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Hotel owner reaffirms business not closing

by jmaloni
Thu, Feb 4th 2010 02:00 pm

by Joshua Maloni

Those staying at the Barton Hill Hotel & Spa in Lewiston on Tuesday may have noticed there was no padlock on the doors. Despite the threat - real or perceived - that the state Department of Taxation and Finance could seize control of the 72-room inn, the establishment remained open and under the operational control of owners Ed and Diane Finkbeiner.

A report in a daily newspaper indicated the hoteliers could lose their multi-million dollar business this week due to $35,842 in unpaid sales tax. A warrant was filed by the state last month, which could've resulted in such an action. On Friday, Jan. 29, the Finkbeiners filed suit in state Supreme Court challenging New York's ability to take hold of their hotel.

Diane Finkbeiner said the legal paperwork was filed Friday morning and, by mid-Friday, the two sides had a working agreement toward resolution that would allow her family to keep their business open.

"It's resolved; there's no tax seizure," Diane Finkbeiner said. "There's no story."

"We're fine; we're open; we're operating; we're continuing toward our plan," she added.

Her attorney, Corey Hogan of Hogan Willig, said a $10,000 down payment was made, in addition to multiple previously issued weekly installments of $1,000. He said that, while final details were still under review by the Department of Taxation and Finance, the hotel was not about to close.

"That is not the case," he said of the Finkbeiners losing their inn. He suggested such news is "the last thing (Lewiston residents) need to hear."

Both Finkbeiner and Hogan said their lawsuit was filed as a means of protection. Once a provisional deal was in place, it was withdrawn.

"I think we're starting to see light at the end of the tunnel," Hogan said.

Brad Maione, who works in the Department of Taxation and Finance's press office, could not comment on any deal that may or may not be in place with the Finkbeiners. He said there was an outstanding tax warrant for the periods between Sept. 1 and Nov. 30, 2008; March 1 and May 31, 2009; and June 1 and Aug. 31, 2009.

Maione said the property seizure process could take place when installment payment agreements fail to come to fruition.

Hotel Mortgage Update

As to the larger issue, the $9 million-plus in mortgage fees the hotel owes CIT Lending Service Corp., Diane Finkbeiner said she and her husband are currently negotiating with an outside investor. She said she is contractually bound to a confidentiality agreement and cannot reveal who or what this new partner entails.

With the new partner on board, Hogan said he expects something sizable - and on the record - will happen in the next one-to-three months. Namely, the mortgage will be dealt with, and funds will be in place to bolster the hotel.

Local business and political leaders have speculated the Finkbeiners are about to team up with an international hotel chain.

IDA Impact

Mark Gabriele, counsel for the Niagara County Industrial Development Agency, said his clients would need to know and approve of any change in ownership equal to or greater than 50 percent. That's because the IDA provided the Barton Hill Hotel with a payment-in-lieu-of-tax agreement on Jan. 1, 2006.

The PILOT program allows the Finkbeiners to make payments in place of real estate taxes to the Village of Lewiston, Niagara County and the Lewiston-Porter School District. The agreement goes until 2019, and the payment schedule fluctuates in each year.

In 2009, for example, the hotel was responsible for 25 percent of what it would pay in county and school taxes, and 20 percent of what it would disburse to the village under normal circumstances.

Gabriele said a mortgage lender initiating a foreclosure, as was the case late last year with CIT, would not automatically nullify or revoke the PILOT agreement. Unless the business changed hands, the contract would remain in place.

However, when the Finkbeiners failed to pay Lewiston-Porter, it did put the PILOT covenant in jeopardy.

The school district has given the hoteliers until the end of April to make all outstanding payments (including penalties and interest).

Hotel Viability

Diane Finkbeiner said 50 rooms were booked over one weekend in January and, business is "surprisingly, astoundingly good for this time of year." She said financial figures are up versus last year at this time.

"We are doing better than expected," she said. "The business is going in the right direction."

 

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