The Hot Springs Advertising and Promotion Commission's forbearance on the $77,279 default judgment it won last month against The Hotel Hot Springs & Spa lets the hotel pay down past due taxes instead of being shuttered.
Division 3 Circuit Judge Lynn Williams' Dec. 8 order empowers the ad commission to close the hotel, but Visit Hot Springs CEO Steve Arrison said doing so runs counter to the panel's mission.
"That's the last thing we want to do with any business," he said. "We're working with them to get their past-due balance caught up. Our goal is to provide goods and services to the people visiting Hot Springs. Our goal is not to close any business.
"We'll work with people, but sometimes you have to file lawsuits and get judgments to get people's attention."
Arrison said the hotel owes $48,455 on the claim filed in October for unpaid July, August and September collections of the 3-percent tax the ad commission levies on prepared food and lodging inside the city. He said the hotel has remitted collections for October and November.
The city code stipulates the tax be used to promote the city and support the maintenance and operation of the Hot Springs Convention Center, which is located adjacent to the hotel. The tax is assessed on more than 70 hotels, motels and campgrounds and more than 300 restaurants and food trucks.
The ad commission's October collections report shows the tax raised almost $5.3 million through the first 10 months of 2017, a 2.8-percent increase compared to the same period in 2016.
"We have several outstanding lawsuits and judgments," Arrison said. "If we collected that, we'd be well over 3 percent for the year."
The Department of Finance and Administration filed $19,290 and $20,938 liens against the hotel last month for unpaid June and July state sales taxes, and Thyssenkrupp Elevator Corp. holds a $189,876 mechanic's lien for an unpaid invoice.
Hotel General Manager Carlos Sibole said he didn't know why tax payments are in arrears, explaining that 2o17 revenue exceeded the previous year's total.
"All the money goes to the corporate office in Mississippi," he said. "That's where they pay things."
Assistant City Manager/City Clerk Lance Spicer said Friday that the city is also exercising forbearance, staying the termination of the 50-year lease on the half acre the hotel rents from the city at 349 Malvern Ave.
Spicer said hotel ownership requested last month that the termination be suspended, paying $5,000 for a 30-day stay that began Dec. 22.
He said the payment wasn't applied to the outstanding balance, which was $30,800 as of last month. Lease terms require the hotel to pay $2,000 a month to rent the adjacent Malvern Avenue location.
"We wish to see the hotel continue to be a contributor to the local visitor economy, and the employment it offers," Spicer said. "However, if the balance is not made current we have been instructed to move forward with forfeiture/termination."
Sibole said in October the hotel's parent company is planning to build a full-service spa and fitness center at the location.
A Federal Deposit Insurance Corp. report shows the New Orleans bank that held the mortgage that secured financing for the construction project was closed by the Louisiana Office of Financial Institutions and went into FDIC receivership in April. In May 2016, First NBC Bank modified the almost $7 million loan to $21 million, according to property records.
Local on 01/06/2018