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Housing Hurdles

As Sebastopol development prepares to break ground, city pol wants housing

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Coming Soon? Piazza's plot awaits the bulldozers.
  • Coming Soon? Piazza's plot awaits the bulldozers.

The sign says one thing, but the facts say another—and raise a question: Will construction on the much-anticipated Hotel Sebastopol ever begin?

The boutique project up the block from the Barlow complex of retail and restaurants has been subject to pushback from some residents as plans for the multi-faceted facility were being drawn up five years ago. The proposal, among other things, signaled a sea-change for a town that honored and amped its agricultural heritage to one that was more interested in tourist-friendly boutique hotels catering to the wine economy. The developer, Piazza Hospitality, operates upscale restaurants and hotels in Healdsburg and beyond.

The sign on the lot—former site of Sebastopol Tractor—says to expect construction to begin this summer. That's not going to happen. Even as the developer has worked with the city planning department to address issues related to disability access, light pollution, solar panels on a carport roof and landscaping issues, Piazza still has to go through another round of approvals from the city as it prepares its construction management plan.

That plan, says city planning director Kari Svanstrom, includes addressing things like road closures, tree protection, noise control during hours of operation, erosion and dust control, securing the site with a fence, construction truck entry points, storm-water protection and more.

During development of the plan, locals expressed concerns over the character of the town—but many also folded in the issue of affordable housing in Sebastopol, and the lack of it. That issue may come to a head in coming months as the city considers another project—the build-out of lots behind O'Reilly Media on Gravenstein Highway.

A developer called City Ventures has come forward with a vision, if not a plan, to potentially buy the lots and develop housing. The company's CEO, Phil Kerr, told the West County Times the company wants to hear from locals about what sort of housing, if any, to develop on the two lots. The property is adjacent to the West County Trail. They've been hearing from at least one local; Michael Carnacchi.

Sebastopol is no different from Healdsburg or Sonoma or Windsor when it comes to the intersection of affordability and tourism. For Carnacchi, town cobbler and Sebastopol city councilman, the question is simple: Can Sebastopol do a better job of encouraging housing development that could, for example, provide options for prospective hotel workers?

"We don't have a lot of places here to build affordable housing," notes Carnacchi, who says that if the City Ventures development comes to pass, he may "push for an aspect that's 100 percent affordable in the new development."

His vision is of humble yurts and tiny homes. City Ventures' other developments are condo projects in the $650,000 to $1 million range. That's great for a summer dacha, but what about local workers already squeezed by high rents and a low prioritization of affordable housing?

"This could be a perfect example of how infill development could work," he says, "and how it could work with the new hotel."

Carnacchi's vision could also be a hedge against future traffic nightmares downtown, already an issue. In the short-term, the Piazza plan will include some road closures and reconfiguring the surrounding sidewalks to provide for ease of and safety of egress for all residents, not just hotel guests.

"Yes, road and sidewalk closures," says Svanstrom in an email. "They are reconstructing Brown Street and have sidewalk improvements throughout."

None of that's been approved and Piazza has submitted "some of this information to date, but not all," to the city, says Svanstrom.

As for City Ventures, "they have a long way to go before they get their permits in, get it to the design review board or the planning commissioners," says Carnacchi.

Carnacchi would also like to see consideration of any plan that would keep cars off local streets. "If one of those parcels was developed as wholly affordable—you'd have the workers who are working at the hotel, for instance, would live right next to the West County regional path. That means no cars, no gas, no insurance costs for local workers who could walk to and fro from work," he says.

Carnacchi's scoping out a future Sebastopol—whether behind the O'Reilly offices or elsewhere—that could provide a path to ownership for young persons in the service economy who can't swing $1 million for a condo, but could float a reasonable mortgage note on a tiny home.

None of this is Piazza's problem, of course. They're in the business of developing hotels and restaurants, not housing their workers. And they've got a few problems of their own to sort out before ground-breaking. Piazza spokesperson Circe Sher says in an email that they're close to breaking ground in the fall, "pending construction and weather-related variables."

The hotel's on high-enough ground to not be impacted by the flooding that hit the city in February. She says the proposed hotel is safe from any 100-year flooding events that may occur.

And Piazza's been trying to be a good neighbor. Back in 2017 Piazza put out a call to the public to see if anyone had a suggested interim use for the lot. Since then they've had a few "activations" on the property including the Sebastopol Documentary Film Festival, the Sonoma County Fair and a blood drive.

Even as the region's tourism economy lags from the 2017 wildfires and the flood, the overall revenue picture for the Piazza Hospitality group, says Sher, is looking pretty good: "Overall total revenue is up from years prior" among their various businesses in the region, which include the h2Hotel, Hotel Healdsburg and a quintet of upscale restaurants.

The development arrives as Sebastopol is, like many burgs, struggling to deal with the advent of short-term rentals in its midst. That has driven up rents, driven out poorer residents and contributed to a growing chasm between the tourism economy and the cost of living.

Restaurants workers by and large live and work in Sonoma County but are increasingly faced with rising housing costs. According to a recent county-funded study, In order to accommodate employment growth, replacement of fire-related losses and overcrowded housing, the county would need to build 26,074 by 2020, or 6,500 units a year between 2016 and 2020. Between 2013 and 2017, the county averaged 716 permitted units per year.

Sonoma County commissioned the study from a firm called Beacon Economics following the 2017 fires. One takeaway that's applicable across the small tourists towns of the North Bay: Hotels such as the Sebastopol Hotel can maximize their potential only if there's a greater balance between the needs of the many and the pampering of the few.

Rising home prices and rents and a robust short-term rental economy have underscored the need for additional housing units across the county, "but the supply response has consistently fallen short," the study noted. That's as true in Sebastopol, says Carnacchi, as it is in Sonoma County at large. The county report concludes that "connecting the dots from underbuilding to economic growth, to the extent the county builds insufficient numbers of housing units, it is also limiting the job and overall growth of the local economy."

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