The Clarke Hotel’s taxes were paid by the bank Wednesday, according to Clerk/Treasurer Tom Neill.
The Clarke Hotel, which is a $1.5 million city investment, is being threatened with foreclosure because of its unpaid taxes. A lawsuit filed in Waukesha County Circuit Court alleges the hotel broke its $3.4 million mortgage agreement by failing to pay its taxes.
The hotel’s delinquent taxes totaled $118,865.91. It also owed $114,143.67 due Jan. 31 on the most recent tax bill. The $233,009.58 has been paid in full, according to the clerk/treasurer's office.
The City of Waukesha is named on the foreclosure lawsuit because the city provided financing to the property via tax incremental financing. The lawsuit acknowledges the city may have claims to the property, but is asking a judge to find “that any and all interests of the City of Waukesha is inferior and subordinate to the interest of the mortgage of the plaintiff and that the plaintiff is entitled to foreclosure of any interest of the City of Waukesha in and to the subject real estate.”
The city invested $1.5 million into the hotel — money that was to be repaid to the city from the hotel room taxes and increased property taxes on the development. The room taxes are current, according to the city's clerk/treasurer's office.
Ever since the hotel opened, it’s struggled. Original partners Andrew Ruggeri and Drew Vallozzi split in 2009. They had “renovated a former crack house into $5 million boutique hotel and upscale restaurant,” stated a 2009 Milwaukee Journal Sentinel article.
In 2009 and 2010, lawsuits were filed against the hotel and restaurant alleging unpaid bills. The restaurant previously was in danger of losing its liquor license in 2010 for unpaid taxes.
The restaurant changed hands a few times, but in September 2011 the restaurant was closed after the owner at the time, Ramon Antonio Mitre Hernandez, was in danger of being evicted for unpaid bills. The hotel has had a sign in the window since September stating the restaurant is “closed for renovations.”