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FSE hotel fog machine on at full blast

Posted on March 27, 2017 by Fred Allebach

As expected the First Street East (FSE) hotel and high-end residential project has its spin machine in high gear. A coordinated plan between the Tourism Improvement District (TID) and the Sonoma Valley Visitor’s Bureau, with the two proposed hotels is being executed. This is to plug raising the Transient Occupancy Tax by 2% while the two proposed hotels tout how much money they will bring in. This potential money stream is the crux of the hotel’s economic benefits argument that they have squarely aimed at the city council.

The following series of quotes are directly from the FSE (Caymus Capital) video played before the Planning Commission, during the initial environmental hearing the other night.

This hotel “project is needed to keep Sonoma viable.” Somehow a Sonoma currently busting at the gills with hospitality tourism money is not viable. Seems like a created urgency for a non-existent problem. In fact, the Plaza is so crowded with tourists now it is almost inconceivable to ramp it up even more.

Sonoma needs “vital housing”, which will be “to benefit all of Sonoma.” The project is “rooted in the community”, “created for the community”, “all community needs have been carefully considered”, with “shared benefits for everyone”, and “fairly represents the needs of all who live in Sonoma.”

The project will provide “a broad set of community benefits” and constitutes “sustainable and smart growth.” The FSE team even threw in “workforce housing,” “entry-level housing,” and “senior housing,” as additional phrases for good measure.

This would all be laughable nonsense if these guys weren’t dead serious about pushing this disingenuous spin to the very end of the line. How many times can community be said before you realize the fog machine is turned on full blast? Never mind that half the community is sick to death of tourism already. The FSE boys are obviously working a line around the theme of community benefits, so let’s take a look at what this all really means.

To FSE, and hotel purveyors, the community is made up of all the people who come and speak to support their project. The community consists of FSE investors, hotel and tourism boosters, and people with million dollar houses who can afford $100 dinners and $16 bite-size hors d’oeuvres at fancy Plaza restaurants. “Seniors” in FSE code means older rich guys.

What they are doing is creating false equivalences and using buzz words to appear as if they are meeting actual needs. Super rich guys are somehow cast as a minority that needs to be represented. More rich guys want Sonoma homes, and it is not fair they should be limited. Well, Sonoma already has enough rich guys, and too much market rate housing. Sonoma’s wealthy demographic is way out of balance, and one more luxury project masquerading as something for the community needs to have its bubble popped right now.

How much are these houses going to cost? Let’s start with some facts: the average home price in Sonoma is @ $600,000. The Area Median Income (AMI) is $60,000. Nobody who earns AMI money can afford to buy a house in Sonoma. (Sonoma County is the 10th least affordable place to live in the entire country!) Anybody who works here as an employee, who makes AMI money, cannot afford to buy a house in Sonoma. The FSE project will overwhelmingly not be serving the AMI community.

Based on current costs to build per square foot, the proposed FSE homes will be in a range costing around a million dollars each, plus or minus. Which one of these is workforce and entry-level housing? Which one of these houses is for “the community?”

At a previous Planning Commission meeting, Steve Ledson said he thought $600,000 was affordable for his employees, that’s why he built his Boccoli development. Maybe people with mucho dinero think $600,000 is an entry level house?

The FSE Planning Commission packet on record says, for the FSE project, “we are primarily designing and marketing the residential units for active seniors, small families and entry level buyers. Entry-level housing is thereby conflated with entry-level buyers.” Nice job, consultant.

The packet material goes on to say,smart new development encourages a mix of housing types for a mix of people, is pedestrian and transit friendly, creates density where possible, protects our outlying agricultural and scenic lands, and supports the key drivers of our local economy which allow people to work and live here.”

This above phrase is a deceptive play on General Plan and Association of Bay Area Governments (ABAG) regional planning goals, and the current housing nexus study. The General Plan says that people who work in Sonoma should be able to shop and live in Sonoma. ABAG says development should be concentrated and dense, to take advantage of mass transit, preserve ag and open space, and to prevent greenhouse gas impacts from too much individual driving. The above phrase says nothing. It conflates actual serious housing goals, for an actual diverse demographic, and subtly makes it over into how poor, discriminated against rich guys (“a mix of people”) need to have a place live too. And you can be sure these guys will not be working at a hotel, nor will they be working at a restaurant, or in construction, or gardening, or anything that a person with AMI-level income would ever do. And you can be sure that not one of these home owners or hotel guests will ever take the bus, and they will ride their gas guzzling BMWs to all the events advertised in the countryside.

Sonoma is already lacking in a mix of housing, because market rate starts have outstripped affordable starts by far. When Sonoma proposes the type of density to equal the housing playing field, the neighbors on Broadway cry bloody murder. The fact is, Sonoma is incrementally being stacked to high-end housing because there is gobs of money to be made, and the money is tempting the Planning Commission and the council to make deals with the devil that go against what the actual community of people here in town want.

