Sonoma Council re-opens door for hotel developer fee waiver

So what exactly happened at the Sonoma City Council meeting of December 6, to hear Kenwood Investment’s appeal to not pay the required housing impact fees for its downtown hotel project? A lot of complicated talk happened, resulting in city staff going off to work with the developer and coming back January 17, 2024 to decide this matter. 

The Sun editorial, To House or Not to House, laid it out simply, does the city of Sonoma want to help create affordable housing or not?

The bottom line of what the developer wants is to pay no fees or greatly reduced fees.  This is what city staff will be working on with the developer, a way to make the in-lieu fee of about $2 million be waved partially or completely, and a way for the impact fee of $17 per square foot for hotel projects (about $1 million for this one) to be greatly reduced for this project and all future hotel projects.

And guess what?  The city council is OK with this.

This sets precedent for future hotel or other commercial development projects in the city. Going forward developers will say, Kenwood Investments did not have to build 50% of the square footage as housing, nor did they have to pay the fees that city code requires if you don’t build housing, so why should we?

Councilmember John Gurney to his credit did say if maybe the eight residential units could be changed from six luxury second home condos and 2 affordable units to all 8 affordable, could this work?  The answer from Kenwood Investment was no, that does not pen out dollar-wise.  Then Gurney said, oh well, this project is so wonderful, it will provide TOT, vitality, jobs, so it will “trickle down” to the rest of us.

Then Mayor Sandra Lowe stated that the city of Sonoma must compete with locations like Napa and Healdsburg to attract the high end tourists, so we need projects like this.  That the more money the city sees in TOT and spending the better.

In short all city council members want this project because they feel it is good for the city economically and the requirement for developers to provide 50% of what they build as housing, with 20% of that housing being deeded affordable, is not that important. 

But equating big money from big developers to what is good for our community is short sighted. We need to think of what is truly good for our community in the long term.  What is good for wealthy tourists, wealthy second home buyers does not “trickle down” to the rest of us.  What about the economic wellbeing and housing for workers who are already here?  What about financial breaks for real, local small businesses so that they are the ones who build a vibrant downtown?  In turn these small businesses will be ones that locals can afford and enjoy, rather than luxury projects like this one.

There needs to be a new economic model, if we want real affordable housing and real economic security for our community in the long term. The economics of giving everything away to those that already have it all, is not in the best interests of our community.