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ABQ files liens against 10 hotels for lodgers tax

The Nativo Lodge is one of the hotels associated with local hotelier Jim Long. He says the company had held off paying lodgers tax to “study the legal issues” associated with the tax as it was assessed during the pandemic. (Robert Browman/Albuquerque Journal)

Copyright © 2021 Albuquerque Journal

The city of Albuquerque during the pandemic has filed liens against 10 hotels for unpaid lodgers tax, including at least four associated with one of the state’s most prominent hoteliers.

Jim Long’s Hyatt Regency in Downtown, Hotel Chaco and Hotel Albuquerque in Old Town and Nativo Lodge in Northeast Albuquerque, had an estimated $336,000 in combined unpaid lodgers tax and hospitality fees as of April, according to liens filed with the Bernalillo County Clerk.

As of last week, the city estimated there was $420,000 in unpaid lodgers tax and hospitality fee revenue throughout Albuquerque. It now has filed more than twice as many liens for the debt as it did all of last fiscal year, when it took that action against four hotels.

While city spokeswoman Sarah Wheeler said it is “common practice” to file liens after three months of unpaid lodgers taxes, she said officials considered the pandemic this year. COVID-19 hit the hospitality industry particularly hard as the virus and associated lockdowns caused travel to plummet.

“Considering the extraordinary circumstances attributed to the pandemic, the City held off on filing liens for more than one year, and some hotels were more than 15 months delinquent,” Wheeler wrote in response to emailed Journal questions.

In the case of the Hyatt, Wheeler said the city began alerting the hotel last June about unpaid taxes – including for the pre-pandemic month of February 2020. Last September, it offered to establish a payment plan with the Hyatt. It sent two additional notices before filing a lien, she said.

Hotels collect the 5% Albuquerque lodgers tax and 1% hospitality fee from their guests and are supposed to forward the money to the city on a monthly basis.

In February, Wheeler said the city sent certified delinquency letters to 26 properties – about 15% of local lodging establishments that collect and remit the tax.

By April, half of the 26 had paid in full or signed on for payment plans. Three more had closed. The city filed liens against the remaining 10.

“The City has a responsibility to the taxpayers of Albuquerque to ensure that taxes are collected fairly. The taxes were already collected by hotels, and all hotels that owed have been given numerous opportunities to work with the city on payment – including payment plans,” Wheeler wrote.

Wheeler would not identify the specific hotels, but a Journal search of county records found seven, including Long’s four hotels.

Journal attempts to reach representatives at the three other properties were unsuccessful Monday.

Contacted by the Journal last Friday about the liens, Long – CEO of Heritage Hotels & Resorts – said the company had held off paying lodgers tax to “study the legal issues” associated with the tax as it was assessed during the pandemic. Long said he still does not believe the tax was collected correctly by cities during the pandemic, but the company has begun making the deferred lodgers tax payments on the hotels it operates.

However, he added that the company intends to bring up the need to reform the law with the New Mexico Legislature in the future.

Long also said he didn’t believe the city used the lodgers tax in accordance with the law during the pandemic.

“We just think the law is poorly written, and the vagueness in the law has allowed cities to not comply,” Long said.

The city said on Friday – two months after filing the liens – it received a payment covering all the back lodgers tax owed on Hotel Albuquerque. By Monday, Hyatt, Hotel Chaco and Nativo Lodge were also paid up, according to the city.

While the Hyatt remains closed, Long said it is not due to the lodgers tax debt. He said he aims to reopen in September, depending on the return of large events to the Albuquerque Convention Center.

“This is a hotel that relies on conventions, and it relies on business travel,” Long said. “And those are the two segments of the hospitality industry that will be the slowest to bounce back.”

Lodgers tax is generally funneled back into the tourism industry. State law requires at least half of the revenue go toward marketing the city to tourists. Other uses include tourism-related facilities. Albuquerque, for example, issued $26.3 million in new 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 was to pay off those bonds and other similar debt with lodgers tax.

As the hotel business cratered during the pandemic, the city’s general fund – which usually covers day-to-day expenses like police and animal shelter operations – picked up the slack.

The city budgeted $3.5 million from the general fund to help cover such debt this fiscal year, and Wheeler said the outstanding lodgers tax should not require additional subsidy from the general fund as the city expects hotels to eventually pay it.

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