Homeowners May Pay for Resort’s Tax Defaults : Oxnard: The city wants to recoup losses by raising maintenance fees of 440 landowners who live in the Mandalay Beach area by about 40%.

Mandalay Beach Resort Hotel, Oxnard’s most lavish seaside vacation spot, has defaulted on property tax payments to the county for the third time in four years.

As a result, the city of Oxnard has been unable to collect its anticipated share of the unpaid property taxes from the county to pay for landscaping and beach maintenance in the area.

Now the city wants to recover its losses by raising the beach maintenance and landscaping fees on 440 homeowners who live in the Mandalay Beach area by about 40%.

“I believe that the entire Mandalay Beach area is covered in the assessment district, so that if anyone defaults, the rest has to make it up,” City Manager Vern Hazen said Friday.

Under a city proposal to be unveiled at Tuesday’s council meeting, Mandalay Colony’s homeowners would be assessed a $94.30 yearly fee to pay for maintenance costs, up from the $67.39 they paid last year.

Under the proposal, the council would set a May 28 public hearing date to discuss the assessment costs. Several enraged homeowners contacted Friday said they will fight the proposed fee hike.

According to a city report, the cost of maintaining Mandalay Beach during the next fiscal year is $117,710. Colony residents would be charged $76,222, plus $41,488 owed to the city by the hotel.

But not all of the fee increase will go toward covering the hotel’s delinquent payments, said Oxnard’s Parks and Recreation Director Gary Davis. The increase also reflects added district maintenance costs to the city discovered in a recent review of city finances, he said.

Davis could not provide an estimate of how much the city has been undercharging the Mandalay Colony for maintenance costs, but he said a breakdown will be provided at the public hearing.

The city’s decision to charge the Mandalay Colony for the hotel’s share of district maintenance costs comes after the hotel missed an April 10 deadline to pay county property taxes.

The hotel already owes the county $764,104.31 for failing to pay property taxes in fiscal years 1988 and 1989. Because the hotel did not pay its taxes, the city was unable to collect $45,116.50 from the county for the hotel’s share of the district maintenance costs during those years. The city covered that deficit by borrowing from other district assessment accounts, city officials said.

The city cannot foreclose the hotel to collect its debt because the hotel is renegotiating its tax debt with the county, said Parks and Recreation official Terri Murphy in a report to the City Council.

However, the hotel last month defaulted in its five-year repayment plan to the county. “The failure of the hotel to make the second-half installment payment by April 10 . . . makes it unclear when the city will be repaid for the delinquent assessments,” Murphy said.

A spokesman for the hotel, which is owned by a group of businessmen headed by Dallas developer Robert E. Woolley, downplayed the significance of his company’s failure to meet its tax deadline and denied the hotel is in serious financial trouble.

“The first quarter did not meet expectations as far as revenues are concerned and we just delayed our tax payment a little bit,” said Bob Dupree, the hotel’s general manager.

“Our performance was less than expected, but it hasn’t been that bad,” Dupree said. “I think we’ve raised enough funds to pay taxes, but the decision to make payments is not up to the hotel management, but with the owner in Dallas.”

But even if the hotel does resume its tax payments, the city will not receive any funds until after the hotel completes its five-year repayment program.

In the meantime, if the City Council approves the proposed fee hike, Mandalay Colony residents will have to foot the bill.

“I don’t feel we should pay the hotel’s bills,” said colony resident Enid Leventhal. “It isn’t fair and it isn’t right.”

“How come the hotel gets away with this?” asked resident Dorothy Grapperhouse. “How come we have to pay for all this and the hotel gets away scot-free?”

“I don’t know why they can take away our property if we don’t pay but they can’t do the same with the hotel,” said Steve Wilson, another colony resident. “I don’t see why we should pick up the tab. I don’t use the beach anyway.”

City officials said the colony residents have to pay because it’s their beach and their landscaping.

“General funds are the only alternative to the payment of these costs,” Murphy said. “This alternative would spread the cost of this tract’s beach and landscaping maintenance to all city residents, rather than only to those property owners who are directly benefited by the maintenance program,” she said.

Hazen said he didn’t know whether the colony residents would be reimbursed if and when the city collects from the hotel.

“We’ll have to look into that,” he said.