The brothers continued to run the hotel until 1863, when they began to focus more on selling liquor. The hotel continued to be a successful and respected business until the neighborhood began to change in the 1870s with the arrival of the railroad. The neighborhood declined and Ebner's developed a seedy reputation, as evidenced by a rash of newspaper articles detailing various thefts at the hotel in the 1890s--including a heist where thieves blew open the hotel safe with gunpowder in 1893.
By the twenty-first century, much of Old Sacramento had been restored and rehabilitated. Ebner's was one of the few original buildings left in the area that had not been restored, and after sitting empty for decades, it was in an advanced state of disrepair. Though there was interest in saving the building, it was deemed structurally unsound and the city of Sacramento found that it cost less to demolish the building and construct a replica than to stabilize and restore the original.
The building was demolished in 2003. In 2010, construction was completed on a replica of the hotel, along with the adjacent Empire House. The interior will now house office and retail space, rather than guestrooms, but the exterior was rebuilt to match the original as closely as possible.