SMART sells downtown Santa Rosa property to housing developer for $6 million

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A local real estate developer has scooped up a former freight railyard next to Sonoma-Marin Area Rail Transit’s Railroad Square station with plans to build hundreds of apartments in downtown Santa Rosa.

Cornerstone Properties closed on the land deal last week with the transit agency, SMART officials announced Wednesday. The Petaluma-based commercial developer paid $6 million for the vacant tract zoned for housing and retail space, after completing a final review of the 5.31-acre property last month.

“We are excited that we have sold this property to a company that we believe will build some much-needed housing for Santa Rosa,” SMART Board Chairwoman Deb Fudge said. “It’s primed and ready for housing. They know the process and what it takes to get development done in the city. Now’s the time to do it.”

For going on a decade, the commuter rail agency tried to sell the downtown parcel, which comes with it a complex mishmash of land easements and possible soil contamination from its history as a former Union Pacific Railroad right of way. Two previous agreements fell through with would-be buyers, the most recent in January, before Cornerstone emerged earlier this year with a winning bid. In July, Cornerstone and SMART officials entered into an initial agreement for the developer to buy the tract.

“We’re thrilled,” said County Supervisor Shirlee Zane, who also sits on SMART’s board. “We’re not going to build our way out of this housing crisis with 30 units. It ain’t gonna happen. We need to have hundreds, we absolutely do, in the right places.”

Santa Rosa was hit hard by the October 2017 Tubbs fire that destroyed more than 3,000 homes, or 5 percent of the city’s housing stock. The historic fire worsened the longstanding housing shortage which started a decade ago when the severe recession caused a sharp drop in residential construction.

Cornerstone originally agreed to pay $6.7 million for the land. Further review of the property located along the SMART right of way between West 6th and West 3rd streets led to additional negotiations, and, based on potential liabilities, the lower final sale price, Fudge said.

Details about what a future housing development might look like on the property are unclear. The developer has yet to submit a development proposal to the city for review. Reached by phone Wednesday, Alon Adani, a principal with Cornerstone Properties, declined to comment.

Earlier this year before backing out of a deal to buy the land, Santa Clara-based ROEM Development Corp. planned 321 apartments that included 48 affordable units above 15,000-square-feet of retail and office space. A food and wine market similar to the Oxbow Public Market in Napa was set to be an anchor to the development.

The downtown area is zoned for buildings up to five stories, said David Guhin, Santa Rosa’s planning and economic development director. The city has long aimed for housing on the Railroad Square site, and welcomed the news of the land sale as a signal of finally seeing an apartment complex near the public rail line.

“It’s a huge step,” Guhin said. “We have put in place a number of policies in the downtown to facilitate housing and a project like this will benefit from those. Hopefully we’ll see something soon.”

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To help motivate builders, Santa Rosa City Council unanimously approved in September an incentive program that speeds up the permitting process and sharply cuts development costs, especially on housing projects that include affordable apartments for high-rises in the downtown. Larger developments could benefit from a 40-percent reduction in typical project impact fees, as well as the usual 18-month review process being slashed in half.

“The goal is to dramatically expedite the process and prioritize it,” Guhin said of spurring city housing development.

The land sale near the rail line comes on the heels of Rohnert Park City Council’s unanimous approval last month for a massive redevelopment of a 32-acre parcel to build a downtown that includes 460 apartments next to its SMART rail station. The town of Windsor, where Fudge is a longtime councilwoman, also hopes to have more than 880 housing units within a quarter mile of its existing train station by the time SMART commuter rail service is expected to start in late 2021 or early 2022.

“When you look at what all of the other cities are doing along the line, it’s exactly what we need for transit-oriented development and also to provide ridership for the train,” Fudge said. “This is also important for combating the impacts of climate change. The primary thing is to get people out of their cars, so they’ve got transportation options and they don’t have to drive. We’re excited to be able to complete our end of the deal.”

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

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