SMART advances mixed-use housing project for Santa Rosa’s Railroad Square

For more than a decade, the leaders of Sonoma County’s largest city have dreamed of transforming a cluster of vacant properties along the railroad tracks in downtown Santa Rosa into a vital new village filled with people opting for lower-impact urban living.

Time after time, proposals to develop the western side of Railroad Square have fallen apart, victims of political infighting, neighborhood opposition and economic slumps.

But the impending arrival of a $428 million regional rail system is breathing new life into efforts to create high-density housing around the Sonoma-Marin Area Rail Transit platform in Railroad Square.

SMART has narrowed its search for a development partner as it prepares to start trains rolling through Santa Rosa later this year. Next month, SMART and the finalist in its quest for a development partner will present a detailed plan to build out the property.

As early as next summer, construction could get underway on a complex of market-rate and affordable apartments, retail spaces focused on food and wine, and a public plaza on a 5.4-acre site just west of the Railroad Square station.

“The market is now ripe for this project to reboot,” said Deborah Fudge, a Windsor city councilwoman and SMART board member active in past efforts to develop the property.

City and SMART officials have long been concerned that high-density housing around the rail station - viewed as a key to the success of the 43-mile rail line - has failed to materialize to date.

When riders get off trains at the downtown Santa Rosa station later this year, they’ll be greeted by a landscape virtually unchanged in a generation.

To the east, they’ll find the historic Railroad Square district, with its cozy coffeehouses, quirky antique shops and trendy restaurants. To the west, they will see debris-strewn vacant lots.

Mayor John Sawyer said he had high hopes that by the time SMART began operating, the housing and retail developments around the stations would be well underway.

“It was always my hope that when the trains arrived, they would be met with an attractive and thoughtful development on the properties around our station,” Sawyer said. “It’s clear that will no longer be the case.”

But after years of focusing on the herculean task of building a rail line, SMART is turning its attention to building housing. The rail authority is focusing on a single developer as it narrows its search for a partner to help it develop the high-profile Railroad Square site.

ROEM Development Corp. of Santa Clara, one of five firms to express interest in the project, is now the sole finalist left in negotiations with SMART. A second finalist, The Wolff Co. of Scottsdale, Ariz., which recently completed the 270-unit Annabel apartment complex south of Coddingtown, pulled out of the running last month.

The company’s president, Tim Wolff, said he was concerned that uncertainty about the affordable housing requirements of the project and the city’s design review process made the project too risky. Wolff asked SMART to pause the selection process and the city to define the affordable housing requirement for the project.

“Our experience informs that to leave such a critical and socially sensitive matter open until late in a public process does not make it easier to resolve,” Wolff wrote to the agency.

But SMART has no intention of pausing the process, said Farad Mansourian, SMART’s general manager. It is embracing the proposal submitted by ROEM, which has constructed over 3,000 units in more than 30 developments around the state since 2000.

The company envisions 268 one- and two-bedroom apartments, wrapped around a 400-space parking garage. That would make it the single largest housing project, in terms of units, in the city’s current development pipeline.

ROEM increased the number of units from the 246 originally proposed, dropped the three-bedroom units and increased the number of proposed parking spaces after meeting with city staff.

The company also is proposing 15,000 square feet of retail space anchored by a food-and-wine market similar to the Oxbow Market in Napa.

The company says is it targeting “young professionals and small families that want to be close to downtown Santa Rosa and Railroad Square.” Price ranges for the market-rate apartments were $1,900 to $2,350 a month, but the number of units to be set aside for low- and moderate-income people has yet to be established.

Alex Sanchez, vice president of ROEM, said transit-oriented developments with workforce housing are the priority for many communities in the state right now.

In other parts of the Bay Area, major companies such as Google and Genentech are forced to bus their employees in from far afield largely because not enough housing has historically been built near transit, he said. While the challenges are more acute in places like Silicon Valley, they also are apparent in the North Bay, he said.

“The market is right and local governments are cooperating with each other to get transit-oriented development done,” Sanchez said. “This is the perfect window of opportunity for a project like the SMART site.”

The city didn’t dictate number of affordable units, but staff made sure potential developers understood the City Council wants to see more affordable units included in housing developments, said David Guhin, interim director of the city’s Planning and Economic Development department.

When developers set aside at least 15 percent of their rental units for lower-income residents, they’re not required to pay fees that would support construction of affordable units elsewhere.

Though based in Santa Clara, ROEM has assembled a local design team, including TLCD Architecture, BKF Engineering and environmental consultants EBA Engineering Inc.

The environmental work may prove key because the site has known contamination issues. The owner of the neighboring Cannery property, John Stewart, spent millions of dollars on underground remediation efforts before halting his efforts after the City Council questioned the most recent iteration of his project.

ROEM’s proposal will be presented by SMART and company officials at a meeting in Santa Rosa on July 11.

Mansourian said he isn’t concerned that only one developer decided to fully participate.

“We’re looking at quality,” Mansourian said. “If we get a quality development with a quality firm that can produce the financing and do this within a reasonable amount of time, then that’s terrific.”

Sonoma County Supervisor Shirlee Zane, who serves on the SMART board and represents central Santa Rosa, said she wishes there was more than one proposal but she’s impressed with the one she has seen. The city and SMART have worked well together to date, and she said she expects that will continue.

Similar plans for a $150 million mixed-use project on the Railroad Square property fell apart during the recession. Political infighting between SMART and the city, wage demands from labor and environmental groups, neighborhood opposition to the proposed affordable housing, and the tight lending environment all conspired to doom that effort.

But Zane expects those past squabbles will take a back seat to the clear and pressing need for additional housing.

“I think the highest priority for most people is let’s get some affordable housing,” she said.

ROEM estimates the project will cost $85 million, which will generate significant local tax revenue.

If, after receiving community feedback, the SMART board agrees to partner with ROEM, the company expects the community outreach process, environmental review and entitlement processes to start right away and take about nine months.

Construction could begin in June 2017 and would likely take two years, with the housing beginning first and the retail buildings following.

“I wish all of this happened sooner. I’m glad it’s happening now,” Councilman Chris Coursey said.

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