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Saggio Hills, the long delayed luxury hotel and residential development on the north fringe of Healdsburg, is moving forward again after being hobbled by legal challenges and a downturn in the economy.

Robert S. Green Jr., the developer, said this week that he plans to complete the final map and design review on the project this year and begin construction in 2015.

"That's our hope," he said. "There's still a lot of work to do, which is great. It's nice to be back, heading in that direction."

"It's a big deal and something we've been waiting for," City Councilman Gary Plass said of the revived signs of life for the 130-room, five-star hotel, and 70-home project on the largest swath of undeveloped land in Healdsburg.

Mayor Jim Wood said it's welcome news, but also cautioned "there's still a lot of things that need to happen before he's ready to begin that project."

Green acknowledged the financing is not fully in place for Saggio Hills. The project has been estimated to cost $310 million, but Green declined to confirm the figure Wednesday.

He expressed confidence the remaining capital will be obtained to begin the hotel construction at the same time the first homes are being built.

"Fortunately, we've been able to put the capital debt in place for two of our projects in Southern California," he said of two large hotels his company is pursuing — in Hollywood and San Diego's Gaslamp district.

"Lenders are back in the business of funding construction loans for hotels," said Green, who is based in Encinitas and has developed several Four Seasons resorts in California and Wyoming.

Saggio Hills, with its approximate $700-per-night hotel room rate "is being designed to compete in the luxury hospitality market in the Wine Country," Green said.

He said that Ohana Real Estate Investors, a strong private company behind some of the most high-profile hotel projects in the country, continues as a "loyal partner" in the Healdsburg project.

Saggio Hills, proposed on 259 acres of the former Passalacqua Ranch, was the topic of debate and intense scrutiny in more than two dozen public hearings stretching more than a year. It was challenged by opponents who derided its "mega mansions," some as big as 6,000 square feet. Critics also raised alarms over the impact to Healdsburg's small-town character.

But supporters said the "world class" resort and 70 high-end homes would dynamically boost bed and sales taxes and provide substantial public amenities, including a 38-acre community park, a firehouse and 14 acres donated for an affordable housing site.

Because two council members had conflicts of interest, only three of them voted on the project. Wood, Plass and then-councilman Mike McGuire finally approved it unanimously in late 2008.

But the environmental report was immediately challenged in court by Healdsburg Citizens for Sustainable Solutions, which sued the developer and the city.

A judge found flaws in the environmental report, but those were revisited and the project was reapproved by the City Council.

The citizens' group insisted the environmental study was still deficient, but in 2011 another judge disagreed, clearing the way for Saggio Hills to proceed.

By then, the economic downturn had put Saggio Hills on a longer hold.

Green this week said the lawsuit, along with extensive public hearings, led to the initial delay.


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"We were prepared to build this project as fast as we could until the entitlement process dragged out as long as it could and the lawsuit came after it was approved," he said.

Some observers said Healdsburg Citizens for Sustainable Solutions and its founder Warren Watkins may have inadvertently done the developer a favor by delaying the project just as the recession took hold, thus averting potential financial calamity for Saggio Hills.

"If they'd started, it's likely it'd just be a big scar up there," Watkins said Thursday of the way the unfinished project would look. "Yeah, Robert Green owes me a bottle of wine."

"The idea that Warren Watkins has ever done either the project — or the City of Healdsburg — a favor in any way whatsoever, is preposterous," Green responded.

As a result of court orders awarding attorney fees and other costs to Healdsburg Citizens for Sustainable Solutions, Green said he has paid out $564,000 to the citizens' group.

While some of those funds have gone to Watkins' attorney wife Janis, a court previously said she was not "self dealing." Instead the court said she was taking the risk she would not be compensated for her time and was seeking to uphold an important public interest in ensuring the project was in compliance with state environmental law.

(You can reach Staff Writer Clark Mason at 521-5214 or clark.mason@pressdemocrat.com.)

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