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Calistoga City officials wary as Pacaso acquires house outside town

Calistoga City officials wary as Pacaso acquires house outside town

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Pacaso protest

"Timeshares Fracture Neighborhoods" and "Stop Pacaso" were among the signs on display during a protest in May in St. Helena.

A home-sharing company that's drawn the ire of neighbors downvalley and sued the City of St. Helena has acquired a house outside Calistoga, raising concerns among city officials.

The city is reviewing its regulations and preparing for a possible home-sharing application within the city limits.

Pacaso has posted a property for sale on the outskirts of the Calistoga City limits, at 3380 Highway 128, in the vicinity of Bennett Lane. Pacaso uses a “fractional home ownership” model to purchase private houses and creates a limited liability company to hold title to a house, and then allows up to eight co-owners to buy shares in the LLC.

Because the property is located outside city limits, any permitting issues would have to go through Napa County. However, the city is keeping a close eye on the situation, said Planning Director Zac Tusinger, as any proposal from Pacaso within Calistoga would have to go before the city’s planning commission.

Planners are working with the city attorney’s office, and also taking a look at how other jurisdictions are dealing with the fractional home ownership startup.

“To some degree it’s an open question as to how to regulate it,” Tusinger said. “It’s an evolving situation and we’re monitoring it very closely.”

Other municipalities, including Napa and St. Helena, have argued that Pacaso is essentially a timeshare operation, as investors can stay at the location for a set number of nights per year so long as each visit is no longer than two weeks. Investors can also “gift” stays to friends or family and sell their shares after one year and either profit from any gain in the home’s value or have to cover any loss in value. Pacaso makes its money by receiving a percentage of the purchase price and monthly service fees for management, maintenance and cleaning.

Records show that 3380 Calistoga LLC. was incorporated in April 2018, the same date the property was sold. At that time, the property was listed as a 3-bed, 2-bath, 1,004-square-foot single-family home in need of restoration. It sold for $1,050,000.

On Pacaso’s website, the property is now listed for sale as an 8,300-square foot, 7-bedroom, 8-bath home, with the price tag of $10.5 million, “or you can own an eighth of the property for $1,480,000 … Prospects are whole home listings that meet Pacaso’s highly selective criteria: epic homes in amazing locations. If enough buyers are interested in co-owning this home, we’ll buy the home and turn it into a Pacaso.”

In response to criticism in the past, Pacaso has said they would limit the properties they are interested in to $2 million, which limits the number of available properties within city limits, Tusinger said.

In June, Pacaso said in a press release it would sell a home it recently purchased in a north Napa neighborhood, citing “community feedback” from neighbors and elected officials.

In July, St. Helena won the first round of a lawsuit against Pacaso. A judge dismissed part of a lawsuit brought by the home-sharing company against the City of St. Helena, in a dispute centering on a definition of a timeshare.

Pacaso owned or managed five St. Helena homes at the time the suit was filed.

Neighborhood communities downvalley have also rallied against the fractional homeownership company’s encroachment. The local opposition group stoppacasonow.com is collaborating and strategizing with other communities to oppose what they see as an existential threat. Their website states, “Pacaso is the newest way for Silicon Valley bros and venture capitalist vultures to make a quick buck at your expense.”

A Napa house that was once described as uninhabitable has undergone a complete makeover and is about to be "flipped" to a new owner. Take a look at the outside and the neighborhood.

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You can reach Cynthia Sweeney at 942-4035 or csweeney@weeklycalistogan.com.

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The Weekly Calistogan Editor

Cynthia Sweeney has been editor of The Weekly Calistogan since July, 2018. Previously, she was a reporter for the St. Helena Star, and North Bay Business Journal. She also spent a significant amount of time freelancing in Hawaii.

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