DANA POINT : Hotel Agrees to Pay City Back Bed Taxes

The city and the Dana Point Hilton have reached an agreement on a plan that allows the hotel to pay overdue bed taxes, city officials said.

After a meeting of city officials and representatives of the nearly 2-year-old hotel earlier this week, City Atty. Jerry Patterson announced that the hotel had agreed to pay about $90,000 in back taxes, possibly within 30 days. He declined to comment on the specifics of the agreement.

“There has been an agreement reached,” Patterson said. He said the exact amount the 197-room hotel must pay the city “depends on whether it is paid soon or over a couple of months.”

The agreement came five days after the city filed suit in Orange County Superior Court seeking $120,000 from the hotel for past-due taxes dating back to April, 1993.

The city agreed to waive certain penalties if the hotel pays the back taxes quickly, Patterson said: “It’s a good agreement for the city that gives (the hotel) a great incentive to pay early.”

None of the back taxes nor interest was negotiable, and those funds must be paid in full, Patterson said.

The city code requires each of the 15 local hotels and motels to add a 10% surcharge to its room rates for a transient occupancy tax, commonly called a bed tax. The revenue from the taxes are due to the city monthly, 20 days after the final day of the previous month.

The city depends on bed taxes for more than a third of its nearly $11 million in annual revenues, according to city officials.