The downtown Quality Inn has been shut down since June. It has a very big tax bill with the city. (Glenn Hicks/paNOW Staff)

By Glenn Hicks

Indebted Hotel

Quality Inn owes nearly $700,000 to city

Nov 18, 2019 | 8:00 AM

The owners of the shuttered Quality Inn hotel in Prince Albert’s downtown owe the city close to $700,000 in back taxes. The debt is one of the biggest in the city’s more than $3.3 million in unpaid tax bills.

Depending on the outcome of mediation, the boarded-up 93-room hotel could end up in P.A. taxpayers’ hands by early next year and city officials are hopeful the doors of the building once regarded as one of P.A.’s top hotels will re-open.

paNOW obtained a tax certificate from the city which shows the numbered company that owns the hotel now owes $669,016.28 in outstanding taxes and penalties. Most of that is for an accumulated levy that currently runs at $114,418.90 per year. The last time the owners were up to date with their taxes was in May 2015.

In June, owner Shah Thobani told paNOW the business, which was purchased in 2007, was not economically viable in terms of driving traffic to the location. It is currently listed for sale for $2 million as an ongoing hotel enterprise, student housing, low-cost rentals, or a form of health care accommodation. ICR Commercial Real Estate, the Saskatoon-based realtors appointed to sell it, said earlier this year the replacement cost would be about $20 million but there had been no offers to buy.

It’s a landmark hotel and it was the queen of hotels for the downtown for many years _{– Jim Toye, P.A. city manager}

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Jim Toye, the city manager for Prince Albert told paNOW they had gone through the process of trying to get the owners to pay their back taxes and a lien was then attached to the property. A further six-month period elapsed without payment, so the city will next make an application to the Provincial Mediation Board (PMB) to try to reach an agreed payment plan. According to the Government of Saskatchewan website, the board’s mandate is to strive to help debtors and creditors reach an amicable arrangement for payment of debt without resorting to legal proceedings.

City could become new owners

“The PMB will try to get the owners to agree to a payment plan,” Toye said. “That could be a three-year plan… and we’re prepared to do that for any landowner [owing back taxes] in the City of Prince Albert.”

Toye said this latest step in the process could take “a few months,” but if an agreed plan could not be worked out through the PMB then a further 30-day notice would be sent to the owners.

“If we can’t work anything out in those 30 days then the City of Prince Albert can take title on the property. We’d own it. Any other interest on that title or, if they owe money to anybody else, would be gone … we would get free and clear title,” Toye said.

paNOW understands there is a mortgage in excess of a million dollars on the property.

We want to make sure whatever goes there is good for the downtown _{– Mayor Greg Dionne}

Toye explained while he’d prefer the hotel to get up and going again and for the back taxes to “get sorted out,” he acknowledged the city had some different ideas of their own if they ended up acquiring the site. The soon-to-be-completed new single University of Saskatchewan campus in the downtown is a factor in that thinking.

“It’s a landmark hotel and it was the queen of hotels for the downtown for many years. We would market it and try to find someone who wants to locate there and offer services to the citizens of Prince Albert,” he said. The seven-storey hotel has a conference area, indoor pool and two elevators servicing all rooms.

A landmark hotel for Prince Albert, the Quality Inn is currently shuttered and in debt. (Nigel Maxwell/paNOW Staff)

It remains to be seen how challenging selling off the hotel to another party would be. If the hotel was once the jewel of P.A.’s downtown hotels it’s looking decidedly unregal on the outside at the moment. The first-floor windows are boarded up (presumably as a security precaution), the police have been called to at least one break and enter incident, and the entrance way show signs of serious neglect. An old mattress, trash and discarded needles are strewn across the small garden area. While these are largely cosmetic issues, the state of the hotel will not be lost on the city’s leadership as they go about rejuvenating the downtown.

Mayor confident building can remain a hotel

Prince Albert’s mayor Greg Dionne said he was hopeful the premises could re-open as a hotel if the city took possession.

“The problem today is that there’s so much debt load on the property that there probably isn’t a buyer out there,” he told paNOW. “But once we get it under tax enforcement we get it clear, so there’s no debt.”

Dionne said the property was easily worth well over a million dollars and he was confident the city would be able to attract another hotel operator.

“I’ve had people suggest a hotel of course, but I’ve heard about a boarding room type place for students and lots of other ideas, so it’s causing some excitement,” he said. “We want to make sure whatever goes there is good for the downtown.”

Dionne added the city wanted to move swiftly on the tax enforcement because, “we don’t want it to deteriorate and we want to get it back up and running.”

The small garden area outside the lobby entrance to the Quality Inn shows signs of neglect including a mattress, trash and needles. The mayor says the city wants to move quickly on tax enforcement to ensure the property does not deteriorate. (Glenn Hicks/paNOW Staff)

paNOW made several attempts to contact the owner but calls were not returned. ICR Commercial Real Estate said it would not comment further at this time.

—

glenn.hicks@jpbg.ca

On Twitter:@princealbertnow