Plans to redevelop a group of three aging hotels at the south end of Vista Avenue could be on hold due to a lawsuit between two of its owners.

Two years ago, BoiseDev brought you the news of plans for local development firm Gardner Company to replace a large hotel site near the Boise Airport with a mixed-use development with a new hotel, apartments, and a Hindu temple. The large site home to Ramada by Wyndham Boise, America Best Value Inn, and Lotus By Hotel Inn has long been the subject of discussions on social media due to poor customer reviews of hotel rooms and police calls to the area. Anyone who was looking forward to the site getting a new lease on life may have much longer to wait due to a complaint filed in Ada County’s Fourth District Court in May. The suit, filed by the majority hotel owner and Las Vegas resident Hitesh Chokshi, alleges two of his business partners transferred ownership of the property to another entity without any sort of approval in a “scheme,” used it to apply for COVID-19 relief funds and, at one point, forged Chokshi’s signature. The suit also alleges there are three liens on the property on various entities that once linked to it and the hotels racked up more than $30,000 in unpaid debt.

“While the original plans for a mixed-use development featuring apartments, a new hotel, and a Hindu temple were submitted by developer Gardner Co. and alleged landowner Boise Management, there have been recent developments that have led to a reconsideration of the project,” Chokshi’s son, Ronak, told BoiseDev in an email. “As a result, the properties are currently under dispute, and the future of the proposed redevelopment is uncertain.”

After the publication of this story, Gardner Company Executive Vice President David Wali told BoiseDev his company is only working on the project as a third-party developer for Boise Management Inc. He said Boise Management is in good standing with his company and has paid all of their bills.

“All we are hired to do is take it through the process with the city,” he said. “…We’re not partners in the project.” The suit is set for a status conference in September after defendants Rakesh Kothari and Jayant Patil, along with their management company Boise Management Inc, denied all of Chokshi’s allegations in a filing last week.

A flurry of ownership changes, LLCs

In his complaint, Chokshi outlined several paperwork moves he says Kothari and Patil made to breach their contract and use for “unjust enrichment” off of the property.

In February 2010, TM Hospitality was incorporated in Utah to manage the three hotels. Chokshi says the operating agreement was changed in the summer of 2017 so he owned 82% of the company and a person named Dhananjay Rawal owned 18%. A year later, Kothari agreed to purchase Rawal’s 18% interest in the hotel venture.

In 2018, three companies were created in Idaho to manage the properties: HP Hospitality, HP Holdings and HP Investments, Chokshi’s complaint said. However, Chokshi’s complaint said the hotels were never transferred to be owned by any of these companies. The complaint filed in May did not say why or whose responsibility it was to do this. In February 2019, Chokshi’s complaint said Kothari, a person named Hitendra Chokshi, and another individual entered into a partnership naming Hotel Professionals Inc as the manager of the hotels. But, Hotel Professionals is not an incorporated company in Idaho or any other state. The complaint does not give any details about whether there is any family connection between Hitendra Chokshi and the plaintiff, Hitesh Chokshi.

Chokshi’s filing said Kothari and Patil, or Hotel Professionals Inc. failed to fulfill their obligations in the 2019 agreement.

A property transfer ‘without authority’

At the same time as the February 2019 agreement, a new Idaho LLC called TM Hospitality was created listing Hitendra Hokshi as the registered agent.

Patil, who so far had not been mentioned in any of the business dealings outlined in the complaint, listed himself as the registered agent for the TM Hospitality LLC based in Idaho in March 2020. “There is no supporting documentation or agreement whereby Jayant Patil was ever sold or assigned an interest of any entity,” the complaint.

Patil and Panil Doshi created Boise Management Inc in October 2020. The next day, the ownership of the hotel properties were transferred from TM Hospitality to Boise Management Inc “without any authority from any of the parties,” Chokshi’s complaint says.

“There was never any agreement company or corporate resolution to give Jayant Patil any authority or ownership interest in the property,” the complaint said. “There was never any agreement company or corporate resolution to transfer the Hotel Properties.”

COVID-19 relief cash, liens and a forgery

Chokshi alleges that the network of entities connected to the hotel site was then exploited by Patil and Kothari. In 2020, the federal government rapidly set up the Paycheck Protection Program and the COVID-19 Economic Injury Disaster Loans to rapidly dispute funds to struggling businesses to keep the economy from crashing due to the pandemic.

Chokshi’s complaint said without his authority, Patil and Kothari took out both PPP and EIDL loans using the companies HP Holdings Inc, HP Hospitality Inc, and HP Investment Inc. These three companies were set up to manage the hotel properties in 2018, but Chokshi says the property ownership was never transferred to those entities. The Idaho Secretary of State lists all three entities as inactive, with two of the three listing Hitendra Chokshi as the registered agent.

The complaint also attached a Notice of Lien from the Idaho State Tax Commission on the property. The filing said there are three liens on the property and “dozens” of tax liens filed against HP Investments, HP Holdings and HP Investments. Another exhibit attached to the filing showed a $35,332 unpaid bill from Alliance Laundry dating back to 2020.

The complaint also alleged Patil and Kothari entered into an Econo Lodge franchise agreement with Choice Hotels International by forging Chokshi’s name. The complaint said this led to a “dispute” regarding payments owed under this agreement and a lawyer from Choice Hotels has reached out to settle the matter. Chokshi’s complaint said in addition to racking up unpaid bills, Patil and Kothari are running the hotels in a way that is “decreasing business substantially.” It included several screenshots of one-star reviews of the hotels

“The plaintiff believes that the defendants are operating a scheme in which they change ownership of entities based on operating agreements, which fraudulently provides them the ability to then transfer real property,” the complaint said.

The complaint said Chokshi has requested accounting and other documents from Kothari about the three entities linked to the hotel “many times” and has not received any information. Chokshi received $1 million in payments from Kothari “as distributions in the matter,” but is still owed a “significant amount of money,” the filing said. The exact amount of what Kothari owes can’t be determined without seeing accounting information.