The Pine Cone's fifth story of the week

Home Next

P.G. inn owes nearly quarter-million in TOT

- Bankruptcy may forestall collection


Published: Dec. 31, 2010

THE OWNERS of one of Pacific Grove’s best known inns owe more than $200,000 in back taxes, according to the city, which is in the process of trying to recoup the lost revenue as the inn’s owners make their way through federal bankruptcy court.

According to city officials, the operators of Lighthouse Lodge and Suites, Jacci and Brian Pflieger, owe $231,602 in transient occupancy tax — the 10 percent tax innkeepers in Pacific Grove collect from visitors and are required to pay to the city every quarter, the city’s budget director said.

Once the Pfliegers got behind, Jim Becklenberg told The Pine Cone, staff sent them a series of letters about the past due TOT, per the city’s municipal code that outlines TOT enforcement rules. The couple was later afforded a city hearing.

“Based on the hearing, we were able to determine what they owed the city including tax and penalties and interest,” Becklenberg explained. “Around that same time, once we finalized that, we learned [the Pfliegers] filed for bankruptcy protection, which effectively put our claim on hold.”

According to bankruptcy documents filed Dec. 15, Lighthouse Lodge LLC, employed 35 workers and in the last fiscal year had $3.2 million in gross revenues. It owed about $8.7 million on a to Orix Capital Markets, had $291,000 in “priority” unsecured debt and $5.7 million in other debt, owed to more than 175 suppliers and other vendors. Court records show the property was valued at $18.5 million and the company had $213,000 in cash.

The owners apparently stopped making payments on the mortgage sometime before March 2009, when Orix declared the loan in default. U.S. Bankruptcy Judge Stephen Johnson ruled Dec. 28 the inn should be sold to pay off creditors.

Jacci Pflieger, who is listed on the inn’s website as the general manager, couldn’t be reached for comment via phone and email messages. The Pfliegers also own Anton Inn off Lighthouse Avenue.

Becklenberg said he’s confident the city will be able to collect the TOT after the Pfliegers’ bankruptcy proceedings have been finalized.

“Hopefully the city will find out in the next few months when we will be able to collect that debt,” Becklenberg said.

Pacific Grove collects about $2.8 million in TOT every year, which trails behind the $4 million it collects in sales tax and is just shy of the $2.9 million it gets from property tax.

Becklenberg said Pacific Grove inns don’t often fall behind on their TOT.

“The vast majority are current,” he said. “Occasionally we have someone who falls behind a quarter, but they pay with penalties and interest promptly, in most cases.”

Chamber of Commerce President Moe Ammar said it’s a “sad day in Pacific Grove when a nice property like Lighthouse Lodge fails.” Ammar said visitors to the chamber office on Central regularly ask for directions to the inn.

“The Pfliegers had a huge following, especially from [visitors from] the Central Valley,” Ammar explained. “They ran a good operation but were victims of the prevailing economic conditions.”