For decades “tear it down” has been a popular local mantra surrounding the Palace Hotel, Ukiah's most significant historic landmark.
Community naysayers say it is time to level the 19th-century structure, listed on the National Register of Historic Places, even if it means using $6.6 million in taxpayer money to raze it to make way for private development. Advocates seem to have no issue with a scheme by the Guidiville Rancheria and a group of local investors to tap into a special $250 million state program to demolish the landmark under the guise of conducting contamination studies, cleanup, and site preparation for private development. Whether a state oversight agency says demolition is not necessary doesn't matter.
However, in yet another twist to the Palace saga, a little-known fact is the landmark Palace Hotel was deemed as recently as 2018 to be structurally sound and suitable for seismic retrofit and a potential transformation into a restored downtown showcase. City building inspectors had accepted a structural engineering firm’s plans and were prepared to issue permits.
It was heralded as “good news” by a court-appointed receiver who had assumed management of the Palace’s fate on behalf of the City of Ukiah.
ZFA, a renowned structural engineering firm in Northern California, developed the detailed plans for the Palace retrofit. The firm has examined the Palace thrice since 2011, confirming its structural soundness and suitability for renovation. Other experts in the preservation of historic buildings share this opinion despite a prevailing local sentiment that the Palace should be dismantled brick by brick at taxpayers’ expense.
ZFA’s retrofit plans would have been costly to implement in 2018, but no more than the taxpayer money the Guidiville group wants to spend now to tear it down.
The detailed ZFA plans languished in the city’s Building Department, unknown to most local citizens, who have fiercely debated the structural integrity of the iconic 1891 building at the corner of State and Smith streets for thirty years. City Hall formally accepted and approved the ZFA plans, but they expired six months later because of inaction.
Jitu Ishwar, who became the Palace owner soon after the ZFA retrofit plans were filed with the city, was aware of them and was provided copies. However, despite the clear path laid out by these studies, Ishwar never followed up on any preventive maintenance or restoration efforts.
Ishwar instead let the Palace conditions worsen after having snapped up the building and prime downtown location in January 2019 for $972,000 in a non-judicial foreclosure. The amount included loans totaling $577,00 that Ishwar provided to the court receivership.
The city of Ukiah orchestrated the receivership after declaring for the first time in 2011 that the Palace was a public health and safety hazard. A second declaration was made last November. Any city enforcement action has been put on hold, however, pending the outcome of the Guidiville group’s disputed state grant application.
City Hall six years ago never publicly announced the filing of the ZFA retrofit plans, their approval, or Ishwar’s takeover of the town’s most visible historic landmark a short time later.
Deputy City Manager Shannon Riley said this past week, “We don’t announce the approval of private development plans.” The general public only learned in 2022 that Ishwar had become the Palace’s owner after he entered into escrow for its sale to an experienced financier, a newcomer to Ukiah. That deal collapsed, and Ishwar quickly signed a pending sales agreement with the Guidiville group.
The ZFA plans expired after gathering dust at City Hall, and the Palace, once a symbol of local grandeur, slid into deeper disrepair. A recommended $400,000 roof structure was never constructed to protect the historic 50,000-square-foot building’s interior. The return of wet winters has allowed rainstorms to batter what remains.
“There’s not much left inside that can be saved,” Kevin Zucco, principal at ZFA, said in an interview last week.
Zucco said, however, that the massive three-story high exterior brick walls wrapping around much of the Palace are unique and beautiful and can be shored up while a new interior is redesigned.
“You can’t replicate what is already there,” said Zucco.
Zucco’s firm has examined the Palace more than any other, beginning in 2011, again in 2018, and as recently as 2023.
Zucco’s father, Gregory Zucco, founded ZFA in 1974 in Santa Rosa. ZFA now has offices in San Francisco, Silicon Valley, Sacramento, and, most recently, Napa. ZFA employs more than 50 structural and professional engineers specializing in historic renovations, seismic evaluations, and retrofits.
Despite the Palace’s continuing slide, Zucco believes the building can still be salvaged and transformed into a new downtown centerpiece despite escalating costs cited in a 2018 court receiver’s report.
“It is worth saving. Some people think it’s too expensive now to do that, but buildings like the Palace are irreplaceable. They have character. It will never get cheaper to save it,” said Zucco.
Owner Ishwar has rebuffed two serious buyers since ZFA submitted its retrofit plans in what former court receiver Mark Adams, a Santa Monica attorney, calls a “real estate play.”
Merely six years after ZFA turned over detailed retrofit plans to the city, the iconic structure is now the center of a heated community debate over its future.
A crucial state decision, expected this month, could seal the fate of the Palace, either preserving it as a testament to Mendocino County’s past or wiping it from the local landscape.
A state Department of Toxic Substances Control representative said the agency is still on schedule to decide this month how much money it might award to the Guidiville rancheria under a special program earmarked for tribes, nonprofits, and poor communities. However, a state oversight agency is opposed to funding the demolition of the Palace under the pretext of contamination studies and site cleanup.
