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Development war: Big stakes, tough tactics

Posted on September 21, 2017 by Sonoma Valley Sun

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In a City over 150 years old, growth and change have always taken place, but the scale of development — and the fortunes associated with it — have never been greater.

The last time the City of Sonoma was so embroiled was in the early 1990s, when housing developers were replacing acres of agricultural land with hundreds of homes. The type of urban sprawl that took over towns like Petaluma, effectively doubling the size of that city in a decade, stimulated citizen push-back, in the form of Urban Growth Boundaries and Community Separators. Those voter-approved measures, the anti-development tactics of the time, effectively brought sprawl to an end in Sonoma County and particularly in the City of Sonoma.

Today, assertive development is again creating community reaction, but the stakes are bigger and the tactics being used by both sides are tougher. This time, rather than housing being the driver of development, it’s tourism and all that comes with it. In this Sun report, we examine the risks, rewards, strategies and tactics of both sides in this battle, and take a look at the unanticipated casualties of Sonoma Valley’s new development war.

Setting the stage

When a four-lane freeway running from Highway 37 to Santa Rosa through the Sonoma Valley was on County planner’s drawing boards in the late 1950s, it was envisioned as part of a freeway system surrounding and connecting the entire Bay Area. Had it been built, Sonoma Valley would by now look very much like Walnut Creek and Concord. The same can be said about the rejection of the extension of BART into Marin and the North Bay; these systems have led to a Bay Area population boom, the replacement of agricultural land with urban uses. As it turned out, Sonoma Valley’s relative isolation provided a natural barrier to ramped-up development.

A look at the Napa Valley provides a glimpse of what could have been our Valley’s fate. As it is, Highway 29 was never widened beyond Yountville, but that’s not prevented bumper-to-bumper traffic nor a profusion of winery and hotel development over the past 40 years. Towns like Yountville have embraced hotel development; but as hotels have grown, its resident population has shrunk.

The development boom has come much later to Sonoma County and our Valley, and examples like Napa’s have taught much to both planners and detractors.

Rosewood: The first big battle

In 1992, Rosewood Hotels of Texas proposed developing a 102-room luxury hotel on land owned by the City of Sonoma above the Mountain Cemetery. By today’s standards, it was a modest skirmish, and the tide was turned when local attorney Joe Costello led an effort to prevent the city from leasing the land for a hotel by organizing a special election to prevent it. An initiative that prohibited use of that vacant property for commercial purposes, and it passed with voter approval of 70%. In its place the Sonoma Overlook Trail was created.

The Sun caught up with Joe Costello to get his current view of the situation. “It is important to understand how the Rosewood experience differs from the current hotel controversies.  Rosewood dealt with City-owned property and its future use, whereas the current controversies involve private property and compliance with the City’s Development Code as well as other land use requirements.”

The Rosewood story ended up forming the narrative of a book or two, and represented the power of the ballot box in upending developer plans, yet by today’s standards it was a modest fight.

Graywood Ranch in Kenwood

The approval of the development proposal for Graywood Ranch in Kenwood almost upended the political career of Supervisor Valerie Brown. Ironically, though it received its basic development entitlements in the late 1990s, the continuing convulsions of the development industry doomed it to a lengthy period of dormancy. Now owned by a Chinese company, the proposal just received approval of Sonoma County’s Planning Commission for a 50-room hotel, 125-seat restaurant and spa over the objections of the grassroots organization Valley of the Moon Alliance (VOTMA), which has raised objections over this project from its very beginnings.

The Sun spoke with Kathy Pons, chair of the VOTMA, who provided this perspective: “The whole project was approved in 2006 with an EIR done in 2004. The project has sat idle until 2014 when Tohigh Investments bought the property and project. They proceeded to Design Review in October 2016 with the plans for the inn, spa, and restaurant and it was noticed that some of the project was different than originally approved. VOTMA filed an appeal to the Planning Commission asserting that the changes needed to be environmentally reviewed.”

Last month, the County heard the appeal and decided that the changes were not significant enough to change the conception of the project. “VOTMA is committed to continue moving forward with the process of further appeal to the Board of Supervisors. We also will be meeting with the people of Tohigh Investments to reduce the impacts as much as possible to the surrounding area,” added Pons.

Once again, the basic approvals for this development happened long ago, and not even a well-organized opposition, utilizing the relatively new political tool of social media, has been able to prevent it.

Sonoma’s Hotel Limitation Measure of 2013

In anticipation of a surge of hotel development in the recovery after the 2008 financial collapse, a group of Sonoma Valley citizens organized to place the Hotel Limitation Measure on the ballot in the City of Sonoma. Though often attributed to the proposal for a hotel on West Napa Street by Kenwood Development, proponents of the measure were attempting to apply a measuring rod to hotel growth and a mechanism for its limitation. Former Sonoma Mayor Larry Barnett spearheaded the effort (Barnett is a member of the Sun Editorial Board).

