY GOOD paper. A serious paper with serious stories, handled well.

I studiously read every issue of the Five Cities Gazette, well aware of the controversy. I never found a single "anti-gay" story.

But no doubt about it, the "don't promote homosexuality" policy was an incredibly foolish business decision as was the idea of starting up five separate give-away newspapers simultaneously. What was Weyrich thinking? Or drinking? Even WiseGuy has never been able to figure that one out! (Though he did have a strong inkling about the ultimate outcome.)

It probably didn't help that Weyrich's righthand man at the time (maybe still there, I don't know) was a smiley-faced liar and fast talking good ol' boy B.S.er. and neither of them knew diddley about the news business. I think they imagined the newspaper business was going to me just like the billboard business. Like "Hey, we'll just be selling ads again, but this time they will be much smaller and won't be along the highway."

Why do I keep humming 'A fool and his money…."?

Stefan

By: George on 2/27/09

copter pilot: discussion of SMB is off limits, is an obvious troll. Write up your story and submit to our editors or get your own blog or let it go, just don't bring that stinky crap in here.
By: InTheKnow on 2/27/09
Personally, I do not care if a single parent, or a small or large businessman or woman, or any hard working American paying as many bills as he can and still feeding his family goes belly up. However, when you claim you have tens of millions in assets and are not paying your debts (the lawsuit with the North County group goes back six years), I have a problem with your ethics. If more than 100 people have been stiffed by Weyrich, regardless of whether he donates to charity, he is promoting the financial decline of our county. Drive your expensive car, take your jets on vacation, but pay the little guy who is depending on the payment; shame on you Weyrich.

Also, Gearhart donated quite a lot to schools and other charities; does that diminish the steeling of millions of dollars from seniors?
By: hotdog on 2/27/09
Another 'upright citizen' fallen to shit. Typical of the rich and right wing fringe. Bunch of crooks. Homophobic religious freaks (Amerikan Taliban) that pollute our democracy. Hang 'em all in the public square.
Copter guy-get off the Bill routine, he is a true patriot that sees and speaks the truth. His past is not pertinent to any of these discussions.
By: Truthbeknown on 2/26/09
Well put, Clem! I think you've hit the nail on the head.

Booty, read carefully the part about Pride. I think you could learn something.

Stefan

By: Booty_Juice on 2/26/09
It's very surprising to see hairy palmed, north county Morlocks resorting to Webster's and sky pixie bible fairy tales to illustrate their sister shagging world view.

I still can't believe nobody is willing to pay $350 per night for a hotel room in Atrashcabama 150 feet from the 101. I personally have always dreamed of living there.

Sure, you can pay 190 in Pismo and piss into the Pacific from your balcony, but in "A-Town" you can kick back and watch an endless parade of tweakers, retards, and zombies stabbing each other while various "Citizens of the Year" spend the retirement funds of the remainder of the local population.
By: Clemintine on 2/26/09
Point made Citizen. How about this too. I think it pretty much sums up SLO County as of late.

The seven deadly sins, also known as the capital vices or cardinal sins, are a classification of the most objectionable vices that were originally used in early Christian teachings to educate and instruct followers concerning (immoral) fallen man's tendency to sin. They are: lust, gluttony, greed, sloth, wrath, envy and pride.
Pride is excessive belief in one's own abilities, that interferes with the individual's recognition of the grace of God. It has been called the sin from which all others arise. Pride is also known as Vanity.

Envy is the desire for others' traits, status, abilities, or situation.

Gluttony is an inordinate desire to consume more than that which one requires.

Lust is an inordinate craving for the pleasures of the body.

Anger is manifested in the individual who spurns love and opts instead for fury. It is also known as Wrath.

Greed is the desire for material wealth or gain, ignoring the realm of the spiritual. It is also called Avarice or Covetousness.

Sloth is the avoidance of physical or spiritual work.

By: CitizenCane on 2/26/09
Merriam-Webster

Main Entry: greed
Pronunciation: \\ˈgrēd\\
Function: noun
Etymology: back-formation from greedy
Date: 1609
: a selfish and excessive desire for more of something (as money) than is needed
By: Truthbeknown on 2/26/09
Maybe that's why they are rich? I think you are right about lending money to a bum. I've heard studies that show lower income folks are overall more likely to pay back debt than the very well to do. That's one reason the credit card companies are so aggresive in their marketing of poor people. Sad, but true.
By: sharibaby on 2/26/09
It's funny how rich people never pay their debts. I'd rather lend a bum five bucks than a rich man $100. I hear Rossi is the same.