Developer Bill Gallaher sells Elnoka site, detailing frustrations over Santa Rosa planning process

That issue arose with each version of the plan, particularly after evacuations during the 2017 Nuns and 2020 Glass fires led to traffic backups and long delays on Highway 12.

Two later versions ― one that called for 676 units and more recently a 272-unit project ― also stalled, even after Gallaher made concessions, such as limiting it to senior housing and reducing the scope of construction.

Gallaher: City processes stall development

Gallaher said much of the blame rests with the city.

Changes in leadership and staff in the Planning Department over the years meant it would take staff months to get up to speed, delaying reviews and progress, he said.

No progress was made on the project after submitting revised plans in summer 2021 that Gallaher said met zoning requirements, the general plan and appeared to have some buy-in from Oakmont residents.

“It was endless red tape and no urgency,” Gallaher said. “The council claims to be pro-housing, but it feels like they’ve done everything possible to slow it down.”

“They just wore us out,” his project manager, Steve McCullagh added.

Gallaher approached Burbank about a deal three months ago, he said.

Gallaher said that while the property seemed like a good investment, he sank money into studies, plans and attorneys and wasted years trying to get something built. Those are resources he could’ve used to pursue other projects, he said.

And he said his experience with Elnoka isn’t unique but indicative of the red tape some developers face in Santa Rosa.

Gallaher Companies has built 2,200 units in Sonoma County, including single family homes, apartments and four senior care facilities. He’s built more than 8,100 units total across 55 municipalities in the western U.S.

Gallaher also is founder of Oakmont Senior Living, which specializes in elder-care facilities, and founder and chairman of Poppy Bank.

He said Santa Rosa, by far, has been the hardest community to build in.

“We have developed in 50-plus jurisdictions throughout California, and we finally had to come to the same conclusion many other developers have come to, that it’s not possible to build market-rate housing in Santa Rosa in a timely and cost effective manner,” McCullagh said.

Over the years, Gallaher hoped elected city officials would be more friendly to development, but the November election did little to change that, said Gallaher, who, along with his family members, has sparked controversy with high-profile spending on political campaigns. He spent at least $1.7 million on an unsuccessful 2021 recall campaign against then-Sonoma County District Attorney Jill Ravitch after her office and state prosecutors sued his company over its abandonment of dozens of frail and elderly residents in two Oakmont Senior Living care homes in Fountaingrove as the 2017 Tubbs Fire bore down.

Developers’ complaints about planning processes aren’t new.

Gallaher has raised similar concerns before.

In 2009, he laid off nearly half the employees at his then-Santa Rosa headquarters, citing not the bad economy but the city’s slow planning process, which had delayed Elnoka and another project.

“We’re tired of it. We’re tired of being kicked in the teeth,” he said at the time.

Gallaher and McCullagh said the city has prioritized development downtown, easing certain requirements and reducing fees, which has made it difficult for projects outside the city center to get built.

“Look how well that’s worked out,” Gallaher said, characterizing the efforts as a “failure.”

He said projects get bogged down by excessive administrative and public reviews that sometimes are unnecessary.

He pointed to a proposal to swap out a wooden fence with a block fence at a town home project he built on Sebastopol Road, which required Design Review Board approval. The hearing delayed the work by weeks, and no one attended, he said.

Out of staff’s control, city officials say

City planning officials acknowledged that while the city is focused on building downtown and in other transportation and commercial corridors, housing is needed across the city.

The Elnoka project was handled appropriately, but sometimes delays are out of the city’s hands, officials said.

Changes to the plan over the years meant studies had to be revised or redone, said Jessica Jones, Santa Rosa’s deputy director of planning.

Changes to state environmental laws also required additional studies, such as fire evacuation analysis.

Jones said the city was still finalizing the environmental impact report and responding to an unprecedented 800-plus public comments when Gallaher submitted revised plans for the site in June 2021.

That forced the city to reexamine the report to see if revisions were needed.

Lengthy reviews and extensive public input are par for large developments, particularly in sensitive areas that have received as much public interest as Elnoka, said Planning and Economic Development Director Clare Hartman.

But some delays are out of the city’s control, she said.

Natural disasters, the COVID-19 pandemic and volatile market conditions have slowed construction across California and the nation.

The city has taken a concerted look since 2016 to streamline city processes and regulatory controls, particularly downtown and in other priority areas. That includes areas destroyed by the 2017 firestorm, to help thousands of property owners, including Gallaher, rebuild more quickly.

