x

Get Breaking News

Receive special offers from ashemountaintimes.com.

County moves to collect occupancy, property, taxes despite Hampton Inn bankruptcy filing

Originally published: Jan. 24, 2013
Last modified: Jan. 24, 2013

Adam Orr

According to Ashe County Manager Pat Mitchell, a judge has set aside the Hampton Inn West Jefferson bankruptcy filing and will allow Ashe County to collect both property and occupancy taxes the county says the business currently owes it.

“The judge has placed the bankruptcy aside, which means Hampton now has to pay us the occupancy (and property) taxes,” said Mitchell. “Between a couple years worth of property taxes, and the occupancy taxes, we’re estimating a payment somewhere between $70,000 to $80,000. Hopefully, we’ll be able to collect that.”

In a Jan. 23 interview, Hampton Inn West Jefferson Member/Manager Amar Patel said he did not dispute owing Ashe County two years worth of property taxes, and a certain amount of occupancy tax, but calculated the total amount closer to $56,000.

The company that owns Hampton, Trimurthi Hotels Land Holdings WJ, LLC, filed for chapter 11 bankruptcy on Dec. 1, 2011, in North Carolina Western Bankruptcy Court, according to court records.

“Right now, we’re still trying to work with our lenders,” said Patel. “We paid a premium on our debt service of (between) $170,000-$180,000, and we’ve tried to emphasize to our lenders that we need to catch on other payments (including Ashe County), but right now we’re at the mercy of the bank.”

Patel said Hampton Inn West Jefferson began operations two years later than expected, in a slumping economy.

“There’s been no help from the county or the town to increase tourism, or the industrial base,” said Patel. “At the end of the day, our (revenues) are about 30 percent lower than we estimated they (would be) in 2007 and 2008.”

Mitchell said the county is authorized by the state to collect a 3 percent occupancy tax, with a third of the proceeds each going to the Ashe County Civic Center, the Ashe County Chamber of Commerce, and the Historic Ashe County Courthouse.

“The county is owed 3 percent occupancy taxes, and Hampton has missed at least a year,” said Mitchell, “and then they went into bankruptcy. Our question became, could we collect occupancy tax while they were in bankruptcy, plus the last I looked they had not paid property tax in at least a couple years. We just found out that the judge is going to set aside the bankruptcy proceeding, so we’re going to issue a demand on (occupancy and property taxes).

“They’re operating. If they have a court order to pay us, they’re obligated. In essence, the way we look at it is. they’re using our taxes to continue operations, and our understanding is they’re not supposed to use occupancy and property taxes to fund ongoing operations.”

 “The best case for everybody is that the bank works with us and we can catch up with everybody,” Patel said about the ability to pay currently owed occupancy and property taxes. We’re still working with our lender, and we’re going to see what we can do, but we’re also looking at other options.”

“The Hampton Inn provides a large base of employment and tourism in this county, (and) if we are no longer operational, the county stands to possibly lose a lot more,” said Patel. “Let’s not trip over dollars to run after pennies.” 


 
For more information and stories, see Ashe Mountain Times.