Apartments proposed at Deer Creek in Petaluma

The shopping center anchored by Friedman’s could have nearly 100 housing units, some affordable.|

The developer behind a hotly-contested east Petaluma shopping center is considering adding apartments to its project as the housing market in the city continues to constrict.

The Deer Creek Village shopping center, which drew sharp criticism over parking and other neighborhood impacts during its planning process, hopes to gain city approval to add apartments on a five-acre parcel on the north corner of the Rainer Avenue development.

The tentative proposal has been in the works for about eight months, according to Greg Geersten, the managing director of San Francisco-based Merlone Grier Partners, which has been developing the property for several years. The 315,000-square-foot center is currently home to large businesses such as Smart & Final grocers, City Sports Club and Friedman’s Home Improvement as well as a smattering of eateries and various other commercial properties.

“I started making connections with individuals just saying ‘what do you think about this?’” Geersten said. “After the Smart & Final deal was done and under contract, we started looking at what we have and where Raley’s is and that whole project and the Regency Center’s (East Washington Place) development has going and I thought ‘you know what, most of the top notch retailers are already here, so what would be a good use over here?’?”

Specifics about the proposal are still being hammered out, though it will likely include less than 100 rental apartment units and incorporate affordable units, Geersten said.

Residents could rely on existing parking, and the proposal is viewed by the developer as a simple infill project. The infrastructure needed to support such a complex already exists, and the housing would be in walking distance to the shopping center’s retail offerings.

“It’s all upgraded, so it’s about as close as you get to started,” he said.

If it’s approved, the project would take about 18 months to build, Geersten said. Though conversations about the planning process have been ongoing with city officials, no formal application has been submitted.

The site falls within an unusual mixed-use zoning district that allows for commercial spaces but not residential uses, according to Petaluma’s Interim Planning Manager Geoff Bradley. Sensitive to the acute housing shortage plaguing Sonoma County after deadly fires wiped out more than 6,800 structures in October, planners are working to identify a path forward, he said.

A recent survey of the 3,125 units in the city’s major apartment complexes showed a meager 1.12 percent vacancy rate, with the majority of those 35 apartments gobbled up post-fire, according to a recent report from the city.

The city is aiming to present the developers with complete information about the approval process by the end of the year, Bradley said. Early estimations show that a zoning amendment, architectural and environmental review and a use permit could be needed for the project to advance, Bradley said.

“It’s a little tricky, but we’re definitely taking a hard look at it – housing is so needed up there in the Bay Area, especially in the North Bay,” Bradley said.

Geersten said housing would also draw significantly less traffic than a retail outlet, an issue that was a major sticking point during the early phases of the project.

Meanwhile, the rest of the shopping center is nearing completion. Dunkin’ Donuts is slated to move into the center in coming weeks, and the developer is looking at attracting a full-line restaurant in what will shape up as a 6,000-square-foot space with in a southern parcel with views of the adjacent creek, Geersten said.

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

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