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A neighborhood group plans to file a lawsuit challenging Sonoma County’s sale of its old Santa Rosa hospital complex, creating another obstacle for the controversial effort to build hundreds of housing units on the sprawling property off Chanate Road.

In a two-page letter dated Monday, an unincorporated neighborhood association called Friends of Chanate said they will challenge the 82-acre real estate deal that was approved unanimously last month by the Sonoma County Board of Supervisors.

The letter was signed by Noreen Evans, a former state legislator who ran unsuccessfully for county supervisor last year and who now represents the neighborhood association as its attorney.

The suit will object to supervisors’ July 11 vote authorizing the sale and “providing parameters for the development” of the property, the letter says. It says neighbors will also take aim at the county’s determination that the sale agreement was exempt from a state law that would have required an extensive environmental review.

The letter does not say specifically who is in the group nor how many people it represents. Evans could not be immediately reached for comment Monday.

Board of Supervisors chairwoman Shirlee Zane said she still needs to speak with county staff regarding the letter from Evans, but she said she was “not worried” about the legal challenge. Reviews required under the law cited by Evans, the California Environmental Quality Act, are not necessary until government officials are actually deciding what will be developed on a property, and all the county has done so far is agree to sell the land, Zane said.

The project still needs to pass through Santa Rosa’s lengthy planning and permit approval process, which will include an environmental review, because the site lies within city limits.

“It’s a little premature. She might want to think about suing the city if they don’t do their due diligence,” Zane said. “We need housing. We all hope that it’s wildly successful.”

While the city has not yet made any decisions about what can be built on the Chanate Road site, developer Bill Gallaher has sketched out a conceptual plan, per the county’s request. He has envisioned building up to 800 rental units for the land, plus as many as 60 additional units for homeless veterans, a grocery store, an amphitheater and other community amenities. Dozens of acres would remain open space.

The total sales price will vary depending on what Santa Rosa lets Gallaher build. He has agreed to pay at least $6 million in cash for the land, intending to construct at least 400 units, and the price will rise by $13,800 for each additional unit he is allowed to develop, resulting in a maximum projected sales price of $11.5 million.

The deal has engendered substantial controversy among neighbors who felt the county was rushing the sale through without considering enough public input. Neighbors have also raised concerns about traffic, the loss of health care services on the site and the future of the property’s open lands.

But the county has defended the deal at every turn, stressing the project’s potential to produce a large amount of much-needed housing, and particularly those of the more affordable variety. Of the maximum 800 rental units, Gallaher intends to make 20 percent affordable to residents with very low incomes, which now equates to an annual salary of $44,050 for a family of four, according to county figures.

County Counsel Bruce Goldstein said his office would “certainly take a close look” at the neighborhood group’s claims once the lawsuit is filed. Gallaher’s project manager, Komron Shahhosseini, could not be reached Monday for comment.

“It’s not unusual in Sonoma County, when you have a controversial land-use item, for someone to try and sue based on CEQA, and generally speaking we have a pretty good rate of success,” Goldstein said.

The county has a “well reasoned” approach to the state environmental law, Goldstein said, calling it “disappointing” that a group would try to halt supervisors’ efforts to create housing — and specifically affordable housing for veterans.

Gallaher’s project already survived one major controversy after neighbors rallied against the deal’s inclusion of a 10-acre parcel they long understood to be part of an official open space preserve. In a concession to the neighbors’ campaign, the deal now requires Gallaher’s team to secure a conservation easement that will permanently protect the parcel.

Despite the looming legal battle, the Chanate Road project appears to be continuing ahead, at least for now.

“My understanding is that things can move forward until we’re told something different by a court,” Goldstein said.

You can reach Staff Writer J.D. Morris at 707-521-5337 or jd.morris@pressdemocrat.com.

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