Sonoma County poised to map fault lines ahead of Chanate campus sale

In the wake of another round of failed negotiations with developers, Sonoma County government officials are poised to spend a half million dollars to pinpoint the seismic fault lines thought to underlie the county’s 72-acre Chanate Road campus, hoping to sooth any skittish buyers in the next round of bidding on the troubled property.

If approved Tuesday by the Board of Supervisors, the first-of-its-kind comprehensive geological and geotechnical review is expected to shed new light on fault location and frequency of earthquake activity at the northeastern Santa Rosa site, which the county has been trying to sell since 2017.

Despite numerous studies in the past 50 years, county leaders say the specificity of a geotechnical review, where contractors dig a network of deep trenches across the property, is key to unlocking the parcel’s potential for redevelopment. Such a study, combined with plans to map buildable areas on the property, would give prospective buyers more certainty and boost the price tag for the land, officials say.

But the work, which also includes a new appraisal, is pegged at $520,000, and it would extend the county’s timeline for a sale to at least October, potentially adding another $1 million expense for upkeep that now costs about $100,000 a month. County officials have set a Dec. 31 deadline for the sale, with hopes of completing the process earlier.

“On the Chanate property, previous prospective buyers have come up to this point in their due diligence…they want to start renegotiating,” Supervisor Chris Coursey said in an interview Monday. “The county has been advised that having this information available in the sale package will answer the questions ahead of time…remove some of that uncertainty, and make it a more attractive piece of property.”

Coursey, whose district includes the Chanate Road campus, said he doesn’t agree with the plan coming before supervisors Monday, but he hadn’t yet decided how he would vote Tuesday. Coursey has championed a more inclusive, transparent process that involves input and communication with neighbors, as well as Santa Rosa officials.

The specter of seismic risk has long existed at the property, with fears that the Rodgers Creek Fault underlies the parcel. But its precise location in the area has never been mapped.

Those concerns and the sky-high cost of building a modern, earthquake-safe hospital on the campus helped chase Sutter away in late 2014. It also has confounded the county’s efforts to offload the property in the intervening years.

Just last month, the county saw negotiations with a fourth prospective buyer fall through when that buyer, Newport Beach-based Village Partners, sought a lower price based on the seismic concerns.

County officials, in documents submitted to the Board of Supervisors, characterized prior studies as providing “inconclusive and sometimes conflicting conclusions,” leading to the still-unproven assumption that fault lines do run beneath the site, officials said.

The prospect of active fault lines undergirding the hilly parcel is chief among a laundry list of hurdles for developers eyeing the site for housing. Other complications include uncertain permitting processes with the city of Santa Rosa and the need to spend millions tearing down decrepit, asbestos-ridden buildings in the abandoned former community hospital complex.

“The county’s brokers and staff view reducing the uncertainty over the existence of earthquake faults on the property and their potential impact on future development of the property as the most significant contributing factor to marketability,” staff wrote in documents submitted to the Board of Supervisors.

Development deals have faltered or been struck down for various reasons stretching back to 2017.

A neighbor-led lawsuit centered on environmental concerns sunk an initial sale to Oakmont Senior Living, a company owned by local developer Bill Gallaher. He had offered up to $12.5 million and envisioned up to 867 housing units on the property.

In the fall of 2019, then-Supervisor Shirlee Zane blamed neighborhood opposition for scaring off the California Community Housing Authority, a quasi-governmental entity from the Central Valley that was poised to buy the property as part of a complex transaction involving shared equity.

Negotiations with a third group of developers fizzled in February 2020 after the group’s chief affordable housing partner, San Rafael-based EAH Housing, couldn’t agree to terms.

As the county's difficulties over the land sale have mounted, security and maintenance costs for the site have increased, reaching $768,000 for the period between July 2018 and June 2019, and escalating to $100,000 per month today.

After Village Partners backed out last month, supervisors agreed two weeks ago to restart the sale process, passing on standing offers from City Ventures, an Irvine-based real estate firm that bid $6.5 million, and from Gallaher, whose company bid $4.24 million.

Caroline Judy, the county’s general services director and point person on the Chanate Road property sale, didn’t return multiple phone messages and an email seeking comment about the upcoming process.

Along with the study, county staff will ask the Board of Supervisors to earmark $20,000 for a new appraisal, the third since 2016. The property alone was previously valued at $4.24 million in 2019 and at $7 million in 2016. The 2016 appraisal also estimated the value of the property once fully developed, pegging the land’s value at $275.5 million once built out with commercial uses and housing.

Coursey acknowledged the risk that a detailed seismic study could lower the value of the land long sought for housing, even while vegetation management and security services at the largely vacant property continue to mount.

“Then we’ll have more information then, too,” Coursey said flatly.

Last year, he defeated Zane in a race that featured constituent backlash over the county’s past approach to selling the property.

“I’m not the one to be defending this,” said Coursey, who took office early this month. “I’ve already said, many times, this is not my preferred plan.”

You can reach Staff Writer Tyler Silvy at 707-526-8667 or tyler.silvy@pressdemocrat.com.