Santa Rosa has been cleared to sell the former AT&T building downtown to a developer with long-delayed plans to transform the concrete monolith into a modern, glass-clad office building.
The state Department of Finance on Friday afternoon informed local officials that the sale, held up for more than a year by the demise of the city's redevelopment agency, could proceed.
"It feels good to be at this point," said a relieved Dave Gouin, the city's director of economic development and housing. "If we can close in the next two weeks, it'll be huge for this community."
The project, known as Museum on the Square for the gallery space once planned for the ground floor, has been the city's highest profile economic development effort for years.
Mayor Scott Bartley said the prospect of finally getting new businesses into a remodeled building in what is now the "deadest part of our downtown" would be a huge boost for the city.
"It's fantastic news that this thing came together and we can get moving on it," Bartley said.
The decision from the state comes not a moment too soon. Developer Hugh Futrell has said he needed to complete the sale by the end of August in order to keep a key anchor tenant. The city now anticipates closing the deal by mid-September, which Futrell has indicated would satisfy the tenant, Gouin said.
Futrell was out of town and could not be reached for comment.
Now that the sale has been approved, Gouin said he was free to identify the anchor tenant as Luther Burbank Savings. The fast-growing bank, which is expanding its mortgage lending business, is looking to move out of offices it leases on Fourth Street east of D Street, Gouin said.
The other major tenant is TLCD Architecture, which designed the project. It started out as a 10-story tower with five stories of residential atop five stories of office and commercial space in the existing structure. The city redevelopment agency bought the eyesore for $3 million in 2007 and agreed to sell to Futrell in 2010 for $1.9 million.