In a battle with Monterey, Portola Hotel loses its claim to be excused on a late tax payment.

The Portola Hotel and Spa relies on its next-door neighbor, the city-owned Monterey Conference Center, for conference guests that in non-pandemic times fill its lodging and meeting rooms and restaurants. Despite that relationship, the Portola and the city of Monterey have been locked in legal disputes for several years, most recently over a late fee the city charged Portola owner Custom House Hotel, LLC, for paying its transient-occupancy tax bill late at the start of the Covid-19 pandemic.

The hotel owners claimed City Manager Hans Uslar verbally promised to waive late fees amid the shelter-in-place chaos, in a meeting with hoteliers and business leaders on the same day the Portola was forced to shut down and lay off 300 workers. In court documents, the city maintained such a promise was never made, and insisted on the rules required on-time payments. On Oct. 23, Monterey County Superior Judge Marla O. Anderson sided with the city. Anderson said she was not going to “second guess nor replace” the City Council.

The Portola’s $346,300 bill for the January-February period was due on March 31 – something the hotel owners do not dispute, but say they didn’t pay on time based on Uslar’s comments. The hotel was also charged a late fee of 10 percent, or $34,600, which they paid in May, then filed an appeal for a refund. Monterey City Council denied their appeal on Aug. 4, and the company sued about two weeks later.

One of the hotel’s owners, Mike Grier, says he’s disappointed with the ruling: “We’re also troubled by the extraction of a penalty given the struggles and impact of Covid that we and other businesses are experiencing.”