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Modesto’s troubled Budgetel Inn suddenly shuts, leaves residents scrambling

Modesto Budgetel Inn & Suites abruptly closes telling around 100 guests to leave

The Modesto Budgetel Inn & Suites on McHenry Avenue abruptly closed on Saturday January 26, 2019. Around 100 guests, many long-term, were told to leave the hotel by the end of the day.
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The Modesto Budgetel Inn & Suites on McHenry Avenue abruptly closed on Saturday January 26, 2019. Around 100 guests, many long-term, were told to leave the hotel by the end of the day.

A day after filing for bankruptcy, the operators of the Budgetel Inn & Suites abruptly closed the business Saturday and tried to force out the roughly 100 men, women and children who have been staying in the often troubled discount McHenry Avenue motel.

A sign outside Budgetel’s office read “business closed” Saturday morning. Families were scrambling to pack their belongings and find their next lodging. The scene was chaotic and many Budgetel guests were upset that they were not given more time.

“We don’t know,” said Racquel Hawkins when asked where she would go next. Hawkins said she has been living at the Budgetel for five months and pays $300 a week. “They just walked up to us and told us we had to go.”

Guests said motel staff told them they had to leave by 3 p.m. or sheriff’s deputies would remove them. But officials with the Modesto Police Department and the Stanislaus County Sheriff’s Department told The Bee they would not assist in enforcing the closure because it is a civil matter.

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Residents at the Budgetel Inn & Suites on McHenry ave vacate the property after being evicted by the hotel due to the business’s closure on January 26, 2019 in Modesto California. John Westberg jwestberg@modbee.com

The closure caught Modesto and Stanislaus County officials off guard, but the county quickly dispatched a team of social service workers to the Budgetel to help the residents. “The reality is that there is very little we can do when a property owner or a local business doesn’t coordinate an effort like this with the city and county,” county CEO Jody Hayes said.

Hayes added that the county is staffing its homeless outreach and engagement center Sunday to help the Budgetel guests.

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Rose Jones looks at her dog April while she packs up all her belongings after being evicted by the Budgetel Inn & Suites on McHenry ave due to the business’s closure on January 26, 2019 in Modesto California. John Westberg jwestberg@modbee.com

The St. Vincent De Paul Ministry of St. Stanislaus Catholic Church was trying to find a few nights lodging for families, the disabled and elderly while directing single men and women to Beard Brook Park, where Modesto has allowed a homeless encampment, according to Angela Huerta with St. Vincent De Paul. She said Beard Brook was making preparations in case Budgetel guests arrived.

Frank Amos, who said he had been the night manager for four years, estimated that about 150 people stayed in the motel Friday night and perhaps as many as half were long-term guests. He said on a busy night as many as 200 people can stay at the motel.

According to U.S. Bankruptcy Court records, the motel’s operators filed for bankruptcy Friday. The debtor is listed as United Resorts LLC., which according to the California Secretary of State lists its CEO and president as Shafi Ahmed. His signature is on the bankruptcy paperwork.

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Residents at the Budgetel Inn & Suites on McHenry ave vacate the property after being evicted by the hotel due to the business’s closure on January 26, 2019 in Modesto California. John Westberg jwestberg@modbee.com

The Khatri Brothers, who have an office on Sunrise Avenue in Modesto, own the property. Neal Khatri was at the Budgetel on Saturday afternoon and said he was there to ensure the safety of the property.

He said he planned on bringing in security guards to remove the people at the motel, saying they had been refunded any amounts owed them (though some guests claimed they did not receive full refunds), it was not legal for them to stay, and the motel was closed.

But many of the motel’s rooms were occupied about 7:30 p.m. Saturday. Some guests said social service workers had provided them with vouchers for at least another night at the Budgetel before they would get vouchers for another motel. Other guests said they didn’t have vouchers and were figuring their next steps.

The motel, two blocks south of Briggsmore Avenue and next to a Denny’s, has been a source of law enforcement concern, from vagrancy to crime, for at least several years. But it also has provided shelter for poor people.

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Anita Hayes packs up her family’s belongings after being evicted by the Budgetel Inn & Suites on McHenry ave due to the business’s closure on January 26, 2019 in Modesto California. John Westberg jwestberg@modbee.com

Built in 1972, the roughly 100-room motel has gone through a number of incarnations, operating as an America’s Best Value Inn and a Vagabond Inn in the past. Around 2015 it changed to a Budgetel Inn.

When contacted by The Bee on Saturday, Police Chief Galen Carroll laid the blame for the Budgetel’s problems in recent years on Neal Khatri, saying he has not been willing to improve the safety and conditions of the motel. Khatri disputed that, claiming that as the property owner he is limited in how much control he has over the operator who leases the property from him.

Sofia Nisha, who identified herself as a Budgetel employee, said she just learned Saturday morning that the motel was closed and everyone had to be out by the afternoon. She declined to answer additional questions, though she said a rumor that the motel would turn off the water and power to force people out was not true.

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The Budgetel Inn & Suites on McHenry ave on January 26, 2019 in Modesto California. John Westberg jwestberg@modbee.com

Anita and Colby Hayes and their 17-year-old son, Aerik, said they had been living at the Budgetel for about 5 months, part of a five-year odyssey of living in motels and with family after losing their apartment. Colby Hayes said they have not been able to rent another one because he was evicted once many years ago.

Colby Hayes is looking for work, and Anita Hayes said she recently was laid off from her job as a housekeeper and is collecting unemployment.

The family plans on staying with Colby Hayes’ aunt for a few days before checking into another motel. But he said that could be difficult. Colby Hayes said the others along McHenry Avenue are full or cost more than the Budgetel. The family said it was paying $300 a week.

They want to stay close to Beyer High School, where Aerik is a junior. “We were still in bed when they told us,” Anita Colby said about learning the motel had closed. “It was a shock.”

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The Hayes family, including Aerik (left) and Anita (center) vacate the Budgetel Inn & Suites on McHenry ave after being evicted by the hotel due to the business’s closure on January 26, 2019 in Modesto California. John Westberg jwestberg@modbee.com

In 2015, Modesto Police singled out the hotel for generating a high number of calls for service. In 2014 the department recorded 469 calls at the property, ranging from disturbances to theft, fights to drug possession and prostitution. A year later the Modesto City Council learned the hotel owed more than $100,000 in unpaid lodging taxes and penalties.

Late August the Budgetel was involved in a controversy over housing for regional homeless when Escalon police were seen dropping off a transient man and woman on McHenry Avenue. The two had originally asked to be taken from Escalon to the Budgetel, but then changed their minds and were dropped off at a nearby Rite Aid.

Kevin Valine covers local government, homelessness and general assignment for The Modesto Bee. He is a graduate of San Jose State University and grew up in San Jose.
Marijke Rowland writes about new business, restaurant and retail developments. She has been with The Modesto Bee since 1997 covering a variety of topics including arts and entertainment. Her Business Beat column runs midweek and Sundays. And it’s pronounced Mar-eye-ke.
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