A former Glen Ellen bed-and-breakfast inn that was seized by the County of Sonoma two years ago has been transformed into a boutique hotel with its own executive chef preparing two-course gourmet breakfasts and complimentary afternoon desserts.

The old Glenelly Inn property reopened before Labor Day weekend as the Olea Hotel following a $1 million renovation over spring and summer.

"We literally gutted the entire two buildings to the studs," said Sia Patel, who owns the hotel with her husband Ashish. The renovation costs don't include the $1.365 million the couple paid for the property in June 2011.

The inn has been used for lodging since the early 1900s under various names, Patel said. While the buildings were in "terrible shape" at the time of purchase, the couple saw the property's potential, in part because the rural Sonoma Valley has relatively few lodging units.

"For us it's a great opportunity to take advantage of the lack of accommodations," she said.

The inn marks the latest expansion by the county's $1.4 billion tourism industry, considered one of the stronger segments of the local economy. Each year the county attracts 7 million visitors for wine tastings and agritourism, cycling and weddings, as well as a chance to simply visit Wine Country and the Sonoma Coast.

In November 2010, county officials took the unprecedented step of seizing the Glenelly Inn to recoup nearly $400,000 in unpaid bed taxes and $60,000 in property taxes. County officials listed the property for sale in order to recoup the taxes and other outstanding debts related to the business.

The Patels, who both grew up in the Bay Area, got into the lodging business in 2007 when they purchased Shoreline Cottages, an 11-room establishment between Fort Bragg and Mendocino.

They spent two years looking around California for their second lodging business before buying the inn property on Warm Springs Road.

The hotel's rates vary, depending upon season and room size, from $160 to $375 a night. That puts them well above the Sonoma County average of slightly more than $100 a night.

The couple plans to open two additional suites next year.

The Olea's executive chef, Khambay Khamsyvoravong, who is also a trained pastry chef, each day prepares what Patel described as a "very high-end" breakfast that typically involves a first course of seasonal fruit, followed by a savory entree. As well, guests are treated each afternoon to a dessert paired with a wine and on Fridays appetizers with wine poured by local wineries.

The Olea is being marketed on the Sonoma Valley Visitors Bureau site. Patel said they also have plans to have the hotel added on such travel sites as Expedia.

The couple lives in a rental house near the hotel with their infant son, Dylan. They both also have day jobs, working remotely in marketing for tech companies.

"I guess we're just crazy enough to take on the challenge," Patel said of owning the new hotel. Even so, she said, the couple is "very happy with the result."