Sonoma County’s Roseland housing, commercial project faces multimillion-dollar funding gap
A multimillion-dollar funding gap could jeopardize a long-awaited housing and commercial project on Sebastopol Road in Roseland.
The Sonoma County Community Development Commission faces an $18.6 million deficit to cover costs of infrastructure work on a 7.4-acre development known as Tierra de Rosas. That work must be completed before vertical construction can start.
The funding gap has forced county officials and developer MidPen Housing, tasked with building the affordable apartments and overseeing development on the entire site, to scramble to find other solutions.
One proposal hinges on getting buy-in from the California Department of Housing and Community Development to use money allocated for housing construction for the street, water and sewer work.
That approval could “unlock the whole project,” said Ali Gaylord, MidPen’s housing development director.
State officials have yet to respond to the request.
But if it’s denied, the project, which elected officials have been discussing since Sonoma County bought the property in 2011, is likely to see further delay.
“The community has been very patient and has a deep investment in this project,” Gaylord said. “We’re doing everything that we can to get this to move forward.”
Tierra de Rosas would transform the largely vacant Roseland Village Shopping Center into 175 mixed-income apartments with retail shops, a community building and a public plaza.
The project is expected to bring long-promised public investments to Roseland, a predominantly Latino neighborhood folded into Santa Rosa’s city limits in 2017.
The project has broad political and community support despite pushback from neighboring businesses and their landlord who fear the project will negatively impact their shops.
“This is a project that can be transformational to one of the most disadvantaged parts of our community,” Sonoma County Board of Supervisors Chair Chris Coursey said. “I have high hopes for it and I’m going to keep working until it gets done.”
County work includes roads, public plaza
Public improvements include extending West Avenue to the Joe Rodota Trail north of the site and building other streets on the property, said Kathleen Kane, assistant executive director of the county Community Development Commission.
Contractors will have to relocate and install water and sewer lines and conduct other underground utility work, build parking and make improvements to the street frontage.
The work also includes construction of a 1-acre public plaza along Sebastopol Road.
Kane said that work must be done before or concurrently with the housing and other construction.
Overall, the Community Development Commission’s financial responsibility is pegged at about $40.5 million, which includes acquisition of the property and prior land remediation.
The county has received about $21.9 million from various sources, including local funds and state grants, but needs an additional $18.6 million to finish the work.
Sonoma County purchased the property — home to a since-shuttered bowling alley, grocery store and dry cleaner in 2011 — seeking to transform it into a mixed-use center.
The project was nearly axed following the dissolution of the state’s redevelopment agencies during the Great Recession and was tied up in funding and legal disputes.
It includes 75 affordable apartments for families with incomes between 30% and 60% of the area’s median income, 100 market-rate apartments, a 24,000-square-foot civic building and a 7,400-square-foot food hall where the county envisions having restaurants and shops.
Infrastructure work was initially expected to start in the first quarter of 2022 with construction of the affordable apartments starting by end of last year.
Today, the only progress made on the project has been the completion of the Mitote Food Park that opened last summer.
State funds could make project viable
MidPen in early January was notified it received a $25.3 million California Housing Accelerator conditional award meant to help fund shovel-ready affordable housing projects.
The regional nonprofit housing developer has requested that the state allow them to share a portion of the award ― just under $11 million ― with the Community Development Commission to help pay for the infrastructure expenses.
MidPen must apply for low-income housing tax credits and tax-exempt bonds, which the developer plans to do this week. Those funds and a county housing loan would help cover construction costs estimated at $65 million.
The California Department of Housing and Community Development had not responded to MidPen’s request as of Friday but Gaylord said conversations with the state are ongoing.
