On Monday, local developer and broker Jim Keller got the keys to his newest commercial real estate purchase.
Only this isn’t a typical warehouse or office space.
Keller is the new owner of Napa’s historic downtown post office.
The post office, located at 1351 Second St., has been closed since it was damaged in the August 2014 earthquake.
Keller purchased the building for $2 million from the United States Postal Service. This longtime Napan plans to turn it into a boutique hotel property with a possible residential component.
“It’s going to be grand and probably one of the coolest projects to hit downtown in many years,” Keller said in a phone interview on Wednesday.
“The property has been sold and the important thing is that the historic features will be protected,” said Augustine “Gus” Ruiz, USPS spokesman.
The post office was closed after the 2014 earthquake. In July 2015, the USPS originally moved to demolish the building, which was built in the Art Deco style in the 1930s.
The agency said that it would cost $8 million to repair quake damage, while it would cost only $500,000 for demolition.
The Napa Franklin Station was built in 1933 with funding from the federal Public Works Administration. In 1985, it was placed on the National Register of Historic Places.
After considerable public outcry, the USPS decided to try selling it to a buyer who could repair the structure and preserve its architectural integrity. An asking price was not publicly listed.
Keller eventually stepped forward with an offer.
“This is great news,” Napa City Councilwoman Juliana Inman said of the sale. Inman has been heavily involved in efforts to save the post office.
“It’s a long way from their original plan, which was to demolish it and sell the land,” she said.
“The community can consider this a big success because we stopped the demolition and we got the (USPS) to sell it,” Inman said.
The biggest hurdle to the deal was parking, said Keller. To solve that concern, he was able to purchase the city parking lot at the southeast corner of Second and Randolph streets.
Without that parking space, “the deal would have failed,” said Keller.
“You can’t build up and around that parcel without having parking to support it.”
In a February interview, Keller said he intends to expand the parking lot into a multi-story garage with more than 220 vehicle slots served by automated parking equipment.
The garage would accommodate guests at the hotel Keller plans to carve from the Franklin Station site.
Keller, who also owns the Main Street Exchange and the Young Building in downtown Napa, offered the city $1.71 million for the parking lot.
The price includes a $557,000 discount of its market value for keeping 65 spaces free to the public, 10 more than the current capacity.
The multistory automatic garage would stack vehicles above a new ground level with about 7,000 square feet of retail space.
Keller said that the $2 million price tag was only the beginning of the expense to develop the project.
He estimated he would have to spend another $6 million to $8 million to rehabilitate the space.
The other hurdle to the purchase was getting the city and other stakeholders on board for the redevelopment.
“I needed cooperation and support from the city, which I got,” said Keller. “That gave me the comfort I needed to close on it.”
The next steps include submitting applications to the city to approve his development ideas. The design of the proposed hotel and how it would complement the post office building is being developed.
“I’m ready to go. I’m pushing as hard and fast as possible,” he said.
“I appreciate the trust that the city and the public have given me to get this thing restored and turn this into one of the more significant blocks in downtown. Everyone’s going to have to trust that we make it something that everyone can be proud of.”
If he could use any word to describe his goals for the building it would be “authenticity,” said Keller.
“It will be authentic. The post office is going to be shining bright,” and be a jewel when finished.
“It’s the biggest project I’ve taken on, but I’m not worried,” said Keller. “We’ve got a good strong vision.”
Keller “has got some real interesting ideas,” said Inman, an architect by profession. His team “has a good handle on what the repair to the building is going to take. I’m very optimistic about its future.”