One sign of Petaluma’s rebound is an uptick in residential and commercial development throughout the city.
Petaluma is starting to breathe again. After taking a one-two punch from its own civic fiscal crisis as well as from the global economic downturn, Sonoma County’s second-largest city entered 2013 optimistic about its future.
“We’re ready to move forward and rebuild ourselves,” Petaluma’s city manager, John Brown, told business and community leaders at a breakfast sponsored by the Petaluma Area Chamber of Commerce. “Our trajectory is straight. We’re prepared to solve existing problems with existing resources.”
One sign of Petaluma’s rebound is an uptick in residential and commercial development throughout the city. At subdivisions like Southgate by Delco, located near the Kaiser Permanente Medical building off Lakeville Highway, and Quarry Heights by KB Homes, on a ridge off the southern entrance to town, workers in hard hats frame houses that should have been built two years ago but were put on hold when the housing market crashed.
Just west of Highway 101 at East Washington Place, a 333,000-square-foot retail complex takes shape on a three-mile campus that at various points in its history had been a horse track, a junior high school and Little League fields. Anchor tenants include Target, T.J. Maxx, Dick’s Sporting Goods and Sprouts Farmers Market.
And at City Hall, steps away from the city’s historic downtown shopping district on the west side of town, planning department staff are fielding inquiries, reviewing impact reports and issuing permits on a wide range of projects: a proposal for 90 upscale residences on what’s now open space at the southern edge of town; plans for a major, mixed-use project in an industrial area near the Petaluma River; the conversion of an office building in a saturated commercial market into an apartment complex; and infill developments, both residential and commercial, on vacant lots sprinkled within the city limits.
“We felt a shift at the beginning of the year,” says Heather Hines, planning manager. “We’re definitely getting busier.”
A general plan to guide development
Developers interested in undertaking a project in Petaluma will find a city that knows its strengths and weaknesses—and what it wants from the development community. The city’s general plan, adopted in 2008 and in effect through 2025, puts it all on the table.
“The general plan is the land use constitution of the city,” says Scott Duiven, senior planner. “It outlines a vision for Petaluma’s long-range physical and economic development and resource conservation, as well as recommends specific strategies, policies and programs to make this vision a reality.”
The plan identifies five key planning issues—economic health, water resources, infill and residential growth projections, public facilities and sustainability—and 15 guiding principles that address pragmatic concerns like maintaining city infrastructure and expanding retail opportunities as well as less measurable goals like fostering a neighborly, friendly city and promoting cultural diversity. The document is thorough and describes challenges and opportunities present in each subarea of the city.
Bonne Gaebler, the city’s housing administrator, suggests developers who want to do business in Petaluma read the plan before submitting a proposal.
“Often developers try to roll out the same blueprint they use in other cities, and then when their project doesn’t go anywhere, they complain Petaluma is a hard place to do business,” says Gaebler. “In reality, it isn’t. But Petaluma isn’t about building thousands of units at a time. We have our own set of values, our own objectives. The general plan lays those out, and the closer you are to that vision coming in, the easier it is to work here.”
Petaluma’s strengths include its location in the North Bay, its ability to offer historic and natural resources as well as modern conveniences, and its people—not only the nearly 60,000 residents who live within the city limits, but also the 20,000 de-facto Petalumans who live within a 20-mile radius of the city and affiliate culturally and economically with it.
It’s a vibrant, engaged community that cares about its town and each other.
“Petalumans love to connect,” says Christine Walker, founder of 23 Seeds, an integrated marketing consultancy, and a member of the Petaluma Design Guild, a coalition of communications and design professionals in the Petaluma area. “You see it in the vast number of people who come out to support our community events and fund-raisers. Petaluma has many subcommunities, but we share certain core values that galvanize us and bring us together.”
“Petaluma is a relatively small market with an active community, so most people have a good knowledge of proposed projects,” observes Bill Sumski, one of three principals at PB&J, a full-service commercial real estate company founded in 2010.
Having separately owned properties in Petaluma during their combined 75 years in the business, Sumski and his partners knew Petaluma had economic potential. So when a number of Petaluma’s office parks and light industrial space came on the market, PB&J went into acquisition mode—and discovered an unexpected bonus.
“We’ve been pleasantly surprised how engaged the community is,” he says, “and it’s clear that residents and community stakeholders are very passionate, especially about food and agriculture.”
