Santa Rosa eyes purchase of former dairy near sewage plant

  • The Llano sewage treatment plant seen from the Peters Dairy, near the intersection of Llano Road and Highway 116. March 21, 2012.

Santa Rosa has renewed its interest in buying a former dairy to create a buffer zone at the regional sewage treatment plant on Llano Road.

The Board of Public Utilities has long been interested in acquiring the 277-acre Peters Dairy to prevent additional homes from being built on the property.

The last time the city considered buying the land was in 2009, when embattled financier Clem Carinalli owned it. He was trying to sell it to the city for $9.5 million and later, as the real estate market deteriorated, $6.5 million.

The city passed on the property at that time, citing the price and a desire to avoid the impression it was bailing out Carinalli, whose highly leveraged real estate empire collapsed as property values plunged and payments to investors ceased.

As part of Carinalli's ongoing bankruptcy, the property is now owned by the lender American AgCredit, which loaned Carinalli $3.2 million on the property in 2007, according to county land records.

Carinalli acquired the land, which is close to where he grew up, after foreclosing on loans he made to the previous owner, Curtis Clemmers, who had planned to develop vineyards on it.

Efforts by the bankruptcy trustee to sell the property as three separate parcels for a total of $6.7 million failed last year, and the full property is now being offered for $3.95 million.

The lowered price has piqued the city's interest. The Board of Public Utilities voted last week to enter into negotiations with American AgCredit, under the holding company Heartland Recovery California F#1, about a possible purchase.

The city has since sent an offer letter to the lender. The confidential bid is subject to approval by the BPU board and the City Council, said Josh Maresca, the city's right-of-way agent.

The dairy is no longer in operation, but part of the property continues to be leased as pasture, Maresca told the board. There also are four rental homes on the property and a cellular tower.

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