With new downtown project, Santa Rosa housing policies face a test

Santa Rosa’s effort to entice more developers into downtown projects appears to be paying off, but plans for a new apartment building north of Old Courthouse Square may soon test whether new incentives can turn pretty pictures into needed housing.

Zach Berkowitz, the owner of a commercial building at ?404 Mendocino Ave., is proposing to build a six-story, 135-unit apartment complex in two buildings on his and neighboring properties.

If approved by the city, the project could be ready for occupancy in 2020, and would provide the kind of affordable, infill housing the city and downtown business community desperately needs, Berkowitz said.

“We were talking about it before the fires, but when the fires happened it was just one more reason to generate housing downtown,” he said.

The October fires destroyed more than 3,000 homes in Santa Rosa. The city has since tried to streamline the rebuilding process and encourage developers to construct apartments downtown and near transportation hubs such as the SMART stations.

Berkowitz’s project would be the first to benefit from the faster permit process the city instituted after the fires, including limits on the role of the Design Review Board. The proposal gets its first public hearing before that board Thursday.

For the project to become a reality, however, the city is going to need to do more to incentivize downtown housing, a conversation that Berkowitz said is encouraging but far from complete.

“We’re saying to the city, ‘This is an opportunity to build housing in a phenomenal location. Are you going to work with us or not?’?” he said.

The answer from the city is an emphatic yes.

“We’ve made housing downtown a priority as a city,” said David Guhin, the city’s director of economic development and housing.

“We are excited that the policies and processes we are putting into place are attracting attention to provide the housing that we need in our community and to do it on a quick timeline.”

In addition to shortening the Design Review Board process from 10 months to three, the city has implemented or is considering a raft of other incentives for developers, Guhin said.

For example, the city could cap certain development fees for five years to encourage taller buildings. Many development fees are paid on a per unit basis, which creates a disincentive to developers to build more units.

“Our current fee structure doesn’t encourage people to build more floors,” Guhin said. One idea is to charge fees up to a certain number of stories, and waive them for anything higher, Guhin said.

The city also is working on an expedited permit process for quality projects where the developer and the city both agree to move forward on a specific timeline, Guhin said.

Such speedy permitting would only be granted to developers who can demonstrate the ability to push a project over the finish line, Guhin said.

“We’ve seen too many projects come in not sufficiently thought through and take up a lot of staff time, and nothing gets built,” Guhin said.

Three ambitious proposed transit-oriented housing projects around the Railroad Square SMART station in recent years have promised to add hundreds of new units in the neighborhood, but each has either stalled or fallen apart.

Berkowitz, who is based in San Francisco, has some experience as a developer. He is a partner with Hugh Futrell in the project to turn the iconic Empire Building on Old Courthouse Square into a boutique hotel.

Berkowitz has partnered with Ed Khakbaz, the owner of the single-story brick building at 420 Mendocino Avenue, which would be demolished. One of the new buildings would stretch back to Riley Street, and then the second would make an L-shape across Berkowitz’s parking lot and occupy the long-time home of Gary Chu’s shuttered restaurant. That property has yet to be acquired.

Tenants in the building at 404 Mendocino Ave. include Sift cupcake shop and Pacific Union Real Estate, while the building at 420 Mendocino was the home of the closed Brickyard Lego shop.

Berkowitz said the project designed by David Baker will have stacked parking on the first floor, solar panels on the roof, and be built with modular units that come prefabricated and can be put together like blocks.

Units would range in size from 300-square-foot units renting for about $1,200 to larger two-bedroom units renting for up to $3,000. He’s open to discussing affordability with the city but noted that the units by virtue of their smaller size are “affordable by design,” he said.

While the project does not yet have financing, Berkowitz said he isn’t worried.

“We wouldn’t be spending the money we are right now if we didn’t think it was real,” he said.