BLOOMINGTON — The Chateau, which faces foreclosure, is behind by $67,000 in local taxes it owes the city, but the settlement of an assessment dispute cuts its 2016 property tax bill by $39,000.
Bloomington Chateau Partners, who own The Chateau Hotel & Conference Center, 1621 Jumer Drive, have stopped paying on an arrangement they had with the city for hotel/motel and food and beverage taxes that they failed to forward to the city prior to 2016.
"They are overdue by $67,000," said Bloomington Finance Director Patti-Lynn Silva. "They pay every month on their regular current (local) taxes, but on the old repayment plan, we have not received a payment since November of 2017."
Meanwhile, the owners' attorney, Nicholas McIntyre, said Friday they have reached an agreement to lower the fair market value of their property by $1.4 million, from $5.4 million to $4 million, which will reduce the 2016 property tax bill by about $39,000, from $149,023 to $110,376. The deal mirrors the assessment and fair market values set for 2017 taxes payable in 2018 after an appeal.
"The property, in the opinion of the owner and in my opinion, had been overvalued," said McIntyre. "No one is trying to attest that it's worth nothing. We were just trying to reach a fair idea of the value."
For 2016 taxes that were payable in 2017, the owners wanted its total assessment lowered by more than $1 million to $746,592, based on a $2.24 million fair market provided by their appraiser, said McIntyre. A property's tax assessment is based on one-third of its market value.
The assessment includes the hotel, conference center, a restaurant leased to the Tony Roma eatery chain, and associated land in the 1600 block of Jumer Drive.
After the ownership group failed to make any mortgage payments through September 2016, a complaint was filed with the McLean County court that month. Court documents indicate the hotel still faces foreclosure and sale.
Following a hearing in 2016 over taxes payable in 2017, the McLean County Board of Review set the assessment at $1.8 million based on a fair market of $5.4 million — a decision the owners appealed to the Illinois Property Tax Appeal Board.
When the owners filed another challenge for 2017 taxes payable in 2018, the local review board decided on Nov. 28, 2017, to lower the assessment to $1.3 million based on a lower fair market value of $4 million.
"I contacted the attorney for The Chateau, and we offered to resolve the 2016 property tax appeal board case at that same level," McLean County Supervisor of Assessments Robert Kahman said Friday.
On Thursday, the local Board of Review received a signed stipulation of agreement from the attorney, and it will be forwarded to the state appeal board to resolve the 2016 case.
"In all likelihood, everything is resolved," said McIntyre.
McIntyre said he was not aware the owners had stopped paying on the back taxes owed to the city.
In March 2014, the City Council approved a tax repayment agreement with The Chateau's owners that called for paying the remaining overdue amount in monthly installments. The agreement also called for the hotel to stay up to date on monthly payments of current local taxes.
By March 2017, the owners had decreased the $335,000 they owed the city in January 2015 to $94,317.
The city's legal staff is looking into the latest breach of the repayment plan, said Silva.
Bloomington Chateau Partners purchased the hotel in 2002, about 14 years after it opened as Jumer's Chateau and three years after the Jumer's chain filed Chapter 11 bankruptcy.
A minimum cost of $2.6 million to modernize the facility was among deficiencies contributing to a lower market value for the five-story, 180-room hotel, said the owners' appraiser, LaSalle Appraisal Group Inc., in a report.