Deadbeat Days Inn Owes Arcata $130,776.62 – March 3, 2010

Wednesday, March 3, 2010

Terrence McNally

Eye Business Editor

VALLEY WEST – The newly opened Hampton Inn and its 82 high-end hotel rooms are expected to be a boon to Arcata’s tourist industry. By Community Development Director Larry Oetker’s estimates, the arrival of Hampton Inn could mean the addition of $85,000 per year to the City in Transient Occupancy Taxes (TOT), commonly referred to as bed tax.

Additionally, Hampton gives traveling sports teams visiting HSU another close stay option. According to HSU Associate Athletic Director Tom Trepiak, Hampton could be attractive to coaches looking for lodging where the team is insured breakfast.

However, an existing Valley West motel continues to drag its heels on paying its fair share of City taxes – undermining Arcata’s General Fund during lean budget years and creating an ongoing headache for City staff.

On Jan. 7, Finance Director Janet Luzzi made yet another attempt to collect on the Valley West Days Inn’s outstanding TOT. She was already over a year-and-a-half into the effort and had been rebuffed by hotel management regularly. But this time she brought backup in the form of Arcata Police Department Sgt. Bob Martinez. According to Luzzi, she wanted to make an impression on Days Inn management, who’d repeatedly blown off City bills. “We’ve been struggling with them since October 2008,” Luzzi said.

Nearly two years of unpaid TOT has built up to $108,000. What’s more, Days Inn is delinquent in over $22.776.62 in unpaid water bills. Considering Arcata’s annual TOT take is some $900,000, the outstanding $130,000 is a major chunk of City revenue. Collection attempts through the firm’s Arcata management have been somewhat fruitless – until Finance received a partial bill payment last year. That check bounced.

The hotel was purchased from the Trinidad Rancheria three years ago, which had operated the North Coast Inn. In the late 1990s, the tribe made a massive renovation to the facility for what was planned as a tourist layover and shuttle service funneling point to Cher-Ae Heights Casino.

The 78-room hotel rebuilt its conference room and installed a three-meal restaurant, bar and lounge. However, the rancheria struggled to make the hotel work and finally sold to John Markley who’s operated Days Inn under the name Penta Arcata A LLC of Orinda. Like Luzzi’s, repeated calls from the Arcata Eye to Markley went unanswered. The developer is active in Orinda public life and has served as chair of that city’s Parks and Recreation Commission.

The Days Inn franchise has been reportedly lumbering since day one under mismanagement. Rotary Club of Arcata Sunrise had traditionally held its weekly luncheons there, but pulled out after a series of scheduling snafus, “The service was so bad,” said Sunrise President Julie Vaissade-Elcock. “It didn’t seem like they even wanted us there.”

While most City residents would find their water shut off 60 days after failing to pay a water bill, City Manager Randy Mendosa has so far been unwilling to flip that switch on Days Inn. Mendosa reasons that the shutoff could likely be the nail in Days Inn’s coffin, and its closure would not only mean the layoff of hotel staff, but could open up a major Valley West building to neglect and blight.

“We’re still trying to find ways to work with these owners for the good of the City,” Mendosa said. “We still have a ways to go. I don’t want to see this become the Eureka Inn of Arcata,” he said, referring to the Eureka hotel that has spent the past decade slowly degrading since its closure.

According to Mendosa, a City lien on Days Inn property and equipment should ensure that Arcata would see its money. “We fully intend to get it,” he said. “I am sure that we will recover our costs.” In the meantime, it’s a waiting game as Arcata watches to see if the giant piece of Valley West real estate can hold on.

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28 Responses to “Deadbeat Days Inn Owes Arcata $130,776.62 – March 3, 2010”

  1. Can the city sue for the money?

  2. Wow… this is a really sad and terribly inaccurate story! Mr. McNally you really should get your facts straight before publishing such an article. The local hotel management has never “rebuffed” Ms. Luzzi, in fact on ever occassion that Ms. Luzzi served ToT documentation they have been immediately forwarded to our ownership! Which by the way you have inaccurately reported here as well. Mr. Markley is not one of the owners (he is our attorney) and our parent company is not based out of Orlinda. Nor was the hotel purchased by us from the Trinidad Rancheria! Your understanding of our utility bills are again misreported and misunderstood. The only reason for my response is to ask your readership to question the rest of your “facts” in this and other articles. You article did serve to upset our staff here at the hotel so good job pal.

  3. By the way we are not the only hotel behind on their ToT, which is not a surprise in these trying economic times. But since purchasing this property in October 2007 I’m certain our parent company will continue to make every effort to get caught up on our debts to our community. In the meantime our staff will continue to serve our guests with the utmost respect and courtesy.

  4. Amy W.

    The lack of a fact checking is probably one of the reasons why The Arcata Eye is a below par paper that even many locals haven’t heard of. This is just one more liberal establishment that prints one-sided, slander filled articles. I sure hope no one takes anything they read in this paper seriously. And maybe if the business editor doesn’t care to try and get a comment from all sides he should try and get a job with the National Enquirer.

