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Second SMART station, affordable housing blocked by new Petaluma City Council

In the new Petaluma City Council’s first meeting, a tie vote has all but killed the revised Corona Station project meant to create more than 500 homes and usher in the city’s second SMART train station.

It was an unceremonious end to a proposal that has dominated public meeting agendas for more than a year, sparked heated controversies and prompted a lawsuit from new Council member Brian Barncale that forced developer Todd Kurtin to go back to the drawing board.

“Unless some miracle gets pulled out of a hat, this whole thing is basically over,” Kurtin said the day after the vote. “At the end of the day, the economics of the project and the politics of the city just didn’t mesh, so it all fell apart.”

The convoluted project, its most recent iteration proposing 131 affordable units at the corner of Corona Road and North McDowell Boulevard, was inextricably tied to the funding of the proposed east side SMART station as well as the future of a 402-unit apartment project next to the current downtown train station.

The vote Monday night effectively denied a linchpin request made by the downtown apartment developer Hines Co. to count affordable housing units on Corona Road toward requirements related to the downtown project. Representatives for Hines say the refusal makes their project financially untenable and scuttles the web of agreements that linked all three projects.

“We wanted to use the affordable housing units at the Corona Station as the (downtown project’s) alternative housing compliance,” Kurtin said, referring to the city policy that requires developers either to include on-site affordable units or place them in an alternative off-site location. “Since we can’t use the Corona Station affordable units to fulfill that, then everything is going to be collapsing.”

The evening meeting marked the first time newly elected officials Barnacle and Dennis Pocekay virtually joined the dais. The inaugural council session resulted in a rare stalemate 3-3-1 vote, with Pocekay joining Mayor Teresa Barrett and Councilmember D’Lynda Fischer in denying the request, while Councilmembers Dave King, Mike Healy and Kevin McDonnell supported the project. Barnacle’s lawsuit against the Corona Station project was a clear conflict of interest, requiring the new council member to recuse himself on the vote.

The split vote could signal a new progressive bloc headed by Barrett and Fischer, after this week’s rebuke of a project that former Council members Gabe Kearney and Kathy Miller historically supported.

Barrett challenged the developer’s assertion that they’re unable to include on-site affordable housing units at the downtown site, drawing a line in the sand.

“I think the project leaders need to go back and decide whether they want to meet the Petaluma standards,” Barrett said, which she characterized as on-site affordable housing. “The developer has the ability to repackage this, and we have standards that we ask them to meet.”

This most recent proposal to build 100% affordable units on the Corona Road parcel was the development’s second iteration, after Barnacle’s lawsuit pushed Kurtin to find a more palatable plan. Kurtin withdrew the original 110 single-family design in November, after it collected Council approval. That withdrawal set off a domino effect that jeopardized the new transportation hub and a downtown housing complex.

Kurtin entered into a partnership with SMART years ago that resulted in an agreement to swap land, promising the rail agency land to use as parking for the second station. In return, SMART was to sell the expansive parcel behind the downtown station to Kurtin’s company, Lomas Partners, for development, giving the rail agency funds for the east side station’s construction. Lomas Partners would then sell that downtown parcel to Hines Co., who was behind the 402-unit proposal at the center of Monday’s Council meeting.

Barrett also offered up a few other reasons for her denial beyond the affordable housing location, including parking, an impression that the developer is inflexible and a long-standing doubt over SMART’s ability to deliver the second station, resurfacing a stubborn vein of mistrust between some in the city and the rail agency.

While Kurtin says he will scrap the affordable housing at Corona Road and return to market-rate units, a representative for SMART said the agency is still devoted to finding a way to build Petaluma’s second station, though its path forward is unclear.

Sonoma County Supervisor David Rabbitt, who represents the Petaluma area and sits on SMART’s board of directors, has led the charge to establish a second station for years. The former Petaluma City Council member and longtime resident says he will continue to push that effort.

“To me, this is a disappointing vote on many levels, including the lack of housing in Petaluma,” he said. “But the goal always will be to have a second station in Petaluma, and as long as I’m in government, that’s a priority for me.”

McDonnell lamented over what he sees as the loss of 131 desperately needed affordable housing units and the potential failure to secure the east side train station at Corona Road.

“I do not anticipate seeing this proposal coming back to council,” he said. “That’s where this big stakes poker comes in. If you think there’s a better project, you vote no. It was never a shiny perfect project, but I think 130 units of affordable units versus none was a pretty good deal.”

He added, “At the end of the day, it’s just never been something where everyone has been pulling the same direction.”

This story was updated Jan. 8 for publication in the Press Democrat.

(Contact Kathryn Palmer at kathryn.palmer@arguscourier.com, on Twitter @KathrynPlmr.)

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