A city-imposed deadline for the current Palace Hotel owner to submit plans to stabilize or demolish the historic structure is only days away.
Whether it will be met, however, is uncertain.
City officials insist that if the Tuesday deadline is ignored, they are prepared to seek penalties, including possible jail time against owner Jitu Ishwar. Ishwar, former president of the Greater Ukiah Chamber of Commerce, and his attorney aren’t talking publicly about their intentions. They continue to avoid answering questions, including written requests.
Ishwar is at the center of a heated community controversy that erupted late last year when details surfaced about a plan by proposed Palace Hotel buyers to secure millions of dollars in public funds to demolish the downtown landmark. The scheme by the Guidiville Rancheria and a group of local investors raised significant concerns among preservation advocates and members of the public who oppose using taxpayer money to subsidize private development projects.
City officials insist that the approaching Tuesday deadline for Ishwar to provide plans to stabilize or demolish dangerous portions of the Palace remains firm.
However, they acknowledge quietly rescinding an earlier order requiring Ishwar to prepare an updated structural analysis first. The Palace is arguably the town’s most significant historical landmark and is listed on the National Register of Historic Places.
Deputy City Manager Shannon Riley admitted private discussions involving Ishwar, his attorney, and city staff led to the structural analysis demand being dropped. Riley, however, brushed aside concerns that the city is ignoring the Palace’s landmark status to eliminate a local eyesore that has rotted for 30 years while city officials, Ishwar, and another negligent longtime owner argued over its fate.
“The fact is that this building is a hazard, and that supersedes public sentiment,” declared Riley.
Riley said the city must “work with the owner and his agents to resolve the issue.”
“As I reported to the (City) Council, we believe that the agents for the building intend to meet the second deadline, and the city is prepared to act on the penalties outlined in the notice if that does not occur,” said Riley. Ishwar and his attorney, Steve Johnson of the law firm of Mannon, King, John & Wipf, are the “building agents” identified by Riley.
Riley said the pair, Ishwar, and Johnson, have been “in communication” with city staff.
“Staff and those agents agreed that a structural analysis may not be necessary at this point (depending on the course of action), and staff agreed to forego that requirement with the understanding that the second deadline would still be met,” Riley wrote in a written response to submitted questions.
Riley said the City Council and the city’s top building official, Matt Keizer, “have already provided direction that the building must be stabilized, demolished, or a combination thereof.”
Does that mean city staff can authorize the demolition of the Palace without further review?
“Additional authorization is not required unless conditions change,” said Riley.
Local preservation advocates, however, question the city’s decision to abandon its demand for an updated structural analysis to serve as the basis for informed decisions.
Dennis Crean said an independent analysis of the Palace’s structural integrity after years of neglect under two ownerships is critical.
“That requirement was a smart decision and the same thing that other cities require from anyone wanting to demolish a historic building. That’s because the City Council and building officials will need that independent analysis, whether the owner applies for demolition or stabilization. Without structural analysis, how can anyone make informed decisions?” asked Crean.
An interested buyer who favors preserving the bulk of the 55,000-square-foot Palace building and reconstructing portions of crumbling brick walls in the original 1891 section said this week he still believes reconstruction of the Palace would be cheaper than demolition, clearing the site and preparing it for new development.
Tom Carter, a noted North Coast contractor who oversaw the restoration of the Tallman Hotel and Blue Wing Saloon in neighboring Lake County, among other projects, said owner Ishwar recently allowed him to take a team of engineers and contractors inside the Palace to assess its current state.
“It is undoubtedly in rough shape, especially after the last two years, but I still believe it can be salvaged and turned into a viable commercial complex,” said Carter.
He conceded that whether adequate private financing can be obtained is another matter.
Carter said potential restoration costs have soared since a Northern California structural engineering firm produced detailed plans in 2018 to stabilize the building and retrofit it to meet current seismic standards. The plans were quietly accepted and approved by city officials but left to languish and expire after Ishwar bought the Palace Hotel and property a year later.
“It can still be done, but the costs of materials have surged. Historic preservation grants and tax credits at the state and federal level will be necessary to make it financially feasible,” said Carter.
Even if fresh financing is developed, it is unclear whether Ishwar would entertain a new purchase proposal over the pending Guidiville group plan.
In 2023, Ishwar quickly struck a deal with tribal representatives after the collapse of an escrow agreement with investor Minal Shankar, a newcomer to Ukiah with national experience in finance. Shankar hired Page & Turnbull, a leading historic preservation architectural design firm based in San Francisco, to prepare Palace restoration plans.
However, Ishwar was wooed by Guidiville promoters, including downtown restaurant owner Matt Talbert, who have promised to make him “whole” for his nearly $1 million investment in the Palace building and property.
Ishwar, Johnson, and Guidiville representatives, who include longtime tribal consultant Michael Derry in addition to Talbert, continue to rebuff questions about their plans, sharing ideas only with supportive community members who want to see the Palace gone and something new in its place.
Publicly, Guidiville, since last October, has maintained a wall of silence around its proposed project.
However, documents obtained from state agencies show that the tribe would be the majority shareholder in a new partnership with local investors, including three cannabis entrepreneurs, Talbert, and others, whom attorney Attila Panczel represents. The tribal connection provides the opportunity for low-interest loans beyond possibly securing public funding under a unique $250 million state financing program for tribes, nonprofits, and poor municipalities.
The documents disclosed the tribe’s attempt to secure $6.6 million in public money from the state Department of Toxic Substances Control to demolish the Palace under the guise of conducting studies for alleged ground contamination at the site.
Guidiville’s state grant application is still under review even though the North Coast Regional Water Quality Control Board, a state agency overseeing contamination studies, rejects the notion that the Palace has to be demolished for possible contamination studies to be done. Senior agency staff said documentation supporting the Guidiville demolition plan did not warrant the funding sought.
Guidiville and its proposed partners argue it is time to raze the Palace and clear the site for new development, including possibly a new boutique-style hotel, apartments, retail shops, a restaurant, and an event center. The proposed Guidiville project mimics what Shankar and Page & Turnbull envisioned earlier.
After months of community debate, Crean and other Palace restoration advocates say city staff “doesn’t seem to be advocating for the city’s interest.”
They cite past studies that show a rehabilitated historical hotel and surrounding retail complex could be an economic draw for a downtown facing severe business challenges, including the eventual relocation of the Mendocino County Courthouse, its centerpiece since the 1860s.
“Why would they agree to drop the city's clear requirement for structural analysis by Mr. Ishwar? Sure, it might cost him something to hire an engineer, but that’s not the city’s problem. With every demand the city makes, he seems to wriggle out of taking any responsibility for his neglect and pushing the city’s demands off into the future,” said Crean.
Crean wondered, “Why does the city keep drawing very reasonable lines in the sand and then let Mr. Ishwar walk right over them?”
Riley seems to be taking her cue from Jen Psaki.
But who is calling the shots?
The Palace hotel had failed at least twice since remodeling. What reasonable person thinks it will do better this time around? There is little interest in bars, restaurants are failing left and right, there is little or no parking, or foot traffic in the area. We already have more than enough dope shops. All point to failure. The space would make a great parking lot for the current business’s in the area.
Actually, it’s the perfect location for the new courthouse.
Not really. The best place for a court, sheriff, jail , and juvenile hall is the area off the end of Orchard Ave and Brush St. several acres there could make a single justice center with all free parking for employees and jurors.