Work continues to revamp Holbrooke Hotel in Grass Valley, National Exchange Hotel in Nevada City |

Work continues to revamp Holbrooke Hotel in Grass Valley, National Exchange Hotel in Nevada City

The National Exchange Hotel in Nevada City has been closed for over a year, while Grass Valley’s Holbrooke Hotel was shuttered in February.

Both iconic structures are undergoing some much-needed renovation being headed up by Santa Barbara-based Acme Hospitality.

But how long will they be out of business, and what is the impact of the indefinite shuttering of mainstays in both cities’ historic downtowns?

“The great economic potential of both properties once they reopen, to my mind, is of paramount importance,” said Erin Lewis, who is handling outreach for the project. “These properties will bring so many employment opportunities to our town, and bring a caliber of tourist to the area that will elevate all of the local businesses.

“For example, the Holbrooke will be positioned in large part as an event venue. When a group of 100 people is visiting Grass Valley to celebrate a wedding, they are eating, drinking and shopping all over town. So in addition to the Holbrooke, the entire downtown will see a bump in business.”

Lewis said the teams working on the hotels are taking the time to really dig into the bones of the structures and make sure all of the critical systems (think electrical, plumbing) are in good condition.

“There isn’t any ground-breaking progress to report at the moment, as the process of carefully rejuvenating such historically significant (and historically decayed) hotels is invariably a very slow process,” she said. “It’s important to note that we are all super-mindful of how valuable these hotels are, as community resources and drivers of the downtown economic engines. While we understand that having the properties closed is challenging, it remains of utmost importance to us that we treat the buildings with the respect they deserve.”

Nevada City

The National Hotel closed shortly after Eastern Real Estate purchased the faded beauty in February 2018.

Over the course of the last year, the tenants on the ground floor, including the Curly Wolf coffeehouse, closed and relocated elsewhere.

The two tenant spaces within the building have yet to be leased, Lewis said, adding, “We welcome all local businesses who may have an interest to reach out directly to submit a proposal.”

So far, there is no estimated date for the long-delayed reopening. Initially slated to be open by last fall, some time-consuming structural issues caused unforeseen delays. Demolition was being wrapped up in late January and the team is currently rebuilding the infrastructure.

“The hotel is buzzing with contractors working actively to repair and replace all of the critical systems within the hotel including plumbing, electrical, structural and mechanical,” Lewis said. “While this is the most important and labor-intensive part of the project, it’s so critical to the longevity of the property.”

The National, which opened in 1856, was touted as the longest continually operating hotel in California. In recent years, however, the hotel’s many issues, including a failing roof that left the third floor uninhabitable, meant much less than full occupancy even during the busy summer months.

So it is difficult to estimate the economic impact of the hotel’s closing. Looking at Nevada City’s Transient Occupancy Tax revenues provides one clue, however. In Fiscal Year 2016-17, that revenue increased 24 % over the previous year thanks to two new factors: short term AirBnB rentals, and the opening of Inn Town Campground.

Looking at revenue by calendar year, Nevada City’s Transient Occupancy Tax increased substantially in 2016, from $293,634 in 2015 to $387,075, and then again in 2017 with $435,045 collected. That revenue dropped by 9 % in 2018 to $396,224 — a loss of nearly $40,000 during the bulk of the time the National has been closed.

The revamped hotel will feature fewer guest rooms. But while Lewis would not specific on the price point, the anticipated revenue to the city when the hotel reopens is likely to be much greater than it was prior to the closure.

Grass Valley

The Holbrooke Hotel was purchased in August of last year, shortly after the sale of the National, also by Eastern Real Estate. Initially, it was hoped the hotel could stay open while the renovation was done in phases. But a decision was made to close on Feb. 12 for an unspecified length of time so that upgrades could be made more efficiently.

“Things have actually been moving along really well over there,” Lewis said. “No real surprises yet, just stripping away the years of aging decor to reveal the stunning bones and intrinsic beauty of the property.”

Marni Mitchell, the executive director of the Grass Valley Downtown Association, noted the hotel has served as a great venue for late-night events.

“We have been looking forward to the renovation,” she said. “Hopefully it won’t be closed for very long.”

City manager Tim Kiser said he could not provide transient occupancy tax information specific to the Holbrooke Hotel, but noted the economic impact of the closure has been mitigated by the opening of several venues attracting visitors to downtown, including Grass Valley Brewing Company and Thirsty Barrel.

Grass Valley Mayor Lisa Swarthout is taking the long view of the disruption to downtown, which she notes includes The Center for the Arts’ major renovation.

“Financially, it could be a little bit painful for the other businesses downtown,” she acknowledged, adding, “The impact that we’re currently undergoing right now is minimal compared to the advantage when they reopen.”

“I’m happy they are working with local contractors,” Swarthout said. “It sounds like the new management group is seizing the opportunity to have it be a gathering place for the community.”

Swarthout met with Sherry Villanueva, the managing partner of Acme Hospitality, to discuss the proposed renovation, and came away “very impressed.”

“This is what Grass Valley needs right now,” she said, saying the revamped hotel will fit in well with the other dynamic changes to the downtown core.

“I’ve worked on Mill Street for over 40 years, since I was a teen,” Swarthout said. “I’m extremely encouraged with what’s happening here.”

With the rise of online sales, many have posited the death or brick and mortar retail.

But Grass Valley’s downtown instead is experiencing a positive forward growth, and the revamped arts center and hotel will factor into that, Swarthout said.

“This will be a knockout place,” she said. “People like the vibe that is going on downtown.”

Contact reporter Liz Kellar at 530-477-4236 or by email at

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