Folsom/El Dorado News

Rainbow Lodge near Donner Summit to reopen under new owners

Generations of Sacramento-area residents have stayed at the historic Rainbow Lodge near Donner Summit for cross-country skiing, fishing and other outdoor pursuits. But the storybook lodge, made from native granite and heavy timber, fell on hard times in recent years after its prior owners defaulted on their loan and a court-appointed receiver took over.

In late December, the venerable inn was purchased out of receivership by a family from Rocklin, which plans to reopen it in February and restore some of its century-old grandeur.

“Initially our focus is to get the lodge and restaurant and bar open and return it to its former glory,” said Craig Mitchell, who bought the lodge with his wife and parents and will oversee day-to-day operations. “There’s so much history. Families have been coming here for decades.”

The lodge, with its steeply pitched green-metal roof and stone walls, sits on the banks of the South Yuba River, not far from Interstate 80 in Soda Springs. For many years, cross-country skiers warmed up there with a drink, a hot meal and a soft bed after long days on the trails.

A pair of skis hang over its knotty-pine bar beneath thick wooden rafters. Historic photographs of the snow-covered lodge and trans-Sierra railroad adorn its walls.

Threadbare carpet, tattered curtains and dated floral bedspreads detract from its rugged mountain charm. The worn items will be the first to be replaced, Mitchell said.

The 33-room lodge was originally built as a stagecoach stop in the 1800s. It was converted to a tavern in the 1920s and became a popular spot for gambling and fishing, Mitchell said.

In the 1990s, the owner of the nearby Royal Gorge Cross Country Ski Resort bought it with the intention of providing lodging for skiers. The resort, opened in 1971, introduced downhill-style ski amenities to cross-country and billed itself as the largest cross-country ski resort in North America

Rainbow Lodge fell into decline starting in 2005 when a group of Bay Area developers purchased it, along with the the ski resort and other properties, for $35 million from Royal Gorge co-founder John Slouber.

The developers, Kirk Syme and cousins Todd and Mark Foster, proposed building 950 condos and single-family houses on Donner Summit. Their plan raised howls of opposition from conservation groups and local residents, including owners at the nearby Serene Lakes community.

The developers’ attempts to sell the lodge failed, and the larger development plan fizzled. They defaulted on a $16.7 million loan from Armed Forces Bank in June 2011, and a judge placed the lodge and Royal Gorge in receivership.

The receiver, Douglas Wilson Companies of San Diego, agreed in the summer of 2012 to sell the 3,000 privately held acres of the ski resort to conservation groups Truckee Donner Land Trust and The Trust for Public Land for $11.25 million.

The same receiver recently sold Rainbow Lodge, along with nearly 115 surrounding acres, for a sum that both it and Mitchell declined to disclose. Public records of the price were not yet available from Placer County.

“We were looking for an owner and operator to step in and take it back to some of its great historical prominence,” said Alan Scott, managing director of Douglas Wilson’s brokerage firm.

Mitchell said the price he and his family members paid reflected both the lodge’s historic qualities and the fact that it needs significant upgrades.

“It’s a very unique property,” he said. “Keep in mind it needs a lot of work, too.”

Mitchell, 44, has a background in finance and once ran a company that made gourmet root beer. He said he hopes to bottle the water that flows from the lodge’s natural spring and perhaps make soda or beer as well.

For now he’s staying at the lodge, getting the heat turned back on and starting to hire front-desk and housekeeping staff.

Hardly any snow has fallen on the mountains this winter, and the Royal Gorge ski area, now managed by nearby downhill ski area Sugar Bowl Resort, closed on Tuesday because its trails were patchy with exposed rock and soil.

Mitchell said he understands he may not have many skiers as guests this season but wanted to reopen as soon as possible to get the word out that the lodge, which had been closed for months, was back in business.

“I’d like for the skiing community to know this season it’s reopened so when next year rolls around, when making plans, it’s more likely to get the wheels turning,” he said.

Perry Norris, executive director of the Truckee Donner Land Trust, said he was delighted to hear there were new family owners at Rainbow Lodge. The land trust owns about 2,100 of Royal Gorge’s 3,000 acres and is preserving its holdings for skiing, hiking and open space.

“I think they’re going to have universal support from the local community,” he said of the Mitchell family. “And I think it fits with the Royal Gorge acquisition.” One of the goals of that purchase was to bolster the local economy through cross-country skiing, which generates about $1 million a year in revenues, Norris said.

The lodge is one of the few places to stay on the Sierra’s western slope heading up to the ski area eight miles away.

“It means jobs. It means revenue. It’s a real positive for Royal Gorge,” Norris said. “What Royal Gorge needs is a bed base. We’re really glad to see the lodge provide that.”