Tax problems persist, but the Eldridge Hotel’s general manager insists the business is in no danger of closing in the foreseeable future.

Rob Phillips, general manager of the downtown Lawrence hotel, said he was in the middle of negotiations with the Kansas Department of Revenue to create a payment plan to satisfy $108,982 in unpaid guest tax, sales tax and Kansas withholding tax bills.

“They (state officials) are working with us very favorably,” Phillips said. “I’m believing that within 90 days it will be totally resolved.”

Officials with the Department of Revenue familiar with the case were unavailable for comment Wednesday.

Revenue officials entered the hotel June 11 with tax warrants and took the business’ cash-on-hand to help satisfy the unpaid tax bills. At the time, revenue officials said they were willing to work on a payment plan and were in no hurry to begin foreclosure proceedings against the 48-room hotel at 701 Mass.

County taxes owed

Phillips said business had remained steady since news of the tax problems became public.

“We still plan on operating and moving forward,” Phillips said. “We’re working on all the problems and are moving forward. That is the only thing you can do in life.”

The hotel also owes $219,665 in delinquent property taxes, dating back to 2000. Douglas County Treasurer Pat Wells had said state statutes wouldn’t allow the county to include the property in an unpaid tax sale until 2004.

¢ 6News video: Hotel owner says Eldridge will stay open

Phillips said he thought that situation could be resolved, too.

“I don’t think any of these issues are anything that can’t be worked out,” Phillips said. “We would just like the economy to pick up, and we would like to receive a little reprieve on parking.”

Phillips said he had money in an escrow account to pay both the county and state tax bills but would not comment on what conditions must be met before the business would have access to the funds. Previously, Phillips had said he had interim financing arranged if the hotel could gain more access to downtown parking to help it compete with the SpringHill Suites by Marriott, another downtown hotel located in the Riverfront Plaza.

Phillips had said the Eldridge’s troubles worsened when city commissioners allowed the Marriott to purchase 138 parking spaces in a city-owned adjacent parking lot for exclusive use by hotel guests.

Phillips had sought exclusive use of a 24-space parking lot just west of the Eldridge, but wasn’t able to strike a deal with city officials.

A parking plan

The Eldridge’s financial problems, though, appear to have begun before the Marriott’s opening, according to tax warrants filed by the Department of Revenue. Those warrants list that the Eldridge began falling behind on transient guest tax payments in August 1999, about two years before the Marriott opened for business.

Phillips disputes that the business was delinquent in 1999, and said that if it was, it would’ve been for a small amount and as a result of a bookkeeping oversight. The tax warrant doesn’t list the amount the business was delinquent for in 1999. Phillips said the downturn in his business that led to the unpaid tax bills began in mid-2000 when the economy began to turn downward and the Marriott prepared to enter the market.

He said he still intended to present a proposal in the “next several weeks,” to city commissioners outlining how the city could help the hotel gain better access to downtown parking.

He declined to discuss the specifics of the proposal, but said it would address parking issues created by the city when it expanded the Lawrence Aquatic Center, which is about two blocks west of the Eldridge.

“The swimming pool creates huge parking issues for us,” Phillips said. “It affected us and everybody else on this end of downtown.”

Phillips said he would also seek to convince the new City Commission that the Eldridge was treated unfairly when it wasn’t allowed to designate downtown parking spaces in a similar manner as the Marriott.

“I’m not against competition, but let’s have a level playing field,” Phillips said. “We always operated under the assumption that we wouldn’t get any favorable parking treatment, and we were fine with that because we assumed no one else would either. It ended up being a wrong assumption.”