PB&J’s tenants include longtime businesses like Amy’s Organics, Camelbak, Athleta and Clover Stornetta as well as companies new to the city, like SPG Solar and tech company AVRS. Sumski says building a new development in Petaluma isn’t in PB&J’s plan just yet, but when the time is right, PB&J will solicit feedback from the community early in the process.”
“Developers and property owners must be extremely sensitive to their surroundings and build alliances,” explains Sumski. “Getting stakeholders involved early is the way to go.”
The city government offers many opportunities for the public to be involved in the development process. Residents can participate in city-sponsored groups that focus on a range of issues: trees, animals, the arts, recreation, transit, pedestrian and bike trails, technology and more. Hines says the city council and planning commission rely on these boards and commissions to ensure the disparate interests across the city are accounted for.
“It’s a fabulous system to make sure nobody is forgotten,” says Hines. “It lets Petaluma’s residents stay energized while ensuring their community is going in the direction they want.”
Problems in paradise
Petalumans like to use words like "special" and "unique" to describe their town. But even Petaluma’s biggest boosters concede the city isn’t perfect.
Traffic is a serious problem, as is the condition of the city’s roads, which are considered some of the worst in the Bay Area. The city’s financial crisis shook the confidence of many locals, while its inability to upgrade its infrastructure has local businesses wondering if their time in Petaluma has come to an end. For example, Petaluma’s wastewater treatment facility cannot support its thriving food and beverage production industry, forcing signature companies like Lagunitas Brewing Company and Cowgirl Creamery to pay for alternatives, like trucking wastewater to Oakland.
The general plan acknowledges these issues and, in recent years, the city has taken measures to address them. Recognizing the city doesn’t have the $130 million it would cost to overhaul its streets, public works staff perform road “triage” using inexpensive-yet-effective materials that weren’t available a decade ago. In 2011, the city hired Ingrid Alverde as its economic development manager, a new position designed to help the city attract and retain business. In less than 18 months, Alverde has impressed many with her ability to advocate for business interests, particularly on the wastewater issue, to city officials.
“Part of my job is to provide ombudsman services to businesses,” says Alverde. “I provide resources and tools so people can navigate regulatory requirements and city procedures so businesses aren’t surprised by or miss something. I also let the city know how it can be more proactive in serving the business community.”
The city also has improved the development process. It reduced impact fees to be more competitive with neighboring cities and streamlined its design review and planning process. It also initiated a weekly development meeting that puts representatives from disparate city agencies and applicants together in a room to review development applications. These meetings have improved the process for everyone involved, according to Alverde.
“City staff members have an opportunity to connect a person with the application, which improves communication,” she says. “Everyone hears from the other disciplines, which helps prevent problems and fosters a better relationship among city staff.”
Pascal Sisich, director of housing development at Santa Rosa-based Burbank Housing Corporation, believes these efforts will bring in development projects where everyone wins.
“When development impact fees are too high or the process is too difficult, people won’t want to invest in the community,” explains Sisich. “The fee reductions and planning improvements reflect Petaluma’s efforts to balance the need for a good public process with the need to develop and redevelop parts of the city.”
Petaluma’s look and feel
The influence of development trends over the past 150 years is evident in the way Petaluma looks and the way it feels as you navigate through it. According to Duiven, Petaluma is right out of a planning textbook in the way it represents many eras of urban design.
“We have the downtown area, most of which was developed before automobiles and thus is more pedestrian-oriented. The southeast section of town sprang up after Highway 101 came into town, and the homes and shops there reflect a more automobile-oriented culture,” he says. “In the northeast, you see the multi-building business parks and residential areas popular in the 1980s and 1990s. The wide walkways and ample bike paths recently constructed along the creeks and the eastern edge of the city reflect the desire to provide alternatives to the car and better connectivity between land uses.”
The city’s urban growth boundary and diminishing availability of large parcels mean that future development opportunities in Petaluma exist primarily in redevelopment and infill projects. An example of the former is Basin Street Properties’ proposed Riverfront development, a mixed-use project that proposes townhomes, apartments and single-family homes, retail shops, office space and possibly a hotel. Early plans feature well-designed buildings within a park-like atmosphere and include a community boathouse and river viewing area. Today, the area is largely industrial. A concrete plant and the city’s water treatment plant are on the same block as the project site, and old railway cars sit abandoned nearby.
