July 29--Over three years ago, the city of Centralia sold the Wilson Hotel so it could be renovated and contribute to business in downtown.

Today -- at least on the outside -- it appears no different than the day it was sold.

Any changes made to the inside are obscured. Windows are papered over and curtains are drawn.

But this much is known about the historic hotel at the corner of Maple Street and Tower Avenue: over $10,000 in property taxes are owed to Lewis County, a balloon payment for the principal amount -- $355,500 -- is due to the city in less than two years, and monthly interest payments have been consistently late.

"We're doing everything we can to move the project forward," Michelle Moline, one of three owners who purchased the hotel, including Frank Monteleone, her husband, and Connie Moline, her mother, said on Wednesday night. "We want the Wilson Hotel to be successful and restored to its past glory."

Following a meeting of the Centralia Downtown Association, Moline said she and her partners are relying on tax credits and grants that would pay for most of the hotel's rehabilitation costs. She also said they have applied for tax credits that can shore up past delinquencies.

Two weeks ago Moline was part of a "mutiny," as described by former Centralia city councilman Ted Shannon, that disrupted the Centralia Downtown Association, which the city funded with lodging tax revenues. Two board members and two regular members resigned, saying Moline and three other members adamantly insisted bylaws were violated when an election ballot for board members was drafted 24 days too early.

Moline, who owns the prom dress store Christella's Closet, had rejoined the CDA in June.

Delinquencies

The city of Centralia, which had purchased the building in 2001 for $275,000, had the Wilson Hotel on the market for four years before the Molines and Monteleone bought it in May 2007 for the full asking price of $395,000. At the time they described plans to use "green" building techniques to renovate the 1914 hotel and its annex, built in 1920, into condominiums, hotel rooms, an upper-floor restaurant and 6,000 square feet of retail space. They planned to have the work finished by the winter of 2010.

The purchase agreement called for average monthly interest payments of $1,777.50 for five years on the main hotel and its annex building before the principal was due.

The second interest payment was more than a month late. A trend was set.

By February 2009, payments on the annex building had been put off for five months.

"It's an ongoing issue," said Centralia City Attorney and acting City Manager Shannon Murphy-Olson, who noted the Wilson Hotel owners were issued a default notice and threat of foreclosure for that five-month period.

As of June 30, the Molines and Monteleone had paid over $2,820 in late fees for the hotel. And their limited liability company, Historic Wilson Hotel LLC, was caught up to only March interest payments.

Besides the penalties, Murphy-Olson said the city doesn't have any additional enforcement authority.

But nor have the Wilson Hotel owners enhanced or preserved the building or created business there, as per the sale agreement's covenants and restrictions.

"That was the ultimate goal and at this point it hasn't happened," Murphy-Olson said.

Moline said she can't tap into federal tax credits or grants until the city creates a local register for historic buildings. The Wilson Hotel is already on the state and national registers.

But in April the Centralia City Council approved the Wilson Hotel and two other buildings owned by the Molines and Monteleone as the first four properties to become part of the City of Centralia Register of Historic Places. And Alex McMurry, chairman of the Centralia Historic Preservation Commission, said those buildings' placement on the register should help their owners acquire tax benefits.

On Wednesday, Moline said she and her partners spent nearly two years trying to "educate the city" about how a local register works in accordance with the state and national registers and considers themselves "pioneers" who "pay the price."

Back Taxes

On the main hotel, $9,853.73 is owed in back taxes, and on the annex building, $948.97.

According to Lewis County, foreclosure action isn't taken until a property is delinquent by a full three years.

Oct. 31 looms as that deadline for the Wilson Hotel.

However, property owners can pay the balance of their most delinquent year to stop the foreclosure process. For the Wilson Hotel, that will be $3,889.44.

"We would never let our building get taken from us in a tax-related sale," Moline said. "We're willing to struggle with the financing before it ever comes to that."

Again, Moline referred to Centralia's lackluster progress toward joining the Certified Local Government Program under the National Park Service, which allows cities to take advantage of Federal Historic Preservation Program opportunities, as the reason tax payments on the Wilson Hotel were not immediately made.

"The city has never had to deal with anything of this magnitude," she said.

The Chronicle reporter Christopher Brewer contributed to this story.

Adam Pearson: (360) 807-8208

Moline: Crews Still Working to Stabilize Historic Hotel

By The Chronicle

Although no visible construction is taking place at the Wilson Hotel, co-owner Michelle Moline says the building is going through a lot of behind the scenes work that no one can see.

Moline says keeping the building stable is the main priority and has taken two years thus far, and that has to be done before major renovations can begin. She says crews have been hard at work to repair major issues with the building that the city of Centralia had begun when it assumed control of the hotel.

"Old buildings are like living creatures in that they require much love, care and attention," Moline said.

The basic infrastructure of the hotel is being maintained and fixed, Moline said, and crews are working to salvage materials to be reused in the project -- such as wood trim and the original wood doors.

Some of the projects Moline says have been completed:

--Identified and controlled the water flow in the basement

--Fortified compromised water-damaged beams in the basement for first floor support system

--Sistered and reinforced compromised beams throughout the building

--Repaired numerous roof and skylight leaks

--Repaired and reinstalled the flashings

--Significant removal of compromised and rotting lathe and plaster

--Disconnected and removed many years of "hodgepodge haywire" electrical wiring and plumbing from the low-income housing period

--Rehabilitated the retail space in the front "shopettes"

--Rehabilitated the retail space in the back of the hotel which included major floor repair and beam fortification

--Deconstructed all of the rotten material in the annex second floor

--Secured all exterior windows from future water intrusion in preparation for window replacement

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