The Clatsop County Sheriff’s Office on Thursday will publicly auction the right to money owed by Portland hotelier Param Hotel Corp. to former Astoria Riverwalk Inn operator Brad Smithart.
Astoria secured a writ of garnishment against Smithart last month in Circuit Court, claiming he owes $139,195 in lodging taxes, attorney fees and interest.
The auction will take place 10 a.m. Thursday at the sheriff’s office in Warrenton. The opening bid will be made by City Attorney Blair Henningsgaard.
Bidders must have cash or a cashier’s check. The highest bidder will receive a bill of sale and the right to whatever amount Smithart is owed by Param as part of its judgment against the hotel’s owner, the Port of Astoria.
Circuit Court Judge Dawn McIntosh has ruled that the Port is obligated to lease Param the hotel for two years, beginning in November, with a five-year extension option. The head of the company, Ganesh Sonpatki, had tried unsuccessfully since 2014 to take over operation of the hotel from Smithart, offering to pay off the debts he had accumulated with the Port, city and county in exchange for his remaining lease. The Port Commission voted to accept the transfer of the lease, but the deal fell apart.
When Param takes over the hotel, the company would pay $580,000 into an escrow account to satisfy its promise to pay Smithart’s debts, according to the judgment. The Port would receive $273,180 for back-due rent and revenue sharing, the city $115,858 for lodging taxes and the county $4,633 for property taxes. The remainder — $186,327 — would go to Smithart.
But the Port has appealed the court’s decision. The bidder in Thursday’s auction likely wouldn’t see a return on investment until after the case is resolved.
Smithart, who has moved to the East Coast, questioned why the city isn’t waiting for the court case to be resolved.
“It’s a good ol’ boy network,” Smithart said, adding the collection effort by the city might not have happened if he had better connections.
Smithart could have filed for bankruptcy, but he said didn’t feel it would be right. He previously had a plan to repay his debt to the city but quickly fell behind.
“If the sale would have gone through with Ganesh like it was supposed to, then the Port and city would have been paid,” he said.