Some residents of the Hotel Petaluma and business tenants below it are nervous about their future after discovering this week that the property's owner has defaulted on his loan and is being sued by his lender.
Marin developer Robert Miller bought the historic downtown hotel, at the corner of Washington and Kentucky streets, for $6.1 million in November 2007.
As of Jan. 1, the hotel had an assessed value of just under $5 million, according to county property records. It was unclear how much Miller owes on the property.
Miller could not be reached for comment Thursday.
Miller has purchased and restored several historic buildings in Northern California, including a handful in Petaluma. In 2003, he won a preservation award from Heritage Homes of Petaluma for his work on the old school administration building on Fifth and B streets. He also renovated a 15,000-square-foot 1920 auto and retail building along Petaluma Boulevard North.
Public records available Thursday gave no indication any of the other properties were in financial trouble.
While the extent of Miller's financial problems are unclear, he is not the only Sonoma County real estate developer to have been hit hard by the economic downturn and depressed real estate values.
Sonoma County developer Orrin Thiessen filed bankruptcy July 15 after falling behind on multiple mortgages. Real estate investor Clem Carinalli and developers Wendell “Del” Nordby and Richard Dowd also have sought bankruptcy protection.
Miller's Hotel Petaluma is home to about 100 residents in its one-bedroom, no-kitchen units, whose rents range from $550 to $750 a month.
Below the hotel is 14,000 square feet of ground-level retail shops. The businesses, including a pub, a nail salon, tattoo parlor, and a record and vitamin shop, overlook one of the busiest corners in Petaluma.
According to court documents and notices given to residents this week, Miller defaulted on his Hotel Petaluma mortgage with Union Bank in Marin County. The bank filed suit against Miller in February in Marin County Superior Court.