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June 13, 2003     Cape Gazette
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26 - CAPE G ZETrE, Friday, June 13 - June 19, 2003 BtrSINESS & REAL ESTATE Sea Ranch Motel closes doors after 25 years Amy Reardon photo The Pritchard family sold the Sea Ranch Motel to Highway One Limited Partnership after 25 years of business. Shown in the back row are (l-r) Bob and Hope Pritchard and Lauri and Chris Weeks. Lauri Weeks is holding son Thomas. In front.are children Molly and Jack. "Each unit will have three lev- els of porches and the buildings will have an Old World, Charleston feel to them. Simple details like 18th century trim work, shutters and iron work will complete the look," said Weeks. "This is going to be a year-round place. A lot of care is going into it. I want people to drive by and say 'That's a good looking piece of property.'" The Pritchard family including children, Laud and Rob, ran the By Amy Reardon The Sea Ranch Motel was not just a business. It was a home. Guests came back year after year to visit, and the Pritchards worked from their house on the property. But they will never paint the walls, make the beds or clean the pool again. The summer of 2002 was their last. Charleston-inspired townhous- es will soon stand in place of the motel on Route 1. Chris Weeks, designer and son-in-law of former owners Bob and Hope Pritchard, hopes to make the project some- thing everyone can be proud of. The Pritchards sold their home and business of 25 years to Alex Pires of the Highway One Limited Partnership. Weeks, who man- ages Booksandcoffee for High- way One, wore several hats dur- ing the sale. He was son-in-law, owner, broker, designer and proj- ect coordinator. "l was working for both sides," said Weeks. "I had to look out for my family and in-laws to make sure they got what they wanted, and I had to help Highway One get what it wanted. Settlement made things simpler. Bob and Hope are on their way and now I'm just designer and project co- ordinator." Weeks designed a complex with 11 units facing a center courtyard. I business for 25 years. "Laurie and Rob were in second and third grade when we moved to the motel," said Hope Pritchard. "The kids always worked for us. They started out folding laundry for 25 cents. When they got older they were our lifeguards. By the time they were 16, they could run the front desk. We really missed them when they went away to col- lege." Although living at the motel helped the Pritchards create a close-knit family, it was a 24-hour job during the summer. "You couldn't have normal life, but we made it work," said Pritchard. "Just think, in 25 years we never celebrated one summer holiday, or a summer birthday. We had to celebrate right at home with people coming in and asking Where they could eat dinner." Owning the Sea Ranch wasn't all bad. The Pritchards were able to develop meaningful relation- ships with their customers who came back year after year. "Our guests are special people," said Pritchard. ,We would see the same ones every year. It was like family coming to visit in the sum- mer. Many have written us letters saying they love the fact that they watched our children grow up, and they were hoping to watch our grandchildren grow up, but when the timing is right, everything seems to fall together." Although the Pritchards put the motel on the market a couple of" years ago, they were not anxious to sell. The smoking ban, howev- er, sealed the deal. "The smoking ban was the proverbial straw that broke the camel's back," said Bob Pritchard. "According to the law, we would have to have 16 nonsmok- ing rooms. We make our living by remaining full for two months: Ju- ly and August. I have to have every room available. We would've had to cheat or break the law. And we weren't going to break the law." The Sea Ranch is one of the last motels in the area where the own- ers lived on the premises, and many guests have written their va- cations will not be the same with- out it. "When people hear about the Sea Ranch they say 'Aw, what a shame.' And we sincerely appre- ciate those compliments," said Weeks, "but my hope is to design something to go here that every- one can be proud of. At least I continue to have insight into the project and by extension so do Bob and Hope. I think that has made everyone a little more com- fortable." Exch;mge Traded Funds are worth a look It seems every few years there appears some "darling" invest- ment strategy or product which is going to revolutionize the market- place, cure acne, hangovers and possibly save sinners. Sometimes we hear of these in- novations in some negative light, like the Derivative (Orange Coun- ty, Calif.) or the Hedge Fund which has been unmercifully shorting the market lately. There is one so-called innovation worth mentioning that has emerged in a very positive light It's the Ex- change Traded Fund, or ETF. Essentially, the ETFs are index funds designed to mirror a specif- ic index like the Dow, NASDAQ or the S&P. To date, there are well over 100 ETF offerings covering virtually every business sector, and further broken down by their exchange listing. Additionally, many foreign country stocks are represented by an index, as are numerous sub in- dexes like the Russell small and midcap. ETFs actually began in Canada in 1989 and have been available here in the states since 1993, when Standard & Poors launched FINANCIAL FOCUS its depository receipts. Since ETFs are traded like stocks (as opposed to mutual funds) they can be bought "at the market" as "limit orders" and can even be "shorted." So where do they fit? Here's my take. To achieve your financial goals, your assets need to be working for you all of the time. Success de- pends on establishing a longterm, disciplined investment plan de- signed around your personal ob- jectives, risk tolerance, and time horizon. Nothing new here. The best way to achieve those goals is through a combination (asset allocation) of low-cost sec- tor targeted Exchange Traded Funds and safe money fixed in- come investments. This combina- tion allows you the comfort and confidence of knowing that while some of your assets are invested in the important sectors of the economy, other assets are invested for safety, providing a balanced approach - appreciation and preservation. The trend is your friend. The probability of making money is directly related to the ability to de- termine trends in the economy. If a particular trend is up, the proba- bility is good that investments will follow if targeted in the sector of the economy which will benefit from that trend. If the trend is down or it is a correcting trend, you can with- draw from that sector as easily as selling a single share of stock, when employing a sector alloca- tion strategy, utilizing ETFs. Sector strategy. I feel one of the best ways to achieve market returns with the least amount of risk is to invest in a specific mar- ket niche (industry sector), or country specific area of the global market benefiting most from cur- rent trends through ETFs. This strategy allows you to nimbly move into or out of industry sec- tors or geographic areas as may be appropriate. Since most index funds (which ETFs are similar to) have outperformed active funds on an aftertax basis over the years, the ETF strategy is both efficient and suitable for many portfolios, especially when combined with an ETF fixed income or other safe money offering. First look at the economy to de- termine the trend. The trend iden- tifies the industry sectors expected to do well in that economy. Pur- chase the ETFs which represent these sectors, then hedge with fixed income and other sectors not highly correlated for portfolio bal- ance. The benefits of ETFs over mutual funds. There many bene- fits of ETFs in comparison with mutual funds. These include the following: The traditional passive invest- ment strategy provides typically lower turnover than actively man- aged funds, resulting in lower capital gains liability. As an index, the ETF is nor- mally protected from the activities of other shareholders. As an index, the cost of active managers' salary and bonus is minimized. A passive asset allocation sec- tor strategy limits risk by diversi- fying among investments which have low correlation to each other. As one investment sector de- clines, another may be moving up, thereby reducing risk. For exam- ple, rising oil prices may be good for the energy sector, but bad for the transportation sector. Examples of several sectors represented by ETFs include Unit- ed States basic materials - DuPont, Dow Chemical, Interna- tional Paper; consumer discre- tionary - Exxon, Wal-Mart, Home Depot, G.M.; financial - Citi- group, Fannie Mac, MBNA; tech- nology - Microsoft, IBM, Dell; Oracle, H.P.; industrial - GE, Boe- ing, John Deere; consumer servic- es, Disney, Starbucks and Well- point Hospitals. Editor's note: John Boraski is a registered investment adviser and elder planner in Rehoboth Beach and can be reached at 227-6850.