Housing developer closes deal on Sonoma Hospital lot

The open-space Sonoma lot at West MacArthur and Fourth Street has been sold by the Sonoma Valley Health Care District to developer DeNova Homes for $3.3 million.

DeNova plans to build 22 units on the 2.9-acre parcel, often referred to as the South Lot, while the Hospital pockets about $1 million, according to Board Chair Joshua Rymer.

“The benefits for the hospital are clear – we were able to take an underused asset and turn it into a financial gain,” he said. Additionally, the Hospital retains ownership of an adjacent 1.2-acre parcel, now used as a parking lot. 

After repayment of the loan and deposits, Rymer said, “SVH receives approximately $1 million which will be entirely used to pay down the hospital’s existing line of credit.”

“The community also benefits, gaining additional and much needed new housing,” he said.

The-22 unit development — dubbed Mockingbird Lane — includes four “affordable homes.” And 18 of them have second units, which could be rentals. 

The SVHCD has no role or financial interest in the DeNova development.

The Hospital reportedly paid $2 million for the entire parcel, in 2016. Plans to flip the lot accelerated a year ago, when a loan from a private party due loomed due in August of 2018.

Rymer said this week that while the sale is beneficial for the hospital, and comes at a time when the hospital is reporting improved financial performance, “it doesn’t mean the hospital is out of the woods financially. The reality is the hospital must continue to look for additional revenue sources and keep a tight rein on expenses.”