Astoria is trying to collect back lodging taxes and other debts from the former operator of the Astoria Riverwalk Inn.
City Attorney Blair Henningsgaard has sought garnishment from Param Hotel Corp., a Portland hotelier that was awarded the lease of the Riverwalk Inn through a court judgment against the Port of Astoria last year and hopes to take over operation of the hotel in November.
The hotel’s previous operator, Brad Smithart, who also owned the now closed Arc Arcade downtown, owes thousands of dollars to the Port, the city and Clatsop County — debts Param has promised to pay off. As part of past negotiations with the Port, Param will have to pay Smithart as well.
Astoria hopes to garnish what Smithart owes the city from this debt. The city could make back some of the money by then selling the debt, Henningsgaard said.
“We’re looking at a way to be able to be made whole essentially, to include all the fines and interests that are owed the city,” City Manager Brett Estes said.
In his filing, Henningsgaard claims that $139,195, representing attorney fees and other debts plus interest, is subject to garnishment by the city.
Param’s lawyer responded that Smithart’s debt will not become due until the Port actually delivers possession of the hotel. This transfer isn’t set to take place until November and is not guaranteed.
The Port, which owns the hotel, has appealed the court judgment. If the Port asks for a stay of the judgment until the appeals process wraps up, nothing would be due to Astoria or others looking to collect on past debts until that process is resolved.
“It is also possible that the Court of Appeals would reverse or vacate the Circuit Court’s judgment, in which case no payment would be due at all,” Param’s response to Henningsgaard states.
Param argues that the judgment against the Port obligates the hotelier to pay Astoria only $115,585, the amount Smithart owed the city as of July 2015 for water and sewer charges and lodging taxes.
While the Smithart case — with its tangled chain of ownership and leases — is an anomaly for the city, Astoria has had trouble collecting money owed by hoteliers in the past. In response, city leaders beefed up a city ordinance and can now audit lodging establishments that fall behind on payments.
“I think at this point we’re current with everybody except the Smithart debt,” Estes said.
It is important that the city collect what is owed, Henningsgaard emphasized. “It’s not fair to allow one hotel to collect (lodging tax money) from its occupants and then not pay it over to the city,” he said.
Smithart could not be reached for comment.
In 2016, the Astoria City Council pursued a judgment against Smithart for nearly $120,000 of debt. The city had previously established a payment plan with Smithart, but he quickly fell behind on the payments.