North Bay rail officials may be softening their stance on when to transfer title for a proposed Santa Rosa food and wine center and transit village site to developers, who insist they need title to get financing.

"We may be moving closer to seeing eye to eye on title transfer issues," said John Nemeth, the rail planning manager for the Sonoma Marin Area Rail Transit agency. "But we are still looking for strong protection so we have recourse if the developer doesn't perform."

SMART owns 5? acres in Railroad Square where plans include a $150 million transit hub, food-and-wine center and mix of low-income and market-rate housing.

Michael Dieden of Creating Housing Associates, the Los Angeles developer selected for the project, told SMART's real estate committee Wednesday that getting title early in the process is necessary to get financing for the project.

Dieden is proposing to bring in the John Stewart Co. of San Francisco, which would provide between $2 million and $3 million for engineering, planning and further environmental studies.

Under the current agreement, SMART will not transfer title to Dieden until financing has been secured, all city approvals have been obtained and a construction contract executed.

SMART officials say that provides protection for the agency, ensuring that it gets the project it wants and in a timely manner.

Stewart, who is developing a $50 million live-work project in an adjacent Railroad Square warehouse, is proposing that title be transferred after the project is approved by the Santa Rosa Planning Commission.

"That would give us some security that we don't get so far down the track and then somebody changes their mind," Stewart said.

If the project gets planning commission approval by the end of this year, the developers could then get the title, which Stewart said is a requirement for the developers' group, the New Railroad Square LLC, to apply for New Market Tax Credits, a federal program that gives incentives for developments in low-income areas.

That funding would be the first step in securing the total funding from a variety of local, state and federal agencies and private investors, said John Clawson of Equity Community Builders of San Francisco, which is consulting on financing for the developers.

Restrictions could be written into the purchase agreement that would allow only the current SMART project to be built, Stewart said.

Nemeth said that the real estate committee will discuss the proposal in closed session.

He said SMART officials may consider allowing transfer of the title after city building permits are issued.

The issue will be discussed at the SMART board meeting March 20 in San Rafael.

You can reach Staff Writer Bob Norberg at 521-5206 or bob.norberg@pressdemocrat.com.