Healdsburg approves Mill District downtown housing, retail redevelopment

Healdsburg’s front entry is set for a large-scale redevelopment project that will transform a former lumber mill into more than 200 homes targeting a range of income levels, an upscale hotel and a collection of new retail shops along Healdsburg Avenue.

The Healdsburg City Council endorsed the Mill District project following a marathon meeting Monday night, authorizing the second-largest housing project in the city’s history. The decision concluded years of negotiations between the city and Vancouver-based resort developer Replay over the 9.5-acre property just north of the Highway 101 offramp to Central Healdsburg, reimagining a primary gateway into the city’s downtown.

Construction is expected to start this fall on utilities and other infrastructure. The mixed-use project, which the developer estimates will cost hundreds of millions of dollars, is scheduled to be built over a 12-year period to abide by Healdsburg’s growth restrictions.

Several council members called the approval a victory in their attempt to address the city’s ongoing housing needs.

“This is I think a pretty momentous moment for Healdsburg,” Mayor David Hagele said Monday, his voice cracking with emotion. “There’s a lot of pent-up housing units that are ready to break through. To me, that’s a big deal.”

As part of the development agreement, a 40-unit affordable housing complex is scheduled to be built during the first phase of construction, which will also include the 53-room boutique hotel and the bulk of 15,000 square feet of retail space below it.

The first 40 multifamily, market-rate homes would also be constructed at that time, all completed as early as 2021 if Replay receives necessary design approvals as well as federal tax credits for the low-income units.

The housing package also consists of a mix of 30 rental and for-sale middle-income units, which will be built gradually over the life of the project.

The units will target those with salaries in the 120 to 160 percent range of the area median income (AMI), or up to about $94,000 for individuals, and as much as $134,500 for families of four.

“That’s been a need that hasn’t been addressed with our housing production to date,” said Councilman Joe Naujokas. “We need to hit this ‘missing middle.’ That’s been consistently raised by the community as a goal and objective.”

Additional community benefits are baked into Monday’s approval.

A nearly 1-acre public park is tentatively slated for the center of the property, in addition to Replay committing $1.045 million toward the city’s purchase of a new fire ladder truck and $1.3 million for new pedestrian and bicycle pathway in the downtown core near the recently finished roundabout.

“That part of town is awful now, and it’s been that way,” Councilwoman Evelyn Mitchell said of its current access to pedestrians. “It’s always been kind of a joke driving into Healdsburg, this great community. This is just going to add to the whole beauty of our city.”

For construction and management of the affordable units, Replay has partnered with Hayward-based Eden Housing, which already oversees the 64-unit Foss Creek Court low-income complex in Healdsburg.

The agreement calls for 24 units at below 50 percent AMI, or $49,000 in annual salary for a family of four, and 16 more below 80 percent AMI, or about $78,500 in income.

An Eden representative said the nonprofit hopes to pursue a handful of under 30 percent AMI extremely low-income units — typically considered transitional housing for those coming out of homelessness — in the project.

To increase the chances the 40-unit complex receives the federal tax credit in the competitive process, the city will kick in $250,000, and in return Replay will contribute the same amount back to Healdsburg’s existing initiatives toward homelessness.

While the council unanimously backed the overall proposal, Vice Mayor Leah Gold voiced disappointment it did not result in even higher-density housing for the local workforce, namely because of its location next to the commuter rail right-of-way.

Sonoma-Marin Area Rail Transit, which is set to extend service to Windsor by early 2022, has yet to finalize service plans northward to Healdsburg and Cloverdale.

“That would have been, to me, the highest and best use of this property,” said Gold. “I’m sure it will be a beautiful project. We will make good use of the affordable and the middle-income housing that you do provide. I’m just hoping that in the future we can do better.”

At full buildout by 2030, the Mill District will include 208 housing units, of which 138 will be market-rate and the remaining 70 are income-restricted, second in scale in Healdsburg only to the 346-unit Parkland Farms development approved by the council in 1995. Replay representatives said they’re ready to get construction underway.

“We’re just extremely excited to get going here and to finally realize what we’ve been talking about the last three years,” said Eric Chan, Replay’s director of development in Healdsburg. “We’re pretty proud that we’ve gone through this process to make a better project and now the real work is to come.”

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