CORTLAND — A court-appointed receiver has been placed in charge of the Ramada Inn and Red Roof Inn motel complex in Cortland and has started rehabilitating the property foreclosed upon in February for failing to pay more than $300,000 in local property taxes and federal income taxes.
The property had fallen into disrepair in recent years and 40 of the 150 rooms in the Ramada Inn had been closed because of water damage from a leaking roof, said the receiver, Louis Fournier of Syracuse-based Sutton Real Estate Co. Fournier was appointed receiver by the state Supreme Court in Cortland County in February and began his work March 1.
He said after talking with the prior owners, Shree Ram Hospitality of Lititz, of Pennsylvania, he concluded the problems arose over the company’s lack of involvement in the property. The company, owned by Dinesh L. Paghdal of Bloomfield, N.J., and Arifu Rahman of Brick, N.J., has owned the motel for less than two years. They could not be reached for comment this morning.
“Out of town and out of touch ownership,” he said. “A lack of hotel experience and a general lack of business experience.”
The complex includes 100 rooms and a banquet facility in the building closest to Clinton Avenue operated under the Ramada name and a separate 50-room building run as a Red Roof motel.
Gulph Creek Hotels of Wayne, Pennsylvania, has been hired to manage the hotel during the receivership.
Fournier said he hired contractors for $300,000 to make improvements to the motel and reopen the 40 rooms in time for last weekend’s graduation at SUNY Cortland. Other improvements made to stabilize the property include landscaping, improving common areas, new carpeting and furniture and a new sewer pump.
Kingwood, Texas-based Mint National Bank, which held two mortgages on the property totaling $4.4 million that Shree Ram took out in 2016, foreclosed as property taxes began to mount. The bank advanced funds to cover the recent repairs, Fournier said.
Mack Cook, the city’s director of administration and finance, said the hotel is a year behind on its taxes and after a re-levy of sewer and water bills the total amount owed rose to about $250,000.
“The receiver expects back taxes will be paid within four to six weeks,” Cook said. “They are not walking away by any means.”
“The city of Cortland has been great to work with,” Fournier said.
In addition to the property tax debt, Shree Ram Hospitality owes $63,504 to the Internal Revenue Service, according to a federal tax lien on file in the Cortland County Clerk’s Office.
Shree Ram was also delinquent in mortgage payments, said Fournier, who did not have the amount available.
A portion of the motel complex had in effect been converted to housing for Department of Social Services clients in need of temporary housing, an arangement that Fournier said he halted when he took responsibility for the property.
Kristen Monroe, commission of the Cortland County Department of Social Services, said Tuesday that the motels are among those where her agency has placed clients, based on price and availability. She indicated the loss of that venue has not posed a significant problem.
The motels’ troubles were of particular concern to city officials as they are located at Clinton Avenue and River Street, a key entrance to the city off Interstate 81’s Exit 11, Fournier said. Cook said city officials are pleased to see the recent improvements.
The banquet facilities and restaurant in the Ramada Inn have not been used to their potential in recent years and the company hired to operate the motel plans to change that, Fournier said. “It’s one of the biggest venues in the area.”
The goal is to sell the property, a process that could take up to 18 months, he said. “The bank is committed to turn it around.”