Bedbugs, anonymous owners and a fresh coat of paint: What's next for Branson's 76 Inn?
Jackie Rehwald
JREHWALD@NEWS-LEADER.COM
Published 10:39 PM EDT Apr 27, 2018
With the clock ticking and a long list of code violations
to correct, 76 Inn manager Daisy McDaniel moved quickly around the
extended-stay hotel on the Branson strip, slapping fresh paint on rails
and walls.
Donald Mobely, who has lived at the 76 Inn since February, said he's seen McDaniel toiling until 9:30 p.m. sometimes.
"These guys are working," Mobely said, motioning to
McDaniel and a man who was helping her when the News-Leader visited last
week. "They're painting, cleaning, replacing beds and furniture."
McDaniel declined to speak to a reporter. But according
to city officials, it's going to take more than a coat of paint and new
mattresses to keep the 76 Inn's doors open.
In a recent health department inspection, several rooms
at the 76 Inn had bedbugs, roaches, nonworking or missing smoke
detectors, unsanitary conditions, holes in the floors and bathroom
vanities, broken or missing lamps, exposed plumbing and wiring, and
broken refrigerators — to name a few of the problems found.
Through a records request, the health department provided to the News-Leader a list of violations three pages long.
City officials have said there are also multiple fire and
building code violations. Since McDaniel declined to comment, it is
unclear what other repairs are in progress or have been made at the 76
Inn.
Citing an ordinance that went into effect in January,
Branson city officials have said they will not renew the 76 Inn's
business license until it passes health, building and fire code
inspections.
The city had planned to close the 76 Inn on April 18 but
gave the owners an extension until April 30 to get the facility up to
code.
Mobely, who uses a wheelchair and appreciates having a room on the ground floor, said he hopes the 76 Inn doesn't close.
More: 76 Inn investors bragged that motel is a 'cash cow' that 'farts out dollar bills'
More: Some hope closing of extended-stay motel in Branson will give them fresh start
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"I want to stay here," he said. "It's good people in a good location."
Like many extended stays in Branson, the 76 Inn is
located on the Missouri 76 strip. Many of its residents do not have
transportation and depend on the central location to be able to walk to
work.
There were about 50 people living at the 76 Inn last
month when the power was briefly cut off due to unpaid bills and other
"unmet requirements." At the time, a spokesperson for White River Valley
Electric Cooperative said the power company had been struggling to
reach the new owners.
A few days later, a man named Marco Kozlowski paid the
electric bill. Kozlowski, who declined to be interviewed over the phone
or in person, said in an email he is a "minority investor" in the 76
Inn.
"The second I found out about the issue, (I) paid the
bill and am working with the city to deal with any outstanding issues,"
he said in the email.
Although electricity has been restored, many of the residents have since moved.
Paul and Kat Bowen, who called Room 200 home for nearly two years, were loading their belongings into a car last Wednesday.
They were planning to live with Paul's father on the outskirts of Branson for a while.
Both said they enjoyed life at the 76 Inn.
"We had Walmart right there, a 24-hour store. We had
Denny's to go eat breakfast," Paul Bowen said. "It was all in walking
distance."
Kat Bowen said she was sad to leave.
"It's been wonderful," she said. "Comfortable beds, nice people, perfect."
'I don't think people are going to be displaced'
In Branson — where some extended-stay motels appear to
change ownership often and new owners can conceal their identities by
using LLCs (limited liability companies) — the new ordinance is intended
to hold owners responsible for properly maintaining the facilities.
Now when a property switches hands, the new owners must
apply for a business license from the city. But the city will not
grant the license until the facility passes health, building and fire
department inspections.
The 76 Inn isn't the only extended-stay motel facing city
scrutiny. Another extended-stay, the Maples Inn (sometimes called Motel
9), was also recently issued a closure notice by the city.
The Maples Inn is on Gretna Road next to Jesus Was
Homeless, a nonprofit Christian organization that helps people living in
Branson's extended stays.