The city has sought to incentivize construction downtown through density bonuses that allow developers to build higher, reducing parking requirements, streamlining permit requirements and reducing fees, Hartman said.

The department’s limited staff have also been prioritized to review plans in those areas faster, she said.

But while downtown presents the best opportunity for adding density close to existing infrastructure and resources, she said, the city must add housing across its seven districts to meet housing goals.

Some 3,900 new homes were built in the past eight-year housing cycle, and 1,800 units are on the rise with more planned, she said.

Hartman pushed back on allegations her department stonewalled the Elnoka project. She said staff was responsive to Gallaher, and the project moved as fast as it could given the circumstances.

Developer says complaints are valid

Others were more sympathetic to Gallaher’s complaints.

Council member Chris Rogers, a proponent of downtown growth whose district includes a large portion of the city center, said Gallaher’s criticisms are fair and he understands the frustrations.

But residents have made clear they don’t support sprawl and want to see city-centered growth, he said.

“That doesn’t mean that projects farther out shouldn’t be considered or built, but it does mean that with finite city resources, staff and time, it has been focused on areas where it has been more appropriate to build,” Rogers said.

Developer Hugh Futrell, whose company has developed housing and commercial projects downtown, said land-use policies and incentives for downtown construction are some of the most progressive in California and they’ve had some success.

Though not all approved projects have been built, several mid-rise projects have been completed downtown and in Railroad Square in recent years, and 360 units are under construction with more set to break ground later this year.

Outside of downtown, Futrell admitted, development can be harder.

Large projects, especially hillside developments and projects in other environmentally-sensitive areas can face red tape. He said residents sometimes use CEQA, the state’s landmark environmental law, to halt projects.

“CEQA provides a treasure trove for affluent ZIP code objectionists to infinitely delay or kill projects,” he said, pointing to a recent lawsuit challenging the county’s redevelopment of the Sonoma Developmental Center.

“Site- and politically-sensitive projects do indeed result in a circular treadmill that incinerates years of efforts,” Futrell said.

“The city would say that all housing is a priority, but is there inadequate focus when it comes to these sensitive projects which could produce a lot of housing like Bill’s? Does the city default to a passive, red tape role in these cases? I suspect that’s the case.”

Future of the property

Wickham, Burbank’s COO, said the purchase gives the nonprofit a unique “opportunity to try to bring affordable housing to an area of the county that has historically lacked diversity in its housing stock.”

Burbank officials declined to comment on plans for the site, saying discussions were in the early stages.

Officials were studying the characteristics of the property and surrounding area to bring forward a project “that is in keeping with the existing neighborhood while also furthering the community’s housing goals.”

It’s unclear how quickly Burbank seeks to start construction, but the nonprofit will need to submit new plans and restart the development process.

Jones said some of the work that went into the environmental study for Gallaher’s project can be reused or modified, depending on the project, which could help speed up the process. But other studies will need to be redone.

The reviews will also require new public hearings, providing an opportunity for Oakmont and other residents to weigh in.

Reducing fire risks and evacuation concerns will be a top priority in any project, said Vice Mayor Dianna MacDonald, whose 3rd District includes the area.

She said Oakmont residents are likely to favor a project with less density and one that provides a new exit from the area to ease traffic on Highway 12.

She said she’d like to see a project that prioritizes affordable housing for seniors — consistent with Oakmont — and one with walking and biking paths to encourage different ways to get around.

“There’s a lot of caution about building in my district and concern over if it’s a proper area for building,” she said. “It’s not going to be popular with anybody to build anything there, so we have to see how we mitigate fears and how we do that is through a lot of open conversations.”

Burbank has been a great city partner and has a good reputation, MacDonald said, and she hoped she could help bridge conversations between the developer and neighbors.

“I haven’t seen their plans but certainly if they include safety measures and work with fire and police on those precautionary issues, I would welcome those conversations,” she said.

Oakmont Village Association manager Christel Antone said the sale was a “complete surprise,” but the association looked forward to working with Burbank, particularly on securing an additional evacuation route, the Oakmont News reported.

Gallaher said he expects Burbank will have more success, but it’s likely the company will face many of the same obstacles he did, though Oakmont doesn’t hold as much political sway as they once did under the city’s switch to district elections.

Gallaher said he would be happy to help finance development of Burbank’s project through his Poppy Bank.

“A nonprofit like Burbank will have a much better chance of success,” he said, adding it was a weight off his shoulders to sell the property.

“We are thrilled to have Burbank build it.”

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