Bank pays back taxes on Burger King property

Published 8:26 am Wednesday, April 15, 2009

The bank that owns the shuttered Burger King on Armory Drive has paid the city more than $7,000 in delinquent business personal property taxes, clearing the way for the franchise to be sold to the restaurant’s national corporation.

The Miami-based company hopes to reopen the restaurant in June, according to the city attorney.

Meanwhile, the former owner of the franchise, Samina Azhar, is due in Franklin City General District Court on May 4 to face 11 felony charges – one for every month that the city’s meals tax went unpaid – and one misdemeanor charge of operating a business without a license. The total meals tax revenue due to Franklin is $64,521.28.

Fulton Bank agreed to pay the $7,614.27 in property taxes owed by Azhar Holdings LLC after the city levied a distress warrant on March 26. The bank foreclosed on Azhar Holdings and took possession of the property after the restaurant closed Oct. 24.

City Attorney Taylor Williams said Fulton Bank’s payment to the city “allows (Fulton Bank) to turn around and sell the equipment and the franchise free and clear of our tax liens to Burger King Corporation, the national corporation. What I’m understanding from that is the Burger King Corporation is actually going to run our local Burger King.”

Williams said the company hopes to have the Franklin restaurant reopened in June but added “(there’s) nothing definite about that.”

Burger King spokeswoman Denise Wilson said there was no new information about the Franklin franchise.

Williams cautioned that the city is still owed other money.

“The meals tax doesn’t attach to the business personal property,” Williams said. “So the meals tax is still hanging out there. I’m hoping the court will order (Azhar) to make restitution to the city for the meals tax that is still owed and the business license tax that is still owed.”

Williams added that the city was “lucky” because Azhar Holdings had given a $4,400 bond as a security deposit for its electric utilities. The city demanded payment on the bond – and the bond company complied on April 6 – to help recoup some of Azhar Holding’s $6,944.86 electric bill, leaving the city with a $2,544.86 balance.

The city is also owed about $2,400 in business license taxes.

“I’ll be frank and tell you I don’t expect that we’ll be able to collect on the electric bill,” Williams said. “We will try to get all that we can get.”

City Manager June Fleming said, “I’m not being accusatory, but a large part of this problem was due to the fact that we were not as vigilant about collecting (taxes) as we should have been. We got here because, quite honestly, we were not monitoring and implementing collections as vigilantly and diligently as I think we should have.”

Franklin requires restaurants in the city collect a 6.5 percent tax on meals served. The businesses are expected to file tax returns to the commissioner of the revenue by the 20th of each month and to pay the taxes to the city treasurer by the same date.

Azhar Holdings operated six Burger King franchises, one each in Franklin, Windsor, Chesapeake and Smithfield and two in Suffolk. All of the restaurants closed on Oct. 24.