A hotel on the Niagara River that closed after a fire last year and another that was slated to go up for auction but never did are facing foreclosure.
An attorney for GE Capital Corp. filed paperwork for a "non-judicial proceeding for foreclosure by power of sale" in Niagara County last week for the Inn on the River and the Fallside Hotel and Conference Center.
Both hotels are located on Buffalo Avenue and were sold by GE Capital in 2005 to a group of Canadians after GE Capital obtained the properties through a previous foreclosure.
The Fallside Hotel and Conference Center, at 401 Buffalo Ave., had been operating late last year, and John Percy, president of the Niagara Tourism and Convention Corp., said he was surprised to learn last month that the doors had been locked and its phones disconnected.
"The staff was trying to reach out to them a couple weeks ago," Percy said. "They walked over there and found out that the doors were closed."
The four-story Fallside Hotel and Conference Center is owned by a company called Niagara Hospitalities.
The eight-story Inn on the River, at 7001 Buffalo Ave., which was condemned last year after it was damaged by fire, is owned by Niagara Hotel Group.
Both companies are headed by Mangat "Mike" Verma, who owns three hotels in Niagara Falls, Ont., according to information given to the Niagara County Industrial Development Agency in 2006 when an application was made for tax breaks for the properties to help finance renovations.
Those 10-year property tax breaks were revoked by the IDA board last August after the owners failed to make payments or complete the projects.
"They are receiving no more IDA benefits at all," said IDA attorney Mark J. Gabriele.
Verma could not be reached to comment Tuesday. A woman who answered the phone at one of Verma's three Ontario hotels, the Villager Lodge, said the two hotels were only closed for winter and for renovations. She would not provide her name.
The 197-room Fallside Hotel and Conference Center was slated to be publicly auctioned by its owners a year ago, but the auction was canceled after the owners decided to negotiate privately with interested buyers.
The Fallside Hotel, which previously operated as a Days Inn, is on a 3.8-acre parcel between Buffalo Avenue and the Robert Moses Parkway near the entrance to Niagara Falls State Park.
GE Capital sold that hotel to Niagara Hospitalities in December 2005 for $3.3 million, according to city records.
The purchase price for the Inn on the River, which has previously operated under the Clarion flag and as the Red Jacket Inn, was $2.3 million, according to information given to the IDA in 2006.
Gordon J. Greene, an auctioneer with the Cleveland-based Chartwell Group who was handling the public auction of the Fallside Hotel and Conference Center last year, said Tuesday that there was still "some serious prospects" for the sale of the property.
The owner of the Fallside Hotel and Conference Center owes $60,486 in county property taxes for 2007 and 2008. County property taxes owed on the Inn on the River for 2006, 2007 and 2008 are $106,637, according to the county. Information on city property taxes owed on the properties was not available Tuesday.
No information was available on how much is owed on the mortgages on either hotel.
Thomas J. Prohaska of the News Niagara Bureau contributed to this report.