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Petaluma sued over Corona project as SMART deal reached

The Petaluma City Council Monday clinched its side of an agreement with Sonoma- Marin Area Rail Transit over the east side second station. Yet the step forward is tempered by a recent lawsuit over the connected Corona Road Station housing development, throwing another wrench into a complicated web of deals that would give the city its desired second station and more than 500 units of housing on three separate parcels.

The agreement between the city and SMART endured weeks of back and forth, culminating in a 5-2 approval at Monday night’s city council meeting. Pending SMART board approval, the agreement mandates the city contribute $2 million toward the station construction and expedites its lease with the rail agency for the downtown depot property it uses for station parking.

City Attorney Eric Danly said SMART will match the $2 million contribution for an initial $4 million investment into the project while the agency “works to secure the rest of the funds.”

Both city and SMART officials have routinely estimated the station will cost $8 million to build, relying on the city’s $2 million contribution collected via traffic impact fees and $6 million in a private land sale between the agency and a private landowner.

However, that plan could be at risk, now that a lawsuit is targeting the landowner Lomas Partners, LLC and its Corona Road Station housing development.

County Supervisor and SMART Board Member David Rabbitt also recently cautioned that other board members may want to reroute the $6 million in land sale proceeds to stave off a financial crisis in the agency. Following its failed sales tax extension in March and a drop in revenue over the coronavirus pandemic, the agency announced it will need to make significant budget cuts.

Mayor Teresa Barrett and Vice Mayor D’Lynda Fischer cast the dissenting votes against the SMART deal, maintaining their record in opposing the housing development at Corona Road. Opponents say the project is not dense enough near a transit station and would encourage more car trips.

Barrett said she hasn’t seen any guarantees that the $8 million will actually be spent on the Petaluma station and raised concerns over recent revisions to language in the agreement by SMART.

“That I think the way that some of these things are written puts the city in a less favorable light and removes a lot of SMART’s buy-in and skin in the game quite frankly, that they will actually provide our second station,” Barrett said. “It has been the motivation for all this talk about the Corona (Road) and Downtown Station developments, which have been dogging us for over a year.”

The five other council members that cast approving votes said the deal isn’t perfect, but considered it their best chance to secure the second station the city has been chasing for years. SMART has said it must add the Petaluma station work to a current contract extending the commuter rail line to Windsor, or risk a potential gap of several years until the contractor could return.

The bloc of five council members have in past meetings made clear their lack of enthusiasm over some elements of the project spanning three housing developments. Several also took the opportunity to express their unhappiness with SMART’s negotiation approach, and took issue that Petaluma is not guaranteed a representative board seat unlike smaller cities.

“There are definitely things in (the agreement) I do not care for and things that were added by SMART that appear to give them wiggle room, but this is important to our community,” Councilwoman Kathy Miller said. “From a political perspective, I think SMART will have a very difficult time not proceeding to build the second station and using the money for something else. From my perspective, I just think we have to hold their feet to the fire.”

Yet, as the city laid to rest its weeks-long negotiations with SMART, the complicated east side station project encountered another snag in the form of a lawsuit.

A group calling itself the Petaluma Community Alliance launched the process to sue Corona Road parcel owner Lomas Partners, LLC and the city of Petaluma, challenging the project’s lack environmental impact report. San Francisco-based law firm Hanson Bridgett LLP is representing the group and Petaluma resident Brian Barnacle.

The complaint, still in the filing process amid county court closures, challenges the 110-unit Corona Road Station project under state environmental guidelines and a state fee collection act. The 24-page complaint argues the development “eschews best practices for effective transit-oriented development,” failed to adequately address its impact on the environment, violates the city’s General Plan and California’s Mitigation Fee Act.

In response, City Attorney Eric Danly challenged the assertions and said the complaint reads to him more like the suing parties disagree with the city’s choice to move forward on the project.

Barnacle declined to offer any details about the members of Petaluma Community Alliance including the group size and whether they are all Petaluma residents. He also declined to share details about funding sources.

“It’s not like there’s just two people who are pissed off,” Barnacle said. “It’s a group of people that are frustrated over this.”

The suit is the second time within the past several weeks that a controversial development has been challenged along environmental lines, following a recently-filed complaint against the Sid Commons housing development.

Editor’s Note: A previous version of this story mistakenly said the lawsuit is over the project’s environmental report, instead of the lack of environmental report.

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

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