Dreams of a development like San Francisco's Ferry Building in Santa Rosa's Railroad Square may hinge on whether the public agency that owns the land is willing to sell.

Michael Dieden of Creative Housing Associates, the team picked a year ago to develop 5½ acres adjacent to the Santa Rosa depot, said acquiring the land is vital to securing financing for the project.

After briefly threatening to scrap the project entirely amid criticism from affordable housing advocates and Sonoma-Marin Area Rail Transit, Dieden has a new plan that he says will address many of their concerns.

The plan, to be unveiled today, adds 40 affordable housing units to the first construction phase. It still includes a market hall and food and wine center, a restaurant, retail space and office space.

Dieden's plan got kudos from some SMART board members, but he said it only will work if the property is sold to Creative Housing Associates.

In the current economic environment, he said owning the land would make it "much easier for investors and lenders to feel secure about the project."

SMART has guarded its ownership of the Railroad Square property, calling it the crown jewel in the agency's as-yet-unsuccessful plans to reintroduce passenger rail service between Cloverdale and Larkspur.

SMART balked two years ago when the city of Santa Rosa pressed to become the lead developer of the site. The SMART site is a key piece of a downtown Santa Rosa development blueprint that goes to the Planning Commission tonight.

But in the year since Creative Housing was tapped to develop the property, expectations about what can be delivered have crumbled.

Santa Rosa Junior College scrapped plans to include its culinary arts program and Dieden asked to drop more than half the housing and to add an above-ground parking garage.

Both proposed changes run counter to SMART's vision of a transit hub with housing and jobs for people riding the trains it hopes to run from Cloverdale to Larkspur.

In May, Dieden threatened to pull out, citing what he called the collapsed housing market and a lack of investors for residential development.

In the two months since, the developers and SMART board members have met at length, redrawing plans and reconfiguring financial estimates.

Neither side would divulge before today's meeting how much SMART is being offered for the land.

Sonoma County Supervisor Mike Kerns, a SMART board member, said the offer probably would include up front money and a share of profits as space is rented or sold.

Marin County Supervisor Charles McGlashan, a SMART board member, said the last version of the financial deal he saw asked too much of the rail agency.

"We are torn with what again looks like an outstanding project with poor financial terms for the agency," he said. "SMART is being asked to give up an awful lot of value."

Estimates on the value of the land, between Third and Sixth streets adjacent to the Santa Rosa depot, range from $9 million to $13 million.

"I'm not saying that is what we expect," Kerns said. "To get a good project in place that includes affordable housing and some of the other good things that we would like to see, we might accept less."

But Kerns was quick to add, "We are not going to give our property away."

Railroad Square neighbors are rooting for a deal.

Jack Gardner, president of the San Francisco-based John Stewart Co., said a sale to Dieden's group would help his group's condominium project move forward.

The Stewart company, which vied to develop SMART's land, has been in sometimes-contentious mediation with the rail agency over a number of access and easement issues between the neighboring parcels.

"I think (Dieden) would deal with us in a much more facilitated, expeditious way to move forward because that is what he is about, getting the whole thing done," Gardner said. "A land transfer is in the best interest of this project and to our properties."

Santa Rosa, and the goodwill of its 74,000 registered voters, is vital to SMART's future.

SMART plans to take another quarter-cent sales tax measure to voters in 2008. A similar proposal narrowly failed in the two-county district in 2006.

McGlashan said the impending campaign will not affect how the board negotiates with Creative Housing.

"I'm not driven by the calendar much at all," he said. "There is a sense that we have a great opportunity, but if it comes at too high a price, we are willing to wait."

You can reach Staff Writer Kerry Benefield at 526-8671 or kerry.benefield@pressdemocrat.