Owners of the Allegria Hotel have filed for a second bankruptcy in four years after state agents seized 50 rooms at the Long Beach hotel because the company owes more than $6 million in unpaid taxes.
Alrose Allegria LLC and its owner Allen Rosenberg filed for Chapter 11 protection on July 2 in U.S. Bankruptcy Court for the Southern District of New York, in Manhattan, citing at least 20 creditors. The largest debt is the millions owed to the New York State Department of Taxation and Finance.
State tax officials posted tax seizure signs on the doors of a third of the hotel's 143 rooms last week before the Fourth of July weekend.StorySome rooms at hotel seized for unpaid taxes
Rosenberg said the seizure forced hotel owners to file for bankruptcy to retake control of the hotel. With the bankruptcy filing, hotel officials could remove the signs and resell the rooms, which were booked for the holiday, he said.
State tax officials would not say if the seizure was lifted.
Rosenberg said the rooms were wrongfully seized because they belong to the property owner, Alrose King David LLC, separate from hotel debt.
Rosenberg and his company are listed on the top 250 list of tax debtors in New York State. The hotel has 25 outstanding tax warrants dating back to 2011 for sales and withholding taxes, tax records show.
"Unfortunately, we've fallen behind on sales tax and payroll tax," Rosenberg said. "We were not paying our debts fast enough. The state got very aggressive right before the holiday. The only way to get those rooms, unfortunately, was through a bankruptcy filing."
Tax officials seized the rooms July 1, "in an effort to encourage the taxpayer to settle tax liabilities," officials said.
Rosenberg said he filed for bankruptcy the next day.
"We had to do it to stay in business," he said. "It's unfortunate; but our operations are not affected. We're open for business."
The company may emerge from bankruptcy after about six months, Rosenberg said. He said he is current with other creditors.
The bankruptcy filing lists the roughly $6 million owed to the state and other claims for $240,000 and $146,300 to two law firms; $141,828 to the City of Long Beach Water Fund; $57,000 to PSEG; and about $35,000 to National Grid.
Rosenberg said the hotel has fallen behind in taxes since 2011, when it first declared bankruptcy. He estimated that about $3 million owed in back taxes doubled with IRS penalties and interest.
He said he had to invest $2.5 million in repairs after superstorm Sandy and Tropical Storm Irene. The hotel on the Long Beach boardwalk opened in 2009 and employs 252 people. The gross weekly payroll is about $151,793, according to bankruptcy filings."We've never had a good, peaceful year," Rosenberg said. "Hopefully, this is the last hurdle for the Allegria. I don't want to scare our guests and clients away."