Barnett says, “By tying the city’s hotel occupancy rate to entitlements to apply for hotels over 25 rooms, the concept was to create a growth ratio so that over-supply did not simply create the need to stimulate increased demand.” Though opponents of the measure said its 80% occupancy threshold was virtually impossible, the city’s occupancy rate now approaches 80%. “People still think it was all about Kenwood Development’s proposed hotel on West Napa, but it was much grander than that,” Barnett added.

It was during this campaign that a profound shift in tactics appeared. To buttress the grass-roots efforts behind the Hotel Limitation Measure, supporters organized under the name “Preserving Sonoma.” Kenwood Investments, however, then funded the creation of a counter-organization with the name “Protect Sonoma.” Many voters became confused about the meaning of voting “yes” or “no” and the identities of the two organizations. Preserving Sonoma raised about $68,000, but used about $40,000 on legal fees to draft the measure and comply with campaign laws. Protect Sonoma ended up raising over $160,000, much of it from Kenwood Development itself.

Competing websites, lawn signs, and public debates fueled robust feelings. Kenwood Development promised a local labor union that it would pay a living wage and allow the hotel workers to join a union, if they wished; that union then had its members walk neighborhoods in opposition to the measure. Mailboxes were blitzed with glossy brochures warning, among other things, that ambulance service would be threatened if the measure passed.

Alliances shifted as the election approached; the City Council sided against the measure, and drafted the opposition argument on the ballot as well as delaying the election. The Index-Tribune, under the same ownership as Kenwood Development, opposed the measure in its editorials. The Tourism Improvement District, funded by a two-percent surcharge on hotel room charges, also opposed the measure. In short, the entire apparatus of City Hall, the hotel developer and the tourism community came to bear against the measure. The Measure lost by less than one-percent of the vote.

The West Napa Street Hotel

The Kenwood Investments hotel proposal is now grinding its way through what measure opponent, former Mayor Ken Brown, called “the process in place.” Most recently, an appeal of the EIR certification by Sonoma’s Planning Commission for the project was upheld unanimously by the City Council when Kenwood Development’s attorney decided that what the appellants were asking for made sense. The land in question is zoned “commercial” but due to its size, 50 percent of the new construction is required to be housing, unless that requirement is waived by the City. Kenwood wants a waiver on the housing requirement, and the EIR is now undergoing review, amendment and revision due to a successful appeal, before the certification process proceeds.

In hearings before both the Planning Commission and City Council, Michael Ross, Kenwood’s architect, and Bill Hooper, president of Kenwood Development, say that listening to and responding to the community has been and continues to be of great importance.

The tactical changes foreshadowed even more aggressive ones to follow as the development war ramped up.

The First Street East project

Until a recent change in its plans, a group named Caymus Capital was aggressively promoting a hotel project on First Street East across from Arnold Field. Its plan: a 30-room hotel and restaurant, and 42 housing units. The land is zoned “Mixed-Use,” which provides for both housing and commercial development. The location, however, has also been subject to special consideration by the City. That consideration included direction that any commercial development be “small scale” such as a B&B (five-room limitation) or office use.

A new generation of neighbors came together to oppose the initial plan.

Sheila O’Neill is one of those neighbors and is taking a leading role in opposing the FSE hotel project. According to O’Neill, Protect Sonoma “is in favor of home development on the 3.4 acre site owned by Caymus Capital.  However, we galvanized residents and friends to oppose the addition of a hotel, restaurant, ‘sundries’ shop, and massive, three-story buildings to the proposed project.”

She explained the opposition further, “The non-housing and out-of-scale components of this project would not be compatible with the existing residential housing and community recreational activities. We feel that all development should respect and comply with Sonoma’s General Plan, Development Code, and the documented intention to return this parcel to all residential, as well as small inns and/or professional offices.”

Caymus has been particularly assertive in its efforts to promote its project. Combining legal pressure on the city, publicly attacking the behavior and statements of Planning Commissioners, professionally produced videos and statements before the City Council by advocates for “smart growth” from Windsor… and all before the project has even gone through the customary Planning Commission review.

As the pr campaign intensified, Facebook and online videos were employed to help make Caymus’ case; opponents fired back in kind. When Caymus posted videos of local supporters to help make its case, opponents rebutted them by revealing connections between speakers in the videos and Caymus Capital and its subsidiaries.

The very organized and tech-savvy opposition may have made its case conclusively. On September 5, Caymus announced it was changing its longtime plans for a mixed-use development to a housing-only project.

“Of course, we had a lot of support for the hotel as people recognized the value of the TOT revenue, but we all recognize that not enough housing is fast becoming a humanitarian crisis,” said Heidi Darling, speaking for the developers. “The best thing for Sonoma right now is more housing, stat.”

By all indications, the development war has ramped up to a new level, and since two council seats are up for election in 2018, it’s likely that the development community will have a hand in finding, funding and supporting candidates they feel will support their plans. Buckle your seat belts; it’s going to be a bumpy ride.



One thought on “Development war: Big stakes, tough tactics

  1. In all of California there are few Plazas. California was developed by real estate developers and leaving space for a Plaza would be unthinkable. The constant pressure for development taking advantage of our wonderful unique Sonoma will continue unabated unless citizens create iron clad protections to preserve this wonderful and unique gem.

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