Troubled hotel settles with Palatine, could reopen in September

The operator of the Palatine Red Roof Inn will surrender its business license and the hotel will reopen under new management, under a settlement agreement between the owner and the village.

The village revoked the business license in May after officials alleged numerous instances of drug dealing and prostitution at the hotel, 1200 N. Frontage Road. Police said at the time that there had been two drug-related deaths at the hotel and that they had responded to 65 calls for service just from Jan. 1 to March 22.

Hotel owner Shashtri Hospitality Inc. had been appealing the decision prior to the settlement.

Under the agreement, the village will reinstate Shashtri's business license, a move that will allow it to avoid having the revocation on its record, Village Manager Reid Ottesen said. Shashtri will relinquish involvement in the day-to-day management of the hotel.

Shashtri also has agreed to pay the village $7,500 in fines and costs, officials said.

The hotel will reopen under the management of Ohio-based J&P Hospitality Management Inc.

"It was a very unfortunate situation, but we're really happy with the new operator that has come forward," Ottesen said.

The new firm has a history of turning around troubled properties, Ottesen said.

"They know exactly what they're walking into, and they are saying, 'The only way we are going to do this is if a whole laundry list of improvements are made to the property before we take it over,'" he added.

J&P is targeting a date in September to reopen. Among the improvements called for in the settlement are an upgraded alarm system for the side doors, a camera system and updated landscaping.