Loophole could work in favor of 7 closed motels - FOX13 News, WHBQ FOX 13

Loophole could work in favor of 7 closed motels

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Could a city ordinance loophole help seven Memphis motels that were accused and closed Friday, May 24, of public nuisance?

The Shelby County District Attorney and Memphis Police Department's Organized Crime Unit closed seven motels around the city after "Operation Bed Bug" found criminal activity, including drugs and prostitution. Law enforcement said some workers encouraged prostitution by renting rooms at an hourly rate.

The motels owners and their legal counsel appeared in Shelby County Environmental Court Tuesday to face charges.

They're researching the state law and a city ordinance which revolves around hourly rates. FOX13 News learned the unified development code, which is part of the city's ordinance could give the motel owners hope. The code address motel hourly rates and the possibility of a grandfather clause.

7 Memphis motels shuttered for nuisance

Defense attorneys for the seven Memphis motels accused of operating a public nuisance say they first plan to educate their clients on the law. District Attorney General Amy Weirich's office said some workers encouraged prostitution, by illegally renting rooms at an hourly rate. But the defense says the state's argument raises questions.

"To whether or not a room can  be rented more than twice during the day," said Leslie Ballin, defense attorney.
According to a 2011 city code, an hourly rate is defined as offering lodging to the public more than twice within any 10-hour period. While Memphis city documents say hourly rate motels and hotels are not permitted in any zoning district, some businesses may fall under a loophole.  
"That's what we're looking into," Ballin said. "I think there is an issue of being grandfather in."

Under the city's code "any lawfully existing nonconforming use of part or all of a structure .... may be continued so long as it remains otherwise lawful." The defense says this could apply to their clients, who likely set up business before the code passed.

"I think that's problematic," Ballin said.

One of the seven motel owners, who asked not to be identified, said he didn't know hourly rates were illegal.

"I'm running the business the last 22 years," the motel owner said. "There is no criminal activity. Couple of times, yes it can happen anywhere, not only on this business."

"Right now, particulars of litigation I'd rather leave alone," said prosecutor Paul Hagerman.

While the prosecution does not mention city code in their case, they do lean on state statue. But the defense says state law on this issue is not specific.

"There's a generic reference on the hourly rate limitation, which is more of a local city ordinance," said defense attorney Ricky Wilkins. "So we think both of them may be an issue, which is what we're being governed by right now; only references the state statue."

Wilkins said he expects a consent order by late Tuesday. During the 14-month "Operation Bed Bug" investigation, police say they responded a total of 350 times to the seven motels. Crimes included rape, prostitution and robbery.

The court case has been continued until Wednesday, May 29.

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