Despite that opposition and outcry from preservationists locally and statewide, the Guidiville group persists in pursuing public funds to tear down the Palace and clear the way for constructing a six-story hotel/restaurant/retail complex in the prime downtown location.
Guidiville and a group of undisclosed investors, led by downtown restauranteur Matt Talbert, are continuing their lobbying efforts. While tribal leaders remain quiet about plans publicly, Talbert and tribal consultant Michael Derry have enlisted supporters to counter concerns. They have lobbied City Hall to stay out of the conflict and unsuccessfully attempted to block news stories about their plans from being published, which are only available through information gleaned from public documents.
Deputy City Manager Riley has repeatedly contended that the City Council’s formal declaration last Fall that the Palace is now a public health and safety hazard is “coincidental” to Guidiville filing its state application only three weeks before.
According to Riley, so was the city's decision to waive the environmental review of the Palace under California’s Environmental Quality Act (CEQA) and its declaration that effectively precluded the state Office of Historic Preservation from conducting a review.
For weeks, Riley, who acts as the public information officer for City Manager Sage Sangiacomo, has insisted the city has only a “narrow path” in what she characterizes as essentially a private property deal outside of city influence.
Riley declined to address mounting public concerns that the city quietly supports the Guidiville plan, hoping it will finally eliminate a community “eyesore” that has dogged city administrators since the Palace was shuttered in 1995.
Meanwhile, the state Department of Toxic Substances Control continues to ponder what’s next. The agency awarded a grant in March but labeled it “To Be Determined” after questions were raised about public funds being used to tear down a historic structure under the guise of contamination studies.
Despite the local clamor for demolition, professional structural engineers, contractors, and historic building preservation experts all agree that the Palace, despite a deepening decline, can still be stabilized and recycled into a viable commercial center in the core of Ukiah.
Former court receiver Adams, in 2018, advised the Mendocino County Superior Court that the city of Ukiah had “approved our basic architectural and engineering plans, so the predevelopment work is essentially complete.”
Adams, however, expressed dismay that a consulting contractor had dashed hopes for an affordable seismic retrofit of the 50,000-square-foot Palace. The estimated cost had risen from $2-$3 million to “the upper $6 million or low $7 million mark,” double what Adams said he had expected.
The contractor, GCCI Inc. of Santa Rosa, who was hired by former Palace owner, Marin County real estate agent Eladia Laines, cited, among significant reasons, the following:
- The addition of new roofing to the project.
- The discovery of significant voids under the building slabs that must be refilled.
- Repointing of all the masonry in the brick walls.
- Significant increase in steel and lumber costs (over double for steel and nearly double for lumber.)
Adams obtained a second opinion from a contractor, lowering retrofit costs to $4.5 million.
Eventually, the receiver decided to sell the Palace to Ishwar, who held a $577,000 lien and was threatening to foreclose.
“It’s a very disappointing outcome because I was led to believe Mr. Ishwar was a serious hotelier and would do something with the building,” Adams said in an interview last Fall.
Ishwar, his attorney Stephen Johnson, Guidiville tribal consultant Michael Derry, Matt Talbert, and attorney Attila Panczel, who reportedly represents other potential Guidiville investors, have repeatedly declined to respond to written requests for comment on their plans or questions raised by the state agency, preservation advocates, or structural engineers.
They have, however, made it clear to community leaders that they favor the “tear it down” mantra, and they have encouraged displays of public support.
Structural Engineer Zucco and other professionals who have studied the Palace disagree that the landmark's time has come.
“They had the chance to do it right in 2018, and they let the opportunity pass,” said Zucco. “It can still be done. It is not too late.”
Tom Carter, a Lake County contractor known for his work on historic buildings in the Bay Area, neighboring Sonoma County, and Lake County, including the Tallman House and Blue Wing Saloon, agrees.
Carter is one of the proposed buyers Ishwar rebuffed a few years ago but remains interested in the Palace’s fate. He has inspected the Palace from top to bottom.
“I walked around the Palace a few weeks ago and took another close look. I still believe we can save that building and, with the help of investors, transform it into a showcase that would make Ukiah proud,” said Carter. “You can’t do it for the quick buck. You got to do it for the long term and the community.”
Carolyn Kiernat is a principal at Page & Turnbull, one of California's preeminent historic preservation firms. She and a team prepared a plan in 2023 for Ukiah investor Minal Shankar; another prospective buyer turned away by Ishwar because she wouldn’t pay the amount he wanted after five years of letting the Palace slide further into disrepair.
Kiernat, too, believes the Palace can be saved and transformed. She recently published an opinion piece in local newspapers and The Press Democrat in Santa Rosa urging the community and city leaders to resist the push to demolish it.
“I have received some emails from folks interested in the property,” said Kiernat. One was from an architect interested in a mixed-use project utilizing state and federal tax credits to preserve historic buildings and provide affordable housing.
“It’s not too late. There are better options than tearing down the Palace and building a faux version,” said Kiernat.
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