Less than a week after the conclusion of a three-hour trial to decide the fate of a deal to develop housing on county-owned acreage surrounding an abandoned public hospital complex called Chanate, a superior court judge has issued a deal-breaking decision.
On Thursday, Judge René Auguste Chouteaur ruled that the Sonoma County Board of Supervisor’s approval last year of an agreement to develop Chanate with developer William Gallaher must be “vacated.” The controversial deal cannot go forward as planned.
A lawsuit filed by the 200-member grassroots organization Friends of Chanate called for the development agreement to be overturned on several counts. Chouteau agreed with only one of the counts, but that was enough to send it back to the board of supervisors for the indefinite future. The deal can only be revived if the county and the developer conduct an environmental review of the proposed project, which is a lengthy, expensive process that doesn’t guarantee the housing and commercial project will be approved.
Attorney Noreen Evans successfully argued the case for the Friends against Gallaher’s Santa Rosa attorney, Tina Wallis and Deputy County Counsel Debbie F. Latham. Evans argued that the less than $12.5 million price that the county accepted for the land was so far below its fair market value that it was a “gift of public funds.” Chouteau disagreed.
It is true, he said, that a 2016 appraisal projected the worth of the Chanate improvements at $275 million, and the land at more than $30 million. But he was more comfortable with a 2014 appraisal of the property that did not consider the projected value of the improvements.
He declined to value the land at its fully developed market value because, he wrote, the improvements are not guaranteed to occur. Therefore, there was no gift of public funds.
Evans then argued that the supervisors had violated the Brown Act by holding secret deliberations on terms of the development beyond its price. Chouteau’s 25-page decision does not seem to disagree that the proceedings may have violated the spirit and letter of the Brown Act. But the proceedings were held behind closed doors, so there is no public record of what transpired, he noted. Because Evans could not present evidence of wrongdoing, such as a transcript of the secret session, she could not prove the facts of the suspected mischief.
Evan’s final and fatal argument was that the deal is invalid because the county sold the land to Gallaher based on his proposal to develop nearly a thousand homes in a forested, riparian area riffling with wildlife without doing an environmental review of the impacts.
The county’s and the developer’s lawyers argued that the supervisor’s approval of the Chanate development “agreement,” signed last year, is not the same thing as approving a development “project.” And since it is not a “project”, they parsed, it is not subject to environmental review. The judge laughed that argument out of court last week and in his written decision he eviscerated it. And that is enough to spike the deal for the time being.
We are reaching out to Gallaher, Wallis, Evans and the supervisors for comment and will keep you posted.
