AUSTINTOWN, Ohio (WKBN) – The former California Palms hotel-turned-drug-rehabilitation center has sold for the second time in two weeks.
The new buyer is VDBE Youngstown LLC and VDBE Youngstown TIC LLC, according to the Mahoning County Auditor’s website. It registered with the Ohio Secretary of State Aug. 9 with Elliot Teitelbaum of Riverside Filings LLC in Cleveland listed as the statutory agent.
GEM Consulting, LLC, a New Jersey-based company, sold the property Sept. 21 for $7.85 million, a $1.3 million profit. It had purchased the property on Sept. 12.
The property has gone through several owners from its beginnings as a hotel, then to Hotel California and California Palms recovery center.
Pender Capital foreclosed on the property and it was sold to GEM Consulting after the previous owner, Sebastian Rucci, was evicted.
The property has made headlines from its time as Hotel California and then its transformation into a recovery center that was raided in October 2021 when dozens of federal, state and local investigators swarmed the facility, looking for evidence of Medicaid fraud. Over $580,000 of funds were seized from the company.
No criminal charges were filed, the business went into bankruptcy, and the case is still going through federal court.