"Cleveland Hopkins Airport tenants owe millions in back taxes"

Thursday, August 16, 2007

Airport tenants owe millions in back taxes
Concessionaire, others were never sent bills
By Susan Vinella
The Cleveland (OH) Plain Dealer


The company that runs the concessions at Cleveland Hopkins International
Airport owes the city $5.4 million in back property taxes, airport officials
say. 

Cleveland, which owns and operates the airport, has been paying property
taxes for HMS Host since 1990, but never billed the company for
reimbursement, airport spokeswoman Pat Smith said. She said it's unclear why
reimbursement was never sought. 

A spokeswoman for Host said the company, which operates the food, beverage
and retail stores that occupy 46,000 square feet of space at Hopkins, is
reviewing the tax-bill documents. 
 
"We're willing to pay whatever the contract requires us to pay," said Sheila
McGee, referring to the company's lease agreement with the city. 

The agreement says the "concessionaire shall pay as additional fees all
taxes, assessments and charges of a like nature . . . which at any time
during the term may be levied or become a lien." 

Ricky Smith, who was appointed airport director by Mayor Frank Jackson in
June 2006, announced in March that Hopkins had failed to collect property
taxes from tenants. But he said officials had not yet calculated how much
was owed. 

Pat Smith said a committee of city and airport officials discovered the
unpaid taxes. She said the company operated concessions at Hopkins before
1990, but the committee could not document unpaid taxes prior to that year. 

The committee does not have a final calculation for how much other airport
tenants owe. In March, Ricky Smith said Executive Hangars owes about $25,000
and that other tenants, including FedEx, UPS and the 100th Bomb Group
Restaurant, also owe unspecified amounts. 

Pat Smith said Wednesday that the money has yet to be paid to the city. 

Smith speculated the loss of tax revenue could have resulted in higher
landing fees. Once the taxes are recovered, he said, landing fees could
drop, making Hopkins more attractive to airlines.

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