Sonoma County’s Roseland housing, commercial project faces multimillion-dollar funding gap

The county Community Development Commission faces an $18.6 million funding gap to pay for infrastructure work on the 7.4-acre site on Sebastopol Road.|

A multimillion-dollar funding gap could jeopardize a long-awaited housing and commercial project on Sebastopol Road in Roseland.

The Sonoma County Community Development Commission faces an $18.6 million deficit to cover costs of infrastructure work on a 7.4-acre development known as Tierra de Rosas. That work must be completed before vertical construction can start.

The funding gap has forced county officials and developer MidPen Housing, tasked with building the affordable apartments and overseeing development on the entire site, to scramble to find other solutions.

One proposal hinges on getting buy-in from the California Department of Housing and Community Development to use money allocated for housing construction for the street, water and sewer work.

That approval could “unlock the whole project,” said Ali Gaylord, MidPen’s housing development director.

State officials have yet to respond to the request.

But if it’s denied, the project, which elected officials have been discussing since Sonoma County bought the property in 2011, is likely to see further delay.

“The community has been very patient and has a deep investment in this project,” Gaylord said. “We’re doing everything that we can to get this to move forward.”

Tierra de Rosas would transform the largely vacant Roseland Village Shopping Center into 175 mixed-income apartments with retail shops, a community building and a public plaza.

The project is expected to bring long-promised public investments to Roseland, a predominantly Latino neighborhood folded into Santa Rosa’s city limits in 2017.

The project has broad political and community support despite pushback from neighboring businesses and their landlord who fear the project will negatively impact their shops.

“This is a project that can be transformational to one of the most disadvantaged parts of our community,” Sonoma County Board of Supervisors Chair Chris Coursey said. “I have high hopes for it and I’m going to keep working until it gets done.”

County work includes roads, public plaza

Public improvements include extending West Avenue to the Joe Rodota Trail north of the site and building other streets on the property, said Kathleen Kane, assistant executive director of the county Community Development Commission.

Contractors will have to relocate and install water and sewer lines and conduct other underground utility work, build parking and make improvements to the street frontage.

The work also includes construction of a 1-acre public plaza along Sebastopol Road.

Kane said that work must be done before or concurrently with the housing and other construction.

Overall, the Community Development Commission’s financial responsibility is pegged at about $40.5 million, which includes acquisition of the property and prior land remediation.

The county has received about $21.9 million from various sources, including local funds and state grants, but needs an additional $18.6 million to finish the work.

Sonoma County purchased the property — home to a since-shuttered bowling alley, grocery store and dry cleaner in 2011 — seeking to transform it into a mixed-use center.

The project was nearly axed following the dissolution of the state’s redevelopment agencies during the Great Recession and was tied up in funding and legal disputes.

It includes 75 affordable apartments for families with incomes between 30% and 60% of the area’s median income, 100 market-rate apartments, a 24,000-square-foot civic building and a 7,400-square-foot food hall where the county envisions having restaurants and shops.

Infrastructure work was initially expected to start in the first quarter of 2022 with construction of the affordable apartments starting by end of last year.

Today, the only progress made on the project has been the completion of the Mitote Food Park that opened last summer.

State funds could make project viable

MidPen in early January was notified it received a $25.3 million California Housing Accelerator conditional award meant to help fund shovel-ready affordable housing projects.

The regional nonprofit housing developer has requested that the state allow them to share a portion of the award ― just under $11 million ― with the Community Development Commission to help pay for the infrastructure expenses.

MidPen must apply for low-income housing tax credits and tax-exempt bonds, which the developer plans to do this week. Those funds and a county housing loan would help cover construction costs estimated at $65 million.

The California Department of Housing and Community Development had not responded to MidPen’s request as of Friday but Gaylord said conversations with the state are ongoing.

“HCD really understands that this is a really important project to both the city and the county and … it checks a lot of boxes,” Gaylord said, noting it helps meet state housing goals and will breathe new life into an infill site.

The funding would help decrease the gap to a more manageable amount that the developer and Community Development Commission have proposed filling with other previously awarded housing funds.

County officials plan to apply for a $2 million grant from the Agricultural Preservation and Open Space District to help pay for the plaza and they are finding ways to cut costs, too.

“We have a high degree of confidence we could fill (the gap) and start construction,” Kane said.

The county will have to seek other financing options if the state denies MidPen’s request. MidPen would lose out on the state accelerator funds and would have to wait to apply for housing tax credits in a future round of funding.

‘Heart of Roseland’

MidPen will know in May if it qualified for tax credits. Construction must start by September if MidPen is successful.

That short time frame would mean the Community Development Commission would have to seek a contractor to begin infrastructure work on the site as soon as possible.

Kane and Gaylord acknowledged it’s tight but doable and said public improvements and site work on the affordable housing parcel likely will occur concurrently.

MidPen has already submitted a building permit to Santa Rosa for the affordable apartments, which is under review, and applications for the site work, Gaylord said.

Construction of the affordable apartments is expected to take 16 months and be completed in spring 2025, while infrastructure work on the entire site is expected to take up to 18 months.

Work on the market-rate housing, civic building and commercial center will occur in future phases.

Gaylord said residents have made it clear developing the site is a priority and the thriving Mitote Food Park is representative of how important public investment is in this area.

She’s glad residents are still behind the project years later, she said.

“This is the heart of Roseland,” she said. “This is a really important project and we’re optimistic that we will see the finish line.”

Coursey, whose district includes Roseland, said supervisors have lobbied lawmakers in Sacramento, including state Sen. Mike McGuire, D-Healdsburg, who served on the board that approved the project 10 years ago, and written letters to state housing officials in support of the project.

The accelerator funds are designed to fund these types of projects and the request is for a “fairly minor” exception to the rules to allow the money to be used for infrastructure work, Coursey said.

“I am counting on HCD to do the right thing,” he added. “That couple acres of asphalt in the middle of Roseland is the liveliest piece of real estate in Santa Rosa. … Just imagine how it could be enlivened by 175 housing units, a real plaza and other civic and commercial spaces.”

You can reach Staff Writer Paulina Pineda at 707-521-5268 or On Twitter @paulinapineda22.

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