Healdsburg's housing cap could crimp mill redevelopment

A large swath of land at the entrance to Healdsburg has been acquired by a Canadian-based development company with plans to build a hotel and housing, but the project could be constrained by the town's strict growth control measure that has drawn fire in recent months.

Replay Resorts announced last week that it has purchased 10 acres, including the NuForest wood mill site and an adjoining piece of property now occupied by a boarded-up building, to transform it “into a park and mixed-use community that will strengthen the arrival experience into central Healdsburg.”

David Hill, managing director and project manager for Replay Resorts, said Friday that the company is planning to build a hotel of 30 to 40 rooms, but “definitely fewer” than the 120 homes that were reported by some sources as word of the transaction spread.

Hill declined to say how many homes might be built, but said they would probably be a mix of duplexes, triplexes and some stacked dwelling units.

“We don't come at it with a hard and fast formula (of) ‘This is what we build,'” he said.

According to county records, the company paid $16.5 million for parcels that include the eight-acre lumber mill site and the two-acre Garden Inn, a shuttered 1920s building that has housed restaurants and guest accommodations through the years.

But the project could face a significant hurdle getting around Healdsburg's voter-approved growth management ordinance, which restricts new housing units to an average of 30 per year.

It seems certain to intensify the debate over whether voters should essentially scrap the ordinance, a proposal the divided City Council supported last month with a 3-2 vote to place the issue on the November ballot.

“There are significant constraints with the GMO, not just this, but any type of project,” City Manager David Mickaelian said.

He noted there are a number of planned homes already approved or set to be reviewed that are taking up the available housing allocations, including some of the 70 upscale homes in the Saggio Hills resort project expected to begin construction soon.

“It looks like allocations will be very difficult to come by,” he said.

The balance between more housing for families and workers and retaining Healdsburg's small-town charm has been part of an ongoing discussion for years, especially as real estate prices have escalated to some of the highest in Sonoma County.

Government-subsidized affordable housing is exempt from Healdsburg's growth control measure. But city officials say building that type of project is more challenging than ever, following the demise of state housing and redevelopment programs.

When an effort began in 2009 to create a vision plan for redeveloping an 80-acre area of central Healdsburg - including the NuForest site - consultants and city officials identified the growth management ordinance as an obstacle to facilitating new apartments and multi-family projects.

“We realized the GMO has unforeseen consequences,” City Councilman Gary Plass said Friday. “For us to be able to develop that site or sites like that, and get the housing we need, we have to change the makeup of the GMO.”

But Jim Winston, head of a group called Healdsburg Citizens for Responsible Growth, predicted Healdsburg “will be like the Wild West” without a growth cap in place.

“It would be ‘Welcome developers. Come to Healdsburg. We're for sale. Name your price,'” he said, adding that people opposed to development without a growth ordinance “are deeply concerned about what Healdsburg will look like in the next five to seven years.”

Winston said the Replay Resorts plan “has merit” and his group doesn't oppose the project - “but we need to know it will be done slowly and orderly over time.”

Attempts to come up with a formula to loosen the 16-year-old growth cap and come up with a compromise fizzled after years of workshops and meetings to try to address the housing quandary.

Last month, a city housing committee recommended doing away with the cap entirely while also requiring developers to double the amount of affordable units in their projects - from the current 15 percent to 30 percent.

As part of that proposal, the City Council also would have to develop a “Housing Action Plan” to find ways to remove barriers to less-expensive housing and create incentives to encourage affordable homes.

The recommendation from the housing committee came at the same meeting where a representative for NuForest said the current growth ordinance would prevent Replay Resorts from building a viable number of homes as part of the project.

Hill on Friday was reluctant to address how the city's growth ordinance will impact his company's project, but said there is no question the cap could make it difficult for building residential units.

He said it is too early in the development process to know how many housing units will ultimately be proposed.

“We're doing volume and massing studies to see how much of the land is consumed by buildings, open space and roads. We're also looking at building heights and amenities,” he said.

Replay Resorts has developed and operated resorts and residential developments in the continental United States, Hawaii, Mexico and the Caribbean.

Hill said Replay Resorts will work with the city and Healdsburg residents throughout the approval process.

The property is zoned for mixed use, which can include retail, offices, services, visitor accommodations or other uses possibly combined with residential development of up to 16 units per acre.

“We will respect and celebrate a design and an experience for this place that reflects the values unique to Sonoma (County) and Healdsburg itself,” Hill said.

He said the buildings will be no taller than the maximum four stories allowed under the Central Healdsburg Plan approved by the city a couple of years ago.

Hill said the lumberyard is expected to operate on the site for about another year.

NuForest, which employs approximately 70 people, has been in Healdsburg since 1982 and is a wholesale operation that does custom milling and manufactures siding, flooring, crown molding and other wood-based items.

The company has been eyeing a move out of Healdsburg for years, with the intent of relocating entirely to Cloverdale, where it already has an existing storage yard.

Editor's note: A previous version of this story had an incorrect name for Healdsburg Citizens For Responsible Growth.

You can reach Staff Writer Clark Mason at 521-5214 or clark.mason@pressdemocrat.com. On Twitter@clarkmas.