But if anyone can give this neighborhood a new lease on life, it’s Basin Street Properties. William White, Basin Street’s founder, began developing properties in Petaluma in the 1970s. Among his projects was the Redwood Business Park, a complex of 25 buildings offering office and light manufacturing space built in the 1980s and 1990s that came to be known as Telecom Valley for the telecommunications companies who flocked there.
In 2003, when a local official lamented the absence of a movie theater downtown, White’s son, Matt, turned the company’s attention to a completely different endeavor: The Theatre District, a mixed-used project aimed at revitalizing the once-bustling wharf area where the Petaluma River dead ends into downtown.
Recalls Matt, “We realized quickly that a theater needed a parking garage, but to be economically viable, a parking garage needed to accommodate more than just movie-goers. We began to lay out a plan that had a little bit of everything—residential units, office space, retail shops, restaurants and, of course, the movie theater with its garage.”
In addition to bringing new amenities, the Theatre District project upgraded the area’s infrastructure, bringing in new curbs, sewers and telecommunications capabilities. The project was financed by $100 million in private, Basin Street capital as well as additional public redevelopment funds.
“This project showed what can get done when a developer and a community collaborate,” says Matt. “The approval process, start to finish, was about five months because we were all working 24/7 to get it done. It’s been a dynamite addition to downtown.”
Mixed-use projects are difficult to fund privately because banks don’t understand them. And state redevelopment funds, which helped Petaluma fund affordable housing developments and projects like the Theatre District, are no longer available. Yet Basin Street is moving full-steam ahead with its Riverfront development. Reflecting its experience in Petaluma, the company asked community stakeholders for their input early in the planning process. And that consideration hasn’t gone unnoticed.
“We appreciate Basin Street’s efforts to listen and include elements like public recreation space, commercial space for local businesses and small-scale housing in this project,” says Maggie Hohle, president of the nonprofit Petaluma Small Craft Center and member of Petaluma’s Recreation, Music and Parks Commission. “The Community Boathouse will be a prime amenity for residents and visitors alike, and we look forward to working closely with Basin Street Properties as it helps revitalize property near our treasured Petaluma River. ”
Economic realities vs. personal ideals
Petalumans take development in their city seriously, and the city keeps them involved both by ordinance and by practice.
“We encourage our applicants to host neighborhood meetings for larger projects even before an application is submitted,” says Hines. “We have an open door policy so people can review the project file and ask us questions, and we send out public notices and hold public hearings. Then we incorporate public feedback into our report to the planning commission.”
Two retail projects that sparked heated public debate in recent years were East Washington Place, developed by Florida-based Regency Corporation, and Deer Creek Village, a 315,000-square-foot, mixed-use center on the east side of town, developed by San Francisco-based Merlone Geier Partners. Both developments are meant to address “retail leakage,” a term that describes when residents and employees leave one city to shop in another. The city explored the problem in a 2004 report and includes it as a key component to the general plan.
“Many of Petaluma’s most vital services—police, fire, parks and recreation, street maintenance and others—are financed from sales tax captured within city limits,” says Alverde. “When residents and employees can’t find what they need here in Petaluma, they shop elsewhere, and those tax dollars are captured by other cities.”
From the get-go, the projects have been about giving Petalumans local access to the retail stores they already were patronizing in neighboring cities. The city’s retail leakage report identifies several retail segments with little or no presence in Petaluma, including home improvement, electronics and furniture. Not coincidentally, these retail segments sell a high volume of big ticket items subject to sales tax.
Both projects were met with public criticism and what was perceived as stall tactics by certain members of the city council. In the case of East Washington Place, the tension led to lawsuits filed against the city of Petaluma by Regency and by a local residents’ group. At Deer Creek Village, no lawsuits were filed. But Merlone Geier paid hundreds of thousands of dollars in concessions to the same group that had opposed the Regency development.
“Petaluma struggles with retail growth,” Alverde notes. “The community likes the idea of supporting mom and pop businesses. But many residents shop the big box retailers for convenience and affordability. By offering both options, Petaluma can keep residents and tax dollars here in town.”
