Anchorage Daily News

PALMER -- The company trying to operate the former Gold Miner's Hotel and Restaurant in downtown Palmer must first resolve a raft of issues inherited from previous owners that includes owing more than a $100,000 in back taxes.

For now, however, the business at 918 S. Colony Way is closed and could be headed for foreclosure.

City officials say they won't issue a business license to the 49th Star Inn until roughly $70,000 in unpaid sales taxes and attorney fees are paid.

Prior owners also owe the Matanuska-Susitna Borough about $50,000 in delinquent property taxes that date back to 2007 and 2008, and the property could go into foreclosure if the 2007 taxes aren't paid soon, according to borough officials.

Officials with the state Alcoholic Beverage Control Board also say the place has no valid liquor license at this point.

The whole situation is complicated by a court battle.

In 2007 Anchorage real estate agent Yong Piening and partner Sun Sin Park borrowed $1.5 million from Washington's Pacific International Bank to buy the hotel property, according to court documents filed by the bank as part of a lawsuit against the partners.

The bank sued in February, started foreclosure proceedings and appointed a "receiver" later approved by a judge to safeguard the business while it was closed, the documents say.

The partners haven't made their $12,411 monthly payments to the bank since August 2008 and also failed to make more than $12,000 in utility payments, the complaint states.

Piening did not return a call for comment.

But during a March court hearing, she told the judge she couldn't make mortgage payments because her business was closed for months in 2008. The state fire marshal's office shut down the Gold Miner's in January 2008 for safety code violations including smoke alarms that didn't work. It reopened in July after a major remodel but was briefly closed again in December for electrical and food-safety violations.

Joel Costonis, a Chugiak businessman, made an offer on the business last year and started operating it earlier this year, according to court documents filed in the foreclosure case.

Costonis is owner of the 49th Star Inn, according to a state database of business records. He is also an organizer of Executive Developing Investments LLC, a hospitality investment company.

Costonis did not return a call for comment.

The hotel and downstairs restaurant opened for business as the 49th Star Inn for about three weeks in February until the bank took possession of the building and evicted him, Costonis told a judge at the March hearing on the bank's lawsuit.

Costonis said he shouldn't be responsible for back taxes, according to a transcript of the hearing. He has put together a detailed business plan to retake the building from the bank but can't start paying down the taxes unless he can operate the hotel.

Palmer City Manager Bill Allen said he's seen no such plan, despite several meetings with Costonis during which the city manager asked for just that.

"I'm on old banker," Allen said. "I don't extend credit just because I like people."

Find Zaz Hollander online at adn.com/contact/zhollander or call 352-6711.

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