Leaders frustrated by silence of Garden Hotel owner

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Beloit Daily News file photo Officials in South Beloit are reviewing legal options as the Garden Hotel and Conference Center remains closed, with no contact from the property owners.

BELOIT - The City of South Beloit is in the process of reviewing its legal options before having to potentially position itself to take control of the abandoned Garden Hotel and Conference Center, according to South Beloit Mayor Ted Rehl.

The hotel and conference center closed abruptly in March, supposedly to make repairs on the building. At the time, hotel staff said the repairs would be finished in June. But come September, the property at the corner of Highway 251 and Gardner Street remains vacant.

Since its closing, the city has attempted to contact representatives from New Chapter Group, the Chinese-based owner of the property, to no avail. Rehl added that Ariva Hospitality, the firm that managed the hotel, does not have a U.S.-based office or headquarters. According to the United States Bankruptcy Court, Northern District of Illinois, there is no record of the Garden Hotel or the Chinese-based company New Chapter Group filing for bankruptcy as of Monday.

According to the Winnebago County Treasurer's Office, New Chapter Group owes $21,572 in property taxes for the first payment that was missed on June 28. On top of the $21,572, a fine of $970.77 was also leveled against the company, according to county records. In September 2018, the company was a week late in paying its second property tax payment and was fined $323.38. Past years appear to be paid in full, according to documents reviewed by the Beloit Daily News.

The property is valued by the county at $1.3 million.

"We can't get in contact with them and it is really frustrating," Rehl said. "We've had a lot of properties like this where an owner leaves, but it wasn't five acres of prime property and a multi-million dollar building. This is more than frustrating for us. It's really tough, right at our doorstep."

Rehl said most municipalities deal with property owners that leave town, but conceded it's not often that a business all but vanishes.

"We all have that, but not this kind of property and at this level," Rehl said.

Rehl said the city's legal staff is currently attempting to make contact with Ariva Hospitality and companies that were in charge of maintenance and grounds-keeping. Since March, the city has had to repair broken windows at the property and maintain landscaping.

We are trying to see what we are up against if the point comes where we can get the property (for the city)," Rehl said. "If someone wants to come buy the property, we can tell them this is what we know about and this is how we can help you."

The slow process to have the city take ownership of the property could take years, with the property owners of record able to challenge the effort for two years after a claim is made. The city would also have to show proof of 7 years worth of property tax payments on the property, according to state adverse possession law.

Rehl said the city could contact the Winnebago County Health Department to request the property be deemed a public health hazard and deemed unfit for habitation to gain access inside the hotel that's had a history of flood damage. Four years ago, the city approved a $6 million upgrade to the hotel after major flooding.

As of Monday, Rehl said the city was not considering a lawsuit against Ariva Hospitality.

"We need to exhaust every possible contact right now," Rehl said.

In the meantime, Rehl said the Garden Hotel was weighing on the city's future development prospects.

"It's the entrance of South Beloit and the City of Beloit," Rehl said. "It's a keystone to the economic picture that's going on. That's not a strong message and that's why we are working as hard as we can. When you are dealing with ghosts, it's very frustrating."

And those ghosts remain elusive as of Monday with a phone number listed for the hotel rings through to a voicemail that is full, with no answer.

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