Silk mill hotel could net city $334K

<p>Transformation of the shuttered brick-and-ivy silk mill into a hotel and restaurant could bring more than $334,000 into city coffers each year, a new report says.</p><!-- Nothing to do. The paragraph has already been output --><p>Plans by a Bay Area hotel developer to build a 100-room hotel on the silk mill property — with 70 rooms and a restaurant within the existing historic structure — were announced earlier this year.</p><p>When the hotel is fully built, it could bring $334,271 to the city budget annually, mostly through the transient occupancy tax, or bed tax, charged on the rental of hotel rooms, the report said.</p><p>The Fiscal and Economic Impact Assessment for the project also suggests Petaluma is lagging behind other Sonoma County communities when it comes to providing overnight accommodations for visitors.</p><p>The city collected $265 per resident from hotel stays in 2007, compared with the countywide average of $447 per person, according to the report prepared by consulting firm Bay Area Economics.</p><p>The fiscal report, to be reviewed by the City Council Aug. 24, is required of large projects proposed in the city under a policy adopted last year.</p><p>The silk mill proposal by hotelier B.B. Patel calls for a 2,100-square-foot restaurant inside the hotel, along with small meeting spaces and an on-site fitness center.</p><p>A second phase of the project would construct an additional 30 rooms in a new building on the property. The hotel would be marketed to tourists and business travelers, according to the report.</p><p>“To take advantage of the property’s unique architectural features, demolition and modifications of the silk mill will be minimized, and the design will expose as much of the historic qualities of the existing building as possible,” the report noted.</p><p>The building at Jefferson and Lakeville streets is on the National Register of Historic Places. It was built for a silk company in 1892 and later housed Sunset Line and Twine from the 1940s until 2006.</p><p>Recently, a group of preservationists and investors sought to transform the silk mill into residential condos, but the group said the plan fell apart due to city delays in adopting a new General Plan.</p><p>Patel, who owns eight hotels in California and is planning to build additional properties in India, was one of those investors, and he purchased the property when it came up for sale.</p><p>His architect, Thom Jess, called the fiscal report “a pretty fair evaluation of the benefits this project’s going to bring,” adding that the proposal would create jobs while preserving a historic building. Patel previously redeveloped an historic 1910 building in Berkeley into a hotel that opened this year, Jess said.</p><p>The hotel and restaurant would employ 32 to 39 workers, with about 70 percent of them in full-time positions, the report said.</p><p>However, the owners of the 15-room Metro Hotel in downtown Petaluma have expressed concern about the proposal’s impact on their business, the report noted. If that hotel closes, the two proprietors and one employee would be out of work, the owners told the consultant.</p><p>Patel would pay $2.1 million in impact fees to the city, and because the property is located in Petaluma’s redevelopment area, about $29,000 a year in property taxes would be paid into the redevelopment fund.</p><p>The silk mill FEIA is available on the city’s Web site at cityofpetaluma.net/cdd.</p><p>(Contact Corey Young at corey.young@arguscourier.com)</p>