A proposed buyer of the historic Palace Hotel told the Ukiah City Council on Wednesday night she envisions transforming the landmark into a lively ground floor marketplace with shops, restaurants, and bars.
Minal Shankar is described by City of Ukiah representatives in a press release as a former investment banker and venture capitalist in the Bay Area, Canada, and the East Coast who now lives in the Ukiah Valley.
Shankar painted a picture of the Palace Hotel she hopes to revitalize:
“I see the first floor of the Palace as an open, airy marketplace with an atrium in the middle. It will have eateries, bars, and retail shops that invite people into the larger downtown area. I would love to see the second and third floors renovated back to a hotel that is reminiscent of its former glory.”
Shankar confirmed Wednesday that she has entered into a purchase agreement with the current owners. It provides for a nine-month escrow “during which additional due diligence will be performed.”
Shankar’s plans were outlined in a press release issued Wednesday night by Deputy City Manager Shannon Riley after the City Council meeting.
Shankar could not be contacted for comment, and information remains sketchy about how she came to be the buyer of a local landmark that has become an eyesore.
Shankar’s Linkedin profile provided her extensive corporate background. She was most recently head of Easly, a Canadian firm whose financing specialties include tax credits. Shankar held that position for two years, until stepping down in August 2021.
Shankar’s ties to global investment and venture capitalist fields include executive positions with Brevet Capital, Northgate Capital, and JP Morgan. She also has served as a research analyst for The Brattle Group in Cambridge, Mass.
Shankar is originally from Ohio and is a graduate of Harvey Mudd College, and the Stern School of Business at New York University. In high school, Shankar graduated from Philips Exeter Academy in New Hampshire.
Shankar’s emergence as the proposed buyer of the Palace is a new twist to the landmark’s long saga.
Unknown generally, the Palace was apparently sold in 2019 by a court-appointed receiver to a Ukiah couple Jitu and Paru Ishwar with local motel and hotel operations. A Superior Court judge two weeks ago dissolved the receivership in order to pave the way for a sale by the Ishwars to Shankar. The city of Ukiah used the receivership process to legally wrest control of the historic but deteriorating hotel from a former Marin County owner.
The hotel has languished for three decades. The 60,000-square-foot structure at North State and Smith Streets was declared a public nuisance following inspections by city building and fire officials. A few years later, the then owner attempted some cleanup but the efforts stalled, and in 2017 a receiver was appointed by the Superior Court to take over the hotel. The Marin County owner eventually defaulted, and the Iswhar ownership under the name of Twin Investments, LLC. was approved by the court-appointed receiver, attorney Mark Adams of Santa Monica.
If Shankar closes escrow, and terms of a settlement agreement among Adams, the Ishwars, and the city are met, the receiver will be formally discharged from oversight, according to an April 6 court order issued by Judge Ann Moorman.
If in fact, Shankar completes the deal, it could herald a new chapter in the Palace’s long history. The hotel was once the center of social life in Ukiah and enjoyed a booming business because of travelers between the Bay Area and the North Coast redwood region.
The Palace Hote experienced the ebb and flow of changing times, but the bar always proved profitable and some of the upstairs rooms became apartments for the town’s established senior citizens. In the 1970s the Palace enjoyed a revival when Pat Kuleto, a restaurant innovator who went onto fame in San Francisco and the Napa Valley, did his first design and remodeling project.
For a decade or so after, the Palace returned to the center of the action with a popular bar and restaurant, good music, and events in a ballroom downstairs. But then the hotel faltered, and it entered into the final stages of decline, stripped of its furnishings and artifacts including murals, and infested by varmints and damaged by vandals.
The building is admittedly in a sad state of affairs having not been maintained since 1995.
Shankar, in the city press release, is quoted as acknowledging the challenges “not just with the building itself but also of the turbulent financial times and of labor and materials shortages and delays.”
“In spite of this I am optimistic about the future and this community, which is why I am so passionate about this project,” Shankar is quoted as saying.
While her plans may sound ambitious given the state of the Palace building, Shankar maintained, “I think this is the right time and place for a project like this.” She cited industry trends in boutique hotels, small towns, and local foods and produce.
“Making the Palace a success is about so much more than that half a city block; it’s about showcasing and building on everything that Mendocino County has to offer,” according to Shankar as quoted in the press release.”
The following is the entirety of the press release issued by the City of Ukiah:
After decades of frustration and disappointment over lack of progress with the Palace Hotel, the Ukiah City Council found renewed hope on Wednesday evening when they met the prospective buyer of the neglected property.
Minal Shankar, Ukiah Valley resident, has entered into a purchase agreement for the expansive structure, starting a nine-month escrow during which additional due diligence will be performed. If that hurdle is cleared, Ms. Shankar says, “I see the first floor of the Palace as an open, airy marketplace with an atrium in the middle. It will have eateries, bars, and retail shops that invite people into the larger downtown area. I would love to see the second and third floors renovated back to a hotel that is reminiscent of its former glory.”
Ms. Shankar brings extensive experience to the project. She is a former investment banker and venture capitalist, has built a successful finance company from scratch, and has experience with a variety of capital sources – equity, debt, and government funds. For the planning, building, and operating, Ms. Shankar will pull from her network “to bring on a group of individuals and companies that have the professional experience to see this through.” That network includes hospitality, historic renovation, and additional financial expertise.
As part of the planning and due diligence, Ms. Shankar intends to partner with the Historical Society of Mendocino to collect as many of the currently undocumented stories that people have about their personal experiences in the Palace as possible, as those will help inform the plans and designs for its future.
“I think this is the right time and place for a project like this,” says Ms. Shankar, citing hospitality industry trends in boutique hotels, small towns, and local foods and produce. “Making the Palace a success is about so much more than that half a city block; it’s about showcasing and building on everything that Mendocino County has to offer.”
Ms. Shankar acknowledges the challenges, not just of the building itself, but also of the turbulent financial times and of labor and materials shortages and delays. In spite of those things, she says, “I am optimistic about the future and this community, which is why I am so passionate about this project.” She hopes to provide additional updates to the City Council during the escrow process.
The Palace Hotel has been vacant and unmaintained since 1995. The building has always been privately owned, thus complicating the abatement process. Over the last three decades, the City of Ukiah has actively worked to encourage improvements of the nearly 60,000 square foot structure. Various studies, evaluations, and an appraisal were commissioned by the City and/or the Redevelopment Agency in an effort to facilitate repairs. City Staff, local business owners, and even a community group called “Friends of the Palace Hotel” attempted to work with previous owners to restore the Hotel.
In 2011, the City Building Official and Fire Marshall inspected the building and determined that the property constituted a public nuisance. The property owner reluctantly made some minor improvements after that, but ultimately stalled in her efforts. In 2015, the City asked the courts—and was granted in 2017—to appoint a Receiver to the project. Again, some progress was made, but then stalled again in 2018 when the Receiver deemed the project financially infeasible. The property defaulted, falling into the hands of Twin Investments, LLC, with the receivership still in place. There had been little to no activity since that transaction.
If the current purchase agreement closes successfully and other terms of the settlement agreement are reached, the Receiver will be released from the project.