"I'm shocked."
That's what Barry Wickes, president of the Pennsylvania Tourism & Lodging Association, said when he learned of developments at the former Holiday Inn at 521 Greenfield Road.
"I've been here since 1990, and I'm not aware of any situation like this at all," he said. "These are just things I've never heard of before."
And those "things" keep piling up at the beleaguered facility, which was stripped of its Holiday Inn franchise Oct. 1.
Wednesday, Lancaster County filed suit against the hotel's owner, Kronos Hotels and Resorts LLC, seeking $38,747.42 in back taxes.
"That is the total we believe they owe at this point [in hotel excise and room-rental taxes], subject to an audit of their books," county Treasurer Craig Ebersole said.
This is only the second time in five years the county has sued to recoup hotel-tax money, Ebersole said, adding that the reason for the suit was simply "nonresponse."
"There are hoteliers who will call and say, 'I know the check is due, but my bookkeeper's on vacation,' or something like that," Ebersole said, explaining how his office works with hotel owners.
"We've contacted them many times and have heard nothing."
East Lampeter Township code enforcement officials served hotel managers with a "notice of violation" early last week, said zoning officer and building code official Lee Young. He said they have until Oct. 24 to abate the violations.
One of the more glaring problems involves the building's fire alarm panel. While the panel is still operating, the security company that was being paid to monitor the panel is no longer performing that job, Young said.
"My understanding," he said, "is that they're not being paid."
Ron Yarnell, of Yarnell Security Systems, which installed and monitored the panel, said he could not comment on the situation. Asked if the hotel was up to date on its payments, he said, "Absolutely not."
Young said, "The panel is behind the front desk and is audible to people there. As long as someone is staffed there 24/7, that's an acceptable temporary solution."
Young said officials would return to the property to "be sure the fire panel is inspected and passes the test."
East Lampeter is mandating that the hotel act to improve its condition. Some measures include removing the trash and debris from the parking lot, uncovering smoke detectors that had been covered over during renovation work, fixing exit signs, and repairing plumbing and electrical wiring in the kitchen.
"Much of what they have to do for us is a do-it-yourself type of project," Young said.
"But that trash," he said, "is not going to disappear without spending money to get it done."
He added, "We are going out next week to be sure they are starting" the work. "It must all be completed by the 24th."
Once officially known as Holiday Inn Lancaster, Visitors Center, the hotel lost its franchise when InterContinential Hotels Group, which owns the Holiday Inn brand, terminated its agreement.
The building, however, still displays Holiday Inn signs and continues to use Holiday Inn material such as name-brand matchbooks, letterhead and brochures.
The hotel is violating policy, said Stephen Boggs, a spokesman for IHG. "De-flagging is supposed to be immediate. They're supposed to take the sign down right away."
Troubles nationwideKronos Hotels continues to experience problems at its other hotels across the country.
Employees at two other Kronos-owned hotels in Pennsylvania said FBI agents had been interviewing employees at those facilities. The employees requested anonymity.
A spokesman with the FBI's Pittsburgh office, Special Agent William Crowley, would neither confirm nor deny that the bureau was investigating Kronos.
At IHG, Boggs confirmed Thursday that his corporation has revoked the Holiday Inn franchise from two other Kronos-owned hotels, in Lansing, Mich., and Greentree, near Pittsburgh.
Also Thursday, the Dothan (Ala.) Eagle newspaper reported workers at two Kronos-owned Quality Inns there walked out and picketed the hotel because their paychecks have been bouncing.
That same day, in Cedar Rapids, Iowa, KCRG-TV9 ran a story that said the state's revenue department is filing additional liens against a Kronos-owned Crowne Plaza Five Seasons to recover $418,844 in back sales taxes.
Friday, police were called to the Iowa hotel when more than 30 employees refused to leave the facility after their paychecks bounced.
Tuesday in Missouri, the St. Charles County Convention and Sports Facilities Authority sued the Kronos-owned Holiday Inn Select in St. Peters, just outside St. Louis, to recoup $37,000 in back taxes.
According to KMOV-TV in St. Louis, which broke the story, local banks haven't been honoring workers' paychecks. In addition, employees discovered they had no medical insurance, even though premiums were deducted from checks.
And employees of the Kronos-owned Clarion Inn in DuBois said their paychecks also bounced Thursday.
Saturday morning, WMGT-TV in Macon, Ga., reported a Ramada Plaza owned by Kronos in downtown Macon owes $21,000 in property taxes for 2007 and $25,000 to the city of Macon for its hotel/motel tax.
The facility also was without hot water from Oct. 1-3 because it did not pay its gas bill, and the Macon Water Authority said it has almost cut off service three times in the last six months.
In Sheffield, Ala., Mayor Billy Don Anderson told city council Tuesday his city endorses the utility department's decision to shut off power to a Kronos-owned Holiday Inn hotel after it failed to pay utility bills, according to the Sheffield Times Daily.
In an Oct. 3 statement, Kronos spokesman Peter Mathon blamed the company's woes on "America's current financial environment."
Employee and media reports, however, show problems began plaguing Kronos-owned hotels across the country within a month of the company's purchase of 16 hotels in June 2007, and eight more in April 2008.
The Pennsylvania Tourism & Lodging Association's Wickes wasn't buying the excuse either.
Violations of state health and liquor codes at the Lancaster hotel have nothing to do with the economy, he said.
"You have to follow state and federal laws," he said. "It's just horrendous management."
"Right now, the factor could be the economy, and our industry is braced for a slowdown in business," he said. "But again, if you're not following the laws, the economy has nothing to do with it. This is Hotel Management 101 type of stuff."
Former employees who worked in Kronos' accounting department (and who requested anonymity) agreed with Wickes' analysis.
"[Kronos] got in over their heads and expected to make huge amounts of money," one former employee said. "These properties could have been profitable if Kronos had bought them and let them run themselves. But Kronos kept one huge pool of money from all of the properties and distributed money from that.
The accounting department "would send out checks and then [Kronos corporate officials in Atlanta] would call their properties and tell them to not release the checks until they were able to move funds."
Accountants said they were often told at the last minute to send out checks "to places where the power was about to be cut off. We would ask them, 'If you can give me the money today, why didn't you sign
the original check we cut earlier?' "
In May, Kronos sent a memo to all of its corporate employees saying it would not be responsible for paying fees for bounced checks to vendors and employees.
In South Carolina, one former employee said, "That's illegal. You can't issue a check to someone and then, if it bounces, make that person responsible for the fee."
Wickes said his concern is that "one bad apple doesn't spoil the whole bunch.
"I can assure you, what is happening here [with Kronos] is the exception, not the norm," he said. "We're in the hospitality industry. But if people have one bad experience, they're not coming back.
"We have a saying ... 'successful hotels put heads in beds,' " he said. A large percentage of those heads are return guests, and if a hotel starts to lose them, it is in trouble, Wickes said.
"From a practical standpoint, the business will not survive," he added. "Eventually, I could see that facility [in Lancaster] shutting down."
Chip Smedley is a staff writer for the Sunday News. E-mail him at csmedley@lnpnews.com.
