SMART deal could lead to second Petaluma station

A deal stuck last month between commuter and freight rail agencies could lead to the development of an east Petaluma rail station and a downtown mixed use project.

The Sonoma-Marin Area Rail Transit authority, which is preparing to launch commuter train service from Santa Rosa to San Rafael later this year, reached the deal with the North Coast Railroad Authority, which operates freight trains on the same stretch of tracks.

As part of the sweeping operating agreement, the NCRA agreed to vacate the downtown rail yard adjacent to the train station on Lakeville Street. NCRA had an easement to park freight trains on the property, complicating SMART’s efforts to develop the land.

“It’s a positive step and a victory for Petaluma,”said Supervisor David Rabbitt, a SMART board member. “It does clear the way for things to move forward.”

With NCRA ceding its interest in the property, SMART is now free to pursue a deal with a developer to sell the downtown land in exchange for construction of a second Petaluma commuter rail platform at Corona Road. The long envisioned second station was promised to voters who approved the commuter rail agency in 2008, but was removed from the initial plans as the agency faced budget uncertainty during the recession.

Farhad Mansourian, SMART’s general manager, said that the agency is now free to negotiate in earnest with Lomas Partners, the developer of the Corona Road site. As part of the deal, SMART would offer Lomas the rights to buy the downtown property for a mixed use, transit-oriented development. SMART would use the proceeds from the sale of the land to build the second station at Corona, where the city has also envisioned more transit-oriented development.

Mansourian said the deal with the NCRA removes a major barrier to developing these projects.

“One of the items that was holding us back was that freight had an easement on the property that we were in negotiations over,” he said. “We were at a point where we couldn’t proceed. Now, we begin moving to the next stage.”

Another potential hurdle to these projects moving forward is reported soil contamination at the Corona Road site. Mansourian said the developer is responsible for doing an analysis and coming up with a solution to clean up the contamination, which must be approved by regional water quality regulators.

The next step in the process would be for SMART and Lomas Partners to reach a deal on the land swap, which could come as soon as this month. Todd Kurtin, principal of Lomas Partners, said he plans to meet with SMART in a few weeks, now that the downtown land is clear of encumberments. Lomas is under contract for the Corona Road land, and has paid a non-refundable deposit for the option to purchase the property, though Kurtin declined to state the size of the deposit.

Kurtin, a southern California developer who initially developed the Quarry Heights project in Petaluma before selling to KB Homes, said he planned to work with the city on building a suitable project around both train stations.

Petaluma used a grant from the Metropolitan Transportation Commission to develop the station area master plans.

“It’s taken two years to get to this position to be able to finalize and craft a deal,” Kurtin said. “I think I’m very close.”

City Councilman Mike Healy, who has been pushing for the second station at Corona Road, said that the city has been working with the developer on creating projects at the two sites that meet the city’s longterm vision. He said the city’s action last year to change its impact fees to include credit for building a parking garage at Corona Road to accommodate commuter rail passengers, was a step toward facilitating the project.

Healy said SMART’s negotiations with the developer amount to the best chance the city has to achieve an east side train station. He said Corona Road is the preferred location for a station.

“It’s all green lighted at this point,” he said. “That’s a good thing.”

(Contact Matt Brown at matt.brown@arguscourier.com.)