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Owner of Opulent Carwash Files to Liquidate Assets

Bankruptcy: Mission Viejo Autohandwash won awards for its design, but a combination of forces kept it from succeeding.

December 20, 2000|MARC BALLON | TIMES STAFF WRITER

An extravagant carwash in Mission Viejo that cost $4 million to build, partly with government-backed funds, has filed for bankruptcy liquidation.

The Chapter 7 filing came two months after Mission Viejo Autohandwash suspended operations.

The carwash was considered one of the most beautiful in the nation, garnering national awards for its unique architecture that featured a 25-foot bronze waterfall and a 42-foot-high clock tower.

But the carwash had been struggling for nearly three years, battered by multiple forces: the El Nino rains in early 1998, intensified competition, and, more recently, sharp increases in utility bills.

Edward L. Komski, the former mortgage banker who built the carwash with $2.2 million in loans backed partly by the Small Business Administration, said in an interview Tuesday that he probably spent too much on the land and the amenities.

The flashy structure featured neon lights, hand-formed steel canopies that shaded gas pumps and a "welcome wall" of gum-ball machines that greeted clients at the entrance to the tile-floored building.

Now, the property is for sale for $2.65 million.

The carwash opened in January 1997 with a bang, Komski said. It was in an affluent area; many of the people who paid $9.95 to $19.95 for a wash drove a Mercedes-Benz.

At its height in late 1997, about 6,500 cars a month passed through Autohandwash. By February 1998, that number had tumbled to 900 as El Nino rains washed away sales. Business never recovered, Komski said.

Adding to Komski's woes, four carwashes opened for business in the vicinity.

In an attempt to win back customers, Autohandwash offered a variety of promotions, ranging from buy-one-get-one-free washes to a free lunch with the purchase of a wash. But the efforts failed to attract customers.

This summer's spike in energy prices was "another splinter in my hand," Komski said, nearly doubling his electricity bill to $5,000 a month.

The carwash fell behind in its payments. Fearing that lenders would foreclose and auction the property, Komski said he decided to close down and file for liquidation.

In its filing last week, the carwash listed both assets and liabilities of between $1 million and $10 million.

Community Bank in Pasadena, the largest secured creditor, is owed nearly $1.4 million, according to the bankruptcy documents at U.S. Bankruptcy Court in Santa Ana.

Early on, Autohandwash's innovative design landed it several awards, including selection by American Clean Car magazine as one of the three most beautiful carwashes in the nation.

The Western Building Show in San Francisco bestowed its Gold Nugget Award on the structure for best commercial project of the year in 1997.

The building also featured a gourmet deli and sky-lighted spaces where customers browsed through racks of greeting cards, shelves of gift items and car supplies.

The carwash also ran a shuttle that delivered customers to nearby retail stores to shop while their cars were being washed.

Komski, who had been a mortgage banker for 15 years, said he is now managing residential real estate investments.

"Sometimes all the puzzle pieces just don't come together," he said of the ill-fated carwash venture.

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