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Hotel Utica owners and City of Utica hope payment plan will avoid foreclosure

By By JOLEEN FERRIS

Story Created: Jul 22, 2010 at 12:58 PM EDT

Story Updated: Jul 22, 2010 at 5:55 PM EDT

UTICA, N.Y. (WKTV) - The City of Utica and Hotel Utica owners are trying to work out a payment plan that would stave off foreclosure proceedings on the hotel - proceedings which are in the final stages of a 2 1/2 year foreclosure process.

City Comptroller Michael Cerminaro says the hotel hasn't made a mortgage payment to the city in years. The city is the guarantor of the hotel's HUD loan. In addition, hotel owners are roughly $400,000 behind on hotel taxes.

In spite of what appear to be insurmountable financial odds, Utica Mayor David Roefaro says allowing the hotel to close is not only an unattractive option, but an expensive one.

"Back in 1999, they either were going to have to knock the building down for 2-3 million dollars," Mayor Roefaro said. "So, they still would have been paying for it today. Instead, Mayor Hanna decided to salvage the hotel Utica which was the right move because it would be like a missing tooth; it's part of downtown Utica, it's historic, downtown Utica and the Hotel Utica are synonymous."

Comptroller Cerminaro says the city and hotel owners are working out a payment plan, but they have to do more than agree to it in order to avoid foreclosure.

"Once you enter into this payment plan, you must maintain a monthly payment on there," Cerminaro said. "If you don't, the foreclosure does not stop and come October, we would file the necessary papers."

Mayor Roefaro says the city is working on lowering the loan's interest rate from 8% to 1%; a move that would save the city money on the monthly mortgage payments.

Hotel owners have not yet returned our call at the time of this writing.

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