Sale of Sonoma County hospital complex to politically active developer nears completion
Sonoma County is on the cusp of approving its largest real estate deal in recent history, a closely watched effort to transform 82 acres of public land into a master-planned community that would introduce hundreds of new rental units into the region’s increasingly tight housing market.
The vision for the land off Chanate Road, the site of the old county hospital complex, could produce one of the largest housing developments built in Santa Rosa in a generation. Bill Gallaher, the Santa Rosa-based developer, could pay as much as $11.5 million in cash for the property, where he’s proposed up to 800 mixed-income rentals and an additional 50 to 60 units for formerly homeless veterans.
The project, which ultimately will go before the city of Santa Rosa for approval, also seeks a mix of commercial and recreational uses for the site. Construction won’t be finished for years, but it has already attracted an intense amount of community interest and political wrangling, as officials try to balance hopes for much-needed housing against residents’ concerns about neighborhood impacts, traffic congestion, development of open lands and the influence of campaign donations.
The project has overcome one major controversy. Neighbors won a concession to save a 10-acre parcel encompassing a meadow that was long considered to be part of an official open space preserve. Despite initial resistance by the county, the oak-shaded meadow will be protected by a conservation easement after neighbors campaigned to exclude the parcel from the deal.
Another group of neighbors is now pushing for building a buffer zone on a different meadow behind their homes. In addition to concerns raised by neighbors, a group of medical professionals is deeply worried about losing the health care facilities on a site that was the epicenter of such services in the county for decades.
The Sonoma County Board of Supervisors on Tuesday is set to hold its first of two votes on a sale agreement, although the formal purchase won’t close unless the project is also approved by Santa Rosa, a process the county estimates could take up to 1½ years to complete.
In the end, the deal is a high-stakes measure of both local governments’ ability to make a large investment in the housing supply at a time when rental vacancy rates are just above zero and the lack of affordable homes is widely considered a crisis.
Caroline Judy, the county’s general services director, said the county’s high housing costs had effectively locked too many people — particularly younger residents — out of the market.
“That’s not a good place to be,” Judy said. “It’s not good for us economically and, certainly for the county and the obligation that we have to provide safety-net services, we’re not able to stabilize our clients without housing. ... We’re fulfilling our mission as part of this property sale.”
Gallaher is one of the most prominent developers in Sonoma County, with a resume of projects that includes hundreds of homes in the Oakmont retirement community, the senior living facilities Fountaingrove Lodge and Varenna at Fountaingrove and the Oliver’s Markets shopping complex in Windsor. He is also founder and board chairman of First Community Bank, a key early lender to Sonoma Clean Power, the county’s public power supplier.