Sonoma County housing projects tied to SMART line face mounting obstacles
More than $1 billion in planned development along the passenger rail line in Sonoma County stands to be delayed as a result of the economic recession brought by the coronavirus pandemic, which has factored in setbacks for several marquee projects that cities and supporters have billed as transformative.
Many of the new projects are touted as living, working and retail spaces less reliant on cars. But the plans, from Petaluma to Healdsburg, have been postponed or thrown into limbo amid uncertainty about governmental approvals, financing and construction, crimping efforts to address the county’s housing crisis at the same time that people have been forced to reevaluate the way they work, shop, dine and use public transit.
The new reality has left developers scrambling to rethink the layout of mixed-use developments up and down the SMART line, where more than 1,800 units of high-density housing was planned or slated for construction.
The largest of those projects is Rohnert Park’s $400 million central square built around its Sonoma-Marin Area Rail Transit station. Groundbreaking on the Station Avenue project is a moving target, with no reported construction timeline, making the city’s decades-long dream of a downtown area elusive.
“It’s a hugely important project to Rohnert Park,” said longtime Councilman Jake Mackenzie. “Its execution has obviously not been made any easier by what we’re going through at the moment, but still the vision exists and the desire to help implement it still exists. I do believe that eventually it will be built. But what the timing is going to be on that, I don’t know.”
The City Council in late 2018 approved the project on the 32-acre former State Farm Insurance campus. It calls for 460 apartments, a five-story, 156-room luxury hotel, and 270,000 square feet of space for offices, shops and restaurants.
The obstacles for transit-oriented residential construction are some of the same across the building sector, and financing challenges are chief among them, said Keith Woods, chief executive officer of the North Coast Builders Exchange, a trade group.
The county’s easing of restrictions on residential construction earlier this month could pave the way for some projects, he said. But securing construction loans is bound to be tough under the current economic headwinds.
“That’s the great unknown,” Woods said. “These are great plans, and every one of these projects would have strong support of most of the community. But none of us write the checks for them, so the key becomes, can they get financing?”
Rohnert Park representatives say they are still optimistic about their downtown vision, but concede it’s likely to take longer to realize.
“It’ll be at this site, definitely. I think this developer still believes in the project,” said City Manager Darrin Jenkins. “I think it’s going to happen. It’s just a question of when, and that depends on what’s going on sort of around the globe really with respect to the virus and economic impacts of that.”
San Francisco-based Laulima Development paid $13.5 million for the land in late 2017 and has put the project on hold before, most recently over last summer, a delay that Laulima representatives linked to high local construction costs and financing challenges. Its original completion date for the first phase of the project was this fall.
David Bouquillon, Laulima’s managing partner, did not respond to interview requests over three weeks. In regular updates with city officials, Bouquillon has discussed revising the project, including moving the location of the hotel on the property, but keeping the remainder of the downtown development intact, according to Jenkins.
To the north, Windsor’s plans to develop a new, $280 million civic center, hotel and housing project around the Town Green also have hit the skids.
The Town Council approved last week a yearlong extension of its exclusive negotiating agreement with the Encinitas-based developer Robert Green Co.
“With COVID-19, the economy and business especially in the hospitality industry has been upended and it’s really uncertain on timing of when we might come out of this,” said Windsor Town Manager Ken MacNab. “A year is a reasonable amount of time. It may be generous, it may not be. We don’t know if in a year the developer will be in any better position than they are today.”
The controversial development is still in early stages of planning, but calls for a new city hall, police station, library and school district offices, along with a 151-room hotel and 87 condos.
The delay follows setbacks in Windsor for a pair of large multifamily housing projects that together account for almost 750 housing units near the town’s future $65 million SMART station, expected to open by the end of next year.