Planned for two decades, construction begins on Cannery housing project in Santa Rosa

After more than two decades in the making and several setbacks, construction on the long-awaited Cannery project near Santa Rosa’s Railroad Square has finally started.

The project, being developed by San Francisco-based the John Stewart Company, will transform the more than century-old former fruit-packing site on West Third Street, just west of the SMART station, into 129 affordable apartments.

Work on the 2-acre property began Oct. 31 and building is expected to start in the summer.

The Cannery project is one of the largest planned or underway developments in Santa Rosa and, along with the 5.4-acre former rail yard adjacent to it, it represents the largest such site in downtown. The rail yard property, previously owned by SMART, was sold in 2018 to Petaluma-based Cornerstone Properties, which plans to build up to 500 apartments.

Santa Rosa and rail officials had long sought to develop the entire property to have a bustling mixed-use development there before trains began running in 2017. But those hopes were dashed, largely by the Great Recession and a lack of construction funding.

A $57 million state loan through the California Housing Accelerator program awarded to the Cannery project in February and a recent permanent loan secured by real estate investment firm Jones Lang LaSalle helped move construction forward.

Jack Gardner, president and CEO of the John Stewart Company, said in a statement the company’s late founder, John Stewart, and his partners worked 20 years to make the project a reality and the recent funding marked a milestone for the project.

“We are overjoyed to have started construction on John’s legacy project, which will bring 129 affordable and transit-oriented housing units to this fire-ravaged community,” Gardner said.

Construction is expected to be completed in January 2025 and the total project cost is $95.2 million, according to Jenny Collins, assistant project manager with the John Stewart Company.

Redevelopment stalled on historic site

Most of the cannery, which was owned by California Packing Company, closed in 1932 when the company consolidated operations.

As plans for a commuter rail connecting Marin and Sonoma counties advanced, city and rail officials eyed a project along the line that would draw residents downtown and provide riders for the train.

Stewart bought the 2-acre property alongside a bend of Santa Rosa Creek in 1999 for $1 million. The property included two cannery buildings and the historic water tower.

He spent the next several years cleaning up environmental contamination, demolishing most of the old buildings and meeting with local officials and residents to create a vision for his property and the adjoining rail yard.

Early plans for the entire 7-acre property called for a food and wine center like that in the Ferry Building in San Francisco, office space, a culinary academy, a fitness center and hundreds of apartments.

But the Great Recession stalled progress on the project.

It was nearly axed following the dissolution of the state’s redevelopment agencies in 2012 by then-Gov. Jerry Brown, who sought to divert tax revenues meant for projects like the Cannery to fill gaps in the state budget.

The project lost out on $5.5 million in tax funding that had been set aside for the development, which put at risk $11.3 million in matching state grant funds.

Stewart sought to scale down the plan and build a smaller, 93-unit senior housing project on his property, which he hoped would later spur development of the rest of the site, but the City Council voted down the plan in 2013.

The council majority said the smaller project didn’t fit in with the long-term vision for the area and they couldn’t justify allocating public funds to Stewart that were meant to be used on the entire property.

Council members who favored moving forward with the smaller development warned their colleagues nothing would be built for at least a decade if they rejected the proposal — foreshadowing the delay to come.

Stewart walked away from the project after the vote and struggles to secure financing further delayed any work on the site.

Mix of housing, resident amenities

The newest iteration of the project was approved in August 2020 under the fast-tracked state-mandated process for affordable housing projects, geared to help alleviate the chronic housing shortage.

Stewart died in September 2020, a month after the project was approved.

The project will feature studio, one- and two-bedroom units in a six-story building. The development will have a computer lab, community room, on-site laundry, two courtyards and a children’s play area.

A quarter of the units will be reserved for people experiencing homelessness and on-site wraparound services will be provided by LifeSTEPS, a Sacramento nonprofit that provides social services. The group and developer have partnered on several projects, Collins said.

Portions of the cannery’s brick walls, loading docks and the water tower that now rests on the ground will be restored and incorporated into the design.

A public pathway will be added connecting the site to the bike and pedestrian walkway along Santa Rosa Creek.

Construction crews recently erected shoring along the existing cannery walls, put up temporary fencing and have begun conducting site and utility work.

In addition to the Housing Accelerator funds, the developer also received: $10.3 million in Community Development Block Grants disaster relief funds aimed at helping Santa Rosa rebuild its housing stock after the 2017 firestorm that destroyed 5% of the city’s housing; a $3.2 million state infill development grant; and $450,000 in predevelopment funding from the city’s housing authority, Collins said.

Stewart’s widow, Gussie Stewart, the company and the development team also worked together to fill a $7 million funding gap, Collins said.

Collins said the company hopes the project is a catalyst for additional development on the western end of downtown.

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