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San Mateo hotelier B.B. Patel purchased the 117-year-old former silk mill on Lakeville Street in July of last year and is proposing to transform the empty brick building into a hotel and restaurant.

Patel purchased the property for an undisclosed price from the Petaluma Preservation Group, whose investors planned to build condominiums in the two-story building.

However, after the city ruled in 2007 that the condo project could not be approved before the adoption of the 2025 General Plan, the group declared the project dead and put the building on the market.

Patel, who operates eight Best Western hotels in California and is working to open more in India, was one of the condo project?s original investors, said Skip Sommer, a local Realtor and historian who was a principal in the Petaluma Preservation Group.

?B.B. was one of our partners, and he bought everyone else out, including me,? Sommer said.

Patel referred questions to his architect, Tom Jess, who said a formal development application hasn?t been filed with the city. But he?s toured the silk mill and is now in the process of designing how 70 hotel rooms and a restaurant will fit in the building.

Another 30 rooms would be located in a new building on the property, which would be built in a second phase, Jess said.

?It?s a historical structure, so we want to minimize the alterations to it,? he said. In preliminary discussions, ?We?ve gotten nothing but good feedback from people so far.?

If the project moves forward, it could require a General Plan change for the property from high-density residential to hotel use. After the building?s last tenant, Sunset Line & Twine, closed its doors in 2006, the city agreed to change the building?s designation from industrial to residential in the new General Plan.

But water-supply and greenhouse gas studies needed as part of the General Plan process delayed the document?s final adoption until 2008, a few months after the condo investors pleaded with the city to allow their project to move forward.

Most large developments in the planning pipeline had been put on hold because the city said it couldn?t certify their projected water use until after the General Plan and its water policies were adopted.

The silk mill?s investors presented information showing that the project?s water use would be below the allowed threshold, but the 2007 City Council said it could not legally make an exception for one project.

The property, listed on the National Register of Historic Places, was put on the market the next year with an asking price of $6.25 million.

Sommer said he hopes Patel?s hotel project moves forward, noting that many in the community want to see the building restored.

?I think B.B. has a wonderful plan,? Sommer said. With a future commuter train stop just up the street at the restored railroad depot, ?it would create a grand entrance to Petaluma.?

The silk mill is one of several high-profile vacant buildings in town, but is currently the only one with a proposed new tenant.

The former Couches Etc. building on Kentucky Street, once a Carither?s department store, is still attracting attention from potential tenants despite being vacant for nearly a year, owner Mark Thomas said.

New concepts for the 1930s-era building have included putting retail shops below offices upstairs, but Thomas said he?d rather lease or sell the building then try to redevelop it.

The Shoe Pavilion store at the Redwood Gateway Center closed last year and in April, the Home Depot Yardbirds location on Lakeville Highway will close.

The former Mervyns department store at the Washington Square shopping center is also without a replacement tenant since the company declared bankruptcy at the end of last year.

The 62,000-square-foot build-ing is managed by the Macer-ich Company, which controls other former Mervyns sites that have since become Forever 21 stores.

No tenant has been signed for Petaluma.

?We have been working with interested retailers to recycle that department store space,? Macerich spokeswoman Anita Walker said.

(Contact Corey Young at corey.young@arguscourier.com)