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A tale of two cities: Hotel development – Sonoma vs. Healdsburg

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Travel writers and tourism planners often cite Sonoma and Healdsburg as two must-see places in Sonoma County. Both are in the heart of Wine Country destinations. Both have highly-rated restaurants, hotels and spas. Both have charming plazas surrounded by unusual shops.

Although Sonoma is older, both cities have been in business a long time. While both cities have struggled in the past to provide quality commercial development that helps pay the bills for streets, fire and police, some critics have been unwelcoming, citing loss of “character” and the erosion of “small town feel.”

The opening of the Dickens classic, “A Tale of Two Cities,” may be the best summary of what’s afoot in both places. “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness …”

On Nov. 19, voters registered in the City of Sonoma will be asked to cast a ballot either for or against limiting the size of new hotels in Sonoma to 25 rooms or less, until occupancy in existing lodgings exceeds 80 percent in the previous one year period. The initiative, called Measure B, came about after a 59-room hotel, proposed by Chateau Sonoma Hotel Group on West Napa Street, half-a-block from the Plaza, began to go through the public approval process.

In Healdsburg, meanwhile, a luxury hotel chain called the Kessler Collection announced in August it had an option to buy a downtown parking lot south of Healdsburg Plaza with hopes to build a 60-to-70-room “boutique” hotel in that city. And while Healdsburg has been working to attract additional hotel development, there are dissident voices starting to rise there as well. Warren Watkins, who has contributed to the campaign to limit hotel size in Sonoma, has formed a group in Healdsburg called Citizens for Sustainable Solutions, and may propose a ballot measure to limit hotel development in that city.

Are hotels a symptom of runaway growth, or a sign of good planning?

In 1996, the city of Sonoma was in an economic slump. After austere cuts and adoption of bare bones budgets, a proposal to build a hotel at Four Corners, at the edge of the city limits surfaced.

It was met with controversy at every stage of the process.

Approved on appeal by the City Council with one abstention, the hotel was eventually built and the redevelopment agency encouraged the development by providing funds for some of the required infrastructure. The abstention was Larry Barnett, who owned a bed and breakfast inn at the time, and is now leader of Preserving Sonoma, the group that created and is supporting the Measure B initiative.

While not in the downtown, the Lodge at Sonoma originally promised 154 rooms, a spa, restaurant, shops and office space. When it opened in 2001, transient occupancy tax (TOT) – the so-called “bed” tax (and the only tax that remains locally collected and locally spent) – was about $630,000.And by year three, the TOT had jumped to $1.9 million. Thereafter, other hotels were built or expanded –MacArthur Place, Inn at Sonoma, Sonoma Valley Inn – all receiving minor assistance for infrastructure from the now defunct redevelopment agency. By 2007-08, the TOT had jumped to $2.6 million and the city’s finances were in good shape.

And then the recession set in.

The situation in Healdsburg was different. After a lengthy planning process, the city decided to solicit a developer to build a hotel directly on the plaza. Looking to the future, the city had purchased a vacant parcel at the west end of the plaza back in the 1980s.

“It took many years to find a developer who could meet our expectations,” said Carla Howell, executive director of the Healdsburg Chamber of Commerce, who is also a former Healdsburg City Councilmember. There was a design controversy to overcome, and there were people who bemoaned the loss of the open space, Howell explained.

But in the end, Hotel Healdsburg, with 55 rooms, was approved and constructed, a high-end restaurant was put in place, along with a retail component. It opened in 2003, and Healdsburg’s TOT rose from $926,000 to $1.6 million three years later.

“Before it opened, we had a few motels, bed and breakfasts,” said Howell. “Hotel Healdsburg drove the lodging market. Others began to refurbish and the whole complexion of the plaza changed. It used to be bars, real estate shops, banks. Now we have more retail, restaurants, tasting rooms and galleries. It has been very good for our economy.”

In Sonoma, the look of the Plaza did not change as much. A building was torn down and replaced by the six-room Ledson Hotel. Real estate offices, galleries, and shops remained. A large complex was built behind smaller shop facades called Sonoma Court Shops. Out at Four Corners, the Lodge added rooms in spaces once designated for offices.

