Petaluma urged to investigate Theatre District construction deals

The recent disclosure that a Petaluma builder hired to work on the $100 million Theatre District redevelopment project also is on the board of the development firm for the project sparked calls Monday for an audit and legal review of the relationship and the nearly $10 million in cost overruns.

At the center of concern is North Bay Construction owner John Barella, who also owns the Roblar Road rock quarry site in southern Sonoma County. In court filings related to a lawsuit filed by opponents of the quarry, Barella wrote recently that he also is the single largest investor in developer Basin Street Properties, which was formerly based in Petaluma.

The disclosure that Barella has been financially linked with Basin Street since 1996 apparently was unknown to Petaluma city officials when they contracted with Basin Street to complete the Theatre District on Petaluma Boulevard South. Basin Street subsequently hired North Bay Construction for infrastructure work on the joint project with the city.

The project, which includes a parking garage, movie theater, commercial and office space and apartments, was built between 2003 and 2007 as an effort to revitalize the city's aging downtown.

The city's share of the project started at $7.9 million but grew $17.1 million, capped by $4.8 million to cover late cost overruns in September 2005. The City Council, though displeased with the overages, approved the money on a 6-1 vote.

Now, some are questioning whether Barella's ties with Basin Street constituted a conflict of interest or would have changed Petaluma's approach to the project.

Former councilman David Keller on Monday asked the council to authorize an independent financial audit and legal review of the relationships and prepare a report evaluating the ethics of those who advised the city.

The council took no action on the request.

Mayor David Glass, who also was mayor in 2005 and voted to approve funding for the cost overruns, said he didn't know of Barella's involvement with Basin Street until recently.

Former council member Pam Torliatt was the sole vote against the funding in 2005, saying the city's deal with Basin Street called for the developer to cover most cost overruns and shouldn't have been overridden without more scrutiny.

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