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Santa Rosa's 'Museum on the Square' delayed again

  • 2010: Artist's rendering of proposed makeover of AT&T building in downtown Santa Rosa.

New state rules clarifying the dissolution of local redevelopment agencies could save Santa Rosa $7 million, but they also may force further delay in the ballyhooed Museum on the Square project.

The upside for the city, which like hundreds of others around the state saw its redevelopment agency dissolved in February, is that it now has a path to recoup $7 million in loans it made to the agency.

The downside is the process outlined by a new state law will further delay the effort to transform a downtown eyesore into a gleaming 10-story multi-use tower.

The City Council on Tuesday reviewed some of the impacts of Assembly Bill 1484, which was signed into law by Gov. Jerry Brown on June 27.

The main one was the need for the city to loan the remnants of its former redevelopment agency, known as the successor agency, an additional $183,000 for new administrative work required by the law, such as hiring an outside accountant to review the agency's financial documents.

Those tasks, if completed on time, should result in the state deeming the $7 million in loans as valid obligations, meaning the city would be repaid from property tax revenues once set aside for redevelopment.

"I think it's not a bad investment, spending $183,000 -- even though we'll get it back -- to get $7 million," said Councilman Jake Ours.

Another potential impact of the new law is the likely further delay of Museum on the Square, already more than two years behind schedule.

The city redevelopment agency in 2007 purchased the long-vacant AT&T building, and in 2010 agreed to sell it at a $1.1 million loss to a development team led by Hugh Futrell.

Plans call for transforming the concrete eyesore into a $23 million, glass-clad tower housing the Sonoma County Museum, a restaurant and four stories of office space capped by five stories of apartments.

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