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 representatives 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 told the City Council she 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.
Online research shows Shankar’s corporate background is extensive. 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 firms 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 Hotel 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 also is quoted as saying, “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 city statement.
Hope Springs Anew For The Venerable Palace Hotel
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 federal and state tax credits for historic preservation could 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 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 immediate days after so many people including my neighbors Bruce Jenney and his wife helped me get through it,” 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 here, 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 big ‘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 note holders, and the city of Ukiah. If the Shankar deal is not completed, the Palace’s 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 actually 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.
Yet, Shankar declares, ‘a Palace project is possible.”
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 a 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 are 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 becoming 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 the Palace can be turned into an economically profitable development.
“I would not be devoting my time and expertise to this without that belief,” said Shankar.