City Secures Additional $370,000 Settlement with Former Sheraton Pasadena Hotel Operator for Unpaid Hotel Tax, Bringing Total Recovery to $867,000

The City of Pasadena said thursday it has received $370,000 to resolve its civil lawsuit against Aimbridge Hospitality and Evolution Hospitality, two operators of the Sheraton Pasadena Hotel during 2019 and 2020. This settlement is in addition to a $497,000 recovery in August 2022 from Urban Commons Cordova A, LLC, another one of the hotel operators.

“I am pleased that we stood up against the hotel operators who wrongfully withheld taxpayers’ money,” said Mayor Victor M. Gordo.

The Sheraton Pasadena operators took hundreds of thousands of dollars in transient occupancy tax and tourism business improvement district assessment monies, without turning the monies over to the city on a monthly basis, as required by law.

The Transient Occupancy Tax, or TOT, is paid by everyone who stays at a local hotel. Hotel operators are compelled by city law to collect a TOT and Tourism Business Improvement District (TBID) assessments from guests, and those funds “shall be held in trust for the account of the city until payment is made to the tax administrator.”

The city’s $867,000 total recovery includes payment for unpaid principal, interest and penalties.

The remaining balance is roughly $39,500.

“We are pursuing the remainder that is owed, through the litigation,” a City spokesperson said.