  5. Arcata Business Owner/Taxpayer

    Does the “every effort” by “The Management” include a plan to pay their taxes? As a fellow Arcata business owner (and citizen) I agree these are trying economic times, but taxes are taxes, and you cannot choose to pay some and not another. Try telling the federal government that the you have been served “documentation” and that “they have been immediately forwarded to our ownership!” and see if that gives you time to make “every effort” to pay. If you continue ignoring your tax obligation I think you should be fined, then if still not paid, shut down. JUST AS EVERY OTHER TAX DODGING BUSINESS WOULD BE.

  6. Terrence McNally

    Is the National Inquirer hiring? Florida is nice this time of year.

    But seriously folks… Days Inn’s listed owner is Penta Arcata LLC of Orinda, California. That’s who foots the bills, in this case, not regularly. Penta’s attorney is not serving Days Inn well as he returns not one of three phone calls.

    An 18-month stale bill qualifies as a “rebuff.” So does the bounced check when the City of Arcata did receive a payment. $180,000 is a lot of money and people get cranky about it.

    Let’s get the facts straight. I’ll call Arcata Days Inn Monday for clarification. Please confirm that Arcata Days Inn management can go on the record on behalf of Penta Arcata LLC of Orinda.

  7. Amy W.

    Hey, business owner/taxpayer. I believe that Charles Rangel didn’t pay his taxes. Neither did Giether. And several other people linked to our current administration. Not that it gives Days Inn the right to not pay their taxes, if that truly is the case. But how many articles did the Arcata Eye write about Obama’s boys and their tax dodging? Does that not bother you? Let’s not forget that some of these men set our tax and economic policy, and can easily afford to pay their taxes. They just decided they were above that and that our rules don’t apply to them. Maybe you should talk about these rich, liberal, hypocritcal men instead of (or at least along with) your fellow struggling small business owners? Do you believe these politicians need to be fined as well and fired from their high paying positions?

  8. @Amy W. : Not sure if you noticed, but The Arcata Eye is a local newspaper. LOCAL. Local means you cover local events, local news, and local deadbeats. The New York Times and Washington Post can cover the national deadbeats.

    But hey, I’m sure the Eye crew would love the fundage to go tromp around the country covering news stories that have absolutely no relevance to the local community. Got any $$$ to spare?

  9. Amy W.

    Well John I was actually commenting on how the other reader commented on how he pays his taxes and no one can pick and choose what taxes they wish to pay. Which is exactly what is happening in Washington. Yes, I did ask how many articles were written about that subject, ignoring the fact that this is indeed a local paper. However, seeing how one-sided the Arcata Eye is, if they did have a national section it would be fair to assume that they would give these thieves who represent us about as much coverage as the New York Times gives them, which is pretty much ziltch. But you better believe as soon as a conservative politician is caught in an scam it would be front page news constantly. That is how unfair and unbalanced both the Arcata Eye and the New York Times are.

  10. Arcata Business Owner/Taxpayer

    Amy W.: My comment had nothing to do with the Arcata Eye or national politicians, simply a comment on what appears to be a business thinking they are not bound by local tax law. Your comments lead me to ask the question: What exactly are you defending?

  11. Terrence McNally

    According to Days Inn Arcata Manager Mike Miller, who was the first “The Management” post here, Days Inn was purchased by Penta Hospitality LLC of San Jose in October 2007 from V.J. Patel. Penta’s principal owners are Tarun Patel, Anil Patel (no relation) and Mukesh Mowji with Penta Arcata LLC of Orinda John Markley serving as Penta’s attorney. While City billing has Penta Arcata LLC as the property owner, Miller clarified that Penta Hospitality LLC is the hotel’s owner. Penta runs hotels in eight states ( Miller stated that Days Inn owes the City of Arcata far less than $130,776.32. According to the City, Days Inn has yet to pay on $22.776.22 in water bills and $108,000 in transient occupancy taxes.

  12. William Zoller

    WHAT? Why don’t they get their water turned off?

    I get a shut-off notice if I don’t pay my bill and it will be turned off if I don’t pay!

  13. Terrence McNally

    Right, William. I’ve gotten one, too! And I was at City Hall the next morning with payment in full.

    City Manager Randy Mendosa’s reasoning was that to shut off Days Inn’s water could permanently put the hotel out of business, laying off workers and leaving a large Arcata building open to blight.

  14. So the Days Inn can stay delinquent because we (as a city) are essential held captive. If Mendosa shuts the water off, jobs are lost and there’s a potential for blight, but then we’re still out of the money we desperately need. That’s just straight up BS.

  15. Terrence McNally

    Not really, John. There’s a lien on Days Inn property: equipment such. Arcata will collect the cash if it closes tomorrow or in six months or in three years. I wouldn’t be surprised if there’s more than $100,000 in kitchen equipment there alone. You may not agree with the tactic, but the City is confident that it will get its due sooner or later.

