Hotel pays Waukesha real estate tax

Waukesha — Owners and operators of the downtown Clarke Hotel and Black Trumpet, a centerpiece of Waukesha's downtown revitalization, have paid the remaining delinquent taxes and business improvement district assessment they owed by the Aug. 31 deadline, a city official said Tuesday.

The city was prepared to yank the hotel's liquor license by July 1, as required by city ordinance, because owners were delinquent on their tax payments.

However, on June 29, an attorney for Andrew Vallozzi's Bethesda Development delivered a check for $121,054 at the Common Council meeting with a promise to pay the rest by Aug. 31.

Deputy City Clerk Gina Kozlik said Tuesday that since Friday her office has received a $16,818 assessment for business improvement district taxes, and she confirmed that $9,337 in real estate taxes, including interest and penalty, were paid through the county treasurer's office.

Still, the hotel is behind on the share of room taxes owners agreed to pay to offset a $750,000 interest-free loan provided by the city.

Steve Neaman, Waukesha's finance manager, said owners are paying 8% of their gross revenue from room charges as required by the room tax, but the hotel doesn't have the volume of business necessary to keep up with the annual loan repayment schedule.

Hotel owners were to use the room tax to repay $45,000 last year, but as of June 30, they were about $25,000 short. Another $50,000 is due this year, Neaman said.

He had not yet calculated any July or August payment but said the hotel was producing an average of $1,850 a month in room tax in May and June when it needs to be paying at least $4,167 a month, on average.

The city lent Vallozzi and then-partner Andrew Ruggeri $750,000 and offered another $750,000 incentive through tax incremental financing to the project as a way to get a dilapidated downtown property redeveloped. Its real estate value had last increased to $5.2 million. Property taxes on the growth in property value are earmarked to repay some of the public financial incentives while room taxes are supposed to repay the rest.