A day after the New York State Department of Taxation and Finance slapped the posh Allegria Hotel with seizure notices for unpaid taxes on July 1, the hotel’s owner and general manager said that the signs had been removed and that it was business as usual as the hotel prepared for a busy weekend.
Last week, a photo of a sign on a hotel room door that read, “This property has been seized for non-payment of taxes and is now in possession of the State of New York,” was posted on Facebook and went viral, sparking speculation that the hotel had been shut down or was in danger of closing.
According to people with knowledge of the seizure, three enforcement officers from the tax department, accompanied by a Long Beach police official, entered the hotel, at 80 W. Broadway, and placed the notices on about a third of the hotel’s rooms, which were not rented. No guests were asked to leave, sources said.
According to the tax department, there are 25 outstanding warrants against the corporation that operates the hotel, Alrose Allegria LLC, 12 of them for failing to pay sales taxes and the rest for nonpayment of withholding tax from 2010 to 2015. The hotel owes nearly $6 million in taxes, according to Cary Zitner, a spokesman for the department, which led to the seizure of the vacant rooms, “in an effort to encourage the taxpayer to settle his tax liabilities.”
“The taxpayer has a lengthy history of non-compliance when it comes to paying the state taxes in a timely, voluntary manner, as required by law,” Zitner said in a statement.
The hotel’s owner, Allen Rosenberg, and its general manager, Nasser Samman, acknowledged that the notices were posted but said that the hotel was never closed, as some claimed, and that the signs were meant only as a warning by the department. The seizure of rooms did not impact any guests, events or operations, they said.
“We’re in business,” Samman said. “The Allegria is working very closely with New York state to resolve the issue, and we apologize for any inconvenience to our guests, but the Allegria is in business. The Allegria always cooperates with New York state; they have a scheduled payment, and the Allegria has been paying and is working very closely with the state.”
Samman said that events were to go on as scheduled on the July Fourth weekend.
“Apparently there was several hundred thousand dollars [owed], and it became a judgment,” Rosenberg said. “[The state] came in and hit a couple of rooms, and we are wrapping up the settlement as we speak and those stickers are off. It’s an unfortunate, ugly, embarrassing moment, but it’s a little speed bump. New York state and the IRS are working with us, and we have our payment plans in place and they are allowing the Allegria to operate peacefully.”
The 144-room, nine-story hotel has had its shares of highs and lows since it opened in 2009. In 2007, Rosenberg, who owns the Manhattan-based Alrose Group, purchased the former King David senior-citizen home property for $21 million to build a boutique-style, oceanfront luxury hotel and spa with an upscale restaurant and other amenities.
The hotel’s financial problems had long been public knowledge, though things seemed to take a positive turn in 2012.
Rosenberg’s development company, Alrose King David LLC, which owns the hotel, filed for Chapter 11 protection in July 2011, claiming $10 million to $50 million in liabilities to more than 50 creditors, but a year later, U.S. Bankruptcy Court Judge Dorothy Eisenberg gave final approval to a reorganization plan allowing Alrose King David to pay off or restructure its debts.
“My gut feeling is that they made a huge payment,” one local official, who declined to be identified, said of the seizure of rooms. “The signs were up for only a day; it was on the room doors and was meant as a warning. But they were never not running. They had a payment plan and were probably behind.”