Jesus Was Homeless spokesperson Ashley Harkness said
residents have left the Maples Inn and it is now closed. She
estimated there were about 50 people living there when it was full last
year.
Jamie Rouch, finance director with the city of Branson,
said the Victorian Palace at 600 Schaefer Drive and the Travel Inn at
505 Gretna Road will be served closure notices this week. Rouch said the
city is working to determine who owns the Travel Inn.
Harkness, who has been with Jesus Was Homeless for six
years, said she doesn't worry at all that folks will wind up on the
streets because of the new ordinance.
"I personally am very grateful," Harkness said of the
ordinance. "I don't think people are going to be displaced. I think
there are enough rooms in Branson that they will find a place to live.
"We can help them with that process. Salvation Army helps
with that process. But at least it will put some sub-par housing out,
because that is not safe. It's not healthy. Mentally and emotionally,
it's terrible."
Difficult to identify owners
According to the Taney County Assessor's Office, the 76
Inn is owned by George & Jr LLC. Connecting the property to specific
human beings is more difficult.
LLCs allow people to replace their names with a corporate name, concealing their identities and other information about them.
Kozlowski, the man who paid the electric bill, is named as the managing member of George and Jr LLC.
Kozlowski told the News-Leader he is a "minority
investor" in the 76 Inn, and it is primarily owned by his real estate
investment students.
Mayor Karen Best said the city has been working to find out who legally owns the property.
"We've talked with many different folks who have claimed to be the owners," she said last week.
In a video Kozlowski shared on Facebook about six months
ago, he and someone named Mark Chornohus drive slowly around the 76 Inn,
bragging that the extended stay was a "cash cow" that "keeps farting
out dollar bills."
More: 76 Inn investors bragged that motel is a 'cash cow' that 'farts out dollar bills'
In the video, Kozlowski continually congratulates
Chornohus for investing in the 76 Inn and encourages others to get in on
the deal.
Down the street, another 'deal' gone south
The Palms Inn, across the street from White Water, closed last month.
Kozlowski told the News-Leader that the Palms Inn is owned by his students.
However, according to Taney County Assessor's records,
the Palms Inn is owned by Branson Hospitality Capital LLC. And according
to the purchase agreement for the LLC that owns the 76 Inn, Kozlowski
is part of the Branson Hospitality Capital LLC.
A man named Arvid Hvidsten sold the George and Jr LLC,
which owns the 76 Inn, to "Marco Kozlowski of Branson Hospitality
Capital, LLC," the purchase agreement says.
More: 7 reasons property buyers use LLCs, from legit to not
Christopher Courtney, a real estate investor in Colorado,
said he sold the Palms Inn to Kozlowski last summer. According to
Courtney, Kozlowski and his associates promised to pay $150,000 down
but had only $50,000 at closing.
Courtney said he was promised the rest of the down payment would be made within 45 days.
According to Courtney, Kozlowski only made two payments to Courtney, who is the mortgage holder.
When Courtney reached out to Kozlowski about the $100,000 and the delinquent payments, Courtney said it didn't go well.
"They told me to go screw myself," Courtney said.
Courtney said he had contractors in Branson go check on
things at The Palms. They found the now-closed motel stripped — the
furniture, refrigerators, microwaves, hot water heaters and bathtubs
have been removed, Courtney said.
Courtney was in Branson this week to foreclose on
Kozlowski and his group. Courtney said it will cost about $380,000 to
get the Palms Inn operational again.
"Last summer I had it up and running at about 90 percent
occupancy," he said, frustrated. "Not only did the people who gave him
money to put down on the Palms lose their money, but now he is
jeopardizing me and my family. It's like the pebble in the pond. The
ripples go far."
Selling Branson to a worldwide audience
As many 76 Inn residents were working to find a new place
to live these past few weeks, Kozlowski was busy hosting real estate
seminars in Canada and Australia.
In a promotional video for the seminars, Kozlowski says
he will explain how to buy U.S. properties "from pretty much anywhere
in the world."
Tickets to the seminars cost at least $7,000, according to the advertisement from the Canadian seminar.
