Second Petaluma rail depot site on the market
Couples lost the parcel to foreclosure while waiting for SMART contract
Published: Sunday, January 13, 2013 at 6:14 p.m.
Last Modified: Monday, January 14, 2013 at 8:47 a.m.
Owners of a property long eyed as Petaluma's second SMART train depot are now “aggressively marketing” the parcel to other potential buyers, saying the rail agency won't make a commitment.
The 6.5-acre property at Corona Road and North McDowell Boulevard was identified as a potential rail station as early as 2005. Because of funding shortages, it was left off SMART's initial construction phase, going on now, from Santa Rosa's Railroad Square to downtown San Rafael.
Two Petaluma couples who owned the property lost it to foreclosure in December to the lender, Sonoma Equity Lending. They had tried unsuccessfully to work out a lease-option or sale with SMART, company president Jeff Mayne said Friday.
Mayne said he recently contacted SMART leadership on behalf of Sonoma Equity investors and was told “emphatically that they are not interested in buying the property at this time.”
“Yet to this day,” he said, “their website and documents say they plan a station at that property.”
SMART Executive Director Farhad Mansourian said Friday that his agency hasn't promised the property owners anything.
“I don't believe SMART is tying them up in any way, shape or form,” he said. “Any implication that SMART is keeping them in a limbo is inaccurate.”
His message to the new owners is: “You need to make your own business decisions.”
But SMART's failure to either secure the property or disavow interest in it as a station site caused several potential developers to back out of deals with the previous owners, Mayne said.
In 2010, SMART identified the site in its property acquisition plan: “SMART is currently considering an industrial property along Corona Road in Petaluma for a rail station. ...The number or extent of the businesses operating on the site is currently unknown, but business relocations are anticipated.”
A lawyer for the former owners said SMART appraised the parcel but never negotiated a lease or purchase option.
When the property was set to go on the auction block in Aug. 2011, SMART was prepared to bid just under a million dollars, Mayne said, but he halted the sale after making a new payment agreement with the owners.
Sometime after that, the owners proposed a $1.4 million sale to SMART, which he said SMART passed on. Ultimately, Sonoma Equity took back the property late last year.
Now, the property could be priced around $4 million, he said. It could be developed into high-density housing that would bring in much-needed property tax revenue to the city's coffers.
Petaluma Mayor David Glass said he personally agrees that SMART should either commit to acquiring the property or tell the owners it no longer is interested.
“To sit there and just say it's on a map for a future use is fundamentally unfair for property owners,” he said, adding that he doesn't know SMART's financial constraints.
“If it fits in their vision for long-term plans, and I think it should, there is a lot of workplace development that could take place. It would be in their best interest,” he said. “Why they wouldn't go after it when it was in the foreclose process and get it for the least possible cost is beyond me.”
Mansourian would not discuss any other potential sites SMART may consider in Petaluma.
“A second Petaluma site makes a lot of sense,” he said. “When our financing improves, we will be considering that and we will be having conversations with the Petaluma City Council, the city manager and will definitely be seeking their input. But we're not anywhere near there.”
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