Plans for the McKay Ranch Subdivision include up to 320 residential units, including up to 172 multi-family units, along with 22,000 square feet of commercial development on a total of about 81 acres in Cutten. | File image via County of Humboldt.


Local developer Kurt Kramer still doesn’t know how much of his proposed McKay Ranch Subdivision in Cutten will ever be built, given the frustrating regulatory hurdles and high costs of housing development here in California and Humboldt County. But he hopes to clear one big obstacle in the coming months by getting the project site annexed into the boundaries of the Humboldt Community Services District (HCSD). Annexation would allow the development to receive water, wastewater and street lighting services.

Nearly a year after the Humboldt County Board of Supervisors conditionally approved the project – a planned 81-acre mixed-use development that could (eventually, theoretically) include up to 320 residential units and 22,000 square feet of commercial space in Cutten – a pair of Kramer-owned companies, Kramer Properties, Inc. and Fairhaven Cottages, LLC, have applied for the annexation, which will be considered at tonight’s meeting of the HCSD board of directors. 

Reached by phone earlier today, Kramer said that even under the best-case scenario, the only part of the project likely to be built in the next five years or so is Phase One (shown in green on the map above), which includes three single-family homes on Manzanita Avenue, at the north end of the project site.

One of those homes is already built, and Kramer said it needs to be connected to public services before it can be sold.

Noting that the full mixed-use project has been in development for nearly two decades, Kramer said he’s skeptical about the state’s commitment to addressing its well-documented housing crisis.

“It’s just crazy,” he said. “They can’t mean what they say,” he added, regarding political promises to address the problem. “[Development] couldn’t be more difficult if they tried.”

Many of Kramer’s concerns pertain to local challenges. For example, he said that the HCSD last fall increased residential connection fees (aka “capacity charges”) by as much as $10,000 per unit, a price hike that could add another $3.2 million to the total cost of the McKay Ranch Subdivision. Plus, he said, the district is scheduled to increase water and sewer service charges in the next five years.

“All we can do is get [the project] as far as we can get it within our control,” Kramer said. “After that we have to let the service agencies and other [government bodies] provide the infrastructure the project needs. If they do that, we probably have a fighting chance.”

While tonight’s agenda includes a resolution to approve a draft application for annexation, ultimately the request must be approved by the Humboldt Local Agency Formation Commission (LAFCo) before being sent back to the HCSD for adoption. The district also needs to notify interested agencies and neighboring property owners before adopting the annexation request.

Terrence “TK” Williams, HCSD’s general manager, said tonight’s agenda marks the first time the board of directors has seen or considered this draft plan for service expansion. He added that much of the draft’s language was originally written by Kramer’s staff and included statements indicating that the district would pay for certain elements along the bureaucratic path.

“I rewrote it” to remove those promises, Williams said, adding that the district has not taken a position on the annexation request or the development project.

“Kramer is putting a lot of pressure on the district to make this happen, but we’re neutral on this,” Williams said. “He’s put a lot of effort into trying to get this subsidized … and he’s really irritated that our capacity charges went up in September.”

Williams said the district is also facing pressure from the County of Humboldt to help facilitate this development in order to meet the county’s Regional Housing Needs Allocation (RHNA), a state mandate for local government agencies to plan for adequate housing development.

Williams said he can’t verify the accuracy of Kramer’s stated figure of $10,000 per unit in increased capacity charges, but typically it can’t be stated as a flat rate. Capacity charges, which include the cost of sewer and water hookups, vary depending on several factors, including the size of fixture units and whether the connection is for single-family homes or apartments.

“We’re not trying to stop the project, but we’re not proponents either; we’re neutral,” Williams reiterated.

Meanwhile, the project has also faced scrutiny from local environmental groups. Before the project was approved by the county last year, six organizations — EPIC, Humboldt Baykeeper, the Coalition for Responsible Transportation Priorities, Northcoast Environmental Center, 350 Humboldt and Earthjustice — called for the development to be fully electrified, with no gas hookups or wood stoves, as a means of lowering its greenhouse gas emissions.

Kramer initially balked at the increased cost and expressed skepticism about PG&E’s ability to supply that much electricity, given the utility’s capacity limitations elsewhere in the county. But he ultimately agreed to go all-electric, and today he said PG&E officials have assured him that they’ll be able to supply power to the development. 

Environmental groups also pressured county supervisors into giving the McKay Ranch Subdivision only a provisional green light by including a condition whereby the developer can choose to make improvements to pedestrian and bicycle connectivity rather than installing a pair of new traffic signals.

Those details have yet to be hashed out, and Kramer said that aspect falls pretty low on his current list of concerns.

“By the time this gets built, their dreams and wishes will probably be funded through grants,” Kramer said. He added that Humboldt County Planning and Building Director John Ford has expressed optimism about finding funding to assist HCSD in building the infrastructure needed to support development in the Cutten corridor, which is a key area for meeting the county’s RHNA numbers.

But at the current rate of development — roughly 20 single-family residences being built per year in the county’s unincorporated areas, by Kramer’s estimate — it will take a long time to meet those needs, he said.

The HCSD board meeting is scheduled to start at 5 p.m. at the district office, 5055 Walnut Drive in Eureka.

Below is an interactive map of the project site (outlined in red):