PD Editorial: County put price first (and last) on Chanate sale

Sonoma County collected $15.05 million but didn’t buy itself any goodwill with the sale of the old county hospital property in Santa Rosa.

After four failed attempts to the sell the Chanate Road campus, long seen as a potential site for housing, the county put it up for auction in November.

The winning bidder, a Las Vegas developer and real estate investor named Iyad “Eddie” Haddad, rattled his new neighbors with a suggestion that instead of housing, he might propose a shopping center, a hotel and resort or, in partnership with a Native American tribe, a casino.

Press Democrat reporter Ethan Varian found another reason to be wary: Haddad’s track record of tenant complaints about squalid conditions, civil judgments and regulatory penalties for “gross negligence and incompetence.” Moreover, Haddad has virtually no experience with large-scale residential development.

But bidders needed only one credential for the county auction: money.

The deal closed on Thursday, Haddad now owns 72 prime acres on the edge of Hidden Valley — and county officials mostly seem relieved that they handed off the hot potato.

Oversight for demolition of the dilapidated hospital and other buildings falls now to the city of Santa Rosa. So will approval of any future development of the property. Whatever proposal comes forward needs careful scrutiny, and any approval must be contingent on enforceable safeguards against substandard conditions — whatever eventually gets built.

Nearby residents are justifiably concerned about traffic after wildfires forced evacuations twice in the past four years. Still, housing, including multifamily housing, makes sense on this site and for the city. The property isn’t large enough for a conventional golf course, there’s ample shopping nearby, and casino traffic would clog two-lane Chanate Road during an evacuation.

The county, which has been looking to unload the property since 2014, initially tried to influence future development. Neighbors challenged an 860-unit rental housing plan in court, and the sale was scuttled. Three subsequent attempts to negotiate a sale failed before the county decided to auction the property.

Caroline Judy, the county’s general services director, said a state law governing sales of surplus property gave the Board of Supervisors two options: accept the highest bid or reject all the bids.

Because the county didn’t look beyond bidders’ bank balances, the board had no reason to reject the bids. Audible whoops and laughter as bids grew during the online auction on Nov. 9 affirm the county’s desire to get rid of the Chanate property for the highest possible price.

Even after Varian’s report detailing Haddad’s checkered history in Nevada, supervisors expressed no regrets about the sale.

“Would I like to be able to carefully vet who buys surplus county property, and choose the winner based on things like integrity and history?” Supervisor Lynda Hopkins said in an email. “My heart says yes, but my head says no.”

In a written statement after the sale closed, Supervisor Chris Coursey, who represents the neighborhood, expressed his hope for “responsible development that responds to the greatest needs of our community, including affordable housing.”

Sonoma County bought a Chanate Road farm in 1874 and turned it into a public hospital. A public health lab, the morgue and the Bird Rescue Center share the site and will have to move. The hospital has been vacant since 2014, and security and maintenance has cost taxpayers $7 million. County officials may be pleased with the sale price, but there is ample reason for concern about the future of this historic property — and the intentions of its new owner.

You can send letters to the editor to letters@pressdemocrat.com.