"I want you to learn how to make massive cash flows, have
a lot of fun doing it and best of all, use other people’s money," he
says in the promotional video.
According to MarcoKozlowski.com, Kozlowski is "well known as one of the world’s leading experts in real estate investing."
Multiple news stories in the U.S., Canadian and British media paint another picture.
For example, a 2016 article in the Montreal Gazette
described how Kozlowski "sells the promise of how to buy U.S. real
estate on the cheap," but former students accused him of using false
testimonials in marketing videos and said Kozlowski's program does not
provide the promised financial windfall.
One former student told the Gazette that students are
encouraged to invest up to $100,000 in Kozlowski's program with the
promise of receiving funding to complete real estate deals in the U.S.
In 2016, the British news outlet The Mirror called
Kozlowski a "get rich quick merchant who is trying to flog American
homes to the British."
The Canadian Broadcast Corporation in 2015 reported that
"some investors who paid tens of thousands of dollars for Kozlowski's
real estate mentoring program say he failed to deliver on a promise to
finance 100 percent of their investments in U.S. property.
Ron Usher is a Vancouver attorney who became interested
is Kozlowski back in 2010 and has attended Kozlowski's seminars. But
Usher said he didn't care about U.S. real estate.
"I saw these ads in our paper, and they just seemed wacky to me," Usher said. "I went and was just boggled by the presentation."
More: Residents at 76 Inn in Branson move out
More: 76 Inn investors bragged that motel is a 'cash cow' that 'farts out dollar bills'
Back when Usher attended Kozlowski's seminars, they were
free events held at hotels. On the third day of the seminars, students
were pressured to invest tens of thousands of dollars in Kozlowski's
program.
He said attendees were told to shut off their phones, not exchange contact information and not ask questions.
"These people know how to hijack the human mind — how they get people in these rooms to suspend disbelief," Usher continued.
Usher, an adjunct professor at Simon Fraser University's
Vancouver campus, said he once brought students to a seminar to educate
them about real estate seminar scams, something Usher said is becoming
more common.
Usher said he wasn't necessarily surprised when he saw a
News-Leader article about Kozlowski and his students purchasing
properties in the Ozarks.
"What the heck does he know about Branson, Missouri? But
he's done this all over the country," Usher said. "They are looking for
places that, to outside people, seem really cheap. ... He says he has
this magic talent for finding deals."
"His big thing for a long time was luxury homes," Usher
continued. "He keeps changing, tuning the pitch. It's evolved over and
over again through the years, but it's all hustle."
'Fixing what's broken'
Kozlowski declined News-Leader requests for a phone or in-person interview but did respond by email.
"I won’t do a face to face Interview. But I’ll gladly do a
Skype one while I broadcast it live as a failsafe. I know your job is
to sensationalize and vilify to help you get a meaty story full of
drama," he said in the email, "even when mistakes are made that are not
intentional.
"When I’m done fixing what’s broken. And making sure it doesn’t happen again, I’ll be happy to get the interview under way."
Through a Sunshine request, the News-Leader obtained
correspondence between Kozlowski, his associates and Branson city
officials. In those, the self-described real estate guru and his
collaborators pushed back against the city's intervention.
In an email from Kozlowski's associate Suzanne Burgess to Branson City Attorney William Duston, Burgess wrote in part:
"We have been remedying all violations since we were made
aware of them. ... [T]he city's actions in March caused a severe
economic loss and downturn to the owners of the 76 Inn and with the
city's continuing refusal to cooperate and work proactively with me adds
further economic loss and creates greater economic and financial
damages to the owners.
"As a result of the closure notice in March 2018 ... the
occupancy at the 76 Inn decreased from about 96% to over 40% and it
displaced several residents of Branson in a horrific manner. The city is
conducting itself against its own code and the closure of the hotel
will displace further Branson residents and potentially cause the owners
to seek bankruptcy. As you can imagine the damages bill to the city is
going to [be] substantial. It is disappointing that your city officials
have no regard for the tax payers as this is a complete waste of tax
payer dollars."