    What may be annoying to Arcata is how long the company has dragged out paying up. Please note that this ToT money has already been collected by Days Inn as bed taxes charged to guests. Penta Hospitality probably has suffered during the recession. But they still retain some big ol’ hotels and resorts:

  16. annomous

    although not everything that was reported was true there is alot of truth to this. fact are facts and bills not being paid are just that not being paid. but what i find even more troubling is the fact that the employees are not being paid regularly. there are a number of ex employees that have filled claims with the labor board for non payment of wages. some have not seen wages in months. this to me is unexcceptable and so wrong, i still dont understnad why the employees are still working there with no paychecks. if the company cant pay there employees or there bills then they need to close so that these employees can atleast try to get unemployment even though that is questionable in this economy. also has anyone heard if they have renewed there business license or are they delinquent on that to? this is just sad because the employees are suffering and with a sinking ship it’s just getting worse.

  17. Blight shcmight, close em’ down.
    ’nuff said.
    Happy Turkeyday

  18. ken

    Spectacular. My wife and i are getting married in may and was planning on having are reception at this hotel…..

  19. Why on Earth would anyone consign such an event to an undistinguished facility like the Days Inn? Even at its peak, it was basically just a random roadside motel.

  20. Pete

    Wasn’t it Bette Davis that said ‘What a dump’!
    Well it is! And so is the rest of this town. Nothing but a DUMP! Arcata is a DUMP! Eureka is a DUMP! McKinleyville is a DUMP!
    The people are useless. The businesses are useless. The service these business give are terrible. The homeless are..well..USELESS. I cant WAIT to get the hell out of this bad rerun of “Green Acres”

  21. Pete's Friend

    Hey Pete, I don’t care what your P.E. teacher did to you, you don’t have to take your aggression out on every single town around you. Get the hell out of this town, do it now before our P.E. teacher reads this and we don’t get a chance to have him do it to us. Signed Pete’s friend.

  22. Pete's Other Friend

    I agree with Pete.

  23. rob

    February 14, 2011 at 6:24 pmi stayed at this hotel in 2009, and they tried to extort a $200.oo deposit for a 49.99 room, the manager at the time, not one of the patels, but a caucasian fellow, looked me in the eye, and said i would get my tripreward points for the chains program, and then, when I contacted the chains promotional arm, he had told them I hadnt paid an eligible rate, I had to fight & fight to get my points, and the fact that i was lied to, left a REALLY bad taste in my mouth.I am not surprised AT ALL to see this property in the paper over other dishonest business practices, given the way they treated me as a CUSTOMER.

    #22738 rob
    December 20, 2010 at 1:57 pmI’m pretty sure the manager at the time (who lied to my face about my getting my reward points for the room I rented) is one ‘Michael Miller’, who, i assume was working on behalf of the patel family in this instance…what I DO know, is I eventually got HALF of the points from the parent chain as a gesture of goodwill, but it certainly soured me on this particular property.–I noticed an article in the eureka paper’s website referencing a government employee notating mr millers duplicity and rudeness on the phone in (bureacratic) matter concerning this hotel.–as rule, bureucrats dont mention the demeanor of who they are speaking with in official reports, but in his case they did.-I am NOT surprised at all.

    and the ‘economy’ claim, is total hoohah,there are at least 3 other hotels in that district that do just fine for themselves.quite simply, the days inn’s lack of hospitality, and rude treatment of guests has EVERYTHING to do with their business practices, and low revenue.NOT the ‘economy’

    I say good riddance to a bad business

  24. rob

    comment by ‘the management’. >>> In the meantime our staff will continue to serve our guests with the utmost respect and courtesy.<<<<

    i'm sorrym but , BWAH HA HA HA. as i note, the management of this property is incredibly dishonest,(notably this michael miller fellow) and rude.-hck, the bureacrat entrusted with colloecting the taxes even noted his rudeness/dishonesty publicly (a VERY unusual step for a bureacrat to take)

    , oh, and i;m not the ONLY customer who felt this hotel was trying to screw them over, either (thank god i stood my ground when they tried to extort that $200.oo 'deposit' out of me for my $49.99 room, id have never seen it again, thats for damn sure) check THIS OUT.

  25. rob

    michael miller is NIETHER respectful OR courteous to guests.i should know, I’ve dealt with his dishonesty in person, thank you very much.

  26. rob

    his lying to me about my trip points, made it next to impossible to complete a promotion the parent chain was having at the time, to boot.

  27. Well, the dump is closed and Miller’s out of a job there, so… it’s moot. He called and gave us a ration after our first story came out, denying any financial problems and blaming us for demoralizing the employees. The good news – for Arcata, but I guess not you Rob – is that there are parties interested in acquiring the Days Inn property and running it like a business instead of ripping off customers and stealing the people of Arcata’s tax dollars.

  28. thomas kautz

    Don’t feel bad, penta hospitality owes over 40 employees from quality inn central in denver backpay from 2009,that’s ok, I here the russians are eyeballing family members of penta


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