
Hawaii was getting a lot of attention. It would have a higher room rate because of the construction and operational costs. Minimum wage States-side was $1.25 - in Hawaii, it was $2.50. Our rate there would be $8.00 in lieu of $6.00. In February the construction was nearing completion, so I needed to go check things out and set up the schedules for operational personnel, furniture and supplies. I took Margaret with me on this trip - it was short - one day to travel , day two for business, day three personal and day four travel home. This property was our first high-rise, with the 2 lower basement floors for parking and eight upper floors for office, lobby, manager's apartment and eighty units with an elevator.

Motel 6's Biggest problem was lack of money, which always left them short, unable to pay bills promptly for construction, furnishings and equipment on the new motels. . Bills were running 90 to 120 days behind. The owners Paul Greene and Bill Becker expected Operations to make up their short fall on their construction costs - $150,000 to $200,000 per project. We could have handled four or five motels a year, but no way on eight or ten. My position was "slow down or obtain larger construction loans". Slowing down and improving our credit rating would have qualified us for larger loans.
I think it's time to go back and tell of events leading up to this point. After building the first nine motels and buying one existing (total ten), we came to a squeeking halt on construction. We were unable to prove our program was profitable, our lenders were waiting for us to prove we were a strong money-backer. On the other hand some of our suppliers that I had gotten to know well were very impressed with the idea of them and us buying existing motels and franchising others. They wanted to furnish the money if I would run and promote them. They were going to called Best 6 Inns - an upgraded Motel 6. The first location would have on Motel Drive in Fresno. I gave notice to Paul and Bill and they wanted to know why would I consider leaving them. I told them I had to take of my future. The statement made by both owners was "there are only three people we are interested in and you are one of the three. You will get your million". I agreed to stay based on this promise.
We mentioned that Operations was doing very well - we had generated $958,000 cash flow for the prior year and it was growing. In July 1967 Bill and Paul began trying to raise money. They did a sell-and-lease back on two original motels and they began working with Trans-American Corp, and with some of their stock company clients, i.e. Citi and Associates. As a result of our success, TransAmerica asked for my help in inspection, finding their problems and recommending changes and directions to make these properties profitable. They were aware of my success with Kirkeby-Natus problem properties. I spent about half of my time the next month or so on this and got very close with these people. There were four west coast properties involved. While this was going on I learned through my contacts that Bill and Paul were in serious negotiations with Citi on a sell-out. I asked for a meeting with them and inquired where I fitted into this picture and what I was to receive from this sale. The answer? "My job. I would receive no money as I had not made an investment".
One of Trans-America problem properties was a very nice 150 unit full service hotel in Palm Springs, and they told me that if I could come up with financial backing, they would sell it to us at a very good price. In the meantime we had been approached by the orthodontist that Margaret had worked for who said he was connected with a group that had resources and were looking to invest. On learning of this project, they expressed an interest in proceeding. I advised my contact and we began working on a deal. But unfortunately it is a small world, and one of Dr. Kuhns potential investor-partners (who incidentally was the campaign manager for Ronald Reagan when he ran for the Governorship of California) happened to go to a party, attended by representatives of Citi and Bill Becker. He had a bit too much to drink and bragged about stealing the 'head man' from Motel 6 for his project! The 'you know what' hit the proverbial fan! Citi threatened to call off the deal with Bill and Paul and provided enough pressure to Trans-America so they called off the deal with us. Nothing was ever said to me by Bill or Paul, but needless to say there was trouble brewing ahead!
