The new owner of the historic Hotel Petaluma has begun a major update of the only single-room occupancy housing in Sonoma County.

Terry Andrews of Marin County bought the five-story 1923 building in October in a foreclosure sale after former owner Robert Miller, also of Marin County, defaulted on his loan.

Formerly a hotel, the building has long been an apartment complex where residents rent small rooms without kitchens. Some share bathrooms. Although not an official low-income housing complex, many of the tenants have been of lesser means.

The property, worth just under $5 million, according to county property records, also includes several ground-floor businesses along Washington and Kentucky streets, including TAPS brew pub.

In late October, Andrews notified the 104 tenants of rent increases averaging about $40 that took effect this month, worrying some about what his plans for the building might be. Rents at the hotel will range from $675 to $795 per month.

Some residents complained to the city and others sought help from a local social services group that assists in landlord-tenant disputes. But after the initial uproar subsided, Andrews assured them he has no plans to convert the building to any new uses.

"No, we're not throwing people out," he said this week. "We're doing massive amounts of work to the place."

Bonne Gaebler, the city's housing administrator, said rents used to be in the $200 range, providing an affordable, private option to government-subsidized or rent-controlled housing.

"But that's not the case any longer," she said. "When real estate values went up, their prices went up. It's a private-sector issue that works itself out."

Nonetheless, Petaluma People Services Center, a nonprofit human services group that contracts with the city, intervened.

Some tenants were upset, thinking that Andrews was going to turn the hotel into something else, said Executive Director Elece Hempel. Others had the impression their low rents were protected.

"About every four or five years something comes up at the hotel. People don't like change," she said. "People think with fair housing (laws) that a landlord can't do what they want to with their property, but they really can."

The hotel, formerly a flophouse for transients and sometimes troublemakers, hadn't seen many upgrades in recent years. Even some residents were leery of their neighbors.

Andrews aims to change all that with a significant investment.

Rents were as low as $575 for some rooms in recent years "because there was no management," Andrews said, a situation that invited drug dealers and other unsavory elements. "We just shut them down and introduced them to the front door."

He made the building entirely nonsmoking, which he said drew more outrage than the rent increases.

Next, he installed 16 cameras in the hallways, with 12 more to come, including in the elevator.

All the brass fittings and door handles were polished to a shine. All the clawfoot tubs will be resurfaced.

Soon, Andrews has plans to install ornate wood-and-glass double entry doors. Inside the two-story foyer, someone had blocked off the second level with plywood, marring what originally was a dramatic entryway.

Andrews removed the plywood and placed a lighted Christmas tree in the second-story spot. After the holidays, a large spray of flowers will greet residents and visitors.

He also removed two vending machines -- "all they had was sugary things" -- and will replace them with fresh-food options.

Residents also for the first time will have high-speed Internet and high-definition cable-TV hookups in every room. A computer with Skype capabilities will be installed in the library, allowing residents to make free telephone calls anywhere in the world.

An ambitious plan calls for a rooftop garden above one wing of the C-shaped building and a glass-ceilinged roof above TAPS that can open in nice weather. The city's historic preservation committee would have to approve those changes.

Andrews said he is committed to long-term improvements to the building, where he stays occasionally.

"We buy buildings," he said. "We don't sell buildings."

You can reach Staff Writer Lori A. Carter at 762-7297 or lori.carter@pressdemocrat.com.