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Petaluma seeks affordable housing developer


Petaluma officials began searching for a developer to build an affordable housing project at a west side parcel, a move that’s vexed a local nonprofit with longstanding plans to construct senior housing on the riverfront plot.

The city in April released a request for developers to submit proposals for senior, individual or multi-family affordable housing projects on a 1.3-acre city-owned lot at 951 Petaluma Blvd. South. Three proposals were submitted by the Monday deadline, though the city attorney declined to release further details, including the names of the entities that submitted packages.

PEP Housing, a Petaluma-based senior housing developer, was among those who responded, turning in plans for a 55-unit development for low-income seniors and senior veterans, according to Executive Director Mary Stompe. The $24 million proposal also includes a wellness center, office space, a small shop for seniors to sell crafts as well as parking and public river access.

Stompe said she’s perplexed that her agency is forced to compete for the right to build on land it had been told would be a future senior housing site. PEP purchased the property in 2006 with the intent to later construct senior housing and a corporate office, and has since invested more than $311,000 with that goal in mind, she said.

Before the dissolution of state redevelopment districts, which sequestered tax dollars for community improvement projects, the city purchased the property in 2011 using redevelopment agency funds. At that time, the former housing coordinator told the city the lot would be used for affordable senior housing and the city council approved a resolution with that intent, Stompe said.

She said PEP undertook a study to determine the feasibility of constructing workforce housing on site at the city’s request in 2015, finding that the project would not pan out. Last year, it submitted a proposal to develop senior and veteran housing, but the city opted to solicit a request for proposals rather than moving forward with that plan.

“This is very, very stressful. I’m just hopeful that the city council will do the right thing and grant us the project,” she said, adding that a representative for an outside developer threatened her employees, further contributing to her unease.

City Manager John Brown said the best course of action was to seek proposals from developers, and comments previously made by staff don’t preclude the city from seeking the best project for the parcel now. The resolution approved in 2011 states only that the property will be used for affordable housing.

“A staff member can get up and say whatever they say in comments at a meeting,” he said. “That may well have been what staff’s intention was, but there are underlying sovereignty issues here. This is a piece of city-owned property, and the city council gets to give the direction to decide how they want to use the property to the community’s benefit.”

Mayor David Glass described the current process as a transparent one that protects the public interest and allows city leaders to make an informed decision.

“We’re seeking an RFP as an opportunity to evaluate all the options with an open mind. At the same time, you receive all the feedback and then it will be the time to figure what the proper course of action is for the public property,” he said. “That doesn’t preclude PEP … People should be wary of a government that says this was all predetermined more than a decade ago.”

Councilman Mike Healy said he supports PEP’s proposal and said he would advocate for workforce housing developments at other sites.

“This isn’t the way I would have preferred to see it unfurl,” he said. “I would have preferred to see it awarded to (PEP Housing) initially.”

PEP Housing manages 12 affordable senior housing complexes in Petaluma, and has a lease contract with the city to house its headquarters at the 951 Petaluma Blvd. South lot through 2020. The agency currently has a waiting list of up to four years, and Stompe argues that PEP’s proposal, which includes 25 units for veterans, would meet the growing needs of an aging population priced out of the broader housing market.

“When a senior comes into our office and says ‘I need an apartment today, I’m living in my car,’ you have to say ‘we have a wait list and you can come back in four years,’” she said. “When someone says, ‘I won’t be alive in four years’ and walks out — that’s why we need more senior housing. So many of these folks have been contributing members of the community and at no fault of their own ended up in this situation.”

Brown said staff will review proposals and return to the city council with a recommendation in June or July. If the city doesn’t commit to developing an affordable housing project, it would be forced to sell the property, appraised at $1.3 million, and deposit the money into its affordable housing funds, Housing Coordinator Sue Castellucci said.

She said construction of affordable senior housing has outpaced that of affordable multi-family developments, with 684 senior apartments and 608 multi-family units in the city. While multi-family units aren’t subject to a tenant age restriction, senior housing has a minimum age requirement, she said.

“In every segment of the population, we need affordable housing,” she said. “It’s a hard decision to make.”

(Contact Hannah Beausang at hannah.beausang@arguscourier.com.)