Tax issue jeopardizes reopening of Selma's historic St. James Hotel

The St. James Hotel in Selma may reopen by July, but only if a complicated tax issue can be resolved quickly, the hotel’s owner told the Selma City Council April 14.

Jim Lewis’ company bought the property for $400,000 in 2019 and invested $5 million to renovate it into a 55-room hotel. It opened with a ribbon cutting ceremony in early 2021 but has closed twice since then.  The historic building on Water Avenue has been shuttered since August 2025.

Lewis told the city council April 14 that he is trying to complete an agreement with the Marriott hotel chain and with a new investor to reopen the hotel, but he said a tax issue is jeopardizing the deal.

It seems that the previous company that managed the hotel paid local and state taxes to the state, but the city has no record of receiving its portion of those taxes, Lewis said. No one, including Avenu, the firm that handles the city’s taxes, knows how much the hotel owes the city if it owes the city anything, he said.

“Any amounts due (to the city) would be subject to a revenue share agreement between the city and the hotel owner which returns 25% of the sales and lodging taxes remitted to the city to the hotel owner for ten years of operations,” Lewis said. 

Several bad things could happen if the issue isn’t settled by next week, according to Lewis.

First, the question about past taxes could make the new investor check out from the deal. Because the property isn’t earning any income, the loan on the property will default, and the lender will most likely foreclose on the property, according to Lewis.  

“If we fail (to settle the tax issue), it (the St. James) will not reopen,” Lewis said. “There will be no lodging taxes and no sales tax.”

Lewis said he was “not looking for free ride” by having the city waive the taxes, but he hoped the city would delay trying to collect the tax revenue until after the hotel reopens and the tax problem can be researched.

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At Tuesday night’s city council meeting, several council members said they were not inclined to waive any taxes owed.

In an interview with the Black Belt News Network this morning, Lewis said he is trying to track down the flow of the tax payments made by the hotel. He said he is confirming if the hotel paid its taxes, and if so, where the tax money went. Could the money be in the hands of Avenu, the contractor who has handled Selma’s taxes? Or did Avenu forward the money to the city of Selma, but the taxes weren’t credited to the hotel?

Lewis said he hopes to have the answers in time to close on the deal next Tuesday.

The St. James has a better chance of success if it reopens under the new agreement, Lewis said. The hotel was previously part of the Hilton chain, but Hilton already operates several properties in and near Selma, including the Hampton Inn on Highway 80. That meant the downtown hotel was competing with other hotels operating under the same brand.

If the St. James completes the deal with Marriott, the hotel will be the only Marriott property from Prattville to Mississippi and from Gulf Shores to Birmingham, Lewis said.

The reopened St. James would offer a continental breakfast and dinner service. Hilton required the hotel to offer three meals a day, which was a money loser, according to Lewis.

The hotel is owned by St. James Hotel, LLC, which is affiliated with Lewis’ company, Rhaglan Hospitality, LLC.

This story has been updated to clarify ownership and size of the hotel.