After fifty-eight years of business, a Nacogdoches gem is shutting its doors, rendering 20-plus SFA students unemployed. The announcement was made Monday in a closed-door employee meeting. It didn’t take long for word to spread around Nacogdoches following the closing, led by owner Susan Reents.
The news came as a shock to many people, including employees, but the groundwork for the hotel’s end had been years in the making. Reents, who took up ownership in 2008 said she has experienced the typical policies from elected officials.
The Hotel Occupancy Tax, a 13 percent tax on a room, is set up to fund very specific projects and efforts by the city. In The Hotel Tax “Two-Step,” Texas Municipal League executive director Bennett Sandlin explains how the taxes are to be allocated. Seven percent of the tax must go to the city, where it must then fund efforts to “put heads in beds.” That means the taxes must be used to “attract overnight tourists to the city’s hotels and motels, thus promoting the city’s hotel industry.” The second part of the law lists nine categories where the money must be spent.
Currently, the Nacogdoches County Exposition and Civic Center is where that 7 percent is being spent—$95,000 a year for the past 10 years, according to City Manager Jim Jeffers.
When Reents initially bought the hotel, the tax was proposed to be raised to 16 percent because the extra 3 percent was needed to fund the center. According to Reents, she and several other Nacogdoches hoteliers resisted the tax increase and were not forced to pay the extra percentage because it was illegal.
Moving forward to 2013, and the outlook for Nacogdoches hotels is not at all bright.
“The whole town is down,” Reents said. “The Occupancy Tax was 10 percent last year, now it’s 35-40 percent due to not being marketed properly with the tax. And it’s not just this hotel, it’s everybody else too. It’s political.”
Although the bed taxes are higher now, Reents said she has been eligible for a tax abatement and was told she could not get anything back—unlike other businesses around Nacogdoches. The Hotel Fredonia has long suffered financial issues, but its status is worse now than it was during the recession of 2008. The Fredonia owner said rumors have reportedly flown around town for years that Reents has charged outrageous prices for rooms. In 2011, she began to lose more business when she was accused of bidding $135 for rooms during Holiday in the Pines. Contrary to the charge, Reents said she bid her usual $95 for the SFA group that wanted to book. That wasn’t the only instance of faulty reports.
“Of course that’s going to run them off,” she said. “Since 2011, we’re $800,000 behind.”
Attached to the hotel, the Nine Flags Bar provided the Fredonia loyals and employees place to celebrate and say goodbye to the hotel they’ve grown to love. When owner Susan appeared, the bar burst into a protracted applause for the person who helped provide a special place for the people of Nacogdoches.
“Susan was the best owner this hotel could have had,” senior Thalia Gomez said. “Not because of how much money the hotel brought, but because of how much she personally cared about all of us. Even the people most businesses would consider the ‘little people.’ And that’s what all managers should strive for. Every business owner should strive to be like her.”
Gomez is one of the twenty plus SFA students who worked at the hotel. Tuesday morning, employees returned to 200 North Fredonia Street one last time to sign-up for unemployment.
“It was heartbreaking going back to work and not seeing anybody there working,” graduate student Christina Banchs said. “We all lost a family and a community. I wish everyone the best. I’m going to miss most of them.”
Not only were the employees SFA students, there were also about 40 more workers who are now jobseekers. The Fredonia let go 90 staffers into the already gridlocked Nacogdoches jobmarket. To ease the stresses of job hunting, the Nacogdoches Economic Development Corporation (NEDCO) has began planning to host a jobs fair for the cutdown employees on Dec. 2. The day will not come soon enough for the many bill paying students like senior Anthony Haskins.
“I just need to find a job anywhere that will hire me,” Haskins said. “Everything happened so suddenly and quickly. I was shocked that we were told the same day that we were going to lose our jobs and I didn’t know how to react. I was upset and confused because I felt business was fine. The last night with my fellow employees and regulars [customers] was one of the best nights I’ve had since I’ve worked there.
The hotel is for sale, but as of now, Fredonia’s doors are locked.