A luxury hotel could transform this California town. Some residents are fighting back

On paper, the Appellation Hotel proffers one vision of the future for downtown Petaluma: a hefty cube of ceramic tile, anchored by a farm-to-table restaurant and crowned with an airy rooftop bar.

Rising 72 feet from what’s now a weed-choked lot, the building would dwarf its neighbors, a scattering of feed stores, Victorians and plazas with old-timey architecture. To some, the hotel concept appears too big and modern for that rustic setting. To others, it represents prime infill development that the North Bay city would be foolish to squander.

These two competing mindsets have stoked a battle among Petaluma leaders and residents, one that has led to scurrilous attacks online and shouting matches at City Council meetings. In the Bay Area, the story is familiar. Every community, at one point or another, confronts the vexing politics of change.

But emotions are particularly charged in Petaluma, where a landscape of grain silos and backyard chicken coops sprawls along the border of Wine Country. Neighboring cities like Healdsburg have already converted into tourist destinations, trading their scruffy charm for Michelin-starred restaurants and luxury hotels — including another Appellation, set to open this summer. 

“Petaluma is like Healdsburg was 20 years ago,” said Charlie Palmer, a celebrity chef who co-founded the Appellation brand. He watched Healdsburg residents evolve from skepticism, to acceptance, to a point where the former outpost for prunes and lumber now has 22 tasting rooms ringing its main square. Such economic prosperity buoys everyone, said former Healdsburg Mayor Gary Plass.

“A town of 11,000 can’t survive and have good schools just by taxing the people who sleep there,” Plass said. “You have to find ways to support it. You have to pick the right projects.”

While Petaluma has a different culture and mentality, it sits right at that crossroads and could easily become the next wine and foodie mecca. 

So far residents and merchants have resisted the transition. The downtown has a trapped-in-amber quality, with seemingly every business opening inside a factory from the early 1900s. A river cuts past the train station and warehouse district, and chain retail gets hidden behind corniced masonry. Plaques commemorate birth dates of the saloon and fire department; T-shirts celebrate the “egg capital of the world.”

Locals who fiercely protect this sense of tradition and independent spirit cast a wary eye toward new real estate.

“Petalumans do not want to become Healdsburg,” said Jane Hamilton, a former City Council member and volunteer for the group Petaluma Historic Advocates, which is pressing for a ballot measure — possibly for a special election or the 2026 June primary — that would undo a recent zoning ordinance to enable construction of the hotel.

“We already have tourists,” Hamilton continued. “We draw people in because we’re a unique, quaint town that everybody can walk around in and visit all of our small businesses. The hotel will serve people who don’t live here, and make life for people who do live here very difficult.”

Proponents of the hotel argue that it would inject tax money and vitality into a sleepy town beset by retail vacancies.

“This is the gateway to Sonoma County,” said Ebbie Khan Nakhjavani, CEO of EKN Development, the Southern California firm that partnered with Palmer for the Petaluma venture (EKN is not involved in other Appellation hotels). Nakhjavani views the small North Bay city as ripe with potential, and uniquely positioned to define its next phase.

“And we want to be on the ground floor,” Nakhjavani said. “We want to capitalize on Petaluma’s incredible history, on its DNA.”

That pitch appealed to Petaluma City Council members who in February approved a zoning overlay to allow dense structures of up to 75 feet in three sections of downtown. Following a backlash, the council reduced the scope of its new zoning rule in March, limiting it to one subarea that encompassed the lot at B Street and Petaluma Boulevard, where the six-story Appellation would open in 2028.

“We’ve listened to everybody, and we were really careful to preserve and protect this historical district,” said Petaluma Mayor Kevin McDonnell, who counts himself among the hotel’s supporters. He touts the jobs, tax revenue and tourism it would bring, and the ripple benefits for surrounding businesses. And the height would be relatively innocuous, McDonnell said, with a recessed fifth floor below the breezy rooftop terrace. The edifice would feel “more like four stories” to anyone looking up from the street.

Unsatisfied, opponents of the hotel and the upzoning began gathering signatures for a voter referendum. They expect to have 5,000 by next week, exceeding the 4,100 needed to qualify for the ballot. With the deadline looming, Hamilton spent part of Wednesday morning outside Umpqua Bank, clipboard in hand, making her case to anyone who would listen. She and others plan to hoist a giant weather balloon near the site at B Street and Petaluma Blvd. this weekend, to show how big 72 feet can be.

Joggers, shoppers and dog walkers who passed by the lot on Wednesday appraised it with bemused expressions. Most people were familiar with the hotel proposal and had strong feelings about it, though opinions were sharply divided.

“Well, I’m definitely against it,” said Mandy Podesta, owner of the Hunter & the Bird, a baby clothes boutique where the shelves teem with tiny floral print dresses and gingham onesies. Tucked into an old grain mill that’s been repurposed for shops and restaurants, Hunter & the Bird is located half a block from the hotel site, within what critics would consider its blast radius. Hunter & the Bird might not stay there long, according to the store’s Instagram page, which announced a relocation in June. 

Even so, Podesta worries about potential traffic and parking impacts for other businesses, as well as the hotel’s sheer bulk.

“It’s just too big to fit in that little space,” she said.

Others expressed undiluted enthusiasm for the project.

“I think it’s going to be great,” said longtime resident Jessica Scerri. She and her brother, Seth Nonmann, were walking down B Street to grab lunch at a Peruvian restaurant.

Like McDonnell, Scerri hoped the new commercial development would help energize a downtown that’s surviving, but not thriving. 

“We’ve had so many vacancies,” Scerri said, gesturing at the row of shops in the grain mill and at a similar strip mall across the street, also in a salvaged building fronted by a dusty brick facade. 

Amid this hodgepodge of retail sits the lot, a third of an acre of dead space with signs advertising the Appellation. Previously it housed a Chevron gas station, which closed more than a decade ago. Now, the parcel is fenced off and strewn with grass and hay.

Preservationists insist they would accept a hotel there if it were four stories instead of six, and more in keeping with Petaluma’s bohemian small-town vibe. Nakhjavani scoffed at this, saying the detractors would find something wrong with any proposed development.

“They’ve been all over the place: ‘It’s too tall, it’s too big, we don’t need it,’” Nakhjavani said, barely suppressing his frustration. “I’ve addressed every allegation, every potential concern. I can’t really hit a moving target.”

Still, even those who want the hotel say they understand why it’s provoked conflict.

Reflecting on the situation, Scerri and Nonmann looked at each other and shrugged. Change, they said, “is just really hard for this town.”