Features ~ Sonoma Valley Sun


To preserve or protect? The battle over large hotels heats up

Posted on June 25, 2013 by Sonoma Valley Sun

The group Preserving Sonoma, chaired by Larry Barnett, supports a public vote to decide if Sonoma should limit the size of any new hotel until the city’s occupancy rate rises to 80 percent. The group has collected enough signatures to qualify the measure for a special election, Barnett said, and will turn those in soon for verification. The election will then come within 90 days of that certification,

The group Protect Sonoma opposes the initiative. Recently, Barnett and Dana Adams, of Protect Sonoma, debated the issue on KSVY FM. Here is a transcript of that discussion.

Larry Barnett: I want to start by taking us back a little. In 1999 a large hotel development company, called   Rosewood, proposed putting a 105-room hotel development on a hillside overlooking Sonoma, where the Overlook Trail is today. The proposal was accompanied by a lot of promises, economic impact, millions of dollars, all kinds of jobs. Joe Costello, who was just a citizen at the time and later a city councilmember and mayor, organized the committee to block that hotel project. Despite the opposition of the Chamber of Commerce, despite the opposition of the editorial position of the Index-Tribune, at that time the only paper we had in town, the initiative passed with a margin of 70 percent. And there is no hotel on the hillside today.

A year later, during my 12 years on the city council, I had spent a number of years trying to persuade my fellow councilmembers to impose an urban growth boundary, to prevent the rampant sprawl of housing developments that were gobbling up the agricultural greenbelt outside of the city limits of Sonoma.

I finally decided that they were not going to do that, and a group of us formed a committee and put an initiative on the ballot that established the Sonoma Valley Urban Growth Boundary, which effectively brought a complete halt to the sprawl and prevented the annexation of additional land into Sonoma for period of 20 years. And the Sonoma we enjoy today passed by 67 percent.

The Chamber of Commerce came out and opposed that vigorously, and the Index-Tribune came out and opposed that vigorously.  Everybody talked about the free market economics and the economic growth; Sonoma was going to go down the tubes, we were not going to have enough money.

Meanwhile, that isn’t what happened. Sonoma thrived. Sonoma remained a desirable place to live.  Now, the reason that passed with 67 percent is because the citizens who live here care about and cherish the nature of life they have here in Sonoma.

Sonoma has seen a huge boost in tourism.  Just over the last year there is a lot of incentive for large money interests to come in and begin to develop Sonoma, which remains a fairly unspoiled town when compared to a lot of other cities in the wine country.  You don’t have to look too far to see what happens to cities in the wine country when they get overrun with tourism and development. Look at Yountville. Yountville is loosing residential population, 10 percent less people live there now than just four years ago.  And what’s the reason for that?  It’s because they have, proportionate to the population, three times as many hotel rooms as we have here in Sonoma.

And really what’s the message?  The message is… It’s nice to visit Disneyland, but it’s not a lot of fun to live there. So, an initiative is a way for citizens to directly involve themselves in the over-arching policies that govern the future of their community. The city council and the planning commission work fine.  I was on the city council for 12 years.  I know how government works.  I understand the city budget better than probably a lot of people that you’ll talk to in town.  But the fact of the matter is, sometimes those processes and sometime those institutions don’t keep up with the sentiments of the community. The initiative process is an example of the sentiments of the community emerging and deciding they want to have a say in a large issue about the future. It’s happened here before. It does not happen very often, but when it does, it’s meaningful It sets the direction for the community and it establishes the nature of the future that we want to have here.

Dana Adams: I’m here today as a concerned citizen, as a mother, and as someone who cares deeply for the future of Sonoma. I see our Plaza with its historical landmarks, where the Bear Flag Revolt took place — the bear that is on our flag today. Our wonderful town is the birthplace of California.  We have a awesome responsibility as caretakers of our history, and we have an obligation to share  it with anyone who wants to visit Sonoma.

In fact, I asked one of the representatives for Preserving Sonoma about all the visitors who want to see historical landmarks such as the Mission. The answer I received was that there were plenty of other missions in the state they could go visit.  Is this the kind of attitude we want to show the world? This is our town, go find some other landmarks to visit?

This initiative will not have the intended consequence. This initiative will tell the world that Sonoma is anti-business, that no one should open a business in Sonoma because we are opposed to growth of any kind.  Make no mistake, this is not an initiative, this is an outright hotel ban. The Preserving Sonoma group uses a lot of numbers, and numbers are wonderful things because they can always be presented as black and white, when in fact numbers can be manipulated.

The numbers Preserving Sonoma use actually sound convincing, until you dive in and take a closer look and realize that this is nothing more than a hotel ban, a business killer, a job killer and a community killer.

Let’s start with the 65 percent occupancy rate quoted by Preserving Sonoma. First of all, that’s a year-round occupancy rate.  What matters most is we need hotel rooms from the months of May thru October, our high season.  It’s nearly impossible to get a hotel room during those months.  As it is, we are already above the national average occupancy rate of 61.4 percent.

