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Santa Rosa council approves scaled back Museum on the Square project

Published: Tuesday, May 7, 2013 at 3:00 a.m.
Last Modified: Wednesday, May 8, 2013 at 8:05 a.m.

Though disappointed to see the top five stories disappear, Santa Rosa City Council members unanimously supported a scaled back version of the Museum on the Square project Tuesday.

The council agreed to sell the windowless former AT&T building downtown to developer Hugh Futrell even though he is no longer proposing to turn it into a 10-story tower topped by 43 apartments.

Instead, Futrell says he'll turn the concrete structure into a glass-clad building with museum and restaurant space on the first floor and four stories of office space above.

Councilwoman Julie Combs said she was “experiencing a tremendous sense of loss” from the elimination of the residential units, which she said could have brought “excitement and vibrancy” to the downtown. Nevertheless she said the smaller project would go a long way toward improving that area of Courthouse Square.

“I think this is one of those instances when we don't let the perfect be the enemy of the good,” Combs said.

Futrell explained that he needed to simplify the project to get it financed, purchased and under construction by August to ensure his anchor tenants can occupy the building by next year.

Council members praised Futrell for his commitment to downtown and his tenacity for the sticking with the project despite many hurdles. The building was purchased by the city's redevelopment agency in 2007 and was in the process of being sold to Futrell and his partners when the state eliminated its 425 redevelopment agencies. The resulting bureaucratic morass has bogged down the project ever since.

“To have the state turn around and kick him in the butt the way it did, it amazing that he's still involved,” Councilman Jake Ours said.

The financing for the residential component of the project was complex and was also impacted by the federal sequestration affecting the timing of special tax credits for such infill projects, Futrell said.

The amended agreement calls for Futrell to close escrow by the end of August. The new sale price will be based on a new appraisal that is underway. The proceeds will not go directly to the city, but will instead be distributed among various taxing agencies in the area, including schools and other districts.

Even though it won't build housing, the project will spur demand for housing downtown, Futrell said.

“We need both jobs and housing. But jobs are the fundamental determinant of housing demand,” Futrell said.

The long vacant building is considered by many to be an eyesore and a major impediment to energizing the downtown. “We need to make that corner vibrant. That corner has been hamstringing our ability to revitalize Courthouse Square for how many years?” Councilman Gary Wysocky said.

City staff estimate the revised project could create 600 jobs and generate $60 million of annual economic activity for the city. Instead of $26 million, the new project will cost $16.5 million.

Mayor Scott Bartley praised Futrell for his personal investment in the project and supported the goal of keeping good-paying jobs downtown. But he said he worried that time was running out for the project.

“I hate to say it, this is sort of a hail Mary attempt to save this,” Bartley said.

You can reach Staff Writer Kevin McCallum at 521-5207 or OnTwitter @citybeater

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