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A concrete eyesore dominating downtown Santa Rosa's skyline would be transformed into an airy, modern mixed-use building housing an art museum, offices and apartments under a proposal unveiled Wednesday.

Developers Hugh Futrell and Bill Carle announced that a city selection committee had chosen their plan to redevelop the windowless five-story former AT&T building on Third Street into a 10-story glass-clad structure.

"Our goal is to create a community gem from what is now a large dead space in our downtown," Carle said. "We think this project is critical to the future of Santa Rosa."

The design, called Museum on the Square, was chosen by a four-member city selection committee from a field of five designs submitted in November. The city, which purchased the building in 2007 for $3 million, has been searching for a development partner for the project since mid-2008.

Mayor Susan Gorin, who sat on the committee, said the Museum on the Square development team was chosen for its visionary architectural design, solid financial position and strong track record of developing in downtown.

"Who knew that building could look so beautiful?" Gorin said of the conceptual renderings. Architect Don Tomasi "has done just an outstanding job in transforming what had been the ugliest building in the city into something that is going to knock people's socks off."

The selection committee was particularly impressed by commitments from two companies — Tomasi's firm and software design company Metier Ltd. — to occupy the building once it's complete. Some of Metier's employees have even expressed interest in living upstairs in the residential units.

Such an arrangement would epitomize the kind of downtown, live-work development the council has advocated, Gorin said.

"This is a dream come true for our council," she said. "We have something to start off our New Year with a bang."

Futrell stressed that it was his development team that was selected by the committee, not the building design, which could change significantly following input from the city.

"We've spent a great deal of time on this project concept, but until we do further outreach, it's conceptual and illustrative," Futrell said.

The current proposal calls for the Sonoma County Museum to occupy 10,000 square feet of the ground floor, with a high-end restaurant occupying the remaining 6,000 square feet.

The next four floors would be office space. Tomasi's TLCD Architecture, which designed the building, has agreed to occupy one floor, while Metier Ltd. has agreed to take at least one floor, perhaps more.

Both companies have signed memorandums of understanding that are binding, Futrell said. "These are serious relationships we've got," he said.

The existing building's high ceilings and strong structural walls make it ideal for creative companies like his that value large, open work spaces, Tomasi said.

"Architects love unique spaces, and we are looking for an open, collaborative environment where we can literally move desks around and reassemble teams consistently," he said.

It is a rare treat, he said, to be able to design the building that his firm will also be occupying.

"This is honestly the project of my lifetime," he said. "Museum on the Square's green design, including the reuse of a derelict industrial building, will make it an outstanding example of environmentally responsible downtown development."

An additional five stories containing 40 apartments would be built atop the existing structure, with the possibility of conversion to condominiums, Futrell said.

Parking for those residences would be in the basement, while parking for the office spaces would be provided at a city parking garage through a deal to share spaces allocated to the owners of the Roxy movie theater, Carle said.

Envisioned atop the building would be a shimmering art installation by Sebastopol artist Ned Kahn. Called "Wind Trellis," it would be a wind-animated shade structure on the rooftop terrace.

The projected cost of the project would be $20 million to $30 million and it could be ready for occupancy by the end of next year, Carle said.

"We're ready to go," he said.

Several similar high-rise projects incorporating retail businesses, apartments and parking have been proposed and then stalled in recent years. Obstacles have included the collapse of the real estate market, difficulty in securing financing and disagreements with the City Council. Vacancy rates for commercial space also have increased.

But this project will succeed where others have not for several reasons, Carle said.

One is that a significant amount of the cost of the project is already in the ground, in the existing structure that will be reused. Another is that the office space will truly be unique, with its high ceilings and open spaces creating work environments that will be sought after, Carle said.

"It's going to be something special. It's going to be a niche market," he said.

Ownership of the building and its more than 50 percent leasing prior to construction make Carle confident that financing will not be a problem, he said.

Carle and Futrell are the owners of Hugh Futrell Corp., which has completed several downtown buildings, including its headquarters in Railroad Square and the Burbank condominiums on Seventh Street.

For the Sonoma County Museum, the project is an opportunity to expand from its historic old Post Office building on Seventh Street to a space more appropriate for large art installations, museum executive director Diane Evans said. It will keep its existing location for its historic exhibits.

And, the price is right. The museum is getting the space for free. It just needs to pay for the improvements to the space.

"We're really excited and we're really grateful for the opportunity they are giving us," Evans said. "I think its going to be wonderful for the whole region."

The developers, however, will not be getting the building for free. The city is expected to sell the property to the developers at market value, Carle said.

The price has yet to be determined, but probably will not be more than the $3 million the city paid in 2007. But the price also would not be so much lower as to constitute a subsidy, Carle said.

"We're not asking them to go and give it to us for $500,000," he said.

The selection committee was made up of Gorin, City Councilman Gary Wysocky and Redevelopment Agency Board members Jake Ours and Philip Olsen. They selected Museum on the Square from five firms that responded to the agency's request for qualifications.

The recommendation goes before the city Redevelopment Agency Board for approval on Friday.

That is expected to be followed by both sides signing an exclusive negotiation agreement to be brought to the redevelopment board on Jan. 24, Carle said.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com.