Petaluma, SMART look to tap state funds to revive second station

The city of Petaluma and Sonoma-Marin Area Rail Transit are eyeing a new partnership and funding source for the city’s long-sought second train station after a previous effort collapsed early this year.

In coordination with SMART and an affordable housing developer, the Petaluma City Council on Monday is expected to authorize a $30 million state grant application that could provide SMART with nearly all of its needed funding for the station now estimated to cost at least $12 million.

This latest attempt to build the Corona Road stop, like the previous web of agreements, would be dependent on similar, albeit smaller, domino-like succession of events and willing partnerships.

Arcata-based housing developer Danco Group continues to move forward with its plan to build 131 affordable units next to the proposed train stop at Corona Road, after a single-family development at the site was nixed amid a lawsuit.

Meanwhile, the city and SMART are joining forces to jockey for state funding they hope will push both the development and transit project toward the finish line, the latest effort in a years-long push to build a second Petaluma stop along the 45-mile system.

“If this (grant) doesn’t come through, it doesn’t change the trajectory,” Sonoma County Supervisor and SMART Board Chair David Rabbitt said last week. “If this doesn’t happen, we will look for other funds when they become available to get this station built.”

As part of the overall project, Danco Group is asking for $20 million of the total grant amount from the state-sponsored Affordable Housing Sustainable Communities grant fund, which is focused on reducing greenhouse gas emissions, Petaluma Planning Manager Heather Hines confirmed Wednesday.

SMART spokesman Matt Stevens said the agency is applying for the remaining $10 million for station construction, which alongside a recently committed $2 million, would bring the total station funding sources to $12 million.

Danco Group did not respond to multiple requests for comment on the project via phone or email.

Under a previous proposal, developer Todd Kurtin of Lomas Partners agreed to swap land with SMART. The rail agency was set to give Kurtin its vacant parcel behind the downtown train station in exchange for some of Kurtin’s land at Corona Road for use as a parking lot for the planned second stop.

Lomas Partners would have sold that downtown parcel to developer Hines Co., which proposed a multistory, 402-unit apartment complex that was later nixed by city council, and provided SMART with $6 million of the land sale profits to go toward its eastside station costs once pegged at $8 million. The city agreed to commit $2 million to meet the total cost.

But the associated 110 single-family housing project at Corona Road attracted heated opposition from residents, and in April 2020, now-Vice Mayor Brian Barnacle and a group called Petaluma Community Alliance sued the city over the approved development. The group, which refuses to disclose member identities or funding sources, has been in talks over a settlement agreement with the city, according to legal documents, and Barnacle withdrew from the lawsuit upon joining council January.

That lawsuit remains active, Assistant City Attorney Jordan Green said last week.

Staring down the legal challenge, Kurtin tapped affordable developer Danco Group to build on his Corona Road property, unveiling an affordable housing project that elicited broad support among city council and residents.

Mayor Teresa Barrett, alongside council members Dennis Pocekay and D’Lynda Fischer, formed the block voting down the downtown project, with Vice Mayor Brian Barnacle recused over his prior involvement.

The January council vote over one site’s affordable housing allotment scrapped the effort entirely, leaving the city and transit agency to look for new methods to bankroll station construction.

“It’s always remained the city’s goal to have a second station at Corona, so nothing has changed about that,” Barrett said Tuesday. “The project offered by Danco I think almost the entire council liked. The previous package with the downtown project, I never could have supported that with the lack of affordable housing there.”

City and SMART officials expressed cautious optimism about their ability to win the competitive grant, and Rabbitt said even if the agency wins the $10 million, costs to build the station have increased, and could exceed $12 million.

Some doubts have been raised by the city as well, with a recent staff report on affordable housing released in advance of the May 17 council meeting questioning the viability of the grant partnership. In the report, staff said the Meridian at Corona Station project, though active, “may not be a viable project if current discussions between Danco and property owner Lomas do not come to resolution on a revised purchase agreement.”

In an emailed statement Wednesday, landowner Kurtin would only confirm he still owns the property, but declined to comment further or answer questions regarding current or planned agreements between Lomas Partners and Danco Group.

Additionally, the staff report estimates it’s unlikely that building permits for the Meridian project will be issued prior to the end of 2022 should the grant come through, signaling the city will likely add another few years to its decade-long wait for an eastside train station.

Despite the tenuous path forward, Barrett said she’s hopeful this new alliance, and potential new negotiating partners following the April 21 announcement that SMART General Manager Farhad Mansourian is soon to retire, will secure a new funding source for the station project.

“I’m looking forward to a new era of cooperation with SMART as they choose a new management system with the retirement of Farhad,” Barrett said. “Everything is poised to go forward and I hope it does.”

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