CLARKSBURG, W.Va. — The Hilton Garden Inn in Clarksburg — five stories tall and right off the highway — has racked up thousands of dollars in tax liens over the past few years.
City of Clarksburg officials, back in May, filed a lawsuit against the owners of the hotel over $41,000 in unpaid business & occupation and hotel/motel taxes. Meanwhile, the state of West Virginia has filed liens amounting to hundreds of thousands of dollars in unpaid sales and use taxes.
The company that holds the $19,630,000 loan for the Clarksburg hotel and a companion hotel in Elkins, Deutsch Bank, filed a commercial breach of contract lawsuit this past May 10. A receiver was ordered for the hotels on August. 2 by U.S. District Judge Irene Keeley.
The company that owns the hotel is Mountain West Hospitality LLC. It’s also the defendant in the federal case.
Its sister company, Mountain Blue Hospitality LLC, is the defendant in a federal lawsuit over an identical Hilton Garden Inn in Morgantown, which is defaulting on a loan of $15 million. That hotel’s plight has received more attention over of the listing of Senator Joe Manchin as an investor.
The hotel in Clarksburg appears to be equally troubled, though.
The link to both hotels is developer William Abruzzino, a Georgia resident with ties to the Fairmont area. Abruzzino’s signature is scrawled across the 2012 deed to the Clarksburg hotel and across the loan for the Morgantown hotel.
Another Abruzzino property, the Crossings Mall in Elkview, has been in Chapter 11 bankruptcy proceedings since the beginning of this year.
In Clarksburg, the Hilton is right off Interstate 79 and a stones throw from retail destinations such as Walmart, Aldi and Star Furniture.
Employees at the Harrison County Courthouse, who were well aware of the mounting liens against Mountain West, said the hotel had been a frequent destination for oil and gas workers during the height of the region’s recent boom.
But location and customer frequency haven’t saved the hotel from trouble.
Local television station WDTV focused on the plight of employees, interviewing a former cook who said he was never paid for the three weeks he worked before quitting.
Asked to respond to the turmoil of two of West Virginia hotels with the Hilton brand, the company this past week declined to comment, saying the hotels are subject to their local management. Both federal lawsuits have made clear that Hilton’s franchise agreement is on the line at each hotel.
“You’ve asked a number of good questions, but I wanted to explain why it is challenging for us to respond,” a public relations representative for Hilton emailed back.
“You will likely know that we operate in a franchise model. Although we can speak on behalf of properties managed by Hilton, we must refer questions for independently owned and operated hotels to their ownership group. That is the case here.”
Two years of trouble have followed the Hilton in Clarksburg. For that hotel, taxes started mounting in 2015.
Liens filed at the Harrison County Courthouse show that from March 31, 2015, through Sept. 30 of that year, the hotel rolled up $76,455.02 in sales taxes, interest and penalties owed to the State Tax Department
Then the problem snowballed.
By Oct. 31, 2015, another $26,988.56 in taxes, interest and penalties was added on.
Then on Nov. 30, 2015, another $26,988.56 was added.
On Dec. 31, 2015: $12,338.78.
Turning the corner into 2016, a lien for another $13,406.05 was filed that Jan. 31.
It all just kept going, every month, clear on through the end of 2016.
By then, the whole debt to the State Tax Department had mounted to $335,951.37.
And that wasn’t the only problem for Mountain West.
Similar liens for unpaid sales taxes to the State Tax Department were adding up for another company property, a Hampton Inn in Elkins. That hotel had $193,803.92 in liens pile up between Jan. 31, 2015, and Dec. 31, 2016.
In Clarksburg, while the taxes owed to the state were adding up, so too was a parallel debt to the city.
The problem began with liens of $22,556.74 and $21,149.22 filed for overdue hotel/motel taxes for November and December of 2015.
That debt kept rolling too, with an additional $60,641.27 piling up through April 2016. In May, 2016, another lien hit for $15,786.73. Another was filed that June for $13,752.66. And yet another followed that July for $15,311.11.
Liens for overdue business & occupation taxes amounting to $15,426.78 were filed for the fourth quarter of 2015 and the first quarter of 2016. Another was filed for second quarter, 2016, for $7,747.75
City leaders and Mountain West officials entered into a debt repayment agreement Sept. 15, 2016, according to the lawsuit filed by the city.
The agreement meant Mountain West was to pay back the hotel taxes in four equal monthly installments starting Sept. 30 and through Dec. 30, 2016, with no additional penalties or interest.
Mountain West agreed to pay fire fees and B&O taxes in six monthly installments beginning this past Jan. 30 and continuing through June 30, according to the lawsuit.
Mountain West made two of the four installment payments on the hotel tax debt, and had paid all fire fees, by Nov. 23, 2016, the lawsuit contends.
Then progress stopped.
Mountain West hasn’t made any payments on hotel taxes and B&O taxes since, according to Clarksburg’s lawsuit. The hotel company now owes about $15,000 in hotel/motel taxes and about $26,000 in business and occupation taxes.
Clarksburg officials are asking for everything the city is still owed, plus 7 percent interest until the debt is paid in full.
They also asked that Harrison Chief Judge James A. Matish put a lien on the hotel property until the debt is paid off. And they want the court to order the sale of the hotel to satisfy the lien.
The liens filed on behalf of the city include a helpful note at the bottom.
“We gladly accept all major credit cards, cash, check and money orders.”