Despite the headlines, many Petalumans have supported both projects. Merlone-Geier conducted a survey of 300 residents who live near the Deer Creek Village site and found more than 60 percent of those surveyed approved of the project. The Petaluma Chamber of Commerce, which represents 750 businesses in Petaluma, has been vocal in its support of both projects. And other developers, even those with retail and office space downtown, welcome the opportunity to bring more shoppers to Petaluma.
“The downtown area is too small to support itself,” says Basin Street’s Matt White. “We need the suburbs inside and outside Petaluma to shop the big box stores for basics, and then come downtown for boutiques and upscale restaurants.”
But as the project heads toward its groundbreaking this spring, Greg Geertsen, managing director at Merlone Geier, feels all parties will be pleased with the final outcome: lots of community space, many local tenants (including Friedman’s Home Improvement) and more amenities within walking distance of eastside homes and businesses.
Increasing the affordability factor
Petaluma Boulevard, which used to be called Main Street, stretches from the southern to the northern ends of town west of Highway 101, and development along it reflects how residential Petaluma has changed during the city’s history. Logan Place, an affordable housing rental development north of Payran Street on Petaluma Boulevard, offers a new chapter in the story of Main Street living, one that shows how the city can achieve many of its goals in one project.
Logan Place is a 66-unit apartment complex being developed by Burbank Housing Development Corporation, whose mission is to build and operate affordable housing in every jurisdiction in Sonoma County. Director Sisich expects about 600 applications for the rentals, and says Petaluma is a key market for Burbank Housing Development Corporation.
“Petaluma is the gateway to Sonoma County and to the greater Bay Area,” says Sisich. “Many of our residents commute but don’t have high-paying jobs. We need to offer them housing close to their employers so they can afford to live.”
Burbank Housing likes working in Petaluma because of the cooperation and support it receives from the city’s housing department and city council. Sisich notes Petaluma has been ahead of other cities in the Bay Area when it comes to reaching its state-mandated Regional Housing Needs Allocation (RHNA), which determines the numbers of housing units, including affordable housing, communities must plan to accommodate by 2022.
“Petaluma’s housing agency staff are great advocates for affordable housing in the city of Petaluma, and the city council has a deep commitment to new and existing affordable housing,” he says. “They worked hard to help us get the financing we needed, and they really made Logan Place happen.”
Burbank Housing chose the site for several reasons. For starters, it’s out of the Petaluma flood zone, a primary concern. It has easy access to amenities—a grocery store and the downtown area are within walking distance—and to major bus routes. At the time of purchase, it was a flat, empty, three-acre lot that, after jumping through the necessary hoops, Burbank got rezoned as a planned unit development (PUD).
Burbank Housing’s timing was right financially, too. The organization was able to get the city’s last redevelopment funds before that agency was dissolved by the state last year.
Logan Place is tucked between an auto body shop and a metal training center, in what’s a mostly commercial district. But quaint farmhouses and collapsing chicken sheds nearby suggest this area was home to several families in Petaluma’s past. With its sweeping views of east Petaluma and proximity to downtown, Logan Place offers the promise of community to another generation.
“The project meets the city’s goals and our goals,” says Sisich. “We think it’s going to have a positive impact.”
Pieces in a puzzle
The cover of Petaluma’s general plan features a collage of photos arranged like pieces in a puzzle. It’s an apt metaphor for the story of commercial and residential development in Petaluma. Sometimes whole sections of the puzzle come together easily; other times, a single piece will cause friction or disappointment. The key to success seems to be in trying different strategies until the pieces click into place.
“People need to understand it’s not a matter of whether Petaluma is going to change, but how it’s going to change,” says Walker. “Petaluma is one town in a landscape of many towns that comprise this nation among many nations around the globe. To look at our city in isolation is wrong.”
Over various points in its history, Petaluma has been Miwok homeland, an agricultural powerhouse, a transportation hub, a bedroom community and a center for high technology. In its early years, tule reeds became wharves and oak woodlands became chicken ranches. Later, those ranches turned into subdivisions and office parks as well as schools and gas stations. Now the schools are becoming retail shopping centers and the gas stations are turning into mixed-use buildings reminiscent of the past.
“Communities are tricky,” says Matt White. “You can’t remove one piece or another and think everything is going to be the same. Petaluma strives to be a well-balanced community—not just somewhere to live, work and shop, but also a place to recreate and connect. It’s going to be fun to watch this city evolve.”
