Hotel Owners Sue Fire District and Fire Marshal Over Closure

The owners of a California hotel have filed suit against a city, a fire protection district, a building inspector, and a fire marshal claiming they unlawfully “red tagged” the building resulting in economic damages in the millions.

Ashish Jobanputra, Manish Thakkar, and Classic Hospitality, LLC filed suit against the City of Anderson, Anderson Fire Protection District, city building inspector Brad Hawkins, fire marshal Steven Allred alleging a violation of their constitutional rights. The term “red tag” refers to a tag affixed to buildings that are deemed to be uninhabitable. Here is a sample red tag.

Quoting from the complaint:

• This action arises from a series of discriminatory and unlawful acts by the Defendants, culminating in the wrongful red-tagging of Plaintiffs’ hotel property, Baymont Inn and Suites, located in Anderson, California. These actions were taken without due process, resulting in severe financial and reputational damage to Plaintiffs.
• Defendants’ actions were motivated by discrimination, targeting AJ and Thakkar and their business in a manner that similarly situated business owners were not subjected to.
• Plaintiffs’ claims include, but are not limited to, discrimination under 42 U.S.C. § 1983 and a due process violation for the Defendants’ failure to provide the statutorily required period to remedy alleged violations before red-tagging the property, thereby depriving Plaintiffs of their property rights without due process of law.
• Plaintiffs seek compensatory and punitive damages for the substantial economic losses incurred due to the Defendants’ actions. These losses include, but are not limited to, the loss of a lucrative sale of the property for $8.8 million, the termination of significant business contracts, substantial loss of revenue, and the costs associated with relocating and refunding guests.
• On December 23, 2019, Classic Hospitality, LLC, managed by AJ and Thakkar, purchased the Baymont Inn and Suites hotel property in Anderson, California, with the intention of renovating and improving the property to increase its value and profitability.
• In January 2020, Classic Hospitality, LLC, obtained a permit from the City of Anderson to replace the roof of the hotel. This was the first step in a comprehensive remodeling plan aimed at revitalizing the property.
• On September 23, 2020, the City of Anderson issued permits for the remodeling of the hotel, after all relevant fees were paid and necessary documentation, including plans and scope of work, were submitted. These permits were essential for the lawful continuation of the remodeling project.
• Throughout 2021, various inspections were conducted as part of phase one of the
• remodeling project. These inspections covered rooms, hallways, and other areas, ensuring compliance with building codes and safety regulations.
• Due to high occupancy during the summer of 2021, room and hallway remodeling was temporarily halted. However, other significant improvements continued, including the renovation of the pool, hot tub, patio, exterior stucco, new exterior paint, and the replacement of signs and ADA parking lots. Routine inspections confirmed compliance and progress.
• On March 17, 2022, Brad Hawkins, the new building inspector, along with Steven Allred, the fire marshal, arrived to inspect phase two of the remodeling, which included several downstairs and upstairs rooms. Despite prior inspections and approvals, Hawkins and Allred demanded the resubmission of all plans, claiming they had no records of the ongoing remodeling.
• On the same day, AJ provided Hawkins and Allred with copies of the original permits, scope of work, and his copies of the plans. However, the officials insisted on new plans from an engineering company, disregarding the existing approved documents and causing significant delays.
• On March 18, 2022, Classic Hospitality, LLC, hired PACE Engineers to create new plans as demanded by Hawkins and Allred. Contact details of city officials were exchanged, and efforts to comply with the sudden new requirements began.
• On April 4, 2022, PACE Engineers submitted the new plans to the City of Anderson). Despite this, on May 6, 2022, the city provided comments on the plans, further delaying the project.
• Between May 7, 2022, and May 17, 2022, AJ engaged in various communications with PACE Engineers and city officials, attempting to address the comments and move the project forward).
• On May 17, 2022, in a display of malice and disregard for due process, Hawkins and Allred, accompanied by other city and fire officials, arrived at the hotel with five police vehicles. They red-tagged the building, citing unsafe conditions due to the lobby being blocked off and exposed wires. The lobby was closed for safety reasons during the remodel, and the wires were not hot, but rather part of ongoing energy-efficient lighting upgrades.
• The red-tagging resulted in the immediate evacuation of all guests and residents by police officers. This forced Classic Hospitality, LLC, to refund all guests and rehouse them in other hotels at its own expense, causing significant financial strain.
• As a direct result of the red-tagging and the actions of Hawkins and Allred, a signed offer to purchase the property for $8.8 million was rescinded. The red-tagging undermined the property’s value and sale potential.
• Additionally, Classic Hospitality, LLC, lost two substantial contracts: one with a trucking company for lodging their employees and another with contractors of PG&E, hired to fight fires in the area. These cancellations severely impacted the hotel’s revenue and bottom line and of course its valuation.

In addition to a violation of their due process rights, the owners allege race and national origin discrimination. Here is a copy of the complaint: