COLUMN ONE : Roadside Revival by the Patels : Indian immigrants, many sharing a surname and a dream, now own one-third of America’s motels. They’ve weathered tough times and bias to give a sluggish industry a shot in the arm.

The Anaheim Tropic Motel is no garden spot. The beige stucco box rises from a sea of shimmering asphalt along a stretch of Harbor Boulevard frequented by panhandlers and other societal castoffs.

Yet to Jay Patel, the motel represents a foothold to success in America. A live-in manager who moonlights as a milkman, he cleans carpets, paints rooms, hands out keys--although he hasn’t gotten around to replacing the missing aqua-green T in the sign that reads ropic out front.

A few miles away, Tushar Patel oversees a growing empire of 12 mid-priced hotels in Orange County, San Francisco and San Diego. As president of Tarsadia Hotels, he tools around in a Mercedes-Benz 600SL and commands a staff of 20 from high-rise offices with a sweeping view of Newport Beach.

Jay and Tushar Patel are not related, but they are linked by a common name and heritage that have become as familiar in the lodging industry as Gideon Bibles in night-stand drawers.

They are among a wave of immigrants from the western Indian coastal state of Gujarat--most with the surname Patel--who own more than a third of the motels in the United States. Indian immigrants control 12,500 hotels and motels with a market value exceeding $26 billion, according to a trade association.

“In another five years, they will control about 50% of all hotel [and motel] assets in the U.S.,” said Gregory C. Plank, executive vice president of Forte Hotels in El Cajon, which operates the Travelodge chain. “It is just incredible how hard they work.”

But for the many Gujaratis who have flocked to Southern California, times couldn’t be tougher. Five years of recession and natural disasters in this tourism mecca have forced many motel owners to cut costs, shelve expansion plans or go broke.

In Orange County, where dozens of hotels surround Disneyland and other attractions, records show that 48 cases involving Patels have been filed for bankruptcy reorganization in the past four years.

“The ‘90s have been disastrous for most people,” said Tushar Patel, whose firm “did great in the ‘80s, lost most of it in the early ‘90s, and has been aggressively buying distressed hotels, repositioning them and selling them off.”

Adding to their troubles, the nation’s 7,200 Indian immigrant motel owners say they have had to overcome discrimination--from the inability to obtain insurance to customers who become rude when they see a brown face behind the counter.

But they are survivors. Industry experts credit their ability to cut costs or change strategy when they encounter adversity.

“They are astute business people,” said Edward G. Coss, a Newport Beach attorney who has worked with many Indian immigrants. “They know what hotel can make it at what price.”

In the process, they are being credited with helping to revive roadside America. They entered the business by snatching up dying family-run motels from older couples who were selling because their children did not want to spend their working lives worrying about changing sheets or unclogging pipes.

Instead, the Indian owners fixed up dilapidated properties and often have turned them into franchised units of large national chains.

“They helped legitimize the economy lodging segment,” said Michael Leven, president of Holiday Inn Worldwide in Atlanta. “The Indian community bought a lot of motels that nobody wanted.”

And Indian immigrants have done it despite representing 0.3% of the U.S. population. Their success in the motel industry is an example of how immigrant groups--Cambodians with doughnut shops and Koreans with grocery stores in Southern California--have clustered into certain corners of the American economy.

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Their story begins in Gujarat, where the Patels were mostly farmers. Their name is derived from the Gujarati pati dar , or landowner.

The state is known for a merchant class that emigrated to Africa to start businesses in nations such as Kenya, Uganda and South Africa.

A few found their way into the American lodging industry by the 1940s, when Indian immigrants bought the Congress Hotel in Sacramento and leased lodges in Northern California.

By 1962, 23 Indian families had bought motels in San Francisco, according to the Asian American Hotel Owners Assn. in Atlanta, the major trade organization for Indian motel owners.

Indians flocked to the United States as college students in the mid-1960s. With education considered critical in Gujarati culture, many earned graduate degrees in sciences and engineering.

