TARGET 2 INVESTIGATES: Appleton hotel shows signs of sinking

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APPLETON, Wis. (WBAY) - We're looking into allegations that the ground might be shifting in a portion of downtown Appleton near the Fox Cities Exhibition Center.

Documents from the inspection of the Red Lion Hotel Paper Valley in February 2019

Action 2 News has confirmed that the city recently conducted an inspection at the Red Lion Hotel Paper Valley which is attached to that property.

After conducting an open records request, we found that Appleton city inspectors paid a visit to the hotel on February 28. During that time, a number of problems were highlighted that suggest the ground might be sinking.

The issue came up as we spoke to the owner, Stephen Nalley, co-founder and CEO of Inner Circle Hotels, about an unpaid room tax totaling more than $142,000 (read related story).

He told us the tax wasn't paid on time because the hotel had to front money to open the exhibition center on schedule.

"Never once have I gone to the paper and said the city did a bad job or the county did a bad job or they didn't budget right. Never once, never once, even though the ground is shifting right now as a result of the building and there's a huge engineering problem," said Nalley.

Nalley said many of the problems started just after the construction of the exhibition center in September of 2016, which was built into a hillside and involved the removal of a substantial amount of dirt.

Some of the pictures released to Action 2 News by the city of Appleton include electrical conduits that have cracked because of movement, an outdoor sidewalk that appears to have sunk, and a deck now pulling away from the side of the building.

Additionally, walls adjacent to the elevators have significant cracks, some up a half inch thick.

A steel beam also had to be replaced beneath the boilers. The report cited, "The structural capacity and integrity of the floor had been compromised and action was taken to place a new beam to support the floor and the boilers above."

Appleton Inspections Supervisor Kurt Craanen wrote when he responded to our open records request, "Some of the photographs and associated comments contained herein were provided by a third party. The City cannot verify the accuracy of this third party information which does not reflect the position of the City."

Linda Garvey, general manager of the Red Lion, told us, "I think if you talk to some of the neighbors in this area, the pile driving created some issues, and I believe there's an additional issue."

Just days before city inspectors were at the hotel, Appleton firefighters responded on February 22 to The Durty Leprechaun bar on the same block of West College Avenue where basement stairs collapsed, trapping and injuring three people.

The exact cause of that accident is still under investigation.

Nalley told us, "It could be coincidence. Probably not, but we don't know, and we're the type of people that we will wait for whatever information comes out to demonstrate what the problem is and then we will move forward accordingly but however we move forward it will be in a civil, professional manner which is in the best interest of the community, not ourselves."

Acton 2 News reached out to Appleton Mayor Tim Hanna for this report and was told that he's out of town.

However, the city's communications coordinator, Chad Doran, released a statement.

"We are aware of issues that the hotel brought to our attention. We recently inspected the property, and we are working with the hotel to determine what is causing those issues. At this point, any guess at the cause is simply speculation," he wrote.