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Forum on hotel limitation measure draws large crowd

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By Pam Gibson/Special to the Index-Tribune

Almost 200 people crowded into Burlingame Hall in Sonoma Thursday evening to hear a civil, spirited discussion of the ramifications of the Hotel Limitation Initiative (Measure B), from the point of view of both supporters and opponents.

If approved, the measure would prohibit the construction of new hotels with more than 25 rooms or expansion of existing ones past 25 rooms, until occupancy levels of 80 percent are reached for the previous calendar year. A special election to decide the issue will be held Nov. 19.

Speaking in favor of the measure were Larry Barnett, a former City Council member, mayor and one-time B&B proprietor, and Ed Clay, owner of Carneros Studios, a custom furniture maker. Barnett is also chair of the Preserving Sonoma Committee, which sponsored the measure. Speaking against the measure were Steve Page, president of Sonoma Raceway and Bill Blum, general manager of MacArthur Place Hotel & Spa. Page and Blum represented the Protect Sonoma committee, which is opposed to Measure B.

Dick Fogg, chairman of the Sonoma County Planning Commission, served as moderator, reading pre-established questions that each side answered and neither side had previously seen. Following an hour of lively back and forth debate on six wide-ranging questions, another half-hour was devoted to questions submitted by members of the audience.

The first round of questions covered the measure’s impact on the urban growth boundary, pedestrian and vehicular traffic, how numbers were selected to limit rooms and occupancy, implications for future city finances, why only hotels were targeted and other types of commercial developments were not, and what defines small town character.

But the heart of the issue appeared to come down to trust. Why are local city processes that provide several opportunities for public input and participation, not trusted to achieve the right and wise development decision for Sonoma? Why is an initiative needed to set the limits in place, without discussion of specific projects on a case-by-case basis with legally-mandated public hearings?

“All projects go through a process,” said Page. “This community engages in this very actively. Things that get approved are modified. The problem with Measure B is that it doesn’t trust the process.” He said the argument for Measure B implies that it is possible to steamroll the elected and appointed people who make development decisions. Instead, without an opportunity for public hearings on individual projects, the public is losing its voice.

Clay disagreed, saying the system is only good for people who know how to work it. “Applicants have staff and lawyers … (while) a citizen might find an hour or two to voice their opinion.” He said the process in place will continue to work, but only for projects of 25 rooms or less.

The “trust” issue appeared to be different when it came to county development decisions. Blum suggested that, with hotel size limited to 25 rooms inside the city, development pressure could force future hotel developers to build outside city boundaries – perhaps in the four corners area near the intersection of Leveroni Road and Broadway – which would deprive the city of transient occupancy tax (TOT or bed tax) revenue, and could add to traffic problems because visitors would then have to drive into the Plaza, the focal point of most tourist visits.

But Barnett countered that the county’s planning processes can be trusted to work. “Now all of a sudden we are talking about development pressure,” said Barnett. “Hotels are not going into the Urban Growth Boundary. The county won’t allow it.” He said he expects the county to abide by the rules, even though there is no legal constraint to force them. “The county won’t do it because it respects the urban growth boundary,” he insisted. “We have always been dependent on the attitude of the county for the success of the Urban Growth Boundary”

Page found immediate contradiction in Barnett’s statement, questioning why he was willing to trust the county’s planning process but not the city’s. “Measure B,” he added, “will push hotel demand outside city limits … but people will still come to the Plaza – by car.”

Responding to a question about why the initiative is only focused on hotels and not other kinds of development, Clay also mentioned process. “The measure is written to deal with the impact of large hotels, but not large development. It has nothing to say about other types of development. If the process works, as opponents say, then minimarts and strip malls will not happen.” He added that the planet is nearing the end of its resources and we all need to reconsider limits on growth.

On the issue of numerical room limits, Barnett was asked how the number “25” was decided as the size that might still be appropriate for a new or expanded hotel.

“Some say it is an arbitrary number,” said Barnett. “Our development code is filled with arbitrary numbers.” He went on to list a few. “The fact is these numbers are developed and are functions of opinions of people and reflect community sentiment.” He added that a 25-room hotel would not have multiple uses attached to it, such as restaurants, spas, wedding sites, meeting rooms and event centers. Larger hotels typically do.

And in response to the 80-percent occupancy number, Barnett said his group does not believe it is impossible to achieve, but wants to encourage small hotels, not facilitate large hotel development. “The Keyser Marsten report (commissioned by the city to study the impact of Measure B) stated it simply … the impact of our initiative would be that hotels will tend to be smaller, independent hotels.”

Blum responded to the numerical question by stating that, for him, the issue of 25 rooms and 80 percent occupancy was critical. “I can tell you, 80 percent is not achievable. Last year we had 80 percent in September and October. The rest of the months are far less. Eighty percent year round is inconceivable.” He suggested that if the hotels were actually that busy all year, the effects on the town would, in fact, be detrimental to residents.

The panel then turned to the issue of traffic.

“Traffic is an interesting issue,” said Barnett. “Some people complain that it is too slow. Others say it is too fast. If we begin to clog our downtown with new hotels, we will have more traffic, force it into neighborhoods, the city will be forced to have more insurance and more traffic lights. So let’s be honest about the toll it takes.” He said development tends to privatize profits and socialize the costs. Investors get rewards while the public pays for hidden costs. So it is important to assess the real cost of development, he said, not just the number of cars. The issue, he said, is tourism and growth in general.

Blum responded that hotels are “always blamed for traffic in Sonoma, but that’s ridiculous.” He said hotels are among the lowest traffic generators for all forms of commercial development and reported that he sat in front of Sonoma Valley Inn this week while he counted cars coming in and out of the adjacent Marketplace Shopping Center. “There were 114 cars in and out before the first car went into the Inn’s driveway,” he said. He added that 70 percent of the visitors to Sonoma are day visitors and that, if they had places to stay overnight, they would tend to walk.

