May 10--BREMERTON -- The Dunes Motel, haven for the unfortunate but a hot spot for police, is headed to the auction block.

A foreclosure auction date on the mostly empty, rundown motel off Kitsap Way is set for May 24. A receiver chosen by Whidbey Island Bank is expected to take over running the place very soon.

On Friday afternoon, a frail man in a wheelchair tossed a greeting as he passed by outside while Suk James and Greg Tift, majority and minority owners, waited sadly for the inevitable in the yellow-painted lobby.

"I came to American, bust my butt over 30 years," said James, originally from Korea. "I have no place to go."

She wiped tears from her eyes. She lives at the motel.

It had been a long morning for Tift at the Kitsap County Courthouse as he tried -- unsuccessfully -- to fend off receivership.

The 64-room Dunes, built in 1978, joins other older motels along Kitsap Way that have sunk into foreclosure in the economic slowdown. Among then was the nearby Chieftain Motel, still owned by the bank, and the Oyster Bay Inn, which attracted a new owner in 2012 and since had some improvements.

Many along the stretch are experiencing low room occupancy rates, including the Dunes, where manager Rod Herfel said it was around 15 percent. Rooms there go for $60 a night; half that for any social-service referrals, he said.

Herfel, who lives there too, said he expects to lose his job. He also said Bremerton is overbuilt with hotels.

"There aren't enough customers to keep them open. There never have been."

Tift and Herfel said new Navy housing and a couple of new hotels hastened the downward spiral of the Dunes and its neighbors. In the past several years, the Navy added a 600-unit bachelor enlisted quarters at Naval Base Kitsap-Bremerton. Two sparkling hotels, Fairfield Inn & Suites and Hampton Inn & Suites, went up downtown.

"When they built those barracks, they should have studied what it would do to local businesses," Tift said.

People coming off the ferry looking for rooms never get beyond the Fairfield and Hampton, and the Dunes couldn't afford advertising anymore, Herfel said.

According to court records, James' Dunes Motel, Inc. took out a $2.2 million loan around 2008 from City Bank of Lynnwood for the Dunes. The bank failed, and Whidbey Island Bank assumed the loan. James and Dunes Motel, Inc. stopped making monthly payments on the loan from April 2012 to the present. It fell steeply into arrears.

James filed for Chapter 7 bankruptcy in February. Some $83,000 in back taxes are owing.

James also owned the Inn at Port Hadlock, closed in 2011, for taxes owed, according to news reports.

Over the years, local social-service agencies had sent clients who needed housing to the Dunes, though that, too, seemed to have leveled off. Larry Eyer, director of Kitsap Community Resources, said his agency no longer sends clients there. Rochelle Doan, spokeswoman for Kitsap Mental Health Services, said her agency sent 10 clients there in the last year.

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