Modesto seeks to have troubled Budgetel motel condemned

Modesto is seeking to condemn the Budgetel Inn & Suites as well as impose a $100,000 civil penalty against the 99-room McHenry Avenue motel, which has provided housing for poor people with few alternatives but officials say also has been home for drugs, prostitution and vagrancy.

City officials will ask the Board of Building Appeals on Thursday to impose the penalty and condemn the property during a hearing at the 4 p.m. The BBA will meet in room B300 in the basement of Tenth Street Place, 1010 10th St.

The city has notified the Budgetel owners, Modesto-based Khatri Bros., and the Budgetel’s operator, United Resorts, about the potential actions.

“The owner of the building ... is hereby notified that a civil penalty hearing will be held before the Board of Building Appeals ... at the hour of 4 o’clock p.m. or as soon thereafter as the owner may be heard, and show cause, if any, why the building should not be condemned as a public nuisance and the nuisance abated by reconstruction or properly repairing the building or by razing or removing it,” states the hearing notice.

City officials also are asking the BBA to impose the $100,000 civil penalty.

Modesto is alleging the Budgetel failed to respond adequately to what is called a notice and order the city issued in September to address problems at the motel, including coming up with a plan to deal with the Police Department’s concerns and to make repairs.

Modesto also issued a notice and order Dec. 12 regarding what it alleges was a lack of progress, though the report for Thursday’s hearing includes correspondence from the Budgetel in which staff claims it tried to address the city’s concerns.

This is the latest trouble to beset the Budgetel.

United Resorts abruptly closed the motel Jan. 26 and staff tried to force the remaining guests out with the empty threat that if they did not leave sheriff’s deputies would force them out. The Sheriff’s Department and Police Department said they would not get involved in a civil matter.

Officials said United Resorts and the Khatris did not tell the city or county about the abrupt closure, causing the two governments to scramble to provide help for the guests, some of whom had said they had lived at the Budgetel for months and in some cases more than a year.

United Resorts filed for Chapter 7 bankruptcy the day before it closed the motel.

About 15 of the rooms remain occupied as of Wednesday, according to Frank Amos, the former night manager, who has said he had been asked to stay on as a go-between among the parties in the bankruptcy. Amos estimated 45 to 60 people are living in those rooms.

He also confirmed the Khatris have been offering guests cash in exchange for leaving the Budgetel. Amos said people living in about six rooms have taken the offer in roughly the past week. The bankruptcy court recently returned control of the property back to the Khatris.

A woman who answered the phone at the Khatri’s Modesto office said the brothers were not in and believed they would not comment for this story. Neal Khatri, one of the brothers, when reached by text declined to comment, stating: “Sorry I am out of town.”

Several people still living at the Budgetel said on Tuesday that two men knocked on doors offering people money (some guests said $100, others said $150) if they would sign paperwork and leave. They said the men threatened to turn the power off but did not carry out the threat.

Carolyn Krauss, 57, said she is disabled and has lived at the Budgetel for about a year after her landlord, who had rented her a mobile home for $650 a month, died and she had to find new housing.

Krauss said she gets about $1,000 a month in a disability payment and has exhausted her savings to afford the $1,500 a month she said she was paying to live in a suite. Several other family members live with her. “All my savings are gone,” she said.

Krauss has saved money since she stopped paying for her suite about a month ago but not enough to move to another motel. Besides, she said she feels the Budgetel owes her something for failing to provide her a clean and safe environment, adding that she and her family had to remove black mold from her suite after the staff’s efforts did not work.

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.