Turning to the issue of Measure B’s impact on city revenues, there were both practical and philosophical differences about what effect the initiative would have. Blum pointed out that the city has lost $1.8 million a year with the demise of redevelopment. The half-cent sales tax measure passed last year has helped, but it expires in 2017 and a promise was made to voters to try to find other sources of revenue before then. Transient occupancy tax, which is governed by how many overnight stays there are in city hotels and inns, accounts for more than 20 percent of city revenues, now pays for much of the city’s public safety and street repair costs, and has become a practical way to make up General Fund deficits, letting tourists help pay for these city services.

“Larry thinks we should raise our transient occupancy tax from 12 to 14 percent and in the process remove the 2 percent that is the money we get for marketing (our hotels). Even if we did, it wouldn’t be enough,” said Blum, referring to the self-imposed 2 percent assessment now funding a Tourism Improvement District (TID) that promotes Sonoma tourism.

Barnett countered that the TID assessment was done because hotelkeepers feared funding for the Sonoma Valley Visitors Bureau would disappear, but it hasn’t yet. Instead, the money could have gone into the general fund, he argued. “Bill is assuming that no hotels will be built in Sonoma. The last two were both under 25 rooms and more small-scale hotels that generate TOT will be built,” said Barnett. “We have to start moving to an economy of ‘enough.’ We cannot continue to want more, more, more.”

But Blum, a former vice chair of the city’s budget committee, said of Barnett’s suggestion, “If we get rid of it we would be the only city in the Bay Area without a TID.” And he asked what the city would do, “If we don’t have a new source of revenue by 2017 (when the temporary sales tax expires)?”

A question from the audience asked the panelists to define what they mean by “preserving small town character.”

Clay defined it as “a place that still feels like a real town, that has a sense of place.” Barnett added that, “You can’t buy a sense of place off the shelf. It requires respecting the historical aspect of time … what we have around us exudes a quality of place that people respond to, it feels so real, it doesn’t feel artificial. If we lose this, we lose it all.”

Page, who said, “I count myself fortunate to wake up every morning in this community,” added that a sense of community is not just about size, it’s about trust. “I think Measure B takes away the voice of the people in our community and sends a message that says … I don’t trust you.” Blum said ensuring quality of life comes from making sure development is done properly for both residents and visitors, and that means residents have a voice in each project.

In the remaining time, questions from the audience touched on the following:

Could one person build two, 25-room hotels side-by-side? Barnett answered that the measure does not allow two small hotels to be built side by side if they are owned by the same person. Hotel room scarcity is a good thing, said Barnett, “Scarcity is a marketing plus,” he said. Blum countered that he supports the city’s General Plan, which “encourages infill development so people don’t need their cars” to go downtown, adding that “scarcity drives up room prices.”

The event, which was sponsored by the Sonoma Valley Chamber of Commerce, was televised on local station KSVY and was scheduled to be rebroadcast. Check ksvy.org for program listings.

For more information on the positions taken by Preserving Sonoma and Protect Sonoma, go to their respective websites.

  • David Eichar

    Bill Blum said that if Measure B passes, room rates will increase. This can only be the result of increased demand and increase occupancy rates. This in turn increases the Transient Occupancy Tax (TOT) revenue to the city. So, if no new hotels are built, TOT revenue will increase. And if hotels with 25 rooms or less are built, TOT revenue will increase. In either case, TOT revenue increases. So why is Bill Blum and Protect Sonoma, Sponsored by Chateau Sonoma Hotel Group, LLC, think we have to have large hotels to increase TOT revenue?

  • jerry seltzer

    How can our community be so insular? This great addition to the Plaza area will help Sonoma; look at how Healdsburg has developed because of its policies…Anyone notice how many great restaurants we have because no one restricted new ones from opening!

  • RoxietheRunner

    Issue aside, this is a fine piece of journalism, covering both (all?) sides of the issue. Thank you, Pam Gibson.

  • Kate Schertz

    In this discussion over the past 6 months, no where have I heard the topic of affordable rooms addressed. Rates for B&Bs and most hotels in Sonoma are way beyond the means of ordinary people. Because there are so few rooms available at moderate rates, rooms thru airbnb are flourishing and the city gets NOTHING in TOT. To me, the issue at stake is whether or not we are becoming an “elite” destination versus a “family” destination. This issue has more to do with the character of our community than 25 rooms or more. Let’s have that discussion here and at city hall. Do we only want to attract poeple who can spend $400 a night for a room or do we want more people who will bring their children to see us for our historic significance and our beautiful kid friendly plaza? I love the plaza when it is filled with kids and families of every income and every ethnicity. To me, that is Sonoma.

    • Mike Stephens

      Kate- This is ridiculous! Look around the town. All the hotels here are affordable! That is why something that will bring in tourists that spend more $$$ is necessary. None of my friends will stay at the current selection of hotels. If you want affordable I think you have to look outside of the wine country. People spending $400 a night have children too and your point makes no sense and is elitist. You are for poor peopel but not wealthy people coming to Sonoma? I certainly hope you don’t live in Sonoma or plan on moving soon! Stop the discrimination!

  • Phineas Worthington

    The idea of creating an artificial scarcity of hotel rooms will benefit only the existing businesses in the short term, a form of “pulling up the ladder” to lock out newcomers.

    An artificial scarcity will not benefit the community as a whole over the longer term. That will diminish trade and thereby, the wealth creation and job opportunities necessary for the rest of us on the lower rungs of the economic ladder to simply have work to live.