City of Marysville lawsuit seeks $5 million from Hotel Marysville owners over fire
The city of Marysville seeks $5 million in damages from the owners of Hotel Marysville in a lawsuit claiming that owners have failed to comply with city code and orders to demolish the building in the wake of a fire that destroyed the downtown landmark.
The new legal battle continues a monthslong dispute between city officials and hotel owners that sparked in June when a fire destroyed Hotel Marysville. Now city officials are targeting and hoping to unmask the members behind the Feather River Plaza LLC, the company that owns the old hotel.
The identities of the specific individuals belonging to the LLC that owns the old hotel remain unclear, but the new lawsuit seeks to learn who they are and hold them individually accountable for money the city says it has lost, or may lose, in the aftermath of the fire.
The lawsuit, filed last week, claims the company holding the hotel was underfunded to adequately maintain the building prior to the fire and lacked insurance, making its individual owners liable for costs that have since fallen on the city.
“We are looking to pierce the liability veil by finding that the Feather River Plaza LLC is simply the alter ego of the underlying owners of that limited liability company,” said Mayor Chris Branscum.
In addition to $5 million in damages, the city seeks penalties of $100 per day starting Nov. 7, 2023, and increasing to $300 per day on Aug. 1, which is when the city first ordered hotel owners to knock down the hotel.
That led to a September hearing before a panel of building experts, who in early October ruled that the hotel was a public nuisance and threat to public safety, including the adjacent property. They ordered hotel owners to demolish the hotel, which has remained hollowed out and standing in downtown Marysville since the fire.
The city has estimated the cost of demolishing the hotel at about $3 million. In the event the city knocks the building down instead of its owners, it could pin that cost as a lien against the building, based on the panel’s decision.
Hotel owners had 10 days from the time of the October decision to show plans to knock down the building, which passed without a response, according to the lawsuit.
Once a historic piece of the city, the hotel had been unused for about 40 years at the time of the fire. The northbound lanes of Highway 70, locally marked as E Street, and a perpendicular section of Fifth Street surrounding the hotel have been blocked off to traffic for months due to risks associated with the building. The city has raised concerns about the structural integrity of the fire-damaged building, as well as the presence of asbestos and its ongoing effects on downtown Marysville.
Branscum said that hotel owners have used “distraction and delay” tactics since the fire and that the threat of targeting individual members of the limited liability company gives incentive for ownership to negotiate a settlement with the city.
“They will be well served by coming to the table and working something out in the near term,” Branscum said. “It will be better for them and it will be better for the city and surrounding region that’s suffering from the transportation delays and negative impacts on business.”
The panel’s decision called for knocking down the building by early December, but that now seems unlikely to happen this year.
In the weeks and months after the fire, the city and attorneys representing hotel ownership sparred over what to do with the building. The city began serving code violations to hotel owners last November — more than six months before the fire, according to the lawsuit.
The hotel was listed for sale last November for $925,000, well below the cost of renovating the old brick highrise or tearing it down. Lance Robbins, founder of Urban Smart Growth, had plans to renovate the building prior to his death last August.
Several posts have appeared on a website, hotelmarysville.com, defending hotel ownership and making accusations against city officials. The posts, which are unauthored, claim city officials have harassed ownership and prevented them from making progress on the hotel. They have also questioned the integrity of the investigation into the hotel fire.
Lawyers representing hotel ownership have not responded to requests for comment. Messages sent to a press email address for the hotel were also not responded to.
A lawyer for hotel owners in July told the Marysville Appeal-Democrat that before the fire owners had been in talks to sell the building to Habitat for Humanity for $200,000. Since the fire, hotel owners have offered to give the property to the city.
This story was originally published October 30, 2024 at 2:53 PM.