One was hotel owners association Chairman Bharat Shah, who is from another large clan. (Shah is derived from shahukar , or moneylender.) After earning a master’s degree in Tennessee and a Ph.D. in Utah, he worked as a food research chemist on the East Coast.

But he yearned to be his own boss: “We came as students, but always in the back of our minds was to be in our own business.”

His break came in 1977, when a Gujarati friend moved from South Africa and started telling him how to make money in motels.

Motels are attractive because they can provide stable income. A 40-room building bought for $500,000 in a good location near a city like Tucson can turn $100,000 profit a year, industry sources say. Deducting for depreciation adds more.

It is a business that allows large families to live together on the premises. For those who speak little English, renting rooms consists of simple transactions such as asking, “One bed or two?”

If times turn tough, owners can put their families to work, reducing labor costs to practically nothing.

“The wife did the housekeeping. The husband did the front desk, and both of them together at night did the laundry and folded the sheets,” Shah said. “The husband and wife, as a team, worked almost 16 hours a day. Doing that, we saved money from the payroll and could turn around and pay off the debt. . . . It hardly took two or three years to return the money to the lenders.”

The formula looked so attractive that Shah started a sideline selling motels to newly arrived Indians. Along the way he came across a sweet deal: the 89-unit Winkler Motor Lodge off Interstate 40 in Winston-Salem, N.C. He bought it in 1979 by cashing in some stock and borrowing against his house and from friends.

“After that, almost every two years I have built a new property,” Shah said. Today, he has a Days Inn and Comfort Inn in Spartanburg, S.C., an Econolodge in Winston-Salem and a Hampton Inn in Atlanta.

So many others have seen the same success in a similar way that “you can repeat that story about 3,000 times,” he said.

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In Southern California, many owners say their families got into the business the same way.

Purushottam Patel, 62, a chemical engineer educated in Michigan, bought the 36-unit Peter Pan Motel in Anaheim in 1976.

“He wanted to be his own boss. He is extremely family-oriented” said his son Bharat P. Patel, 32.

Within three years, Purushottam Patel had more than doubled the size of the Peter Pan. Then he built the 122-room Convention Center Inn next door. It was followed by Castle Inn in 1989, a 200-room fortress that includes gargoyles whose red eyes light up at night and flowering plants draped over balconies.

Now, Castle Inn Inc., as the multimillion-dollar family enterprise is called, wants to bring its development full circle: tear down the Peter Pan and build a 190-unit, all-suites hotel.

Tushar Patel grew up at the 25-room Hacienda Motel in Anaheim, where his father, Bhikhu, moved the family from Africa in the 1970s. As a youngster, Tushar helped by sweeping, renting rooms and doing odd jobs.

Today, the family’s Tarsadia Hotels in Costa Mesa has hotels stretching from a Clarion at San Francisco Airport to a Ramada in San Diego. With Tushar Patel and his brother now in charge, it draws some of its strength from having 150 family members in Orange County, although only four of the nine Patels working in its headquarters are related.

Chandu Patel, who owns the Dana Point Hilton, came to America as a scholarship student in 1974, earned an MBA and learned how to sell hotels from friends. He started his own company by 1979 and has developed 17 hotels, of which he owns nine.

He said he thinks Gujaratis have a natural talent for running hotels: “India is more welcoming. In India, if you have a guest you will get out of your bedroom and you will sleepin the living room.”

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In retrospect, Indian motel owners make their rise sound like a simple matter of hospitality and hard work. But it also has required contending with discrimination and difficult economic times.

With dark skin and accented English, some had trouble securing loans or credit for supplies, or insurance.

“When I began representing Indian clients, there was a backlash in society in terms of Indians owning a hotel or motel,” said lawyer Coss. “Today, that’s far less.”

