Despite intense lobbying efforts at the state level, an oversight agency is standing firm in its declaration that the demolition of Ukiah’s historic Palace Hotel is unnecessary to conduct possible ground contamination studies or remedial work.
Newly released documents show the Guidiville Rancheria early this month appealed a state funding agency’s decision to “disallow” $5.3 million in taxpayer money under a special program aimed at tribes, nonprofits, and poor municipalities. Guidiville and a group of proposed local investors wanted to use public funds to raze the three-story brick landmark, clean up the site, and proceed with private, for-profit development of a boutique hotel, restaurant, event center, and retail shops.
A final decision by the state Department of Toxic Substance Control has dragged on for weeks, deepening a divisive community debate about the fate of an iconic structure listed on the National Register of Historic Places. The Palace has been located at the corner of State and Smith streets since 1891 and, for a century, served as a social and commercial centerpiece of downtown.
Famed SF restaurateur Pat Kuleto refurbished the Palace restaurant and bar in the 1970s, but within a decade, the hotel was faltering. It closed in the 1990s and, for nearly three decades, has slid into steep decline under two private ownerships. City officials have twice declared it a public safety and health hazard since 2011.
Now, a bid to have the public finance a teardown so proposed buyers can move ahead with their still secretive plans to develop the site has created a local uproar.
For the second time, however, a state regulatory oversight agency publicly maintains that preliminary reports provided by the Guidiville Rancheria, its tribal consultant, and an investment partnership to support the demolition scheme do not support any measures beyond “standard investigation techniques” that can be used around the perimeter of the landmark building.
Heidi Bauer, senior engineering geologist at the North Coast Regional Water Quality Control Board, stated unequivocally in a formal response this week to the Guidiville appeal: “If contamination exists beneath the actual building, it likely will be from a very old release and unlikely to be still volatile enough to cause vapors to intrude into the building.”
“Even if this condition did exist, this typically can be reassessed prior to reoccupation of the building and mitigations (i.e. HVAC systems) put in place to mitigate this risk without requiring the demolition of the building,” said Bauer.
In her strong rebuttal to the tribe’s reconsideration request, Bauer discounted the tribe’s list of potential petroleum and related contaminants due to historical underground heating and fuel storage tanks that Guidiville and investors claim to be located at or around the Palace site.
“We have not seen information that leads us to believe that the environmental investigation performed to assess the risk to human health and water quality cannot be achieved using standard investigation techniques that can be employed around the perimeter of the building,” said Bauer.
The state Department of Toxic Substance Control, the state agency handing out $250 million earmarked for tribes, nonprofits, and poor municipalities, asked the North Coast Water Board to review Guidiville Tribal Chairman Donald Duncan’s April 1 request that a state decision to include no grant funding for demolition be reconsidered.
The firm response from Bauer, chief of the oversight agency’s clean-up unit, casts doubt on whether Guidiville can secure state funding for anything other than standard investigative work to determine the level of contamination, if any, at the Palace site.
It is unclear whether the lack of state funding for demolition is enough to push Guidiville and its partnership to consider recycling the Palace Hotel, which structural engineering and historic preservation experts contend is a viable alternative and could create a draw for the downtown area.
Tribal representatives, including Duncan and consultant Michael Derry, did not respond to written requests for comment on the regulatory agency’s renewed stance, nor did the attorney representing a list of potential investors, which includes downtown restaurant owner Matt Talbert and three local cannabis entrepreneurs.
In the meantime, current Palace owner Jitu Ishwar faces a new city order demanding that he contract with a certified structural engineer to evaluate the decrepit landmark and seek permits for either stabilization or demolition.
Ishwar missed the first deadline this week, and city representatives scrambled to assure the Ukiah City Council and the public that the ‘hard deadline’ for the new city demands is May 14.
In a report to the City Council this past Wednesday, Deputy City Manager Shannon Riley said about the structural engineering and permit demands for stabilization or demolition, “Again, we’re not mandating one or the other; we’re simply stating that something has to be done.”
According to a transcript of her comments, Riley told council members, “We’re setting hard deadlines. There are penalties for failures to meet those deadlines.” Under code provisions, Ishwar could face escalating fines and possibly jail time if he does not comply.
Riley said Ishwar’s failure to meet this week’s deadline to produce a contract with a structural engineering firm was serious but not as grave as the approaching May 14 demand.
“We have some confidence, I will say, that they are working to meet the deadlines, and we will continue to keep the council and the public posted,” said Riley.
Ishwar, an investor in hotel/motel operations in the region, and his attorney, Stephen Johnson of the firm of Mannon, King, Johnson & Wipf, did not respond to written requests for comment.
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