BUCKTOWN — More than a month after a hostel along Damen Avenue in Bucktown/Wicker Park closed, the IHSP Chicago hostel saw its business license revoked by the state for allegedly owing unpaid taxes — a one-two punch owner Josh Erwin says has been difficult.
"I feel we were punched in the gut. We were a very successful business and we were closed by means out of our control. We were the first to bring hostels to the Bucktown and Wicker Park area," said Erwin, who owns IHSP Chicago with two partners.
In addition to the Chicago outpost at 1616 N. Damen Ave. — which opened in November 2011 and closed on May 31 — IHSP also has locations in Santa Barbara, Calif. and New Orleans, Louisiana. The latter two hostels remain open.
The building's owners and IHSP's former landlord, New York-based CLK Properties, paid $7.5 million for the 1616-28 N. Damen Ave. buildings in July 2015, county records show.
"We were trying to negotiate with them to keep our business but their goals were to kick everyone out and sell the building. This is less about the license [revoked] and more about us being the leaseholders and them using their power to squash the little guy," Erwin said.
A representative from CLK Properties did not return a request for comment.
Located on a sought-after block just steps from the bustling North, Damen and Milwaukee avenues intersection, the three-story building at 1616 N. Damen that housed the hostel on its two upper floors went up for sale on June 14, two weeks after the hostel moved out.
A bright green sticker from the Illinois Department of Revenue announcing a revoked license was placed on the door of the hostel on July 19, more than a month after the hostel left.
The building, mostly empty save for two ground-floor tenants and still for sale, was described by a real estate broker as a "trophy building" that could be attractive to big retailers like Target. The hostel had agreed to leave about three years before its lease was due to end, a broker told DNAinfo in June.
"Getting that second and third floor space back [from IHSP] was very important and there is a lot of tenant demand for that sort of space," the broker said last month.
Citing taxpayer confidentiality laws, Terry Horstman, a spokesman for the state revenue department, said he cannot give the amount of taxes alleged owed by IHSP Chicago or comment on the license revocation.
Erwin declined to comment on the pending revenue department case.
Mansoor Ansari, a tax lawyer who says he has helped clients battle the green sticker and revoked licenses, is not involved with IHSP Chicago. But, he said, "your life is over basically, if you get a green sticker in Illinois."
"It the equivalent of the Illinois shakedown. They will write [business] up for a debt and if you don't pay they will shut down your business," Ansari said.
Ansari said a green sticker means unpaid sales tax and businesses that continue to operate after a license is revoked over unpaid sales taxes can face fines up to $1,000 daily.
The Facebook page for ISHP Chicago has been removed. A worker who answered the phone at the Santa Barbara location said that there are no plans to reopen in Chicago.
