Sonoma County’s Chanate Road ex-hospital site could become 800-unit housing development
Sonoma County supervisors are considering an ambitious plan to sell the 82-acre site of the former Sutter Medical Center off Chanate Road in Santa Rosa to a prominent local developer who wants to build as many as 800 new housing units there.
The Board of Supervisors is expected to vote Tuesday on moving forward with a proposal that, if ultimately finalized, would mark the county’s largest land sale in recent history. Developer Bill Gallaher and his team would pay as much as $12.5 million in cash for the property, though county officials say the deal is worth many millions more when various cost savings are taken into account.
Gallaher’s vision would transform the Chanate site - a sprawling campus in the eastern Santa Rosa hills that includes the shuttered hospital and dozens of acres of open space - into a large mixed-use community.
Among the hundreds of planned housing units, 20 percent would be affordable to residents with very low incomes. Some of the total units would be reserved for seniors and veterans.
The deal would bring to a close a more than two-year period of uncertainty about the future of the site, which Sutter vacated in 2014 when it relocated its hospital next to Luther Burbank Center for the Arts. More importantly for local government officials, however, it would provide an influx of new units into Sonoma County’s perennially tight housing market, while addressing neighborhood desires for open space and community amenities.
“I don’t think we could have gotten a better proposal,” said Supervisor Shirlee Zane, whose district includes the Chanate site. “It’s really what we had - and certainly what I had - envisioned for this wonderful property ... We desperately need housing.”
Beyond housing, the development would feature 68 acres of open space, two miles of trails and include a recreation center, dog park, amphitheater and grocery store.
The entire Chanate site spans 117 acres, but 26 acres owned by the Sonoma County Water Agency and 9 acres owned by the county’s Agricultural Preservation and Open Space District would not be included in the sale.
Under the deal coming before the board, Gallaher would plan to build at least 400 residential units on the site for a payment of $6 million. The price would rise for each additional unit built up to 800, with the maximum purchase price set at $12.5 million. Once sold, permitting through the city of Santa Rosa - the Chanate land is owned by the county but within Santa Rosa’s city limits and will need to pass through its planning process - will determine the number of units the site can ultimately support.
But the government would also reap substantial savings because Gallaher has agreed to lease the site’s morgue and public health lab buildings back to the county for $1 annually for five years. They are currently valued at about $1.6 million over that time period.
Additionally, the county would save about $10 million on the cost of demolishing the seismically unsafe hospital building, bringing the total value of the deal up to as much as about $24 million, county officials said. Gallaher’s proposal plans to preserve the facade of the main entrance to the hospital building.
Gallaher brings to the Chanate project extensive local ties to the area with a professional background that includes building hundreds of homes in Oakmont and senior living facilities Fountaingrove Lodge and Varenna at Fountaingrove.
Choosing a developer
The process of choosing a preferred developer for the Chanate site began in August 2015 when supervisors approved broad plans to sell or lease the property. Sutter relocated at the end of 2014 from the aging Chanate hospital building, which county staff found would cost the county about $94 million to modernize and renovate.
Because the property was considered “surplus land,” the county in October 2015 first offered the site to nonprofit developers, as required by state law, but received no interest, officials said.
The county then launched a request for proposals to develop the site in February of last year, and received two proposals by the May deadline: one from Gallaher’s team and one from a team led by Curt Johansen, who was once chair of Petaluma’s planning commission.
Gallaher’s proposal was chosen by a committee that included representatives of various county departments and the city of Santa Rosa.
The county and city are working on a memorandum of understanding that would outline agreement on the broad components of the Chanate deal, said Caroline Judy, director of the county’s general services department.
Once the project moves under the city’s purview, it will have to undergo an environmental review, including analysis of traffic impacts, according to city and county officials.