Tom Carter, a longtime North Coast contractor with experience in turning old buildings into new uses, said Wednesday he has secured title to the Palace Hotel, the historic downtown Ukiah landmark.
Carter bought Twin Investments LLC, a privately held company that owns the decrepit Palace and the downtown property from owner Jitu Ishwar. The transaction, which avoided the escrow process, includes a pending demolition permit issued by the City of Ukiah, according to Carter.
Carter said he has already approached city building officials about how to proceed to abate public safety issues that hang over the brick building which covers 66,000 square feet. A year ago, city officials declared the Palace a public safety issue, and ordered scaffolding placed around sections fronting public streets.
“The intent is to move quickly to eliminate the public safety concerns and began cleanup and stabilization of brick walls on the interior. Patching the existing roof to prevent further water damage this winter is also a top priority,” said Carter.
Deputy City Manager Shannon Riley said Wednesday, “We were just made aware of this possible transaction yesterday afternoon, but we have no specifics or verification at this time.”
Carter did contact city building officials Wednesday morning, according to Riley, and told them of his intent to stabilize the historic building.
“However, this was our first communication with him, and no plans or details have been submitted,” said Riley.
Local historic preservationists Wednesday praised the sale to Carter, and his intent to preserve the Palace.
“It’s about time that the Palace Hotel is in the hands of somebody with Tom Carter’s know-how and his sincere commitment to protecting Ukiah’s prominent landmark,” said Dennis Crean.
Crean cited Carter’s professional record, including being the contractor on the renovation of the historic Tallman Hotel in neighboring Lake County. He praised Carter’s plans to shore up the Palace and make immediate roof repairs to prevent any further interior water damage.
“City officials should be grateful for this turn of events and support Mr. Carter and allow him to get to work,” said Crean.
Carter is a veteran contractor who has left his mark on historic building projects in neighboring Lake County, and the Bay Area. Carter helped transform and make additions to the acclaimed Tallman House and Blue Wing Saloon in Upper Lake. His company also oversaw the retrofit of the brick Loren Train Depot on the border of Oakland/Berkeley into new administrative offices for Children’s Hospital. Carter has overseen renovations of Victorian homes throughout the Bay Area.
Carter said Wednesday that his priority is stabilizing the Palace, a building that he has personally inspected in recent years and believes can still be renovated into new uses. The original portion of the Palace at State and Smith streets was erected in 1891. Later additions were added in the 1920s, including an underground garage for the growing number of travelers along Highway 101 which then ran through the center of town.
The Palace is listed on the National Register of Historic Places. It is an iconic structure that is enshrined in local memories and enjoyed a brief revival 50 years ago when Pat Kuleto, then a local contractor, did cosmetic rehabilitation. Kuleto went on to achieve fame as a leading restauranteur and designer in San Francisco and the Napa Valley. By the 1980s, however, the Palace was falling into disrepair, and eventually shuttered. It has become the town’s most visible eyesore as developers, city officials and concerned citizens argued for four decades about its fate.
In 2019 Ishwar acquired the Palace from a court receivership for about $972,000, but he never made any improvements or took action to prevent further deterioration.
In the summer of 2023, Ishwar walked away from a proposal by new local investor Minal Shankar to transform the Palace into a restored boutique hotel/restaurant/bar and shopping complex. Shankar had hired the noted architectural preservation firm Page & Turnbull in San Francisco to prepare preliminary plans for restoration of the Palace.
On the sidelines, however, a group of local investors led by restaurateur Matt Talbert wooed Ishwar. They had enlisted the local Guidiville Rancheria tribe to be partners in a plan to demolish the Palace and reconstruct a rebuilt version on the site.
Ishwar scuttled his deal with Shankar after the Guidiville tribe assured him that they would make him “whole” for his investment in the Palace and property.
Ishwar quickly announced a sale to the Guidiville group, but the plan was contingent on the tribe securing a special $6 million state grant to tear down the Palace under the guise of conducting ground/water contamination studies and cleanup. The state grant program, aimed at helping poor tribes and public agencies, faltered when a state agency assigned oversight of the proposed Palace project declared demolition unnecessary. That was followed by a top state agency administrator involved in the decision-making raising concerns about the tribe being used as a “mule” for local investors.
The Guidiville collapse put Ishwar back to square one.
Earlier this year Carter actively urged city officials not to authorize demolition of the Palace despite its decaying condition, and the mounting public safety concerns.
The Palace’s fate has been in limbo for months, while Carter quietly worked in the background with Ishwar and his attorney Stephen Johnson to secure title.
“It was decided the most direct way for me to acquire the Palace was to buy Twin Investments LLC from Ishwar because that is the entity that owns the building and property,” said Carter.
On Wednesday Carter declined to specify the sale price but acknowledged it was in the range of the $1 million price the Guidiville group had agreed to pay.
Now that he has secured title, Carter said he is eager to stabilize the Place’s interior walls, clean up the debris and structural damage that has occurred in recent years, and make temporary repairs to the roof to prevent storm water from further ravaging the building.
“A family-owned contracting company is ready to move ahead on that end. Once we get the building stabilized, we can secure investors to transform the structure into a hotel/restaurant complex supported by surrounding retail shops,” said Carter.
Carter said he intends to engage with local investors and business interests to secure the Palace’s long-term future. Carter said his family has set up a special email contact so local people who care about the Palace can share their thoughts: thepalacehotel2024@gmail.com.
“It will not work unless the Palace is the focus of community interest. There is no quick buck to be made here. It is going to require long-term investments,” said Carter.
The hotel looks huge in the photo accompanying this article. Surely it is too big for the smallness of the town (just sayin’) even in the summer! Was built when the future looked rosy, I reckon. That fire escape halfway down toward the back should be the end of the bldg.
I watched the Palace Hotel go down hill starting with the loss of the first Black Bart Room. If the hotel is revived there is still little interest in business locating in the center of town. Who is going to stay there and what will they do for entertainment and tourism? There is little parking during the day. With the court house moving there will be even less interest. I hate to say it but the Palace property would make a great parking lot for all the downtown businesses. Maybe a really nice steak house and parking?