American Canyon is ready to sign on the dotted line of a 30-year Watson Ranch agreement spelling out what the city and developer will each do to make the planned community a reality.
Watson Ranch is to bring hundreds of homes, new parks, a new school and new businesses to the city. In addition, it is to transform the ruins of the century-old Portland Cement Co. site into a town center with shops, restaurants, event centers and hotel.
The City Council last week introduced an ordinance to approve a 30-year, 100-page development agreement with developer American Canyon I, LLC. A final reading and adoption is scheduled for June 18.
Among other things, the agreement requires the developer to build about $10 million in parks, build certain roads, provide for the Napa Valley Vine Trail and dedicate two acres for a community plaza.
For its part, the city must do such thing as process development in a timely fashion, forgive impact fees and share taxes associated with the town center project, said special counsel Michael Durkee, who worked on the agreement.
“Is this perfect? No. Could it be perfect? No,” Councilmember Kenneth Leary said.
Councilmember Mark Joseph said he’s struggled with the agreement as it’s taken shape over the past two years.
“I have some very serious reservations about some of the terms of the agreement even today,” Joseph said. “On the other hand, I am not oblivious to some of the benefits it offers.”
Councilmember David Oro said there’s been a struggle to craft the agreement because Watson Ranch is so big and unique. For him, a big draw is creating the Napa Valley Ruins & Gardens town center at the old cement plant.
“We get a sense of place, a sense of pride and a location to become a better part of Napa Valley,” Oro said.
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Mayor Leon Garcia agreed. The town center will make American Canyon a drive-to city, rather than a drive-through city, he said.
Vice Mayor Mariam Aboudamous said the city is working with a developer who is planning to stay and who is reasonable.
“I always joke about, ‘How old will I be when this is complete?’” she said. “I’ll be in my 50s and I’m ready to get started.”
The development agreement calls for the city to give the developer 50 percent of the sales taxes and transient occupancy taxes generated by Napa Valley Ruins & Gardens. The terms are up to $45 million or 30 years, whichever comes first.
City Manager Jason Holley said redeveloping a dilapidated, boarded-up concrete facility is a risky commercial venture.
“The point of that tax sharing is to incentivize development of something that will be unique in the North Bay and really kind of groundbreaking for our purposes here in American Canyon,” Holley said.
American Canyon in October 2018 received a financial report from Seifel Consulting on the proposed Watson Ranch development. It predicted the project will net the city $21.2 million over 30 years, considering money the city must spend on police and other services and the tax money that will be generated. That also takes into account the $45 million in tax-sharing for the Napa Valley Ruins & Gardens project.
Once Watson Ranch is fully built out and the tax-sharing has ended, the development should cost the city $4 million annually and bring the city $6 million annually, for a $2 million annual gain, the report stated.
The development agreement is only with American Canyon -1, LLC. The Newell family, which also owns a portion of the Watson Ranch land, is not a party to the agreement.