Petaluma expects affordable housing plan at Corona Station

The city is anticipating an affordable housing developer will take over the Corona Station residential development abutting the planned east Petaluma SMART station, a move that could appease opponents and add desperately-needed affordable housing.

The embattled project has garnered intense public scrutiny over the past several months, from hours-long public comments lambasting the plan to build 110 single-family homes to a recently-filed lawsuit challenging the development.

Staff and council are expecting the 6.5-acre east side parcel at the corner of Corona Road and McDowell Boulevard to change hands this fall if owner Lomas Partners secures Arcata-based affordable housing developer Danco Group for the new project.

Planning Manager Heather Hines said she has been corresponding with Danco representatives recently to provide assistance as they pursue disaster tax credit funding options for the project.

It is unclear how solidified the partnership is between Lomas Partners and Danco Group at this stage.

“We do not have an application for this project at this point, so it’s really all based off a couple of phone calls,” Hines said of the project’s status.

Todd Kurtin of Lomas Partners declined to comment and did not answer questions about a possible contract with the new developer.

Should the process move forward, Hines said the proposed residential project of 116 units throughout 10 three and four-story buildings will be 100% affordable, available to renters earning between 30 and 50% of the average medium income.

One of the project’s most vocal and public-facing opponents, Brian Barnacle, the signatory on the lawsuit, indicated approval for the change in developer. Barnacle and a community group called the Petaluma Community Alliance filed a suit against Petaluma challenging its approval of the project.

“We’re encouraged that the project could be transferred to an affordable housing developer and we would like to settle this suit,” said Barnacle, who is also running for city council. “There’s a lot of momentum from all parties to move beyond this.”

Councilman Mike Healy, who has been a staunch supporter of the project and its connection to the proposed Corona SMART station, said he thinks Danco Group’s proposal is likely to go forward if they are awarded disaster tax credits. As far as the timing of the project handover, Healy pointed out possible pressure exerted by the citizen-backed lawsuit.

“I think Lomas is scrambling to do a deal that gets them out of the litigation,” he said.

Both Healy and Hines also expect the developer is also likely to qualify for the streamlined ministerial review process created by SB 35, potentially fasttracking elements of the project.

The plans are the latest chapter in what has become a months-long saga over the Corona Station development project and its ties to the proposed SMART station and the 405-unit Downtown Station apartment project – a complex web of agreements for projects that will alter the face of Petaluma.

Changes at the Corona Station parcel likely signal a return to at least some of these agreements, which encompass more than 500 new units of housing, a new transportation hub and involve Sonoma Marin Area Rail Transit, the city, a handful of developers and a citizen-led lawsuit.

“There is a rather complex development agreement with the city and Lomas, and there is one between to the city and SMART,” Healy said. “I’m expecting those will have to be reopened and looked at again.”

Council first approved the Corona Station development February in a 5-2 vote, with Councilwoman D’Lynda Fischer and Mayor Teresa Barrett casting the dissenting votes.

(Contact Kathryn Palmer at kathryn.palmer@arguscourier.com, on Twitter @KathrynPlmr.)