The Sonoma City Council on Monday voted to put a controversial measure that would limit hotel development on the November ballot, setting the stage for a bruising and divisive battle tied to the city's identity and economic growth.
The council voted unanimously to set the so-called Hotel Limitation Measure for a special election Nov. 19. The measure would cap new hotels or expansion of existing ones to 25 rooms unless Sonoma achieves an annual occupancy rate of 80 percent, which the city has never done.
Fault lines were exposed Monday by the council's narrow decision to give Mayor Ken Brown and Councilman Tom Rouse the authority to draft an argument against the hotel measure that will be included in the voter pamphlet. Councilman David Cook supported the action.
Councilman Steve Barbose called the ballot argument a mistake, one he said would play into the hands of voters who believe city leaders have essentially been poised to rubber-stamp larger hotel projects and are seeking to do so in the future.
"I know you feel passionately about your position," Barbose said, "but it's ironic you're going to make peoples' case for them."
Brown said from the dais that he was "taken aback" by Barbose's comments.
"I don't see any reason to think my support for putting an argument on the ballot measure degrades confidence in the City Council," Brown said.
Councilwoman Laurie Gallian also voted against allowing the council members to draft the argument against the measure.
Cook participated in Monday's proceedings even though he previously took a vote against the hotel measure as president of the Sonoma Valley Chamber of Commerce. The city's attorney advised Cook Monday that he saw no conflict unless Cook considered himself biased on the issue.
"I really think I'm coming here with fairness," he said. He also called the hotel measure a "defining moment" for Sonoma that gets at the city's "identity crisis."
The special election is estimated to cost the city about $30,000. The council had the option of adopting the proposed ordinance but clearly a majority on the governing body opposes the measure.
No hotel projects currently are pending in the city. Plans for a 59-room luxury hotel on West Napa Street that sparked the current debate are on hold pending the outcome of the ballot measure, according to representatives for developer Darius Anderson. Anderson is a principal of Sonoma Media Investments, which owns The Press Democrat.
The council on Monday reviewed a consultant's report that generally casts the hotel 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 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.
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.
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 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.
Several members of Preserving Sonoma, a group backing the ballot measure, criticized the report Monday on a number of fronts, including in that they said it omitted consideration of the impacts of larger hotels on Sonoma's environment and quality-of-life.
"We do not choose to live here because we have large hotels and a lot of tourists," said Jim Kent.
Backers of the hotel measure say its intent is to slow the growth of large hotels in Sonoma by establishing a link between supply and demand. They said the city is wasting money on a Tourism Improvement District that levies a 2 percent tax on rented rooms and raises $450,000 annually, ostensibly to try and increase occupancy levels through marketing efforts.
"This initiative is designed to make sure we don't have too many hotel rooms that are empty," said Sonoma attorney Bob Edwards.
The group also contends the city is ignoring other potential sources of revenue for the city, including by raising the city's transient occupancy tax, which is currently 10 percent.
But Bill Blum, general manager of MacArthur Place Hotel, said the fact no new hotels have been approved in Sonoma in the past decade means the city "doesn't have a hotel problem." MacArthur Place has 64 rooms and is located four blocks from the Sonoma Plaza.
He likened the ballot measure to a "slow death" for Sonoma's lodging industry by restricting new hotel construction or expansion of existing sites.
You can reach Staff Writer Derek Moore at 521-5336 or Derek.moore@pressdemocrat.com.
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