Newport Beach developer seeking to buy Sonoma County’s Chanate Road property quiet about development plans

The Southern California company at the center of Sonoma County’s latest effort to sell its former hospital site along Chanate Road specializes in multipurpose development, and brings a group of real estate heavy hitters with a track record of major builds.

Sonoma County supervisors on Oct. 13 selected Newport Beach-based Village Partners’ $7.8 million bid to buy the county’s 72-acre Chanate Road property, setting in motion a 60-day period to review the details. Barring unforeseen circumstances, both sides have circled Dec. 31 as the date to close the deal for the property to finally change ownership.

However, for a county that has faltered amid negotiations to offload the property to three previous potential buyers, the deal seems far from done, especially, some local leaders said, given Village Partners’ unfamiliarity with the problematic property.

This costly site to maintain in northeast Santa Rosa largely has been abandoned and one that county leaders have sought to sell for housing development. Only the county coroner’s office, its health laboratory and a nonprofit bird rescue remain operating there.

Since its 2016 launch, Village Partners has promised a host of vibrant, mixed-use projects in Southern California, but it has yet to break ground anywhere.

“This is a new group, and they’ve never built anything,” said Sonoma County Supervisor Shirlee Zane, whose district includes the Chanate Road property and who has been a longtime champion of selling the land for housing. “If we end up at the end of December and the deal falls through, we’re screwed. Who’s going to want to buy this property?”

Village Partners may be new, but the company boasts top leaders with decades of experience at high-profile, nationwide real estate development firms.

Before launching Village Partners, Principal J. Donald Henry was vice president of development and acquisitions for Related Companies, a major private real estate firm with more than $60 billion in developments, predominantly houses and condominiums.

Michael Morris, another principal with Village Partners, has 30 years of experience, including work for LNR Property Corporation, which has offices nationwide.

Several attempts by The Press Democrat to reach Henry and Morris, including numerous phone calls and emails, were not successful.

Bill Witte, chairman and CEO of Related California, the state branch of Related Companies, vouched for Henry’s bona fides when it comes to land acquisition, a role Henry held in the early 2000s with Related.

But Witte said it’s likely Village Partners, which he described as a boutique firm, would have to bring in another group to help with Santa Rosa development of the entire 72 acres, a parcel six times larger than any the company has worked with to date.

In selecting the relatively new firm, the county could set the property down a path toward development of a variety of homes and apartments, as well as business and commercial uses.

Led by Henry, a California real estate developer who has completed projects adjacent to Hollywood & Vine and luxury apartments in Los Angeles and Santa Monica, Village Partners was formed.

The company touts four mixed-use development projects spanning Los Angeles, Orange and San Bernadino counties, all with the “village” moniker. But The Village at Montclair, The South Village at Claremont, The Village at Redlands and the Village at La Floresta in Brea are all just concepts at this point. And the company has submitted no development plans for the only property the company apparently owns — the languishing Redlands Mall, which the company bought last year — city planner Ivan Flores confirmed.

The Village at Montclair faces a Nov. 2 city council vote there before work could begin on plans to build 370,000 square feet of new residential and commercial space, including 360 units on 6.3 acres, Montclair city manager Ed Starr said.

None of its proposed projects is larger than 12.2 acres, a fraction of the size of the Chanate Road campus.

Even if Village Partners goes forward with buying the property, which has served as a community and county hospital for 150 years, Zane said the company’s lack of results to date is concerning.

“We’re going to have money in our pocket, but there’s not going to be anything built for some time,” Zane said.

County leaders were obligated to select the highest bidder in otherwise equal bids, a factor that pushed aside five other potential buyers, none of which came close to matching Village Partners’ offer.

If the company decides to bolt, the county will keep its $500,000 deposit. But county leaders then would be forced to find a path forward in the wake of another round of failure.

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