Council approves 10-month payment plans for two hotel owners after partial payments; checks must clear or injunction could be enforced

The South Padre Island City Council on a voice vote agreed to structured payment plans for two hotel owners who arrived at the meeting with partial or full payments toward long‑standing past‑due hotel/motel occupancy-tax balances and who requested waivers of penalties and interest.

City staff told the council that as of the meeting one owner (the Ramada/Island Inn properties) had an outstanding balance including penalties and interest of roughly $447,000 to $448,000 and that he paid $363,835.93 by cashier’s check that day. Staff said the remaining balance consisted principally of penalties (about $51,000) and interest (about $32,000) totaling about $84,000. The owner asked the council to waive penalties and interest; council members discussed precedent and fairness to other businesses before amending a motion to remove penalties and interest that accrued for specified months in 2023 from the total and to place the remainder under a 10‑month payment plan beginning June 1. The council required that the owner remain current on future tax filings while on the payment plan.

Council and staff noted that some of the unpaid months dated back to 2023 and that the city had taken legal steps (including an injunction) after other collection efforts. The city’s attorney and staff said the cashier’s checks must clear; if any check does not clear council authorized staff to proceed with the court-ordered enjoinment.

In a separate but similar case involving Continental Inn LLC (Sunchase Inn Suites, Super 8 and WindWater Resort), staff reported a balance of $392,190.82 that included penalties and interest of $77,881.40. The owner, identified in the record as Mr. Manoharan, paid $314,309.42 that day and became current on recent tax filings, and requested a waiver of penalties and interest. Council approved a 10‑month payment plan beginning June 1 contingent on cleared funds and regular current filings; council members again declined to waive attorney fees or filing costs at this time but discussed including those recoverable costs on future delinquent accounts.

Council discussion was extensive and at times pointed. One councilmember noted that the taxes are collected from guests and billed to the city for public uses, saying, “you collected money from your guests … you used it for other things and that's a misuse of trust.” Another member emphasized the city’s need to avoid setting a precedent that encourages delinquency. The city attorney said the city had incurred legal and filing work to pursue collection and estimated attorney time and costs that could be added to future recoveries, though the council chose not to add attorney fees to the current arrangements.

The motions for both owners include these conditions: the immediate payments presented at the meeting must clear the issuing banks, the owners must enter a 10‑month payment plan beginning June 1 for the remaining penalties and interest (with certain 2023 penalty months removed from one package by amendment), and the owners must remain current on future tax filings or face enforcement action including possible injunction and closure of properties.

The council recorded the votes as carried after discussion. City staff will verify the cashier’s checks with the banks and return to the council if the payments fail to clear.