The initiative says new hotels with more than 25 rooms cannot be built until the current occupancy rate hits 80 percent — that’s completely unrealistic.  Only three cities in the entire country hit that rate: San Francisco, Honolulu, and New York City.  So, let’s tell the truth, this initiative is a ban on any new hotels being built in Sonoma, ever. The fact is with construction costs where they are today it does not make any economic sense for any developer to construct a hotel with 25 rooms or less.

This hotel ban is completely unnecessary because we have already have a very stringent approval process in place to monitor and approve or deny any development within the city limits.  The city has a general plan in place, which Larry Barnett tentatively approved.

The Chamber of Commerce, Sonoma Valley Vintners and Growers Alliance are against this hotel limitation initiative, not to mention countless businesses and existing hotels.  Sonoma is barely solvent. To spend $30,000 on a special election, money we don’t have, seems ludicrous to me.

Now on the subject of money. Additional tax dollars from visitors will help us pay for the services all of us want and need.  Did you know that the city had to cut back on mowing the lawn in the plaza?  The police chief just announced that there are 250-275 gang members in our Valley.  How do we pay for more police?  How do we pay for more support for our youth programs?  That’s all money that comes from visitor dollars. Seventy percent of  the city’s budget goes to police and fire, and 40 percent of that money comes from the hotel room taxes.  We can barely provide the services to our community with hotel tax revenue that we have now.

Preserving Sonoma wants to limit any potential growth of that revenue. (The Sonoma Hotel Project) will generate an estimated $3.5 million dollars in tax revenue over the first five years.  Imagine what we can do with $3.5 million for our community, and that’s just the occupancy tax. Another $1.8 million in property tax will be generated, money that the city desperately needs. Where else do you want to see the money come from?  An increase in your property tax?

As far as traffic is concerned, don’t forget there used to be a printing press at that location, and it had dozens of cars going in and out on a daily basis.  A new hotel at that location would barely impact traffic any more than when the printing press was in operation. Hotel guests will drive in, park, and walk our community.

Bottom line, you can’t have a black and white law like this on the books. Each project should be judged on a case-by-case basis.  We have a system in place that has worked so far and we should keep it that way.

Dana Adams: Larry, you started out comparing this project to the project up on the hill.  There is no comparison, that proposed site was public land. A lot of people have brought up the hospital project that involves seizing private land. This hotel is on the developer’s land that conforms to Sonoma general plan.  How can you compare the two?

Larry Barnett: First of all the basis of comparison has to do with the feeling of the citizens who live here and how they feel about the development of the community. It really does not have to do with the location or the status of the land. It has to do with whether or not Sonoma wants to develop in a way that primarily focuses on the needs of the tourists as opposed to the need of the community.

Now there is a linkage on taxes. The Transient Occupancy Tax (the tax paid by hotel guest per room per night) is very important and provides a significant part of our budget.  However, our proposal will have no effect on TOT. It has been historically 10 percent.  Two percent was added to that fee, which is going to something called the Tourism Improvement District, which Is going to generate this year $450,000. It was imposed at the request of the large hotels in Sonoma who felt like their occupancy rate was to low, and they needed more money to promote. So the city said O.K., you can form a TID, you can tack two percent on to each hotel bill and you can use that $450,000 in order to promote your hotels to boost your occupancy rate.

Now, why is it we are subsidizing the promotional budget of our hotels is another question that we can debate separately. The fact of the matter is that historically the TOT that Dana is talking about has been closely guarded by the city as a very special opportunity for locally generated taxes that are not shared with any other entity. The surrounding areas have higher TOT rates; Napa Valley has some cities that collect 14 percent. If you want to talk about the city budget, and the city budgets are always important and I grappled with it for years, we could instantaneously add nearly a million dollars to this city budget without building one new hotel room anywhere in the city of Sonoma. That would be by canceling the TID, taking that two percent and adding another two percent on to the TOT. That would immediately produce $900,000 for the general fund. There is more than one way to skin a cat.

I just want to make one other comment. This is not a ban, I don’t like to hear the use of the word ban. This has no effect on any hotel proposal for 25 hotel rooms and under.  25 room hotels have existed and will continue to exist in Sonoma quiet easily. The Inn in Sonoma, which started with 18 rooms and was only built maybe five or six years ago, has been so successful that it has applied to increase the 26 rooms.

Larry Barnett to Dana Adams: I’m interested as to why you would even contemplate using terms like ‘job killers’? The initiative does not eliminate any of the existing TOT revenue and so where does the term job killer come from?  It used to be on the Protect Sonoma website. I noticed that this particular statement has been eliminated  from that website and I’m wondering why you decided to resurrect it, because it is inflammatory and it’s not true.

Dana Adams: It’s not inflammatory and it is true, this hotel will create jobs, it will help keep businesses around the Square open which creates jobs, and will create internships for students.  This hotel could bring added business. We have nothing like this hotel in Sonoma right now.  So, yes, this will create jobs in the hotel itself.  It will help stimulate business around the square. How can you say that it does not help jobs?

