New land-use concept emerges as Hospital Board votes to sell empty lot

The Sonoma Valley Health Care District Board board voted Thursday to definitely sell its empty 2.83-acre lot along MacArthur at Fourth Street West. The board has three bids in hand from commercial developers, but a new proposal emerged that instead calls for workforce housing project at “little or no profit” for community-minded investors.

Earlier, the board had met in a private session to review terms for an outright land purchase proposed by three commercial developers: DeNova Homes, Caymus Builders, and Kler Architects. No financial details have been made public.

The hospital bought the land in 2016 for $2 million.

Thursday’s 4-1 vote to sell, likely by September to meet financial terms of the original purchase, would seem to rule out the hospital being part of any development and property-management team. Norman Gilroy, who advocated for low-rate housing on the site to accommodate hospital employees, proposed that idea to the Board June 29. That plan had no provision for financing.

But this week’s public comment session, developer and philanthropist Simon Blattner renewed the call for affordable housing on the site, and asked for 120 days to form a group to buy the land for workforce residences.

“I want to build something here,” said Blattner. A team from a similar project he is building in San Francisco is in place, he said, and “they want to look at the land.”

The goal is to “see if we can do something good around here” at “little or no profit,” he said.

A major donor and fundraiser for the hospital, Blattner co-chaired a capital campaign in 2013 that raised $11 million for the facility.

Hospital CEO Kelly Mather said the hospital’s general attorney would have to be consulted regarding Blattner’s announcement, in light of that the other proposals had met the RFP deadline.

Because the process was a Request for Proposals and not a formal bidding, it would seem the Hospital is not restricted to choosing one of the three submitted plans. Even so, the three developers were frustrated by the Blattner concept. “Something is wrong with the process if the deadline is met and then someone comes in at the last minute,” was one post-meeting comment.

Earlier in the hearing, Norman Gilroy took some time at the podium to answer questions the board had of his proposal for the hospital to retain ownership of the lot. Gilroy imagined a volunteer community group would come together to direct a flexible development process. He projected the land would cost $2.5 million, and that the project itself would cost $8 to $10 million. Burbank Homes, a non-profit housing developer, was interested, he said; they did not bid because they thought it was highest bidder process.

Boardmember Peter Hohorst amicably disagreed with Gilroy’s assumptions, one of which is that the board is rushing into a sale. No, said Hohorst, the hospital has had the land since 2009.

Hohorst also noted of Gilroy’s proposal, that for it to pencil out, it would have to be dense — a factor that might alienate immediate neighbors on whom the hospital would depends on for future parcel tax votes.

Hohorst will not need more facility space, said Hohorst, because industry trends point to a lessening demand for inpatient care. Hohorst said the proceeds from the sale would pay for medical needs, and finally, that if the hospital was to make a nod to running the outfit more like a business, such a non-performing asset should be sold.

Boardmember Bill Boerum said that the Gilroy idea was not the only alternative, and that more engagement should be done with key community stakeholders, such as the city and the philanthropic community. He called for the hospital to engage community stakeholders

Boardmember Sharon Nevins said that the Request for Proposals had been out for months, and there has been no response from the school or fire districts. The responsibility for engagement lies on the proposing parties, she said.

Boardmember Joshua Rymer said he was disappointed that Gilroy’s plans were not more specific, and that it sounded more like a process than a proposal. Rymer echoed Hohorst’s observation that the hospital will need less space in the future, and that selling the parcel removes the burden of paying off a loan.

Gilroy himself spoke favorably of Simon Blattner’s ideas.

In additional public comment, Fred Allebach said he was disappointed that the three developer proposals were all market rate housing, with only the minimum inclusionary requirement for affordable housing. Allebach noted that the local workforce housing situation was dire, and that Blattner’s proposal addresses the documented disconnect between the philanthropy community and housing needs.

Allebach also noted that the hospital board had just asked the community for help with the parcel tax, and it would be a perfect reciprocal gesture for the board to take into account salient community housing needs in the sale of the land.