Petaluma Sheraton hotel for sale

After operating under the same ownership group for more than a decade, Petaluma’s largest hotel is up for sale.

Owners of the 184-room Sheraton Sonoma County-Petaluma are looking for a possible buyer, following a $3 million upgrade that wrapped up in 2015, said Tom Birdsall, co-owner and representative of a broader investor group.

Birdsall and other investors have been the primary owners of the Sheraton since it opened, and took over management one year later.

“We’re looking to find a buyer out there that makes sense to sell to,” Birdsall said. “We’ve held the hotel for a long time.”

Opened in 2002 at a reported cost of $33 million, the Petaluma Sheraton is among the most recognizable sights at the southern gateway to Petaluma. The hotel includes 15,000 square feet of meeting space, and joins adjacent office buildings in a nautically themed development area around the Petaluma Marina.

The hotel currently has an average occupancy rate of more than 80 percent, Birdsall said, compared to the latest numbers from Sonoma County Tourism showing a county-wide average of 76 percent in 2015.

As Sonoma County’s southernmost hotel and conference center located along the Highway 101 Corridor, the Sheraton is notable for its proximity to corporate clientele from companies in San Francisco and Marin County, said Ben Stone, executive director of the Sonoma County Economic Development Board. The hotel has also been buoyed by tourist traffic to the region.

“It’s a good time to sell, because the economy is so good. Money is cheap. Tourism is good,” said Stone, who described the tenure of the current investors as one of the longest runs of consistent hotel ownership in the county.

Birdsall said the investors were not in a rush to find a buyer, but that the renovation prompted the group to gauge interest in a possible sale. The group began looking for a possible buyer earlier this year.

“We went through an extensive renovation of the hotel, so we’re looking to see if there’s someone out there to sell to at this point,” he said.

The Sheraton’s profile also increased following the consolidation of the brand’s previous rewards program with Marriott International in April, which added 50 million people to a roll of 20 million eligible to redeem points for hotel stays in Petaluma. Even prior to the merger, as many as one third of the Sheraton’s summer guests would stay using points, Birdsall said.

The hotel has more than 80 employees, and almost all are expected to retain their jobs under new ownership, he said. Most employees of the Petaluma Sheraton are union workers represented by Unite Here Local 2850.

“We’re a big employer. Many people have been with us for 10, 15 years. They are really essential to the success of this hotel,” said Birdsall, who also owns other hotels that include a Hampton Inn and Suites in Windsor.

Sheraton employees voted to join Unite Here in 2006, and were the first hotel workers to unionize in Sonoma County, said Wei-Ling Huber, president of the local chapter. The union also represents workers at the Graton casino, including those that will staff its forthcoming hotel, and will represent workers of a hotel under construction in Sonoma.

Huber praised the news that Birdsall expected employees to continue under a new owner, but said that, unlike at other hotels in the Bay Area, no formal agreement exists for the Sheraton’s employees to transition.

“We’d love to see that in writing,” she said.

The Sheraton is managed day-to-day by Interstate Hotels & Resorts, which runs hotels in several countries and across the United States, Birdsall notes. The hotel would likely continue to operate seamlessly under new owners.

“The hotel will stay open and operating no matter what,” he said.

(Contact Eric Gneckow at eric.gneckow@arguscourier.com. On Twitter @Eric_Reports.)