Larry Barnett: I did not say it would not help jobs, I’ve asked you why you referred to it as a job killer? What jobs are going to be killed by this?

Dana Adams: The jobs this hotel will supply, for one.

Larry: Our initiative goes way beyond this hotel. I’m not sure whether your representing Protect Sonoma or Protect Kenwood investments, but I’m really not here to address the specific merits, or lack of merits, of this project alone. This is an initiative that is going to effect every hotel proposal for the city of Sonoma, including potentially larger hotel projects. There’s absolutely nothing in the General Plan that prevents Sheraton from coming in the future and buying the Sonoma Chevrolet lot if it becomes available, and proposing a 250 room hotel on West Napa Street.

Dana Adams: That’s why it should be kept to a case-by-case basis.

Larry Barnett: A case-by-case basis isn’t the way the general plan works. The general plan basically lays out the parameters as to what is allowed in a given Zoning Use.  When a hotel is put in a commercial location, the general plan provides no language as to the number of rooms that are permitted. They can apply for as many rooms as they want.  When you go through the process of an EIR, it’s a process that attempts to determine the mitigations that have to happen to allow the development to occur.  Land use in California is tilted to development. It’s tilted to development by making things mitagatable. It’s all basically a matter of coming to terms with what it is that’s required by mitigations and then you can go ahead with the project.  It’s not easy to deny something if the general plan does not have very clear and objective language as it pertains to standards.

Dana Adams: You very well know that it is not realistic to impose a plan with a 25 room  limit. It does not make any economic sense.  I have talked to several developers in this community, respected developers who say there is no way that anyone would build a hotel win 25 rooms or less because it’s not economically feasible.

Larry Barnett: Then why in the city of Healdsburg did they build a hotel with 16 rooms, with a beautiful restaurant, that’s enormously successful?  What you’re saying isn’t true.  I just read in the Chronicle today that they are opening a social club in an old building in San Francisco, that a very wealthy couple has owned. They’ve put millions of dollars into it, and oh yes, it has 14 rooms.

Dana Adams: San Francisco, which has the 80 percent occupancy rate.  You can’t compare Sonoma to San Francisco.

Larry Barnett: Well, we may go to 80 percent if we stop building hotel rooms. How many hotel rooms were there in Sonoma 13 years ago?

Dana Adams: We’re already past 80 percent in the summer.

Larry Barnett: I was in the hotel business, I know what it is like here. You know you could have 1,500 rooms in Sonoma and you’d be busy and full in the summer.  We live within 30-60 minutes of a population of five million people, who want to go away for the weekend. The fact is, 13 years ago we had 250 rooms and today we have 508 rooms. They were full 10 years ago and they are full now on the weekends. That’s the hotel business.

Dana Adams: Which Seems to support the need of another hotel. By the way, I’m not here on behalf of Kenwood Investments.  I am here because I want to see the city thrive.  I don’ t want to put it into the ground.  When you say Preserve Sonoma it sounds to me like you want to embalm Sonoma and stick it into the ground.

Larry Barnett: When it comes down to it, this is a simple issue.  Our opposition would like to make it complicated but it does not have to be complicated. This issue is about the way people who live here feel about this community. How do they want to live? What’s the pace of life?  What’s the quality of life?  What’s the scale and character of the community?  You don’t have to be a rocket scientist to see what happens in towns that don’t have some sort of regulation in place.  We’ve all been to Carmel, we’ve all been to Monterey, we’ve all been to Yountville. You all see what happens. The free market forces are merciless. There is only one thing they’re interested in, it’s money.  And I have never in my civic experience here in Sonoma ever heard a developer come before the various civic bodies and say, hey look, the first and most primary reason that I want to do this project is I’ve got a chance to make a boatload of money.  It’s always couched in terms of about how good it’s going to be for Sonoma, all the wonderful jobs, all the wonderful money, all the wonderful people and how we’re going to do this and how’re going to do that. Nobody’s ever honest enough to say ‘hey look, it’s all about money. We want to make a lot of money.’  And I would have a lot more tolerance to the development community if they were just honest about their motivation.

Dana Adams: It’s not just about the money, it’s about quality of life, it’s about choices. An additional restaurant in town would be nice.  The chance other nice establishments to emerge at sustained growth would be nice.  You talk about that $450,000; right, that is to promote tourists to come here to benefit all businesses, restaurants, and hotels.  Look. to be honest, I don’t think any of us are far apart for what we want for Sonoma.  I don’t want massive urban growth, I love the character of Sonoma, and the small-town feel as much as anyone else.  But this hotel ban is overkill.  It’s prosperity dynamite it’s an effective ban on any new hotels being built.  This in turn will hurt our local economy, and I’m afraid, with many other concerned citizens, that this hotel ban will lead to the financial demise of our town, with the Plaza filled with empty storefronts. So to be clear, I’m not here solely supporting the hotel.  I am here because I am alimentally against this hotel ban or so called hotel limitation initiative, and the unintended consequences it will have in destroying the city’s finances.  And destroying our quality of life, other than improving it.  I speak for the families who are fighting for the future, not preserving the past.