Healdsburg consultant’s role questioned in sale of mill site to hotel developer

Before tourists discovered Healdsburg, before the “Redwood Empire” became Wine Country, there was a lumberyard at the gateway to downtown, one of the first sights to greet motorists coming off the freeway.

Nu Forest Products is still operating there, manufacturing siding, flooring and crown molding. But its days are numbered since the property sold this spring to a Canada-based company specializing in hotel and residential projects.

Just what will get built on the site is still uncertain, part of the ongoing debate over tourism, growth and housing affordability in one of the priciest real estate markets in Sonoma County.

But a city housing consultant’s ties to the buyer of the property, and his role in convincing the hotel developer to come to Healdsburg, have inflamed the discussion.

Jim Heid, who was hired by the city to help the community come up with a vision for remaking central Healdsburg, is under scrutiny for his ties to Replay Resorts, a former client of his that bought the Nu Forest property.

Critics, especially those who see Healdsburg’s small town character threatened by a flood of tourists and affluent, second-home buyers, complain Heid was hired as a neutral facilitator for community workshops on housing and redevelopment, yet enticed Replay Resorts to come to Healdsburg.

Heid is not accused of profiting from the deal, and city officials say he has done nothing improper as far as the Nu Forest sale. But his association with David Hill, project director for Replay Resorts, has prompted questions about favoritism, and whether he is tilting development toward a hotel and high-end housing that define other projects by the company.

Heid, who lives in Healdsburg, owns another house in town he began renting to Hill in May, which has raised more questions about whether his relationship with Replay is too close.

“The appearance is that this is not a totally objective relationship. It may be legal, but it raises questions the public is well deserved in asking,” former Healdsburg Mayor Pete Foppiano said of the landlord-tenant relationship between the two men, as well as Heid’s work as a consultant for the company in 2013.

Healdsburg has been grappling with whether to loosen its strict construction limit, now set at 30 new market-rate homes per year. The controversy has made Heid a lightning rod for opponents of a November ballot measure on the change to the growth ordinance, in part because it is seen as facilitating Replay’s ability to build homes if the company doesn’t have to compete as much for building allocations.

The proposed change would allow more than twice as many market-rate homes to be built - up to 420 homes over an initial six-year period - and allow the City Council to reset the cap without voter approval.

Heid, like the City Council, has come to favor amending the growth control measure, which puts him at odds with slower growth proponents and those skeptical of more hotels.

He acknowledges telling the developer in 2015 that the NuForest site and adjoining deteriorating Garden Inn building were for sale.

Hill said Heid told him of the 10 acres of developable land for sale in city limits. “I said ‘That’s impossible. Where are there 10 acres in Healdsburg?’” Hill said of his surprise to find such a large swath of land.

In April, Replay announced it was buying the site in a $16.5 million transaction with plans to build a hotel and housing, according to county records.

City Councilman Eric Ziedrich defended Heid, saying it was public information that the Nu Forest property was for sale.

“It’s not like he fed them some inside information,” Ziedrich said.

But Heid’s critics are not appeased.

“You put it all together and it starts to smell a little fishy,” said Jim Winston, head of Healdsburg Citizens for Responsible Growth.

Winston, who wrote the growth management ordinance approved by voters in 2000, is opposed to plans to amend it, fearing a floodgate of new development that will alter Healdsburg’s small-town character.

Some, like Winston, think Heid crossed a line and went beyond the role of neutral facilitator and fact provider at city-sponsored meetings. But others say Heid’s critics are looking for any opening to keep the tight growth ordinance in place and undermine the conclusion that it needs to be changed to allow for more housing diversity.

Heid said his critics are searching for a conspiracy that doesn’t exist.

“People are grasping at straws, not looking at the real question: What is the future of Healdsburg and how do you house people who want to live here? All of this is smoke and dust,” he said.

City Manager David Mickaelian said Heid has done good work for the city over a number of years and his connection to Replay is not something the city is questioning.

“There’s nothing that financially benefited him. I haven’t seen anything,” he said.

Heid said there is a larger context to the controversy swirling around him - a tension in Healdsburg surrounding two potential futures, neither right nor wrong.

One scenario is to continue the city’s current path, with few new homes and slow annual growth. But he said the result is a limited number of extremely high-priced, large, single-family homes plus whatever affordable housing the public sector can afford to build and finance.

“The middle of the community will continue to leave (because) those who work here cannot afford housing,” he said.

The alternative, he said, is to expand the number of housing units built each year, but with an emphasis on smaller, more “affordable-by-design” rentals and ownership units, to get more housing for those who work in Healdsburg, creating a more diverse population and economy.

Builders, he said, would be required to include more affordable housing in their projects and the public sector could focus on those who need the most help.

While there is general community consensus that diverse and less-expensive types of housing are needed, there is disagreement on how to achieve it.

Attorney Gail Jonas, a resident of more than 50 years, objects to what she describes as Heid’s “conservative, free market ideology.”

And she claims he is “tone deaf” to polls and workshops in which citizens expressed a desire to change the town’s focus from continued tourism promotion.

Warren Watkins, whose Healdsburg Citizens for Sustainable Solutions group fought against the luxury Saggio Hills resort hotel and residential project anticipated to break ground soon, said there is a tourism overload, and now a second resort wants to go downtown because of Heid’s invitation.

“It’s not supposed to be his role to determine that we have another resort,” Watkins said.

Heid was first hired by Healdsburg to engage the community in the visioning process launched in 2011 for the 80-acre area south of downtown, including the wood mill site.

It resulted in the City Council in 2014 adopting the Central Healdsburg Avenue Plan, which spelled out broad development guidelines for the area with housing, hotel, office and institutional uses.

Heid said Replay was a client of his for about four months in 2013 when he was hired to write a report for a potential hospitality and residential project on a portion of the large Langtry Ranch in Lake County. But the project never got off the ground.

Replay was already interested in Healdsburg, and he drew their attention to the Nu Forest site which had been for sale for 10 years, he said.

He noted the city conducted a long-term planning process, including an environmental study to confirm how the wood mill site and the area around it should be developed.

Now that it’s been sold to Replay, he said the process should be focused to make certain it’s developed consistent with the Central Healdsburg plan.

Hill, the official with Replay Resorts, said the company is looking to build a hotel with 40 to 50 rooms and a restaurant. As far as the number and type of new homes that will be included, he said it will hinge on whether the growth ordinance is amended by voters and the housing action plan is adopted, because it details home size and income-level objectives for new housing.

“We may not do anything until we know how people are voting in Healdsburg,” Hill said.

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