Trucks wait to be loaded at the Shamrock ready-mix concrete plant on Hopper St. in Petaluma.

Shamrock Materials says Sonoma County competitors have 'unfair advantage' because they don't have proper permits

KEVIN MCCALLUM
THE PRESS DEMOCRAT

One of the county's largest concrete producers is pressuring Sonoma County officials to shut down two of its competitors, arguing that the county has unfairly allowed its rivals to continue operating without proper permits.

Shamrock Materials, Inc. last month asked a Sonoma County Superior Court judge to order county planning officials to take enforcement action against competitors Wheeler Zamaroni in Santa Rosa and Austin Creek Materials sites in Cazadero and Santa Rosa.

San Rafael-based Shamrock claims both firms are operating facilities in violation of state and county laws. It alleges the county's Permit and Resource Management Department has failed to enforce those laws.

"They're getting an unfair advantage over the rest of us that have had to go through the permit process," said David Ripple, vice president of Shamrock. "We just want a level playing field."

Shamrock's complaint is unusual because it argues that the county's permit process is too permissive, a position not often taken by Sonoma County businesses.

"I don't think in my 25 years I've ever seen a lawsuit like this," said Pete Parkinson, county planning director.

The complaint may also reflect how fierce competition has become in an industry that has seen sales plummet following the collapse of the county's construction industry.

"When times are good and you're busy, you're not so worried about your competition because you're doing well," said Louis Zamaroni, president of Wheeler Zamaroni.

County officials say they have concerns about all three facilities cited by Shamrock, but they are working through the permitting process to bring the operations into compliance.

"We generally find that it is much more productive to work with those operations through the permit process than it is to go and shut somebody down," Parkinson said.

One of the locations at issue is Wheeler Zamaroni's quarry and landscape materials operation on Petaluma Hill Road. Since 1989, when it received a use permit, the operation has expanded without the proper permits, according to the county.

The others are Austin Creek's new aggregate distribution yard at the Airport Industrial Park and its quarry on Cazadero Highway. The yard is operating without a permit, and the quarry may be operating in violation of its existing permits, according to county officials.

Shamrock claims the two companies have been allowed to continue operating these "illegal" facilities for months. The county should instead have shut down the illegal portions of the operations after the violations became known, Shamrock claims.

"There is no question that the Wheeler Zamaroni site and the two Austin Creek sites have engaged and continue to engage in clear violations of county and state law," Shamrock's petition reads, adding that there is "no excuse" for the county's failure to shut the operations down.

But enforcing alleged code violations is not cut-and-dried, Parkinson said.

County officials aren't required by law to shut down operations over permit issues, and Shamrock has no legal basis to compel such action, Parkinson said.

The county uses a number of factors to determine whether to allow a company to continue operating facilities while permit issues are pending, Parkinson said.

These include whether there are immediate health, safety or environmental issues being created by the unpermitted facilities, and whether there are community concerns, he said. None of these are present in the three locations at issue, Parkinson said.

"It's not like we have a whole bunch of complaints about these operations," he said.

Planners also consider whether there's a likelihood that a permit application would ultimately be granted for the operations. In the case of Wheeler Zamaroni and the Austin Creek quarry, the locations are long-established mining operations.

Austin Creek's airport yard, which began operating last year while an application was pending, is located in an industrial area where similar uses are allowed, Parkinson said.

Zamaroni thinks something more base is behind Shamrock's efforts.

"They've had a monopoly down there in Marin County, and I think they are trying to do the same thing here," Zamaroni said. "They don't like competition."

Since getting its 1989 permit for a landscaping material yard, Wheeler Zamaroni has slowly inched into Shamrock's concrete market.

It has added a "batch plant" for mixing concrete, a complex made up of cement silos, a hopper for sand and gravel, and a belt to move material around.

In 2007, the company added a pug mill, a machine it uses to mix gravel and dry cement together to form the base rock used for roads. Zamaroni invested in the mill to better serve contractors widening Highway 101, he said.

Both seemed like reasonable additions to his business and within the scope of his existing use permit, he said.

"Our permit entitles us to do blending and mixing of aggregate and such, so our interpretation of that was our pug mill was not outside of our use permit," Zamaroni said.

The expansions put Wheeler Zamaroni in more direct competition with Shamrock, which has three ready-mix concrete facilities in the county. Ripple, who lives in Novato, said he got curious in 2008 after spotting one of Wheeler Zamaroni's mixer trucks -- under the name North Gate Ready Mix, Inc. -- on the highway near his home, he said.

He checked to see if the operation had the proper permits, and he found that the county had opened an investigation a year earlier, he said.

In the three years since, the county has allowed Wheeler Zamaroni to continue operating its "illegal" concrete operations, Ripple said.

Shamrock had to spend the money to get the proper permits to open its facilities, and when its competitors don't, that gives them a competitive advantage, Ripple said.

"We're all in the same business, and we should be all playing by the same set of rules," Ripple said.

For example, Shamrock spent a year getting permits for its Petaluma ready-mix plant, Ripple said. The permit includes numerous conditions addressing issues such as hours of operation, truck traffic and air quality, he said. Similarly, efforts to open a new facility on Todd Road have taken eight years and cost it hundreds of thousands, Ripple said.

"The process was long and arduous," Ripple said.

County officials have at times expressed frustration with the company's failure to meet deadlines for information requests. But the application is now complete, and planners are reviewing it.

The new activities at the site, including a stone fabrication building that houses a massive stone saw, will require significant changes to its 1989 permit, including an amendment to the General Plan to rezone the land from diversified agricultural to limited industrial, and changes to the use permit.

Public hearings will be required but have yet to be set, according to the planner on the case, Karin Theriault.

The Austin Creek distribution yard is a simpler issue. Austin Creek Materials is based in Cazadero, where it also operates a quarry. Last May, it sought to operate a simple aggregate distribution facility on Aviation Boulevard.

The application process took longer than the company expected, however, and by Sept. 1, the company had begun operating at the location, according to Steve Canalis, general manager.

In an e-mail to a county planner, Canalis explained due to the "timing issues associated with the permitting process" and the "financial hardships associated with the current economic conditions, we had no other option."

For jumping the gun, however, Canalis will pay financial penalties. The county is proposing a nearly $26,000 fine against the company for opening the business without permits.

"It's not chump change," Parkinson said.

Canalis called the suit a "publicity stunt" and an "attempt to discredit the good name and success" of a family-owned business operating since 1946.

"It is unfortunate to see a competitor that has put themselves in a position that requires them to stoop to this level and these types of tactics," Canalis said in a statement.

Ripple denies the company is afraid of competition, looking for publicity, or trying to sully the name of its rivals.

He said it has been frustrating to scrupulously follow the county's permitting rules, only to watch his competitors flout them and be allowed to profit from their actions.

"We did not do this lightly," Ripple said. "We did this only after much thought and only to get the county to enforce its own rules."

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com.

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