The owner of the Astoria Riverwalk Inn may owe the city more than $63,000 in transient room taxes, but that didnt stop him from asking Astoria City Council to change the way the city collects it.
Brad Smithart approached the podium during the public comment period Tuesday night to say his was the largest motel in town and the only one managed locally without a franchise, although City Manager Paul Benoit disagreed. For this reason, Smithart asked for his taxes to be collected quarterly, despite the fact his overdue tax bill stretches back more than a quarter to March.
Currently I operate the Astoria Riverwalk hotel, the largest motel in town, also the only one managed locally for a nonfrachise, Smithart said. Currently, your city ordinance requires transient tax being paid on a monthly basis by the 15th of the next month, and its late after the 20th. How hotels work, how my hotel works, is I balance everything on a fiscal quarter. Im an independent hotel so Ive got to balance Expedia, Hotwire, Priceline all third-party reservations. ... Those reports dont come to me for 30, 60, sometimes 90 days. Because they do everything also on fiscal quarters.
Smithart continued, So right now the city is requiring me to pay monthly. When I dont pay it on time, you guys are charging me a fine and also interest. So what the city is asking me to do is pay my money that I necessarily do not have or have not collected as of yet.
Benoit disagreed, and at that time Smithart became confrontational and verbally combative, to which Benoit asked Mayor Willis Van Dusen with a laugh, Am I being cross-examined?
Actually, properties such as The Lamplighter, The Crest we have a good number of nonfranchise, locally owned and operated hotels, Benoit said.
How many rooms are those? Smithart interrupted. They are small properties, they are not a large (operation) Im over 108 and Im looking at 115 rooms here in nine days. So you cant compare me to those motels because they are not of volume. Im more comparable to a Hampton, or a Best Western or a Holiday Inn on my volume of rooms, which you could comment on due to how much transient tax I pay on a yearly basis.
Van Dusen then asked Smithart to be polite and Benoit to do the same as he continued, by explaining Smithart owed the city more than $63,000, dating back to March. Well in excess of a quarter, Benoit said. Transient room taxes are paid by the customer when booking a hotel room within the city limits. That rate is 9 percent of the room charge, and hotels are expected to collect it and then turn it over to the city every month.
The city had previously collected on a quarterly basis, Benoit added, but changed to monthly a few years ago in an effort to make payments easier, after consulting with other hotel operators.
Some years ago, we did have problems with other properties and it was recommended to us at a meeting we had with several property owners, including the owner of the Holiday Inn, Benoit said. He said it was his experience that you were way better off collecting monthly and he explained the reasons, gave me recommendations to call other properties and other cities do collect monthly. Weve been doing that now for several years without incident, without comment, without a problem. But it is a City Council choice as to whether we collect quarterly or collect monthly. It was recommended to us that when you collect quarterly payments, the sums are so large, it can be very difficult for property owners to write those checks, given other bills.
Van Dusen told Smithart the council would look into it. But Smithart pressed further.
So youre saying in the last two years, you havent had any problems collecting transient taxes? He asked.
Fewer problems than we had before, Benoit answered.
Fewer problems, but probably the same people you had problems with before you changed it, youre still having problems with, would that be correct? Smithart exchanged, which prompted Benoits cross examination comment.
Smithart told the council he has been in the industry for 25 years and currently owns the Riverwalk Inn. He is also the general manager, the account manager and sometimes the human resources manager, he said. So what you guys are asking is for me to give you my money, you hold on to it and not pay me any interest on my money and then adjust it when it becomes time.
He said he has worked in more than 22 communities and Astoria is the first community that has ever collected on a monthly basis. Van Dusen told Smithart he will be on the agenda for the next meeting, Oct. 7, and the city would discuss the monthly versus quarterly collection at that time.