Demolition By Neglect

Heavy winter rains this past week pummeled the historic Palace Hotel, sending storm water gushing into an already severely damaged landmark.

A return of back to back wet winters – which are typical for the region – is taking its toll on the town’s most significant historic building after more than three decades of neglect under two ownerships, and a largely hands off policy at City Hall.

At least 3.1 inches of rain were dumped on Ukiah over a 72-hour period ending Friday as a second rainstorm swept through inland Mendocino County. More heavy rain is expected Sunday, promising the Palace's interior, already ravaged by neglect, to become even more saturated.

Jitu Ishwar, the current owner, has done nothing to protect the building or stem the decay since he acquired ownership of the Palace in 2019, according to city officials.

Deputy City Manager Shannon Riley has said Ishwar has made “zero progress” to shore up the Palace under his ownership. Prior to Ishwar’s takeover in 2019, at least there had been some interior cleanup under former owner Eladia Laines, and subsequent preliminary structural and engineering studies were done under the direction of a court-appointed receiver. 

Since Ishwar obtained a clear title to the building, however, nothing further has been done. 

“It’s like demolition by neglect,” complained Dennis Crean, a local advocate of salvaging major portions of the damaged Palace building and recycling the historic three-story brick structure into new uses. 

Crean and others say they are increasingly disturbed by a widely promoted “false narrative” that it is “too late to save the Palace, and that nothing short of a complete demolition is the only outcome.”

Ishwar and his attorney Stephen Johnson of the law firm of Mannon, King, Johnson & Wipf continue to ignore questions seeking public comment about Ishwar’s role in the Palace’s advanced state of deterioration, or why he has spurned at least two serious offers in the past few years from potential investors who sought to rehabilitate the historic building. 

Lake County Contractor Tom Carter, who renovated the acclaimed Tallman Hotel and Blue Wing Saloon in Upper Lake, came forward this week and said that less than two years ago he was eager to enter into escrow to buy the Palace from Ishwar, and restore it. 

“I went through every inch of that building, I know the condition, and I know what can still be done,” said the veteran contractor. Carter said he proposed to Ishwar that at the very least a new roof to protect the building from the elements should be a top priority.

Carter, who has experience in rehabilitating historic properties in Sonoma County, San Francisco, and Oakland, said Ishwar rebuffed his offer, and ignored his bid to enter into escrow.

“I had the check in hand to get it going,” said Carter.

Carter said he now believes Ishwar at the time was already in talks with Minal Shankar, another investor who collaborated with a team of preservation experts for a year to develop the most serious renovation plans yet, only to have her deal with Ishwar collapse last summer.

Carter said he agrees with former court receiver Mark Adams that Ishwar has no interest in returning the Palace to the center of community life. “He’s engaged in a real estate play,” said Carter.

Ishwar now has an agreement with the Guidiville Rancheria and its backers of a $6.6 million taxpayer-funded scheme to demolish the 133-year-old landmark so a state study of possible contamination from purported underground fuel storage tanks can be made, and a possible two-year cleanup done if necessary. 

The state Department of Toxic Substance Control has the Guidiville application under review. A spokesman said a decision will be made this month. 

Demolition of the Palace could happen this summer if the state grant is awarded. The Guidiville tribe is only one of two tribes applying for grants that specifically targets tribes, nonprofits, and municipalities in poor areas.

For Ishwar and Guidiville, the new round of storms may be a blessing in disguise.

Even before this past week’s heavy round of rains, historic preservation experts worried that the unprotected Palace may not be able to survive a second wet winter. 

Investor Shankar said she spent $22,000 in a futile effort in late 2022 to lay tarps across the Palace’s patchwork roof and divert water from collecting on the roof in hopes of stemming the tide. There was limited success. Ishwar initially agreed to pay half the cost, but he never followed through, according to Shankar.

Several months later the city formally declared the Palace building a “public safety hazard” after city building and fire department inspectors found that last winter’s storms had accelerated deterioration inside the Palace, and “substantially contributed to the building’s current unstable condition.”

Now this past week’s heavy rains are provoking more city concern that sections of the oldest unreinforced brick walls of the Palace could give way, damaging neighboring buildings or falling onto the streets surrounding the hotel.

The draconian scenario sends chills through local advocates, who had high hopes for the structure to be shored up and recycled into a new downtown centerpiece under Shankar’s plan. They fear city officials may be even unwittingly aiding the Guidiville group’s efforts to secure state funding to tear down the 1891 landmark.

Shankar, an experienced financier who now lives in Ukiah Valley, emerged with the most serious restoration plan yet for the Palace. In 2022, she hired a noted San Francisco team of historic preservation architects and designers who produced a plan that included a boutique hotel, bar and restaurant, a cluster of shops and a rooftop event center.

But Ishwar, as he had done the year before with contractor Carter, walked from their proposed deal. 

Ishwar acquired the Palace in 2019 with ideas of his own to recycle the building into new uses but he abandoned those plans, according to court receiver Mark Adams, a Santa Monica attorney.

Ishwar and his wife Paru and their partner Anil Bhula have been hoteliers in Mendocino County for the past 25 years and have connections to a string of motel operations in Sonoma and Lake counties. Ishwar and Bhula’s Fairfield Inn on Airport Boulevard was honored last summer by the Redwood Empire Fair board of directors as “the business of the year.” 

Ishwar at one time served as president of the Ukiah Chamber of Commerce.

Ishwar, however, has had a tangled history with City Hall. His aging Economy Lodge property fronting State Street has been red tagged repeatedly for permit violations and efforts to force compliance are stalled. The project has become another eyesore in town.

The Palace Hotel under his ownership has further declined, and Ishwar now faces a city order to either stabilize the building or demolish it.

City officials acknowledge enforcement on that order is on hold pending the state decision on the Guidiville grant application.

Critics worry the city may be acting in concert with Ishwar and Guidiville to get the Palace torn down, and the site cleaned up for new development. The group is proposing a faux Palace that mimics the plan Shankar and her advisors produced.

Deputy City Manager Riley brushed off critics’ concerns that the city’s public safety declaration and the Guidiville application for state funding to demolish the Palace are linked. 

“The city’s declaration and the submittal of the grant application were two parallel pathways that were in no way connected,” said Riley.

Riley said, “Our (building and fire department) officials had no pre-conceived notions about what the outcome of their inspections would be, and I have no reason to believe that the grant applicants anticipated this declaration.”

Ukiah, unlike other cities including Glendale, Oakland, and San Francisco, has not adopted any ordinances to protect historic buildings.

Architect Alan Nicholson accused city officials of “rolling out the red carpet for Mr. Ishwar and Guidiville Tribe to demolish the Palace by exempting them from any environmental review or oversight with normal checks and balances from the City Council, Planning Commission or the Demolition Review Committee.”

“Ishwar is actively demolishing the Palace Hotel by blatant neglect,” said Nicholson. He argued that Ishwar was ordered to prevent further water damage to the interior but “he has done nothing.”

Nicholson said the city is negligent for not imposing fines and other repercussions on Ishwar.

“It is the same policy we have seen for 30 years of Palace neglect with the city talking tough and looking the other way,” charged Nicholson.

(Mike Geniella is a veteran North Coast journalist and regular contributor to local news organizations.)