Ukiah’s Palace Hotel may have reached the end of its storied career. At a special meeting next Wednesday, the Ukiah City Council will consider a resolution approving the building official’s recommendation that the historic edifice be demolished.
On a blustery day in January of 2019, a small crowd gathered on the Ukiah courthouse steps. They were there to witness a brief attempt to auction off the once-magnificent centerpiece of the city’s downtown. No one responded to the opening bid of $982,126, and the property passed into the hands of Total Lender Solutions, a foreclosure processing service in San Diego. Long-time Ukiah resident Pete Castro nostalgically recalled his high-school prom at the landmark hotel, decades ago. “It’s such a beautiful piece,” he said. “It needs to be saved.” Real estate agent Todd Schapmire said the square footage alone made it worth the price, plus the $6-8 million minimum he estimated it would take to bring the building up to a usable condition.
But on September 29th of this year, the city’s building official inspected the Palace, and found multiple structural failures, including a section of the second floor that had collapsed, blown-out weather proofing, failed joists, and a whole bank of buckling lead glass windows looming over State Street. A power-point presentation documenting the findings shows dry rot, moss flourishing on floorboards, open framing, and extensive weather damage. A heavily footnoted staff report prepared by the city’s attorney David Rapport advises the council that, “Demolition of the building is necessary to prevent an imminent risk and serious threat to public health or safety.” Because the building official suspects that much of the recent damage is a result of a storm during an emergency declared by the Governor, Rapport wrote that the demolition is exempt from environmental review. The building official also believes that the Palace is so unstable that tearing it down is necessary to mitigate further emergencies. The Palace is listed on the national Register of Historic Places, but because the Planning Director found that it is a threat to public safety, Rapport stated that “no review of the building’s historical significance is required.”
The property has been vacant since 1995. In 2011, the city declared the Palace a public nuisance, and tried unsuccessfully to bring it up to code through mediation with its owner at the time, Eladia Laines, of Unique Properties in Sausalito. In January of 2017, visiting Judge Leslie Nichols granted the city’s petition to appoint Mark Adams, of the Santa Monica-based California Receivership Group, as the receiver of the property. In the next few years, according to a chronology from the settlement agreement accompanying the agenda item for Wednesday’s meeting, Adams borrowed money from Jitu Ishwar on several occasions. After a notice of default in 2018, Ishwar bought the property in a non-judicial foreclosure for just a little over $972,000. Not long after the attempted auction in January of 2019, Ishwar filed articles of organization with the state to establish Twin Investments LLC, and conveyed the title of the unsold property to the new company. Adams was discharged from his obligations as receiver in April of last year.
He will have 30 days from receiving the city’s demolition order to present a plan to stabilize the building and apply for a permit to tear it down.
The City Council’s approval is not necessary for the building official to issue the order, but the city is holding the public meeting on November first at 4:00pm because the building holds so much public interest.