Forte’s Plank said Indians encountered “real estate people who did not want to sell to them.” Major motel chains, which charge a fee to owners who want to affiliate with them, “might have looked a little askance.” Some owners hired whites to work reception desks in the early days to overcome guest resistance.

Holiday Inn’s Leven recalls that an industry consultant told him that he was “going to find a lot of curry palaces” when he started running the Days Inn chain in 1985.

“What in hell is that?” Leven said he asked.

“That is the Patels,” the consultant replied.

When he pressed further, Leven said, he was told that many of the immigrant-run motels smelled of cooking odors that wafted from the family’s living quarters behind the front desk. Leven said he investigated further and found that Indian-run motels were no better or worse than others in the chain. He ended up believing that the consultant’s advice was nothing more than an expression of prejudice.

Despite strides in the industry, Leven said a few customers still hold biased views against Indian motel owners.

Discrimination and misunderstanding led in 1989 to formation of the Asian American Hotel Owners Assn., which has become the major education organ for the Indian American motel owners who make up most of its membership. In one measure of industry acceptance, its glossy magazine is filled with ads from motel chains and lenders.

And one South Carolina seller of hotel phone systems chose as its toll-free number: 1 (800) 92-PATEL.

It’s no wonder. Indian Americans compose 39% of the franchisees of 1,643 hotels in Day Inns of America Inc. of Parsippany, N.J. They have 37% of the Comfort, Quality, Rodeway, Clarion, Friendship and Econolodges of Choice Hotels International of Silver Spring, Md. They are highly sought by other franchised chains such as Travelodge, Holiday Inn, Super 8, Howard Johnson and Hampton Inn.

“They are very entrepreneurial and excellent at service-oriented businesses,” said Choice spokeswoman Mercedes McDonnell. “They are also very industrious at getting capital.”

Gujaratis stay close to one another through Hindu temples and customarily loan money to each other to help businesses start, much as Korean immigrants sometimes form lending circles, or kyes.

“We have so many friends and family who can help us,” said David Shah, who manages the Diznivu Hotel in Anaheim with his wife, Leena. “Indians are family-oriented people. They don’t mind lending money.”

That’s important, because the savings and loan debacle has made borrowing difficult. Now, lenders tend to favor experienced operators, and sellers demand $100,000 down payments for small motels instead of the $25,000 they once accepted, Shah said.

As a result, younger Gujarati newcomers are having to look to other kinds of opportunities, such as running sandwich shops.

Jay Patel, for one, would like to buy his own motel. Instead, he operates the Anaheim Tropic for the owner, his brother, by day. By night, he brings fresh milk to 200 customers on his Alta-Dena Dairy route. He and his wife live in a modest apartment behind the bulletproof plastic window of the check-in counter.

Dressed in white Indian sandals, shorts and a gas station-style work shirt with the name “Jay” stenciled on it, he said the motel “is a good business. You work hard, you make money.”

But the tourism downturn has forced some owners to defer plans to make badly needed renovations.

And some immigrants have had to file for bankruptcy.

Jay Shah saw the value of the Captains Quarters Motel he runs with his wife in Anaheim double to $4.4 million in the first five years that he owned it. But from that 1990 peak the value has fallen to $1.4 million as tourists have shied away from Southern California, forcing the couple to file for bankruptcy reorganization in August.

“It was a few things--the riot, the recession, and ups and down of the economy,” said Shah, 59, a physician who has kept afloat by maintaining his practice while his wife manages the motel.

This year, business is up 25% and he said he expects to emerge from the reorganization in a month. But there are no guarantees. Shah said he puts his faith in “the Hindu system of fate: Whatever happens happens.”

Stories like that are common, yet they have not daunted the hopes of newcomers. Dreams of motel ownership have almost become an inside joke in the Indian community, particularly since a singer named Bali delivered the “Patel Rap” in 1989. The lyrics describe a man who keeps his shop open late to save enough to buy a motel:

“His wild ambitions have no bounds/and soon he will be on foreign ground/American cousins soon will face/Patel motels all over the place.”