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City, press coverage hurting Holbrooke

A front-page article by Staff Writer Kyle Magin appeared in The Union on Thursday, Sept. 2, titled, “Liens Filed Against Holbrooke.” You can find it at http://www.TheUnion.com.

You can also find copies of the liens along with a copy of Mayor Lisa Swarthout’s letter addressed to the owners of the Holbrooke. The liens, once recorded are a matter of public record. The city wanted to be sure the public was aware of its action, so they provided The Union with a copy of Mayor Swarthout’s letter. I am upset that the city released that letter.

The impression left by the article is certainly damaging to the Holbrooke and its owners.



But you don’t have the complete picture.

Let’s start with the lien for delinquent water and sewer charges in the amount of $4,878.71. The delinquent amount is for water and sewer charges during 2009 when the owners were not operating the business. These are someone else’s bills for which we are being held accountable.




The city can do that. It’s legal. We have been paying regularly on the delinquent amount (not our bill), reducing it from $7,497.66 to $4,878.71. Subsequent to the article, we paid this amount in full to avoid water shut off.

No action was taken by the city against the operators who didn’t pay. Instead, we paid all their delinquent amounts, but the public is left with the impression by the Mayor’s comments that the owners are cheating the city.

The amount of the lien for transient occupancy taxes is for $36,757.56. Of that amount, $25,968.10 represents taxes collected from guests. The rest is penalties and interest tacked on by the city, penalties they have a right to impose.

However, the entire amount of the delinquency is for 2009 taxes not paid by the operators of the hotel during that period. They left town without paying taxes they collected.

We’re still here and have been paying the taxes we have collected and intend to continue doing so. Yes, we are late, and we’ll pay a price for that in penalties and in the press.

The city took no legal action against either of the two operators (Atkinson Johnson or Atlantic First Holdings) for withholding taxes due to the city, yet the city is threatening us with criminal prosecution for not paying someone else’s debt.

The city can hold the owners responsible for those taxes and the late charges and interest even though we didn’t collect the taxes. It’s legal.

Is it fair? To the city, that’s irrelevant. The lien isn’t the problem. In fact, we advised them to take that step to protect their interests in the event of a sale.

We get it. The city needs the money. We know they have to be aggressive about collecting what is due to the city.

In the article, Mayor Swarthout was quoted as saying, “The reality is, they’re collecting the money and not paying the city.” She knows very well that we did not collect the money for which the hotel is delinquent. Her indignation is misdirected.

The day the article appeared, concerned patrons were calling about whether the Holbrooke would close, leaving them without a venue for their scheduled event.

Previously, The Union took an already public announcement by the bank about the potential auction of the Holbrooke and made it a front-page story, resulting in eight banquet cancellations within 24 hours. The auction didn’t happen because of a possible pending sale. But the damage had been done.

Everyone says that the Holbrooke is important to Grass Valley. Everyone also knows it has been struggling in this economy. If the Holbrooke closes, everyone loses, including the city.

If we sell it before the bank decides to shutter it, everyone wins – except the owners who can’t possibly recover their investment. We’re not asking for sympathy. We’re just asking that the city and The Union not make it more difficult than it needs to be.

From Jim O’Brien and Mike Nudelman of The Holbrooke.


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