And then Rosewood appeared.

Rosewood was the name given a proposed resort its developers hoped to build on public land above Mountain Cemetery. While no official proposal was ever filed, proponents engaged the community in discussions that soon became rhetorical warfare. Opponents fielded an initiative that won. It was narrow in scope, prohibiting hotels on public land.

In Healdsburg, the hotel on the plaza, built on public land at the behest of the city, needed to expand, but had no space. Healdsburg’s charm had been discovered and it was drawing visitors north. The hotel’s developer acquired land in the next block and built H2, a 36-room LEED Certified hotel in a modern design. It opened in 2010, with a restaurant and shops a half block from the Plaza. It has no parking for cars. Only bikes.

“I’ve heard residents complain that there is no place to park when they come downtown, but I think this is a perception more than a reality,” said Marjie Pettus, Healdsburg city manager.

H2’s site is, in some ways, like the one proposed by Chateau Sonoma Hotel Group.That site is a half block from the Plaza, would offer valet parking in a private parking lot and was once a gas station site. But the Sonoma Hotel Project’s latest proposal now includes 120 parking spaces on its site (H2 provides maps to local streets and parking lots) and, while larger than H2, its design has been revised to “fit in” with Sonoma’s history. And “fit” is all important in the initiative fight.

Barnett has said on many occasions, and on the Preserving Sonoma website, that the initiative is about preserving Sonoma’s small town character. During an October public forum on Measure B, he was asked to define what that meant. He replied, “it respects the historical element of time, it exudes a quality of place that people respond to. It feels real, it doesn’t feel artificial.”

While Barnett claims the initiative is not about the proposed hotel, the initiative he created addresses size, limiting new hotels to 25 rooms and prohibiting existing hotels from expanding beyond that number, or adding any more rooms if they already have more than 25. It does not say anything about design that “fits” Sonoma’s character or the number or location of hotels of 25 rooms that can be built.

In Healdsburg, the Hotel Le Mars, owned by Bill Foley (who now owns Sebastiani Winery), is a hotel Barnett says he admires. It is a 25-room, high-end hotel that Howell calls “the most expensive hotel in town” on face value, although she acknowledges it offers discount packages.

Like Sonoma, Healdsburg is benefitting from the taxes that come from hotel stays. But unlike Sonoma, all transient occupancy taxes are spent on specific services. “An initiative in 2002 designated all TOT to be spent on community services, in other words, parks and recreation,” said Pettus. But in 2004, when Healdsburg raised its TOT to 12 percent, the additional 2 percent went to the general fund. In Sonoma, all TOT goes to the general fund with an additional 2 percent (collected by the Tourism Improvement District) going to hotel marketing. And that brings people.

The issue of traffic – vehicular and pedestrian – has been raised in both communities.“A town of 11,000 couldn’t support all the incredible things we get to enjoy (without TOT),” said Howell. “An extra five minutes to let someone cross the street is worth it.”

Sonoma has grappled with parking issues in the past. It has rejected metered parking and has built only one new parking lot, and that was more than a decade ago. Except for traffic studies required of private developers, Sonoma has not had a comprehensive traffic study in years. One is currently out to bid to update the Circulation Element of the General Plan.

Despite traffic concerns, other small towns are also trying to attract hotels. Sebastopol recently changed zoning to allow a hotel to be built into four existing industrial buildings near a new shopping and event center called The Barlow. The proposed “boutique” lodging would have 50 rooms. In Petaluma, Ross Jones is going through the process with his 50-room downtown “boutique” hotel.

The obvious push for hotels is to provide revenue in an anti-tax environment that often relies on voter-approved tax measures. In Sonoma, TOT provides $2.3 million annually (based on 2011-12 receipts), and in Healdsburg this fiscal year, it will provide $1.9 million for community services and $410,000 for the general fund.

But the proponents of Measure B are not focusing on revenue. They’re talking about character and about size. And if 50 rooms is “boutique,” what is big?

“What is the nature of ‘big’? We can argue about the specifics, but we all know how it feels,” said Barnett in a recent blog. “It sends its own non-verbal message about values and priorities to residents and visitors alike. The external landscape determines the internal landscape of how we feel and think about Sonoma. Our sense of place is ‘small’ and we want to see that continue for both residents and visitors.”

