Resort fails to pay hotel taxes
Posted-Tuesday, July 26, 2005 11:47 PM EDT
By KIRK SWAUGER
TRIBUNE-DEMOCRAT SOMERSET BUREAU
BAKERSVILLE - Somerset County officials are taking legal action against Hidden Valley after the resort failed to pay hotel taxes for nearly three years.
County Solicitor Dan Rullo said Hidden Valley owes the county $53,200, along with $12,300 in penalties and attorney's fees, for a total of $65,500.
"These are funds that are entrusted to them," Rullo said Tuesday at the county commissioners' meeting. "They receive this tax from customers and hold these funds as a fiduciary for us."
The county has retained Beer Ream & Co., 250 E. Union St. in Somerset, to conduct an independent audit of the resort's records since the hotel tax was enacted in September 2002.
Officials are threatening to file a municipal lien against the resort if the taxes are not paid, and is not ruling out criminal charges if it is proven the taxes were fraudulently withheld.
Hidden Valley is owned by the Kettler family in the Washington area, resort spokesman Keith James said.
James said he is unaware of the delinquent hotel taxes.
Hidden Valley executives did not immediately return a telephone call seeking comment.
"If there's anything legal that could be pending, I know there wouldn't be any comment," James said.
Hidden Valley paid its portion of the hotel tax for the most recent quarterly reporting period, after failing to turn over the money since the beginning of 2003, county financial analyst Randy Welker said.
"It's a concern somebody would collect this tax, not remit it and spend it on something else," Commissioner Brad Cober said.
With its cluster of hotels near the Pennsylvania Turnpike interchange and two major ski resorts, the county collects about $650,000 a year from the 3 percent tax.
The money is used to promote tourism in the Laurel Highlands and provide grants for tourist-related initiatives.
All of the other dozens of hotels and bed and breakfasts in the county apparently have turned in the tax, officials said.
"We're going back and taking a close look to make sure it's being done," Cober said. "We're going to be doing more monitoring."
Though Hidden Valley never has received a county tourism grant, independent Nordic Ski Patrol did get money this year to groom cross-country trails at the resort and surrounding state forests and parks, officials said.
Cober said the problem was exposed during an ongoing annual county audit. He added that Hidden Valley forwarded its hotel-tax reports only after being contacted by county officials, but did not turn over the money it owes.
The hotel-tax ordinance contains provisions that could include potential criminal charges for "willful failure to comply," Rullo said.
Hidden Valley does not have a hotel like neighboring Seven Springs Mountain Resort, but does brisk business with townhouse and condo rentals, especially during ski season.
Hidden Valley was founded by George and Helen Parke in 1949, when the Pittsburgh couple purchased a 112-acre farm to start a country inn. In 1957, a few ski slopes were added, homes were built, and the resort began to grow.
One of the resort's regular guests, Washington developer Clarence Kettler, forged a relationship with the Parkes and bought Hidden Valley in 1983.
Since buying the resort, the Kettlers have focused mostly on constructing exclusive new homes above the resort, rather than on the ski operations.
Though Hidden Valley officials deny the resort is for sale, Cober is aware of the speculation. "I've heard those same rumors," he said. "I've heard it's for sale, but I don't know if it is or it isn't."
I'm wondering if there might be more than tax troubles for Hidden Valley. I am assuming the Hidden Valley discussed in this thread is the PA one. Lost lawsuits have a tendency to stifle cash flow.
Published: September 19, 2005 11:35 pm
Hidden Valley pays back taxes just in time
By KIRK SWAUGER
Hidden Valley barely beat a deadline to pay its delinquent property taxes before the Somerset County resort was to be auctioned at tax sale on Monday.
Just an hour before the tax sale, the financially troubled resort paid $500,000 in cash and signed an agreement that it will turn over almost $205,000 more by year end or when it is sold.
"That's the only way we'd take it off" the tax-sale list, Tax Claim Solicitor Nathan Rascona said.
Hidden Valley owed $704,570 in back taxes for 2002 and 2003, and $1.14 million overall for the past three years, records reveal.
Its owners, the Kettler family of Washington, said last month they want to sell the ski area, golf course and other property.
"The agreement for the resolution of the tax problems was in place last week," resort spokes-man Keith James said.
"We continue to move full-speed ahead at Hidden Valley on all levels. The golf course is open and functioning, (as is) the restaurant (and) lodging. And we're planning for the ski season ahead," he said.
A resort spokesman has said five serious buyers have emerged, and two others have expressed interest. The bidding deadline is Sept. 30.
If the resort hadn't paid its past-due taxes by 11 a.m. Monday, about 90 of its properties, including the ski area, golf course and sewage plant, would have been sold to the highest bidder.
That likely would have created a feeding frenzy in the courtroom where the tax sale took place: An unfinished house at Indian Lake skyrocketed to $75,000, though no bids were taken for dozens of pieces of land or trailers.
The delinquent taxes are the latest in ongoing financial problems for the second-largest ski resort in southwestern Pennsylvania.
In early August, Hidden Valley turned over three years of hotel back taxes after the county threatened legal action. At that time, the resort paid $65,611, including about $53,200 for the tax and the remainder in penalties.
Founded by George and Helen Parke in 1949, the resort was purchased in 1983 by regular guest Clarence Kettler.
In all, 25 of 106 properties were sold at the tax sale, officials said.