The Nativo Lodge is one of the hotels associated with the local hotelier Jim Long. He says the company withheld renting tax payments to “investigate” the legal issues associated with the tax as assessed during the pandemic. (Robert Browman / Albuquerque Journal)
Copyright © 2021 Albuquerque Journal
The city of Albuquerque filed a lien on 10 hotels for unpaid rental tax during the pandemic, including at least four associated with one of the state’s most prominent hoteliers.
Jim Long’s Downtown Hyatt Regency, Hotel Chaco and Hotel Albuquerque in Old Town, and Nativo Lodge in northeast Albuquerque had an estimated $ 336,000 in unpaid lodging taxes and hospitality fees in April, according to liens filed with the Bernalillo County Clerk.
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Until last week, the city estimated that there was $ 420,000 in unpaid taxes and hospitality fees for renters across Albuquerque. It has now filed more than twice as many liens on the debt as it did in all of last fiscal year when it brought this lawsuit against four hotels.
While city spokeswoman Sarah Wheeler said it was “common practice” to file a lien after three months of unpaid rent taxes, she said officials had considered the pandemic earlier this year. COVID-19 hit the hospitality industry particularly hard as the virus and associated lockdowns caused travel to collapse.
“Given the exceptional circumstances attributed to the pandemic, the city has been on hold on filing liens for over a year and some hotels have been more than 15 months in arrears,” wrote Wheeler in response to questions sent via email of the journal.
In the case of the Hyatt, Wheeler said the city began notifying the hotel of unpaid taxes last June – including for the month leading up to the February 2020 pandemic. Last September, it offered to set up a payment plan with the Hyatt. It sent two additional notices before filing a lien, she said.
Hotels collect a 5% Albuquerque rental tax and 1% hospitality fee from their guests and are supposed to pass the money on to the city on a monthly basis.
In February, Wheeler said the city had sent certified written warnings to 26 properties – about 15% of the local lodging establishments that collect and pay the tax.
By April, half of the 26 had paid in full or signed payment plans. Three more had closed. The city has filed a lien against the remaining 10.
“The city has a responsibility to Albuquerque taxpayers for ensuring that taxes are collected fairly. Taxes have already been collected from hotels and any hotels owed have been given numerous opportunities to work with the city on payment – including payment plans, “Wheeler wrote.
Wheeler refused to identify the specific hotels, but a journal search of the county records found seven, including Long’s four hotels.
Attempts by the journal to reach representatives of the other three properties were unsuccessful on Monday.
Long – CEO of Heritage Hotels & Resorts – was contacted by the Journal last Friday regarding liens and said the company had withheld rental tax payments to investigate “the legal issues” related to the tax, as it was during the pandemic was established. Long said he still doesn’t believe the tax was properly collected by the cities during the pandemic, but the company has started making the deferred tax payments for the hotels it operates.
However, he added that the company intends to raise the need for future law reform with the New Mexico Legislature.
Long also said he doesn’t think the city used rent tax in accordance with the law during the pandemic.
“We just think the law is badly written and the ambiguity of the law has allowed cities not to obey it,” Long said.
The city announced on Friday – two months after filing the liens – that it had received a payment that covers all post-tenant taxes owed on the Albuquerque hotel. According to the city, Hyatt, Hotel Chaco and Nativo Lodge were also paid by Monday.
While the Hyatt remains closed, Long said it wasn’t due to renters’ tax debts. He said it intends to reopen in September pending the return of major events to the Albuquerque Convention Center.
“This is a hotel that relies on convention and business travel,” Long said. “And these are the two segments of the hospitality industry that will be the slowest to recover.”
Tenant tax is generally fed back into the tourism industry. State law requires that at least half of the revenue be used for marketing the city to tourists. Other uses include tourism-related facilities. Albuquerque, for example, issued new $ 26.3 million bonds in 2019 to fund several projects, including a massive overhaul of Los Altos Park and a new indoor track for the convention center.
The city should pay rent tax on these bonds and similar debts.
When the hotel business plunged into craters during the pandemic, the city’s general fund – which usually covers day-to-day expenses such as police and animal shelter operations – filled the gap.
The city budgeted $ 3.5 million from the general fund to cover that debt this fiscal year, and Wheeler said the outstanding rental tax should not require an additional subsidy from the general fund as the city expects hotels to provide it finally pay.