In the recent public forum, Steve Page, representing Protect Sonoma, a group that opposes Measure B, said “Small town character is not about size. It is about whether or not there is a sense of community present. There is in Sonoma.”

Discussions about character are emotional and intangible. No one is right or wrong in their feelings. The election materials represent an attempt to provide the facts. But at the end of the tale, only the years to come will tell whether the outcome of the hotel limitation initiative was “wise or foolish.”

 

  • Megalon1

    Good article – thank you.

  • Chris Scott

    Excellent. Thank you.

  • Jim Pacheco

    Overall a very balanced article. Though there are a couple of items I would like to point out.

    I had visited Healdsburg several times before Hotel Healdsburg was built. Ms. Howell says the Healdsburg square “used to be bars, real estate shops, banks. Now we have more retail, restaurants, tasting rooms and galleries.” I remember restaurants and several retail shops on the square before 2003. Ms. Howell implies that there were none before Hotel Healdsburg. Her quote is biased into making the reader believe that the hotel brought in all of the restaurants and retail shops.

    You say the Hotel Limitation Measure “does not say anything about design that “fits” Sonoma’s character”. Here is the language copied directly from Measure B:

    To Chapter 19.50, “Special Use Standards,” after the text of section 19.50.040, add:
    19.50.045 Large Hotels.. . .
    B. Large Hotel Use Permit Findings.. . .
    2. That the approval will not adversely affect the historic, small-town characteristics that give Sonoma its unique sense of place.

  • Mike Stephens

    Great article! The Healdsburg Hotel has brought more shops and restaurants and in a down economy stores remained open and thrived. The Healdsburg Hotel was a very wise move on HB’s part. There was resistance at first, but everyone I know that has lived there for decades and those that have recently moved to HB thinks it is a great place. I know when I go visit I wish Sonoma could have some of the new options HB offers. Perhaps one day..

    • Jim Pacheco

      I liked the Healdsburg square better prior to the building of the hotels. The hotel appears as a 3 story wall if you walk by it. It’s just too big for the square.

  • Jay Tierney

    Every article on this subject should have a proper editorial declaration of the fact that the owner of this newspaper is the developer in question. Journalistic integrity 101 – just saying.

    Other than that, this was very well written.

  • Mike Stephens

    I think everyone realizes this by now. Did you just figure it out? It has nothing to do with whether the hotel should or shouldn’t be built. Build the hotel already! Any future development as this project clearly displays; should be of highest quality and add to our charming town. It you vote yes on Measure B Sonoma will only continue to build inferior establishments and attract traffic that doesn’t spend money in our town.

  • Dee Test

    There are many “quality of life” issues that are not addressed in this article. Traffic and congestion effects in the immediate vicinity are only part of the considerations related to negative impacts. The geography of Sonoma places the Plaza in the center, where the two sides of town bisect, and where there are already significant impediments for cars and foot traffic to cross, creating a barrier between segments of our community. Originally, when small towns were built, the central Plaza was supposed to become a site of congregation, where community members would socialize and gather for necessary commerce and trade. Our Plaza is being converted to provide a tourist mecca, distorting the desire and capacity for our own community members to gather there. Many of us find this distasteful and counter-productive, in terms of community cohesion. There are few alternatives to cross from one side of town to the other, and they are quickly becoming more impossible to navigate (ie – Broadway at Leveroni). The impacts of a new large Hotel (and all its associated developed appendages) can be expected to further discourage people from being willing to cross to “the other side of town”. Usurping our central community gathering place, and prohibiting even the ability of our people to cross into the other sides of town, will clearly destroy the character and cohesion that are left in our town. These are “quality of life” issues that are not addressed with an accounting of TOT dollars, not withstanding the questionable utilization of those dollars for actual community improvements. I agree with the others who have pointed out the necessity to acknowledge financial “conflicts of interest”, whenever individual comments or articles are printed. Many of those who are strongly in favor of further tourist development in Sonoma have significant “conflicts” in this regard.