Historic Empire Building could become boutique hotel

The historic Empire Building in downtown Santa Rosa is being sold to a developer who plans to turn it into a boutique hotel.

Hugh Futrell, who transformed the long-vacant former AT&T building downtown into the new home of Luther Burbank Savings, says he expects to complete the purchase of the iconic four-story edifice July 15.

He did not disclose the purchase price, but it’s below the most recent $2.6 million list price, said broker Paul Schwartz.

“I think Hugh is frankly the perfect buyer,” Schwartz said. “I’m very hopeful that he will be able to go forward with the hotel construction. I think it would be very exciting for downtown.”

The sale and successful renovation of the beloved clock-topped building would be a sign that the city’s $9.2 million effort to reunify the two halves of Old Courthouse Square may be starting to deliver on its promise of sparking the revitalization of downtown Santa Rosa.

The high-profile public works project, which has been under construction for two months, removed towering redwood trees that obscured views of the building’s unique architecture, and will soon install side streets around a new central plaza suitable for special events like concerts and farmers markets.

The project, which has been discussed locally for nearly 30 years, is scheduled to be completed by Thanksgiving.

The 20,600-square-foot building at 37 Old Courthouse Square has been on the market for nearly two years. Futrell said he became interested after seeing several potential buyers pass on the purchase for one reason or another.

He’s had the building in escrow for a few months and recently completed the detailed analysis necessary to close the deal, he said.

“It seemed obvious to us that it was an important building for the future of the downtown core,” Futrell said.

Built in 1908, two years after an earthquake that leveled many downtown buildings, the stately building has been a bank and a college, and for most its recent history housed the law firm of Geary, Shea, O’Donnell, Grattan & Mitchell.

The firm moved out in 2016, but some of the lawyers continue to own the building through a partnership, Empire Building Associates. It will need an extensive, multimillion dollar interior renovation, but the exterior of the landmark structure will not be changed, Futrell said.

The ground floor would likely include a lobby and restaurant - and possibly a bar - while the upper three stories would be turned into no more than 40 hotel rooms, Futrell said. He stressed the hotel concept is merely the front-runner at the moment. He does not yet have a hotel partner, but said interest from hoteliers about the boutique hotel concept is high.

If that doesn’t work out, however, Futrell noted the building could still be renovated and new office or commercial tenants found. The only existing tenant is the Sonoma County Bar Association, on the first floor.

For most of the city’s history, the city’s central square was home to the county courthouse. In 1966, the courthouse was demolished and Mendocino and Santa Rosa avenues were connected through the square, creating two smaller squares divided by a four-lane road.

The buildings along the west side of Old Courthouse Square in particular have struggled for years to retain tenants, partly due to the lack of parking.

Various reunification plans have been proposed and studied over the years, but the project only got traction last year after a group of downtown property owners and business leaders, Futrell included, pushed the city to act. They advocated a simpler, less-expensive design than the $17 million one on the books at the time, and pushed for the side streets to include ample parking.

The City Council agreed and fast-tracked the reunification project last fall.

The initiation of the work spurred significant interest in the Empire Building, and several potential buyers explored a purchase, Schwartz said. They considered uses that included housing, hotels, office and mixed-uses, he said.

But the cost of the upgrades, which include a new elevator, roof, windows and HVAC system, are substantial, he said.

Futrell, more than other buyers, understood the reunification project’s potential to transform the downtown core, and recognized how the iconic Empire Building was poised to benefit from the changes ahead, Schwartz said.

“Urban revitalization doesn’t happen overnight,” Schwartz said. “It’s an evolutionary process, but you have to have a catalyst.”

He believes that reunification project is that catalyst, and the entire city - not just the downtown - will benefit from it.

“A community is only as strong as its downtown,” Schwartz said. “I’ve never worked, in my opinion, on a more important property, at a more important time.”

Futrell, who has yet to fully lease out his nearby Museum on the Square project, says he’s not worried about being overextended in downtown, noting he’s been building there for decades.

“We’ve invested tens of million of dollars in the downtown core, and now we’re going to invest some more,” he said.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @srcitybeat.