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City Of Ukiah Grants Conditional Permit To Demolish Palace

The City of Ukiah City announced Thursday it has granted a conditional permit for demolition of the historic Palace Hotel after keeping a permit application secret for 10 days.

The decision triggered an immediate outcry from advocates locally and statewide for recycling the downtown landmark into a new commercial centerpiece.

“These sorts of statements and actions by the City Manager and Deputy City Manager are perfect examples of why we public members can’t trust their claims of transparency. Instead, it seems as if their aim is to prevent public participation and to act in secrecy,” said Dennis Crean of Ukiah.

The 133-year-old Palace’s fate has been the subject of a divisive community debate for months. Secrecy has enshrouded plans of the current owner, Jitu Ishwar, and those of the proposed new buyers who include the Guidiville Rancheria, a group of investors including the owner a Bay Area construction company who has secured the permit to tear down the building, and downtown restaurant owner Matt Talbert, who is listed in a demolition plan document as “Program Manager.”

No one connected to the planned demolition project responded to requests for comment on the Palace’s planned demolition, including Ishwar, his attorney Steve Johnson of the law firm Mannon, King, Johnson and Wipf, Talbert or Ron Batiste, the owner of the Eagle Environmental Construction & Development Co. of Emeryville.

Unknown is whether Ishwar is still in escrow with the Guidiville tribe, which lost a bid earlier this year to secure $6.6 million in special state funding to demolish the Palace under the guise of conducting possible ground contamination studies. In contrast, the Emeryville firm is estimating demolition costs now at a fraction of that: $500,000.

Whether Ishwar’s Twin Investments LLC remains owner of the Palace site, or in partnership with others, the planned destruction of the 55,000 square-foot mostly brick structure will be a significant loss, according to nationally known preservation advocates.

“I am shocked and saddened to see that a conditional demolition permit has been issued for the Palace Hotel,” said Carolyn Kiernat, a principal in the noted architectural preservation firm of Page & Turnbull in San Francisco.

In 2023 Kiernat and a technical team prepared a Palace restoration plan for Ukiah investor Minal Shankar but owner Jitu Ishwar scuttled that deal in favor of another with the Guidiville Rancheria and a group of investors that purported to make him “whole” for his 2019 investment.

Kiernat called it a “short-sighted approach to a historic building that could have been a catalyst for economic development in downtown.”

Local Palace advocates ripped city staff for keeping the application for demolition secret for 10 days after it was submitted by representatives of Ishwar.

“The city staff has clearly been hiding behind partial truths if not intentional obfuscation,” said Dennis Crean, a member of a Ukiah group challenging possible demolition. Plans to raze the Palace were first uncovered during a review of documents submitted last October by the Guidiville tribe in support of securing $6.6 million in special state funding.

Crean lambasted the city’s stalling over the 10 days in disclosing Ishwar’s intent.

“While working to approve a permit behind closed doors, they claimed they were simply preparing the owner’s permit application to share with the public and City Council. All the while they couldn’t even acknowledge the simple fact that a demolition permit application was received,” charged Crean.

The city’s decision is certain to prolong a divisive community controversy and it could spark potentially costly and lengthy litigation.

Demolition could happen within weeks although further submittals are required.

In the city’s Thursday announcement Deputy City Manager Shannon Riley said once a contractor is hired to do the work, a site plan, demolition schedule, encroachment permit, and traffic/street closure plan must be reviewed and approved before work can begin.

However, no further approvals from the City Council or other senior staff at City Hall are required under what Riley labels a “ministerial process.”

It is a path city administrators including Riley and City Manager Sage Sangiacomo chose to take because they see the Palace issue simply as a “matter of public health and safety on private property.”

The “private property mantra” has been embraced by City Hall to avoid dealing head on with how a structure that is listed on the National Register of Historic Places has been allowed to so seriously deteroriate over the last three decades under two ownerships, including Ishwar, a former president of the Greater Ukiah Chamber of Commerce.

For now the Palace’s planned demolition solely rests with Chief Building Official Matt Keizer.

Last November Sangiacomo convinced the City Council to declare the Palace an “imminent hazard to people and property” in the surrounding area based on findings of city building and fire inspectors, but not on opinions of professional engineers, architects, or contractors who believe the landmark can be recycled into new uses including a boutique hotel and bar/restaurant.

In Thursday’s announcement Riley defended the city’s demolition permit approval, contending that it “cannot force a private property owner to take on a project that is economically infeasible.”

Riley said any new development will need to “comply with the downtown zoning code.”

“As part of that pre-development process, there will be opportunities for public input,” said Riley.

Riley concluded by declaring that “while this outcome may disappoint some, it is also an important first step to getting a vibrant, safe, anchor building in Ukiah’s historic downtown.”

Kiernat of Page & Turnbull was not reassured.

Kiernat listed in writing what she called the “saddest part of this saga.”

