Sonoma Cheese Factory lawsuit rejected paving way for Mattsons to operate site as shopping center

A lawsuit challenging the City of Sonoma’s upholding an 18-year-old use permit for the Sonoma Cheese Factory was rejected this month in Sonoma County Superior Court, which described the legal rationale behind the suit as “flawed and unpersuasive.”

The decision by Superior Court Judge Arthur A. Wick paves the way for owners Sonoma’s Best Hospitality Group to operate under a 2004 use permit granted by the City, which allows the building to operate as a “shopping center” with up to nine retail tenants, including a delicatessen/restaurant in the 11,420-square-foot building on Spain Street.

The Cheese Factory has been among Sonoma’s most iconic downtown businesses since its deco-style building was built at 2 W. Spain St. in 1945 by co-founder Celso Viviani, and his son Pete. The business was purchased in 2020 by Sonoma’s Best, a group of companies owned by real estate investors and developers Ken and Stacy Mattson. At the time of the sale, Sonoma’s Best spokesperson Karin Rogers told the Index-Tribune “there (were) no significant changes planned to the building.”

The suit was filed in 2019 by a local group calling itself Protect Our Plaza, which challenged the City’s decision to allow the Cheese Factory to operate under a 2004 use permit, potentially allowing the Spain Street business to expand without environmental review.

The Cheese Factory ownership at the time, siblings Maria Viviani and Nina Respicio, had announced plans to renovate and grow the business – with one Oxbow Market-style proposal expanding the interior’s footprint to 25,000 square feet and allowing two restaurant tenants to serve 245 indoor seats and 72 outdoor seats. Neighborhood opposition stalled the proposal and the project was eventually abandoned.

Instead, the owners lobbied the City to reaffirm the Cheese Factory’s use under a 2004 permit, which allows for a more limited expansion of its retail capacity. Initially, the Sonoma Planning Commission denied the old permit, but the City Council overruled the decision and deemed the 2004 permit valid.

The 2004 permit allows the owner of the Cheese Factory to retrofit the building to allow between one and nine tenants to occupy the structure to engage in retail activities, according to the city. The permit also allows the operation of a delicatessen/restaurant and an outdoor dining area and barbeque for a maximum of 103 seats.

The suit alleged the City of Sonoma and the Sonoma City Council were “trying to ‘shoehorn’ multi-tenant food businesses into a 15-year-old permit for use identified as retail.”

The suit also argued that a CEQA review is required, as “no environmental review had ever been conducted for the expansion of the Cheese Factory under the 2004 permit.”

In rejecting the suit, the court ruled that the statute of limitations bars any challenge of the 2004 use permit, leaving it unclear what project or activities by the Cheese Factory ownership are in dispute since no project application is currently before the city.

“(The petitioners) do not specify which… activities are the subject of this dispute or constitute the ‘project’ at issue, or if there are other activities,” the court wrote in its motion of judgment.

Sonoma City Councilmember Madolyn Agrimonti applauded the outcome.

“I’m very pleased that the court agreed with and upheld the City Council’s decision,” said Agrimonti, the only current member who was on the council at the time of the 2019 permit decision.

Agrimonti also noted the “excellent legal work” of the city’s attorneys which, through the court’s dismissal of the suit, saved the city from “having to pay hundreds of thousands of dollars to the other side in attorney fees.”

In a statement on behalf of Protect Our Plaza, resident David Eichar said there are “fundamental flaws” in the legal basis for the court’s decision.

“We are also disappointed that the Mattsons have been rewarded by these errors,” said Eichar.

Eichar said that POP is currently evaluating its options which could include an appeal of the court’s decision.

Requests for comment from Sonoma’s Best Hospitality Group were not returned by press time.

Email Jason Walsh at Jason.walsh@sonomanews.com.