Update: City board votes to condemn Budgetel motel in Modesto, where residents remain

Modesto’s Board of Building Appeals voted Thursday evening to condemn the Budgetel Inn property on McHenry Avenue and assess $100,000 in civil penalties against the owners.

The action, declaring the troubled site a public nuisance, gives the city authority to abate the problems after 30 days if the owners fail to make numerous improvements.

Owners Neal and Johnny Khatri of Modesto told the three-member board they’re prevented from doing anything to the 99-room motel until a bankruptcy court decision set for March 14. The former operator, United Resorts LLC, filed for Chapter 7 bankruptcy Jan. 25 and closed the business the next day.

Neal Khatri said remaining tenants need to be evicted and squatters removed to alleviate a dangerous situation. The owners said drug addicts break into vacant rooms and children are left unattended in the motel at night. The owners said they ask police for assistance but are told that dealing with remaining tenants is a civil matter.

The brothers said it’s not advisable to make repairs until the remaining tenants are out, since people are causing the damage, and the legal eviction process could take two to three months.

“I need help. I can’t do it myself,” Neal Khatri said. “I don’t have a gun. I don’t have a badge.”

City building officials said the Budgetel failed to respond to orders calling for repairs, pest control and measures to correct unsafe conditions at the roach-infested motel. Between Jan. 1, 2017, and Sept. 6, 2018, the property generated 732 calls for police and other agencies, resulting in arrests for drugs, prostitution and other activity.

Among other things, the city has wanted to see a plan from Budgetel to discourage criminal activity. Neal Khatri said a number of agencies and even nearby Doctors Medical Center have shown interest in the property.

The power went off earlier Thursday at Budgetel. A Modesto Irrigation District crew shut off the electricity around 4 a.m., said Amber DeLeon, who stays with her aunt in one of the rooms. She said a number of residents went outside to see what was happening as the MID crew arrived, leading the workers to call police to the scene. About 15 rooms still had been occupied as of Wednesday.

Officers were dispatched on a report that some residents were creating a verbal disturbance, police Lt. T.J. Moffett confirmed, but they no longer were gathered outside upon officers’ arrival and no contact with them was made.

DeLeon said the MID crew pried boards from the motel’s electrical closet and worked in there, but also worked on the power pole between Budgetel and Denny’s. Whatever they did knocked the 24-hour diner into darkness for about 20 minutes, she said. A Denny’s employee confirmed the power went out but could not provide a time estimate.

Her aunt is on an oxygen machine, DeLeon said, so the loss of power will force her to find a new place to stay. But DeLeon herself said she will remain at the Budgetel on a California Rural Legal Assistance lawyer’s advice.

A representative for the CRLA said Thursday that her agency has been speaking with some of the tenants but declined to provide specifics.

Several other residents said Thursday morning that they also intend to stay put and face eviction. Maya Franklin said the loss of power means she pretty quickly will have to move with her stroke-disabled husband. He often falls out of bed during the night, and it was hard enough to help him when she could turn on the lights. “I can’t do it without lights,” she said.

Her son probably will stay at Budgetel as the family’s representative in any legal proceedings, Franklin said.

The MID crew told residents the power was being shut off for nonpayment, DeLeon said. MID spokeswoman Melissa Williams told The Bee on Thursday morning that she could not comment on the specific account because the utility protects customer privacy.

Last week, MID issued a statement to The Bee about bankruptcy cases: “In general, we have an obligation to serve and we don’t just disconnect a customer due to bankruptcy. In bankruptcy cases, we bill the customer for two separate periods — one prior to the bankruptcy and one after their filing. We do our best to collect on both periods. The court tries to maximize the value of the estate for the benefit of all creditors. Utility providers are typically at the top of the list of creditors to be paid.”

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Deke has been an editor and reporter with The Modesto Bee since 1995. He currently does breaking-news, education and human-interest reporting. A Beyer High grad, he studied geology and journalism at UC Davis and CSU Sacramento.