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Developers of the approved Carneros St. Regis luxury resort must ferret out ways to support affordable housing or contribute more money to the city’s affordable housing fund, according to a lawsuit settlement reached Wednesday. 

An affordable housing advocacy group, Latinos Unidos del Valle de Napa y Solano, filed a lawsuit in May against the St. Regis developer — SR Napa LLC of Colorado — and the city of Napa.

Latinos Unidos claimed the developer of the 245-room resort wasn’t doing enough to support affordable housing for the planned resort’s estimated 500 employees. Latinos Unidos also claimed the project’s environmental impact report didn’t properly address water and traffic issues and other factors, according to court papers. 

Kevin Teague, attorney for St. Regis, said the settlement includes plans for the developer to help clear financial and permit hurdles for as many as 300 affordable housing units by late June 2014. 

Developer Jeff Selby said SR Napa will tap affordable housing funding sources including city grant funding and federal and state monies.  

The developer will pay as much as $3 million in fees to the city’s affordable housing fund. The fee system, Teague said, is based on a sliding scale, depending on how many affordable housing units get construction funding and secure city approval. For example, if just 150 units are shovel-ready in June 2014, the developer will pay $1.5 million in fees, he said.

The sliding scale fees agreed to in the settlement will be in addition to $1.4 million the developer must already contribute to the city’s housing fund, Teague said.  

The city is in the process of considering sites for the housing, Teague said. 

According to the developer, between 75 to 85 percent of the resort’s employees will be hired locally. The project’s economic study said resort employees would earn a median income of $38,000, with full-timers receiving benefits.

Beth Painter, land-use planner for the project, estimated Friday that St. Regis will cost between $250 million and $300 million to build. Construction could begin in early 2012, Teague said. 

“The Stanly Ranch St. Regis project will bring new jobs to the Napa area, will provide the construction industry with much needed employment and will be a great source of revenue for the city of Napa,” Teague said in a written statement issued Friday. “This agreement is good for the Napa economy, good for its environment and good for the families who qualify for affordable housing.”

Both Teague and Painter said they could not give details about project’s efforts to obtain financing. 

“The good news is ... the economy is shifting and there’s more comfort in terms of looking for funding and financing projects,” Painter said. 

Napa City Manager Mike Parness said the St. Regis project is the “most critical” project the city has looked at in the last decade. 

“The project is a very significant one for the city (at) many different levels. What the (settlement) agreement does is it benefits all parties,” he said.

The agreement allows the developer to move forward with the project, helps the city meeting affordable housing needs and Latinos Unidos’ interests in securing more affordable housing in that area.

Marisa Loza, a Napa immigration consultant with Latinos Unidos, praised the agreement.

“It’s important when the city or county approves big projects like this that they include specific plans for providing new affordable housing for the new employees who will clean the hotel rooms, maintain the grounds, work in the restaurant,” she said in a written statement. 

“This resort also includes new vineyards, so we’ve also negotiated for extra funding for farmworker housing. All those new jobs will impact the area’s very limited supply of affordable housing,” Loza said.

The city expects to garner $4.4 million in tax revenue from the resort’s first year. St. Regis will be a 245-room resort with a modest-sized winery, covering 93 acres on Stanly Ranch.

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