Riverwalk Inn owner beholden to many
Published 3:48 am Thursday, February 19, 2015
- Hotelier Brad Smithart, who operates Astoria Riverwalk Inn through Hospitality Masters, owes a percentage of his gross revenues to his landlord, the Port of Astoria, transient room taxes to the city of Astoria and back taxes to the IRS.
Brad Smithart owes a lot of money to a lot of people. Smithart is owner and operator of the Astoria Riverwalk Inn at the Port of Astoria through Hospitality Masters.
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The Port of Astoria’s counsel mailed a letter Feb. 9 giving notice of default to Smithart, and Executive Director Jim Knight publicly announced the action Tuesday at a Port Commission meeting. The Port’s Finance Manager Jim Grey estimated that Smithart owes the Port about $179,000.
The Port’s counsel is still researching when the process turns from a notice of default to the eviction process.
Smithart also owes the city an unidentified amount of transient room taxes. The city doesn’t know how much, Financial Analyst John Snyder said, because Smithart hasn’t given the city reports to gauge the taxes owed since June.
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Meanwhile, the IRS filed a notice of federal tax lien against Smithart Jan. 14, claiming that he owes $16,402.62 in back taxes.
Smithart, who also opened the Arc Arcade in downtown Astoria in July, did not make himself available for an interview.
He has leased the Astoria Riverwalk Inn, a former Red Lion Inn, from the Port since March 2012. He pays the Port $10,000 a month in rent May through October; $5,000 in monthly rent November through April; and 10 percent of his gross revenues.
“There’s also no valid reason why he hasn’t supplied the revenue reports like he’s supposed to each month,” Grey said, adding that Smithart had owed the Port his revenue reports dating back to March or April, before bringing them in Friday. The Port is now poring over them to figure out exactly how much he owes.
Grey and Knight said Smithart has provided vague reasons for falling behind, such as tight cash flow and a lack of time.
“We’re hoping to come to an amicable solution really fast, to protect the Port’s interest,” said Knight, adding that the first choice is to find another operator for the hotel.
Smithart had recently listed the Astoria Riverwalk Inn for sale at $1.2 million. After comments from former Port Commissioner Jack Bland that Smithart was looking to sell the hotel, Smithart said he was looking for investors in the hotel and had no intention of leaving.
Ganesh Sonpatki, who owns several budget hotels in the Portland area, told the Port in October he was interested in buying Smithart out of the hotel, developing it into a budget lodging and possibly restarting the former Seafare Restaurant & Lounge, located between the hotel and the Chinook Building above the West End Mooring Basin.
Knight said the Port has heard interest but can’t field offers to operate the hotel while Smithart still has an active lease. A representative from the Astoria Riverwalk Inn asked the Port for extensions to avoid eviction, he said. But the Port denied his request, Knight said, because of Smithart’s history of falling through on his financial obligations.
The Port Commission in March 2012 sided with Smithart and partner Seth Davis’ proposal to reopen the hotel over a competing proposal by the significantly more well-off Williams/Dame & Associates, which wanted the Port to tear the Red Lion down before it would build a new hotel. It gave Smithart and Davis a five-year lease running through most of 2017.
In October 2012, it voted to give Hospitality Masters an option to extend another five years. At the time, Smithart stated that his and Davis’ intent was to be around at least 30 to 40 years.
In August 2013, Smithart, by that point alone in Hospitality Masters, received an eviction notice from the Port. He narrowly avoided it after falling behind on rent and revenue-sharing, in addition to being behind on transient room taxes with the city.
In November 2013, the Port Commission voted 3-2 to give Smithart a $30,000-a-year break on rent, lowering it to $5,000 a month in the winter months, provided he invest the saved rent into the Port’s building and provide it an accounting of the improvements. Grey said the Port’s been shown evidence of improvements, but not of how much.
At the time of the lease amendment, Smithart had recently caught up after falling as much as $40,000 behind on payments with the Port in 2013. That same month, he worked out a 30-day repayment plan with the city of Astoria, to which he still owed about $48,000 in transient room taxes at the time.