Does this FSE project all add up to a community benefit? The supposed benefit is all in terms of money, of direct income to the city and through “multiplier effects”, i.e. rich guys buying $80 paring knives at Williams Sonoma. Basically, the city is being asked to take a poison pill of more luxury economy, that will serve to drive out more AMI people and reduce town diversity, to get money from TOT etc., to somehow trickle this money back to the AMI people who won’t be here because they are all getting run out of town by high prices. AMI people are becoming more under-represented in Sonoma’s demographic by the day.

Listen to the public comments about people who have had their rents raised unconscionably. The lust for money is the root of all evil. (1 Timothy 6:10)

If the FSE boys really cared about the community and its actual needs, they would not continue to inequitably cater to the 1%. They would build more than the minimum inclusionary unit(s), and they would take a haircut to lower the prices to make a real “mix of people.” If they were actually serving “the community”, they could go more towards a break-even profit horizon, as rich people morally concerned about the community would and could do. But no, people who already have it made need more, they need to get the Caymus Capital advertised “exceptional returns.” That’s life in the economic stratosphere. Us little guys just don’t understand how good this all is for us. Somehow, we didn’t learn this way of thinking in our biased liberal arts educations. We thought fair meant something.

The only way Caymus Capital is going to make out on this project, to get its investors the advertised “exceptional returns”, is to have a hotel that, like Monopoly, can pull in super high rents that no one in the AMI range’s family will ever stay at, and to later sell the hotel to a big corporation. They will also build houses that sell for top dollar, for a “mix of people”, that “live here”, that are way above the AMI income range.

All the talk about community benefit is basically trickle down BS, because if trickle down worked, why hasn’t anything trickled down yet and the 1% have all the wealth? Where’s the beef? Where’s the multiplier effect? What we are seeing from FSE is the same kind of spin we got from the Kenwood Investments spin machine mercenaries, turn actual facts and common sense on its head, tell lies, repeat them incessantly, and try to sell it all to three votes on the city council as some kind of economic pragmatism.

When hotels get the super high rents, what happens to the guy with one house on Baltic Avenue? Well, just like Monopoly, they lose and the hotel guys win. And what kind of sucker is going to buy this framed as a community benefit? The only people who could frame this as a benefit are the 1%. This is the exact framing and spin war we have going on now in Sonoma. The axis of 1% hotel interests, the TID, and SVVB, all have a paternalistic Rockefeller type of “common sense” that is actually only common to the barest minority of wealthy people.

Taking this kind of trickle down nonsense as the town’s medicine is just not going to fly. Sonoma needs people in city hall to stand up to this and represent the 50% of the electorate who voted for Measure B, who voted 4 to 3 on the SVCAC to deny the Kenwood Investments hotel. This is not Steve Page’s “vocal minority” standing in the way of progress. This is half the town. Half says these hotel projects need serious down-sizing.

This FSE 1% strategy all sounds a lot like Trump. In fact, it is a lot like Trump, because these guys are birds of a feather. They take advantage of the system to rip off the little guy, play hardball, intimidate the opposition, stack the jury, swoop down like vultures and buy up all the underwater property from actual “hard working American families”, and then try to sell it all back in the form of luxury real estate as a community benefit!?@#$$%#@ This is how it really is.

The Planning Commission is only going to be Phase One of the hotel project(s) here. Appeals to the city council are virtually guaranteed no matter in whose favor the Planning Commission rulings go. Then we will see in the staff report, if the city as a whole can present some kind of balance on this overall set of hospitality development issues to the council, or to what extent the economic benefits argument has permeated the thinking of staff. Hopefully it will not recap the overwhelming “this is not a significant impact” as we see in the Kenwood Investments hotel EIR. Where is staff to stand up for the common man?

Doesn’t anybody remember the Rosewood Hotel and how the town did not want that?

Basically, we have a choice to shoot for a carrying capacity planning future, an actual sustainable Sonoma, or we can push hospitality growth in a race to the bottom and sell out soil to the devil for money. Just like A Tale of Two Valleys and Battlefield Sonoma, we can try to be like Napa, or we can stay like Sonoma. It is very clear that the hotel-tourism-corporate wine-hospitality axis wants Sonoma to be just like Napa.

At the council stage, the northeast neighborhood planning guidelines will make their come back, and hopefully the council will see clear to get rid of the hotel and bust it down to a bed and breakfast as called for. We may have to suffer more market rate housing, but at least the city can take its new nexus study figures and soak these FSE and other hotel guys to the maximum extent possible. If Caymus Capital expects “exceptional returns” form this hotel project, they need an exceptional soaking to extract from them the monetary benefit they are not willing to give up front.

 



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