Minal Shankar, a recognized leader among a new generation of online investment bankers and venture capitalists, may be the last best hope for the decaying Palace Hotel, a Mendocino County landmark with a storied history.
Shankar, a newcomer to the Ukiah Valley, is the unexpected buyer of the Palace who entered into escrow last week for its purchase. The historic 1891 hotel is in poor condition, ravaged by years of neglect, but Shankar sees promise.
Shankar believes her expertise in securing financing that maximizes federal and state tax credits for historic preservation might make the difference in the Palace’s fate.
“I am optimistic. I believe the Palace even in its current state can be transformed into a viable commercial business center,” said Shankar.
Who is Shankar?
She is an engaging 30-something success story in the online banking world, a global citizen born in India, educated in the U.S., and introduced into the world of money management by her financier father. On her own, Shankar has enjoyed enough success to leave behind big city lights for a quieter life working remotely from an area she sees as “the real Northern California.”
Shankar found her dream home in September 2020 overlooking Lake Mendocino after a random search across Northern California. By then, she already had made her professional mark in online banking services in Canada, and as a financial analyst for firms in New York, Boston, Los Angeles, and San Francisco.
In 2021 Shankar was honored by the Canadian Lenders Association for being a woman “Leader in Lending” for her role in founding and becoming CEO of Easly, a Toronto-based firm that in a few short years secured $77 million in research and development funding for startups.
Shankar is a graduate of Harvey Mudd College at Claremont, one of the nation’s premier engineering, science, and mathematics universities, and the prestigious Stern School of Business at New York University.
It was by chance that Shankar ended up living in Mendocino County in September 2020. She had returned to the SF Bay area where her parents lived as the COVID shutdown engulfed the world. “The pandemic allowed me to realize I could work remotely and live in a small-town environment that I felt would better suit me,” she recalled.
It has not been without its challenges. A year after moving into Marina Estates north of Ukiah, the Hopkins Fire was started along the Russian River by an arsonist in September 2021 and swept uphill to Marina Estates. A dozen homes were destroyed or damaged. Shankar has just started a vacation in Europe when she learned her house was fire damaged but was still standing. All the outbuildings including a guest house were burned to the ground, however.
“I was in shock, and immediately returned home. In the days after so many people including my neighbors Bruce Jenney and his wife helped me get through the trauma,” recalled Shankar. The Jenneys’ home was destroyed in the fire, and they have since moved to Texas.
For Shankar, the community solidarity she found in her personal crisis was a turning point. “I knew I needed to live and work in this kind of community, and I chose to stay.”
Shankar says it was on a random drive through her new community that she noticed the decrepit Palace Hotel and a “For Sale” sign posted on its front facing North State Street.
Sometimes it takes a newcomer to see old problems with fresh eyes, and Shankar felt confident from the start she was onto something.
“I started to make inquiries, and I kept getting more interested as I learned more and poured over available documents,” said Shankar.
“It became clear to me that after some due diligence and team planning, I could make a viable project of the Palace with the help of historic preservation-related tax credit financing.”
The current owners, Twin Investments, LLC, bought the property in January 2019 while it was still under the control of court-appointed receiver Mark Adams. Adams, a Santa Monica attorney, was appointed to take control of the building by the Mendocino County Superior Court in 2016 after the city officially declared it a public nuisance because of health and safety code violations.
Superior Court Judge Ann Moorman on April 6 approved a settlement that mandates the court-appointed receivership remain in place until escrow with Shankar closes successfully. The agreement was reached among Adams, the current noteholders, and the city of Ukiah. If the Shankar deal is not completed, the Palace will remain in limbo.
Yes, Shankar says she sees the long list of negatives that have mired the historic hotel in uncertainty for three decades. In reality the 66,000-square-foot, 90-room hotel is three structures constructed at different times. The original brick portion was built first on the corner of North State and Smith streets.
“After spending a year researching the Palace, I see the problems clearly. I know the building, especially the oldest section, is on the edge structurally. No doubt it could be expensive to transform the Palace into something viable,” said Shankar.
Shankar signed the purchase agreement last week for the Palace and entered into a nine-month escrow because “I think I can make something happen.”
Shankar acknowledges the oldest part of the downtown Ukiah landmark is one step away from being too far gone structurally. “If action isn’t taken, I don’t how much longer it can stand,” she said.
Shankar said it seems that “essentially we will need to build a box inside the walls.”
In addition, the old hotel’s interior is largely stripped of anything with value, short of a few notable exceptions including the lobby fireplace, a backbar, and decorative staircase support leading upstairs.
A large skylight covers a central area that Shankar hopes to turn into a sunny marketplace, but a protective cover needs to be replaced immediately. “I don’t know if the area can get through one more rainy season exposed to the elements,’’ said Shankar.
Because there remains a host of uncertainties Shankar said a long escrow is needed. “It will allow for a myriad of issues to be resolved, and team planning to be done on how the Palace can be transformed into an exciting downtown draw.”
Part of Shankar’s early efforts is documenting the historical influences of the Palace on the community. She is working with the Mendocino County Historical Society, which has a treasure trove of information about the long history of the hotel.
Shankar in short exudes confidence about the Palace’s prospects with the air of a convinced lender rather than a developer.
“I have the time and the energy. I am encouraged by the support I am receiving from Ukiah city officials, and residents and businesses who believe repurposing the Palace is critical to the future of the core downtown.”
Shankar sees Ukiah as poised to draw more visitors and become the inland anchor of a county-wide tourism sector that has transformed the remote Mendocino Coast into a world-class visitor destination.
“Ukiah is only a two-hour drive from the Bay Area. It is in wine country, but the town still has its own character. There is a freshness to the area that appeals to visitors,” said Shankar.
Shankar said she is not discouraged by local naysayers who think the possibility of a Palace revival is folly. She brushes off reactions to online posts with barbs about her unexpected emergence as a buyer.
“I understand the reasons why,” said Shankar. For decades local residents witnessed the Palace, after a brief revival in the 1980s, slide into becoming a community eyesore. It has sat abandoned and largely unprotected since 1995 under out-of-town ownership.
Shankar said she chooses to focus on the possibilities, however, rather than become bogged down in the murk of past Palace problems.
Shankar shared a photograph on Instagram of a glass of champagne she placed on the beat-up old lobby bar after signing the purchase agreement and going into escrow. “It just seemed right,” said Shankar.
That does not mean she is starry-eyed about what lies ahead.
“I am not a person to act on sentiment. I do my homework.”
Shankar said she feels over the next several months a Palace project can become a reality.
“I would not be devoting my time and expertise to this without that belief,” said Shankar.