Inspectors from the state Department of Agriculture were surprised Tuesday to find a local hotel using a guest room as a walk-in refrigerator.

According to the inspection report, room 102 of the Holiday Inn, 521 Greenfield Road, contained macaroni salad, meat loaf, mashed potatoes, vegetables, rice, apple pies, chicken, tomatoes, liquid eggs and fresh eggs delivered that morning.

When the hotel's walk-in refrigerator failed, the job of refrigerating those contents fell to the guest room's air conditioner, which did cool the food — slightly.

The room was 65 degrees, according to inspectors' reports, 24 degrees higher than the maximum temperature allowed by state public health guidelines.

Department of Agriculture spokesman Chris Ryder said his department was responding to a "consumer complaint." Regarding the refrigerator breakdown, he added, "No matter what the reason is, they can't do that."

The food, he said, was destroyed and denatured (rendered unfit for comsumption.) While Ryder did not know exactly what procedure inspectors used, he said often bleach will be poured over food to make it inedible.

That inspection, however, is only one of the problems at the hotel.

On the same day, officers of the State Police's Bureau of Liquor Control Enforcement searched the property for evidence the hotel was selling alcohol without a liquor license.

The Lancaster County Treasurer's office says the hotel owes room rental and excise taxes.

And the state Department of Revenue recently placed a lien on the property for $29,259.28 in unpaid sales taxes for November and December of 2007.

Further, employees have reported bounced paychecks. Health insurance premiums have been deducted from paychecks, but an employee who requested anonymity and recently required surgery was told the company had no insurance.

Electricity has been cut off and restored a number of times. Cable television service was turned back on last week after a five-month disruption.

Housekeeping employees are refilling discarded guest room shampoo bottles and returning them to bathroom vanities. They are told to rinse out guest room trash bags and re-use them.

This information was provided by a current employees, who asked to speak anonymously, and was corroborated by former employees.

No liquor license
The recent Liquor Control Board infraction might be the hotel's biggest problem at this point.

Board spokesman Nick Hays said the establishment's liquor license expired in February.

According to the warrant signed by Magisterial District Justice B. Denise Commins, officers received a complaint on Sept. 18 that the hotel was selling alcohol without a license.

That evening, Officer Chris Keisling entered the hotel's banquet room and saw that "a bar was set up in the back corner of the room. On the top of the bar was a menu for the sale of alcoholic beverages with a list of prices," according to the warrant.

Keisling also witnessed liquor sales.

His observations and interviews with employees enabled Keisling to obtain a warrant and search the hotel Tuesday.

The findings of his search were not available as of Friday.

Sgt. Troy Lokhaiser, district office commander of the enforcement bureau, said he could not comment on the ongoing investigation, but said he believed it would be completed in two to three weeks.

According to an employee at the hotel, the facility has been serving alcohol since the license expired.

Hays said the license "expired and was not renewed." He noted the license was still held in the name of Lodgian Inc., the company which owned the hotel before selling it in June 2007. "There was no application for a transfer of the license."

This Holiday Inn is owned by Kronos Hotels LLC, an Atlanta-based hotel chain founded by its chief executive officer, Malaysian entrepreneur Charles Morais.

The Greenfield facility was one of 16 hotels in eight different states Kronos acquired from Lodgian for $64.9 million in that 2007 transaction. A Holiday Inn in York was also part of the deal.

Calls to the local hotel were immediately referred to Kronos headquarters without comment.

A Kronos spokesman, Peter Mathon, said neither he nor company officials could comment on the situation, except to say "the refrigeration problem has been solved."

Kronos operates the Holiday Inn as a franchisee of InterContinental Hotels Group (IHG). IHG closely monitors management of its franchises and, in fact, has in the past removed the franchise tag from other Kronos-owned hotels.

A spokesman at IHG said Friday that officials are aware of the problems with the Holiday Inn here but were at a convention in California and unavailable for comment.

Taxes due
Of the money due to the county, Lancaster County Treasurer Craig Ebersole said, "We have some collection issues with that facility. We have not received any money from them since July 21."

The 1.1 percent excise tax and 3.9 percent room rental levy helps fund tourism marketing efforts and construction costs for the downtown convention center project on Penn Square.

Ebersole said it would be difficult to estimate the exact amount due because "we rely on their monthly reports." He added, "Their reports are inconclusive and we will be doing an on-site audit."

A frustrated Ebersole said, "We have tried and tried and tried to work with these people."

Former manager
Tom Showalter was an assistant general manager at the facility for a year and a half and was the acting general manager from July through December 2007 during the transition from Lodgian to Kronos ownership. He said problems began immediately.

"Our main fire panel was outdated and didn't pass inspection, even when Lodgian owned the hotel," he said. "As part of the sales agreement, Kronos said it would be replaced.

"But they never did," he said. "Then, in September, it failed another inspection but they [Kronos representatives] played stupid. They said they didn't know anything about it and blamed me.

"I was just another scapegoat in that situation. That's all they do."

Tina Potts was the general manager from October 2006 until she left in July 2007. She confirmed Showalter's account regarding the fire panel.

"They [Kronos] knew about it prior to the hotel being sold," she said.

She realized something was wrong when "the very first paychecks issued by Kronos didn't show up on payday. I called corporate and demanded they overnight them but they said they couldn't."

The paychecks arrived Monday, but shortly thereafter, checks started bouncing.

"My immediate boss was terminated and he told me to get out of there when I could."

Showalter said he was working one day when PPL workers "showed up at the door to cut off the electricity. I cut a check, gave it to them, and then called the corporate office to tell them they better put the money in the account or it was going to bounce."

Showalter said he was told that three weeks ago during a job fair at the hotel, PPL did shut off the electricity. People attending the event had to move from the banquet hall into the lobby to take advantage of natural light.

It was while Showalter was working at the hotel that housekeeping staff was instructed to refill shampoo bottles and re-use trash bags because, he said, some vendors would not provide supplies to the hotel.

"We spent a lot of time going to Costco [to buy supplies]," he said.

This is not the only Kronos-owned hotel with problems.

Kronos owns the Crowne Plaza Five Seasons in Cedar Rapids, Iowa. According to reports published in the Cedar Rapids Gazette and televised on KCRG-TV, the company owes the city $71,000 and the state more than $400,000 in unpaid taxes. Employees there also report bounced paychecks. Vendors have sued for non-payment and the general sales manager recently sued Kronos alleging sex discrimination.

In Sheffield, Ala., the city council voted late last month to terminate its lease with Kronos for the ground the hotel sits on for non-payment of taxes. The company was operating the Holiday Inn, Sheffield.

While he said employees fear reprisal if they talk to the press, Showalter said he wanted to go on the record because "I have been working in hotels since I was 20. I learned to respect Lancaster County hotels from a tourist perspective," adding he moved here from Georgia to take the Holiday Inn job.

"That hotel is right in the middle of the tourist area," he said. "I just think it's terrible what's going on out there."

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Chip Smedley is a staff writer for the Sunday News. E-mail him at csmedley@lnpnews.com.