Study: Hotel limits could hurt Sonoma

A consultant's report that will be the focus of Monday's Sonoma City Council meeting appears to provide ample ammunition to opponents of a proposed measure that would limit hotel development in the city.

The report generally casts the so-called Hotel Limitation Measure as a potential economic damper for the city, in part by thwarting the potential for more revenue in the form of bed taxes, which help fund city services.

The report called it "highly unlikely" that Sonoma would ever achieve an annualized hotel occupancy rate of 80 percent, which would be the threshold needed to overcome a cap on new hotels or expansions involving more than 25 rooms.

Mayor Ken Brown on Friday said he had not yet seen the report. But he came out publicly against the hotel measure, saying it could lead to "unintended consequences that would not be positive for the city of Sonoma."

The City Council on Monday is expected to set Nov. 19 as the date for a special election estimated to cost the city $30,000.

The council on July 15 narrowly authorized the $17,500 impact study after supporters of the ballot measure gathered enough signatures to qualify the initiative for the ballot. The contract was awarded to Keyser Marston Associates Inc., which by law had 30 days to prepare the study.

Over the past decade, Sonoma's lodging properties have achieved an average annual occupancy rate of 62 percent, with a peak in 2006 of 66 percent, the consultant concluded.

The city has 39 lodging properties with a total of 527 rooms. Half of the properties have no more than three rooms. Five lodging properties have more than 25 rooms and provide 78 percent of the city's total room supply, according to the report.

Supporters of the hotel measure contend that it is necessary to protect the city's quality of life from what they consider to be major hotel development.

Larry Barnett, a former bed-and-breakfast owner and city mayor and main proponent of the measure, on Friday seized on the report's finding that new hotels can have the adverse effect of lowering occupancy rates.

"Since increasing our occupancy rate is important, imagine what more large hotels will do to our existing rate," Barnett said.

He also noted the report's finding that if the ballot measure is approved, "it is likely that new lodging development in Sonoma will continue to be comprised of independently operated small inns and hotels."

Overall, however,the 14-page report paints a negative picture of the measure's potential economic impacts on the city of 10,000.

The report notes there is a limited pool of investors for smaller lodging in Sonoma because such development lacks "operating efficiencies and marketing advantages of larger properties."

Such larger hotels bring in more bed taxes, which in turn help fund city services, because these facilities historically have had higher occupancy rates, the report says.

In a supplemental report, city staff stated the hotel measure could "arguably undercut" the city's general plan, which includes language stipulating that city regulations not "unduly burden local business operation and development and provide incentives for business improvement."

Staff also wrote that the measure could circumvent the city's planning process. "Such a process allows the city to grow and develop in a way that is consistent with the evolving standards and objectives of the community, an evolutionary process that the hotel measure forecloses," the report stated.

Opponents of the hotel measure contend its true aim is to thwart a 59-room luxury hotel proposed by developer Darius Anderson on West Napa Street, about a block away from the city's plaza. Anderson is a principal of Sonoma Media Investments, which owns The Press Democrat.

Bill Hooper, president of Anderson's company, Kenwood Investments, did not respond to an email Friday seeking comment.

You can reach Staff Writer Derek Moore at 521-5336 or derek.moore@pressdemocrat.com.