Healdsburg City Council OKs revised deal with Montage resort developer

Construction of a community park and access to a new hiking trail, each tied to the Montage Healdsburg hotel property, are not expected to occur before 2023 under a revised deal struck with the resort’s developer and approved by the Healdsburg City Council.

In a pair of 4-0 votes Tuesday, the City Council signed off on updated terms to the decade-old agreement with Sonoma Luxury Resort, a subsidiary of Robert Green Co., which built the new $310 million-plus ultraluxury resort hotel at Healdsburg’s northern edge. The second of the two approvals ensured the changes to the 2011 development deal take immediate effect.

The amended agreement safeguards a future affordable housing site for up to 150 apartments and townhomes on the secluded, 258-acre oak-studded property, plus a $1 million contribution to the project. It also assures that a pair of roadways near the Parkland Farms residential subdivision will be constructed for public access. The developer also will continue with preparing the land for a fire substation and contribute $1.75 million toward the long-planned project.

Green, however, will no longer be responsible for building the firehouse, nor the nearby bicycle-and-pedestrian pathway.

Instead, another developer will construct the fire substation starting next year, with a scheduled 2023 completion. Robert Green Jr., the president and chief executive officer of his Encinitas-based commercial development firm, will also make cash payments to the city to pass off construction of the bike path and grading work on the affordable housing site, with cost estimates due in April.

In addition, Green will still perform grading for the 36-acre community park site, as well as maintain a $3 million contribution to its future construction. But with the park now estimated to cost $10 million, and the city lacking the funds to begin work once master planning is finished, the phased project remains several years away from opening to the public, city staff said.

“It’s sobering to hear, because it’s a considerable amount of money,” Councilwoman Ariel Kelley said Tuesday at the council’s virtual meeting. “At the same time, I want to remain optimistic we’re going to be able to deliver on some of these community benefits for our residents in short order. I know you sense the urgency that’s there on getting that plan to fruition.”

A parking lot at the park is planned for the first phase of construction, as is build-out of the bike path. But without completion of the parking, Green was unwilling to compromise on when the public could access a hiking trail on the resort property that he was set to build as part of the original development deal. The roadway that leads to the hotel was not designed for curbside parking.

City Manager Jeff Kay, just over two weeks into his new job, looked to assuage any discontent among the council and public over ongoing delays in public amenities associated with the resort. The 130-room hotel opened last month, and work on the first set of 70 custom villa-style homes has gotten underway, Green told the council Tuesday.

“It’s a pretty impressive list of how the community benefits from this project,” Kay told the council. “It’s refreshing for me to be able to come into a community where the … partnership with developers yields this kind of opportunity to bring things that are really needed and will benefit the community.”

Green also is making an almost $500,000 contribution toward upgrades to the Dry Creek Road-Highway 101 interchange, bringing his total cash payment to the city to more than $6 million, plus transfer of land for each of the city projects. The fees to cover grading of the bike path and affordable housing site will add to that total.

“There may be impressions by folks here in the meeting or in the public, (but) this is not an attempt by the developer to redo the deal with the city. This is simply our desire to complete our obligations,” Green told the council. “We still are on the hook for all of the same costs that we have always committed to. We simply want to facilitate the city’s current schedule and sequence of events going forward.”

Green is appealing a record $6.4 million state fine for extensive water quality violations tied to the resort’s construction in the winter of 2018-19.

City discussions during the summer of a renegotiated development deal drew widespread criticism over concerns that residents would lose out on pledged public benefits connected to the project. Council members took heed and city staff worked to keep the on-site affordable housing project rather than move it elsewhere in exchange for cash. Most of the other amenities also fell into place in the revised deal.

No members of the public spoke Tuesday in the council’s sign-off.

“If we’re continuing to have these public benefits that are being put in front of us but inaccessible, I think that will create frustration for the community that I’d love to see us come up with a way to alleviate,” Kelley said. “I’m thankful that this amendment allows flexibility there, where we’re going to have the grading move forward and do that in conjunction with the fire substation. I do think that looks like the right sequencing at this time to continue that forward.”

Councilman David Hagele, who lives in the Parkland Farms subdivision, recused himself from the discussion and vote because of his home’s proximity to the Montage Healdsburg resort.

You can reach Staff Writer Kevin Fixler at 707-521-5336 or kevin.fixler@pressdemocrat.com. On Twitter @kfixler.