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Sonoma County gives developer exclusive right to negotiate purchase of ex-Santa Rosa hospital site

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Sonoma County supervisors moved forward Tuesday with plans to sell 82 acres of county-owned land in the Santa Rosa hills to a well-known local developer who wants to convert the site, where the former Sutter Medical Center was located, into a mixed-use community that includes hundreds of new housing units.

The sale of the land off Chanate Road to developer Bill Gallaher and his team is intended to make a major stride toward expanding the county’s tight housing market, including the addition of more affordable units. If the sale is finalized by supervisors in several months, it would mark the county’s largest real estate and housing development deal in recent history.

The Board of Supervisors voted 4-0 to enter into exclusive negotiations with Gallaher, whose company would pay as much as $12.5 million in cash for the land. County officials say the deal is worth nearly twice as much when cost savings are considered.

Supervisor Lynda Hopkins abstained from the vote, saying she did not have enough detailed information from closed-session discussions that happened before she assumed office in January.

The closed-door discussions fueled concern from many members of the public who attended the meeting Tuesday. Residents said they felt blindsided because conceptual details of the proposed development emerged publicly just days ago.

But county officials said public input informed their request for development proposals early last year and that closed-session conversations since then were legal and necessary to discuss property negotiations.

Officials also stressed that once the county sells the land, the project would then be subjected to extensive review by Santa Rosa and further public input. While currently owned by the county, the Chanate site is within Santa Rosa city limits and must pass through the city’s planning process after it is sold.

“There will be many opportunities for the public to be heard,” said Supervisor Shirlee Zane, whose district includes the Chanate site, at the hearing’s outset. “We have to find housing that everybody can live in, that everybody can afford. And we have some unique opportunities as a county, in that we do have quite a bit of land. This land in particular is quite fabulous ... and there’s many opportunities to develop this in a way that could be very beneficial to the community.”

Gallaher’s development plans could result in as many as 800 new housing units on the site, with 20 percent of them affordable to residents with very low incomes. Units would also be set aside for veterans and seniors.

Additionally, Gallaher’s plans include 68 acres of open space, two miles of trails, a grocery store, a recreation center, dog park, amphitheater and more.

The Chanate site totals 117 acres in size, but the sale would exclude 26 acres owned by the Sonoma County Water Agency and 9 acres owned by the county’s Agricultural Preservation and Open Space District.

Gallaher would plan to build at least 400 units on the site for an initial cash payment of $6 million. The price would rise for each additional unit built up to 800, for a maximum purchase price of $12.5 million.

County officials said the total value of the deal would surpass $24 million, including $10 million the county would save by avoiding demolition costs. In addition, Gallaher agreed to lease the morgue and public health lab spaces on the site back to the county for $1 annually for five years, saving the county additional money.

Still, many neighbors of the site have voiced strong worries about whether the area can really support so many new housing units.

“Four hundred to 800 units would completely overtax the infrastructure of the area, including Chanate Road,” said longtime neighbor Jim Barnes, eliciting applause. “As anyone who has driven or walked on Chanate Road knows, it can’t be expanded.”

Evelyn Anderson, who lives near the site and sits on the board of Santa Rosa City Schools, worried about the impact of the project on education.

“When you’re talking about additional housing, you’re talking about children. And in order to educate those children, we need space and teachers, of which we do not have available in that neighborhood,” said Anderson, who spoke on her own behalf.

Another concern raised by multiple speakers centered around a certain section of open space neighbors felt could be threatened by the development. Some speakers also criticized the county for failing to use the shuttered hospital complex as temporary housing for the homeless.

But officials said the project’s details and potential impacts — including possible effects on traffic, as well as seismic and environmental considerations — would be addressed when the proposal goes through Santa Rosa’s process.

“I really feel for anybody out there who sees how it impacts their lives. Anytime we do land use, it’s like this,” said Supervisor James Gore. “Every single affordable housing project we propose, people say, ‘I support affordable housing, but not here.’”

The project was not uniformly criticized. Brian Ling, executive director of the Sonoma County Alliance, was among those who spoke in support, calling the Chanate project perhaps the best single option the county had to “make a big dent in our housing crisis.”

“It’s not the overall solution, but we’re looking for some big steps,” Ling said.

After the meeting, Komron Shahhosseini, Gallaher’s project manager, said he understood the concerns raised by residents. He acknowledged the process surrounding the project so far has been somewhat “opaque” because the county was weighing two competing proposals to develop the property.

“However, the process going forward with the city of Santa Rosa is one that is going to be anything but opaque,” said Shahhosseini, who also sits on the county’s Planning Commission. “All of these things are going to be studied — they’re going to be probably studied to death. And they’ll be mitigated and, hopefully, our goal is to have a project that everybody is thrilled about.”

Supervisors are expected to finalize terms of the sale in a few months, after which the project would move into Santa Rosa’s planning process. Units could open in 2020, county officials have said.

You can reach Staff Writer J.D. Morris at 707-521-5337 or jd.morris@pressdemocrat.com. On Twitter @thejdmorris.

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