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Stymied by lawsuits and rising costs, the developer behind the Napa Creekside Apartments is walking away from the affordable housing project.

Bridge Housing Corp. of San Francisco will no longer move ahead with the development, spokeswoman Lyn Hikida announced Monday night. The company, a specialist in developing subsidized housing, had been working with the city to create 57 dwellings on the site of a defunct seniors’ home at 3700 Valle Verde Drive.

The developer decided to abandon its plans after consulting with Napa Valley Community Housing, the city and Napa County, according to Hikida. Napa Creekside had gained support from the city’s Planning Commission and City Council, but a judge voided those approvals two years ago after a neighborhood group sued, arguing it was too dense for the area and its environmental studies were insufficient.

“I felt the neighborhood was taking on more than was reasonable in low-cost housing, because there’s already another one across the street on Villa Lane,” said Roger Lewis, a retired oil well drilling executive and a 15-year resident of the neighborhood. “I didn’t think it was right that one neighborhood should bail out the others, (and) I didn’t feel the city should ignore the requirements that surround building in a sensitive area.”

Despite the courtroom setback, city officials declared as late as last November they would continue trying to see the apartment plan through.

In the meantime, however, changes to a key state financing program for affordable housing began favoring larger complexes in major cities at the expense of Napa Creekside, which Hikida said drove up the cost estimate and made the project unworkable.

“We think had we gone down that path (of a study), the environmental finding would have supported the development,” said Hikida. “But the financial feasibility is something we can’t achieve any longer.”

Builders of affordable housing in California compete for tax credits offered by the state’s Tax Credit Allocation Committee, but rule changes last year would put the Napa project at a disadvantage, according to Kathleen Dreessen, executive director of the nonprofit Napa Valley Community Housing.

“If there was one application for 200 units and one for 50, and only so much money in the pot, it’s more likely the 200-unit one will get the tax credit,” she said.

Because Bridge Housing continues to own the Valle Verde Drive property, the future of any housing plans on the site remains uncertain.

“We are still considering our options for next steps,” Hikida said Tuesday. “…We’re still committed to talking with the city and county to find other sites.”

More than five years in the planning, Napa Creekside was intended as an expansion of the old Sunrise Assisted Living center. Bridge Housing and Napa Valley Community Housing were to co-manage a mix of one-, two- and three-bedroom apartments, offering them at rates affordable to lower-income families.

But even as the project first gained city approval in 2012, a circle of residents formed the Neighborhood Coalition to Protect Salvador Creek. That June, the group sued in Napa County Superior Court, saying the project could threaten fish in the nearby creek, a branch of the Napa River, while worsening traffic and littering problems in the area.

After a judge sided with the residents in 2013, the City Council approved a largely identical plan for Napa Creekside, adding more environmental studies asserting the apartments would not harm Silverado Creek’s salmon or steelhead.

But the court also struck down that plan in March 2014, demanding a full environmental impact report before construction could begin. Napa and Bridge Housing also were required to pay the neighbors’ group $72,000 in attorney fees.

On March 1, the City Council is scheduled to formally retract its approval of the development to comply with the judge’s decision, according to Lark Ferrell, manager of the city Housing Authority.

“This is disappointing,” she said. “I think there’s a lot of support in the community for affordable housing. It’s just unfortunate there was a neighbor who, through CEQA (the California Environmental Quality Act), was able to derail this project.”

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Public Safety Reporter

Howard Yune covers the city of Napa and the town of Yountville. He has been a reporter and photographer for the Register since 2011, and previously wrote for the Marysville Appeal-Democrat, Anaheim Bulletin and Coos Bay (Oregon) World.

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