  • The City of Ukiah does not have a preservation ordinance like many California cities “so there is nothing to prevent this from happening again in the future.”
  • A structural assessment by a licensed structural engineer was not required by the city to prove that demolition was the only viable recourse.
  • The city of Ukiah self-nominated to become a “Preserve America City” under the Advisory Council for Historic Preservation’s national preservation program.
  • There were willing buyers who showed they were interested in and able to make a significant financial investment that would have revitalized this property.


  1. Ralph May 24, 2024

    Saying the unspoken part out loud, Ukiah has become such a $hithole that no rational business reason exists to make the very substantial investment required to bring this back. If the property was in healdsburg it would have been done 15 years ago. The failure of the community to repair and keep this landmark is a failure of the whole community more than a failure of the owners, supes, and other interested parties. Ukiah needs to step up and clean up as a community if they want to have “nice things”.

    • Ron43 May 24, 2024

      Dear Ralph Ukiah is not now nor ever been a S hole. I lived here for over 80 years and I have seen its ups and downs over the years. One problem is our city managers, the last decent one was Lyle Cash. Wonderful man. He was so skilled at attracting business and services to the city. I hope Ukiah can rise up again. At least we have people Doug Crane. I’m hoping the city will fire the present upper management and get a fresh start. The Palace is a separate issue. The lack of business downtown coupled with the lack of parking destroyed its ability to succeed. Now the county wants to build the new courthouse in the worst place possible, Leslie St., on Bosco’s property. Then add in the vacant post office, railroad depot, and empty strore fronts. We need real management.

    • Ron43 May 24, 2024

      Regarding the Palace. I forgot to add the following. It failed because. People are not drinking as much as they used to,. The Seven Eleven,, E and B Club, and several other bars are gone. The state hospital closed, Masonite closed, the mills shut down ( we had ten close to town), several small businesses left, like Car electronics, industrial pipe on Orr Springs rd, machine shops closed, we have no decent middle income homes for doctors, nurses, and other professionals, only one hospital, no city wide, reasonable priced, fiber optic internet for work at home folks, but then there are no homes for them anywhere near town. And the list goes on and on. But I’ll stop here. I still love my little Ukiah.

      • Lazarus May 24, 2024

        All true. But you did not mention the collapse of the marijuana business. Like it or not, it fueled this county’s economy when all the above went or were going south…
        And if I were to place blame, it would be squarely on the past and present Board of Supervisors. And the State also should share some major blame. In hindsight, legalization was a huge mistake for Mendocino County.
        Thank you,

        • Ron43 May 24, 2024

          Yep the city and county thought that marijuana tax would save the county. And it turned out to be a bust. But when you depend on dope to save you, you are the dope.

          • Mark Scaramella May 24, 2024

            The “marijuana tax” was NOT a bust. According to the County’s last tally, the revenue generated from the “marijuana tax” was well over $20 million — and counting. According to the advisory measure which accompanied the pot tax measure half of the pot tax proceeds were supposed to go to “roads, mental health, emergency services and enforcement.” Not only was there never even a hint of an attempt to account for that revenue, but there were no allocations made to any of those named purposes. By our calculation at least one quarter of one half of the $20 million plus should have gone to Mendo’s chronically underfunded VOLUNTEER ambulance services. But when Supervisor Haschak briefly raised the question a couple of years ago, Supervisor Gjerde just shrugged his do-nothing shoulders and said that since the County already spends money on roads, mental health, emergency services, and enforcement, why not just ignore the advisory measure which was used to sell the marijuana tax to the public? Immediately, all four of Gjerde’s brain-dead colleagues, including Haschak, agreed and the subject has never come up since. So not only did pot growers who wasted millions of dollars applying for the nearly impossible-to-get permits, but that money was wasted for years as County administration continued to pretend that the permit program could be fixed as upwards of a dozen different managers and organizaional structures flailed away at a program which should have been handled with use permits from the outset requiring no special program at all. So the “tax” was not a bust. The bust was the County’s mishandling of it and its failure to allocate the proceeds to the purposes the voters approved.

            • John Sakowicz May 24, 2024

              County money seems to go to county employees — payroll and pensions, starting with our highly overpaid CEO.

  2. Houndman May 24, 2024

    A permit issued through Ukiah Planning and Building is either ministerial or discretionary (conditional) it cannot be both.

  3. The Shadow May 24, 2024

    Sadly, the City Manager’s office is more interested in seeing the issue go away after 20+ years of neglect by city officials. Receivership was always an option, but that’s just too hard and takes too long. Of course if the city had done it 20 years ago, it would probably be the jewel of downtown again. Our wise City leaders think the easiest thing to do is demolish it. What an apt description of what has happened to Ukiah. “We had to destroy the village in order to save it.”

  4. Big Jim May 25, 2024

    Mr. Ishwar’s own greed is what placed him in his current predicament. He abandoned a workable plan in favor of a pie-in-the-sky scheme that relied on securing a $6.6 million grant, based on false premises. But the state saw the scheme for what it was. Now it appears that the City leaders have assumed some sort of responsibility to prevent Ishwar from taking a loss on his speculative investment. Ishwar has a right to make speculative investments, but he is not guaranteed that those investments will be profitable.

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