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Historic Silk Mill Looking for New Buyer

The Petaluma city council approved a hotel at the site in 2008, but redevelopment has lagged because of the economy.

The historic Silk Mill on Lakeville Street, which has sat vacant since 2006, is again on the market, four years after it was purchased by a Bay Area hotelier, but not developed.

Whitney Strotz, a managing partner at Cassidy Turley, which is handling the sale, says the company has already received calls of interest from wineries and food and beverage retailers, although the 37,000 square foot site could also become a multi-family housing development, retail center or a hotel.

Click here to see detailed site plans and photos of the Silk Mill

“We’ve had preliminary conversations with city and they are interested in increasing both jobs and housing in Petaluma,” Strotz said. “We’re trying to find someone who can come up with a project that makes business sense and that will preserve the façade of the building. The feedback we’ve gotten so far has been extremely encouraging.”

The former mill was built in 1892 and is on both the National Register of Historic Places and the California Register of Historic Places. The two-story brick building, done in the Georgian Colonial style, was used for silk processing and later to manufacture fishing line, silk parachutes and parachute cords for space flights, including the historic Apollo mission.

But when its last tenant, Sunset Line & Twine moved in 2006, the building was shuttered and became a magnet for the homeless who would occasionally break in to escape the cold and teenagers who vandalized the exterior. Soon after it was acquired by the Petaluma Preservation Group, a group of local investors, lead by realtor Ralph “Skip” Sommer, with a plan to convert the site into condominiums.

But the city required water-supply studies as part of the 2025 General Plan, delaying the project. Eventually the condo project fell apart, with investors reportedly collectively losing more than $1 million. (None have gone on the record because they all signed confidentiality agreements during the sale.)

In 2008, BPR Properties purchased the building for an undisclosed sum and said it would turn the former factory into a 95-room high-end hotel with an adjoining restaurant. The city council even went so far as to change land use designation from high-density to residential in 2009 in hopes of spurring redevelopment of the historic site just one block from the future SMART train station.

But BPR, led by Bay Area hotelier Bhupendra "B.B." Patel who redeveloped Berkeley's Hotel Shattuck and is behind Burlingame's Crowne Plaza Hotel, sat on the project, citing weak economic conditions and lack of available financing. The company did not return repeated calls for comment.

If the site is sold, the former silk mill—the first west of the Mississippi—may finally get the attention it deserves.

“I hope that we find a suitable buyer for it because the project (hotel) that was presented to us and the council approved was very exciting and would have offered a lot to the community,” said Petaluma Mayor Dave Glass. “It’s a project that already has a had a economic analysis done and would be ready to go…The transient occupancy taxes could really help us out.”

How would you like to see the Silk Mill redeveloped?

Jay November 25, 2012 at 10:22 PM
Marin Headlands Hostel above Sausalito (formerly Fort Barry) is the perfect prototype. That place is usually packed to the brim, travellers from all over the world, especially groups from Europe and Asia. At $26 per head in the dorms, its actually usually sold-out; a very profitable operation... Sonoma county would be their next stop, if only a great similar affordable option would be available. The City of Petaluma could even be part-owner (well, maybe) to be expediting the paperwork and process...
Karina Ioffee November 26, 2012 at 02:51 AM
Interesting idea, Jay, but whoever purchases the property will need to invest millions of dollars (at least $5 million, is one estimate I've heard) to gut the inside of the mill and put in running water, etc. since there are not bathrooms. All in all, a considerable undertaking, especially for a city that is has lost so much revenue from its general fund over the past 6 years.
Jay November 29, 2012 at 12:00 AM
Hi Karina, if renovation for a hotel is $5M (plumbing etc for 100 rooms) then figure $2M for a hostel. Just two large shower rooms on each floor, dorms, kitchen; it doesn't need to be high-end. In San Francisco about a dozen hostels are booked summers. Those folks google search for similar, and there isn't any up north; Petaluma would be a next stop ... Say 200 dorm beds sold-out for 5 months, covers the mortgage.
Alexandria Killinger May 22, 2014 at 03:44 PM
I personally would hate to see this building become condos or a hotel or restaurant. Where the building is located is very close to all of these things that are already numerous in the area. What I would love to see it become is a place for the community of Petaluma, a school for young children, community center. Something to give back to the community not the economy.
Frank Graham June 02, 2014 at 02:50 PM
I want it. Give me some time to earn the money. I've called it for years

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