New hotel eyed for Healdsburg is certain to stir controversy

A prominent piece of property just south of the Healdsburg Plaza is again being eyed for a hotel, certain to stir the ongoing debate over how far Healdsburg can go to accommodate tourists without losing its small-town identity.

David Wilhelm, a high-end real estate developer who has created exclusive golf course and resort properties, including the Mayacama Golf Club and its 31 home sites and casitas in the hills east of Windsor, is buying a parking lot on Healdsburg Avenue, along with a building fronting the historic plaza.

He has told several merchants he plans to build a hotel.

Both Wilhelm and those involved in the sale of the property declined comment this week other than to confirm the parking lot at 230 and 244 Healdsburg Ave. is in escrow, along with the building on Matheson Street across from the plaza that contains Copperfield Books and three other businesses. The two parcels are contiguous.

“I haven’t purchased it yet. When I do, I will make a statement,” Wilhelm said when reached by telephone.

But merchants in the Matheson Street building said he came around in early July and introduced himself as the new landlord.

“He said he owned Mayacama (Golf Club),” said Annette Ballestero, owner of the One World Fair Trade Store inside the Matheson Street building. “He said he would make the parking lot a hotel. He said it would take awhile.”

Details of the size and scope of the hotel have not been disclosed, but Wilhelm’s ex-wife said “he wants to create a pretty hotel with an interior courtyard and balconies.”

“Lots of times people come to Mayacama and don’t want to play golf. They want to be in Healdsburg where the action is,” Mary Linda Wilhelm said of the market a hotel could serve.

But building a hotel on the property is fraught with potential obstacles. A previous boutique hotel group, the Kessler Collection, withdrew its proposal for a 75-room, five-story hotel on the parking lot site in the face of a community outcry over its height and scale.

The company looked at reducing the size before deciding in late 2013 that a smaller project would not be financially feasible.

City officials note that the hotel would need to have parking for guests and employees, a challenge if it is built on top of an existing parking lot. There is the possibility of underground parking, but that would be expensive.

Regardless of the details, the project is likely to engender intense scrutiny if not opposition from residents who don’t want to see more hotels downtown and worry about an overconcentration of visitor-serving businesses at the expense of locals’ needs.

There have been calls for “sustainable tourism,” a phrase gaining traction among residents concerned about too many wine tasting rooms, traffic congestion, lack of parking and rising housing costs linked to second-home buyers who make it even tougher for families to afford to live in Healdsburg.

Some have called for a moratorium on approving new hotels until a study can be conducted on the positive and negative impacts of tourism.

City Council members have not shown any inclination to impose a moratorium but have agreed to commission a study and survey of tourism’s effects.

“Another hotel going in downtown will annoy some people,” Mayor Shaun McCaffery said this week. “It takes proper outreach and a buy-in from the community, if indeed that’s what he’s doing.”

The mayor said there are two competing schools of thought in Healdsburg about hotels: The first is that there are too many and they should be limited, because “if you have too many hotels you are like a fake town.”

The contrary view, he said, is “if the demand is there, why not take advantage of it?” and create more accommodations to capture additional bed taxes that help sustain the city’s general fund, parks, recreation, and housing programs.

City officials say it is difficult to comment on the project without knowing more details about it.

“I hope whoever purchases the property listens to the community and has an understanding of what the community’s expectations are before deciding on doing anything with the property,” said City Manager David Mickaelian.

Some point to the successful example of the developers of the h3 hotel, which is currently under construction across the street from the parking lot being purchased by Wilhelm.

After the Kessler debacle, the Sher family and Paolo Petrone - the principals of the h3 hotel, who also built the Hotel Healdsburg and h2 hotels - made sure to vet their project in informational meetings prior to submitting anything to the city.

They met with individual council members, business leaders and even members of a citizens’ group that wanted to restrict the size of new hotels. Ultimately the developers decided to scale down the size from 43 rooms to 39.

Eric Drew, the real estate agent who represents the owners of the parking lot on Healdsburg Avenue, said this time around the sale also includes the Matheson Street building.

The sellers are John Holt, Bill Wheeler and survivors of the late Rob Jacobi, a former city planning director.

Zoning on the properties is downtown commercial, which allows for restaurants, retail shops, hotels and residential units as long as residential is not the primary component.

The asking price for the properties was $7.9 million, although Drew, who is under a confidentiality agreement, would not divulge the price it sold for, nor what is planned by the buyer.

“Kessler was trying to fit an oversized foot into a very small shoe. Probably more appropriate is something half of what he was proposing, or less,” Drew said.

Any project would require approval by the Planning Commission, and if appealed would go to the City Council.

How the Matheson Street building fits into the plans for a new hotel remains uncertain. In addition to the Fair Trade store and Copperfield’s, there is also a fabric store and a longtime kitchenware shop in the building. Store employees expressed anxiety about how long they will be able to stay, given the pending sale of the property.

Ballestero said when she asked Wilhelm what he intends to do with the retail stores, he replied that he didn’t know.

But Drew said the stores’ leases extend for three to five more years.

“Any buyer would have to honor existing leases,” he said.

You can reach Staff Writer Clark Mason at 707-521-5214 or clark.mason@pressdemocrat.com. On Twitter @clarkmas