Editorial: Prioritize housing, not hotel, on Truck & Auto site
It was welcome news that the old Sonoma Truck & Auto car dealership on Broadway has a new owner that plans to clean up the long-neglected eyesore. Quite frankly, the City allowed that mess to go unchecked for far too long, when it could have required the former property owner to give it a spruce up.
As the direct neighbors across MacArthur Street, new owner MacArthur Place has plenty of incentive to pretty-up the property. They want their guests to see something up to “Wine Country standards” when they make that turn off of Broadway — that is obvious.
What’s less obvious is what will become of the 1.86-acre site. In August, MacArthur Place sought the Planning Commission’s approval to add 11 guest rooms to its 64-room collection. After the hotel’s representative asked for a waiver from the City mandate that suggests 50% of the proposed 6,400-square-foot building area be developed as housing, the Planning Commission asked for $1.1 million for the City’s Housing Trust Fund, $100,000 for each new hotel room.
The commission was right to ask for something — despite four major construction projects, in 1997, 1998, 2018 and 2020, the hotel has never added to the local housing stock, nor paid any sort of in-lieu fee. (It should be noted that in 2018 and 2020, the City did not recommend any housing component or fee in its staff reports, a disappointing missed opportunity since by then, the hotel was in the hands of deep-pocketed investors. The City also has never established a set housing waiver fee formula.) While built by longtime Sonoma resident and restoration expert Suzanne Brangham, the hotel was sold in 2017 to the Arizona-based IMH Financial Group. But after filing for bankruptcy in 2020, IMH became part of a JPMorgan Chase and Co. subsidiary called Lat33 Capital. As many hotels suffered in the pandemic, JPMorgan recorded $119.5 billion in revenue in 2020, the same year it increased fees on investment banking activity by 25%, according to Fortune.
Here in Sonoma, it seems their hotel investment is going extremely well. In August, Chad Parson, CEO of Lat33 Capital, said, “The past few months have been some of the best in the MacArthur Place’s 20-year history with record average daily rates and record-breaking occupancies consistently over 80%.” As of Monday, guestrooms at the luxury hotel cost $439 on weeknights or $709 on weekends, while their highest-end room, the “Chef’s Cottage,” ranges from $859-$1,579.
Meanwhile, the $1.1 million in fees sought by the Planning Commission will likely not build even one unit of housing, if the developers decide to pay it, which remains unclear. But with their recent purchase of the Truck & Auto site, the City has another bite at the housing apple. Unlike its current 5-acres, this new property can’t be described by developers as “not compatible” with housing. The site is a blank slate, ready for a fresh idea.
Hotel rooms, spa services or restaurants could certainly be part of the equation, especially if they serve residents, not just hotel guests. But if the City really wants to add to the permanent housing stock, here is a prime opportunity to hold MacArthur Place to the 50% housing standard it set in 2019. Any claim that doing such would make the project “financially unfeasible” is hogwash for a company as resource-rich as this one.
If not here, then where? If not now, then when?