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The North McKay Ranch subdivision, a proposed mixed-use development with plans for up to 320 housing units, took a big step forward last night as the Humboldt Community Services District’s (HCSD) Board of Directors agreed to pursue annexation of the 81-acre project site in Cutten.

If the district’s annexation application gets approval from the Humboldt Local Agency Formation Commission (LAFCo), then the subdivision will have a source for its water, wastewater and street lighting services through the HCSD.

It has taken the project a long time to get to this point. In fact, depending on your start point, the timeline could be as long as 30 years, according to project developer Kurt Kramer, who said as much via Zoom during last night’s meeting. That’s if you go all the way back to when Louisiana-Pacific owned the forested land and undertook a subdivision master plan ahead of selling off the parcels.

Kramer himself has spent more than two decades getting the project this far, which required numerous public hearings, negotiations and modifications to appease critics, a full environmental impact report and approval from both the Humboldt County Planning Commission and the Humboldt County Board of Supervisors. (See the links at the bottom of this post for details.)

Kramer’s application for annexation by the HCSD languished for more than a year due to disagreements over who would pay for the necessary infrastructure.

At last night’s meeting, with Director Joe Matteoli absent, the board made it clear that Kramer himself will need to bear those costs. Before diving into deliberations on the matter, however, Director Greg Gardiner asked staff to lay out the scope of the project.

General Manager Terrence “TK” Williams gave the details: In total, all phases of construction call for 50 small-lot single-family units, 96 standard-lot single-family units and 174 multi-family units, plus 22,000 square feet of commercial development. Another 34 accessory dwelling units (ADUs) could also be developed at full build-out.

Gardiner quickly voiced his support for the project, noting its long time in development and its proposed inclusion of low-income housing, “which we desperately need right now.”

Director Heidi Benzonelli, on the other hand, had questions for Kramer. As shown in the map below, the project is planned to be developed in multiple phases over many years. Benzonelli asked for a timeline for phases one and two and the expected median price of the resulting homes.

Kramer, his disembodied voice reverberating in the boardroom, said the only thing he’s looking to accomplish in the foreseeable future is build Phase 1 (in green above), which calls for three single-family homes on Manzanita Avenue. “And I can’t even begin to tell you what the cost is for this housing,” he said. 

That’s because things can change rapidly, Kramer explained, noting that the district’s own connection fees have “effectively doubled” over the past 18 months. “Everything’s going up. … I hope you understand, I can’t even begin to throw a number out.”

Benzonelli said she understands that, but her fear is that Kramer may come back sometime in the future looking to renegotiate terms.

“My job here is just to assure that we can provide the water and the sewer for this project … without burdening the ratepayers and my constituents with the cost of this development,” she said.

Kramer said he has no intention of burdening the ratepayers, but there’s additional work needed before the district has adequate sewer service capacity. Kramer has also agreed to foot the bill for a 250,000-gallon water storage tank.

He went on to say that there’s a 20-year development agreement on this project, and he lamented the difficulty in making progress.

“This is a very difficult project, and private, market-rate development is effectively over in Humboldt County if we can’t come up with some viable solutions to to make it happen,” Kramer said. If the county wants to continue only pursuing subsidized low-income housing projects then “that may very well be what this project evolves into,” he added.

Gardiner again voice his support for annexation, citing “the future and our kids.”

Despite a late plea from Benzonelli for community feedback at the meeting, the only person to address the board during the public comment period was Gordon Clatworthy, a district ratepayer and former candidate for Humboldt County Supervisor who was there in part to record the meeting for Access Humboldt. (He spoke in favor of annexation.)

Director Michael Hansen noted the project’s previous agency approvals and said the question before this agency was pretty narrow: “Can the district provide water and sewer? Yes, we can,” he said. “There’s some upgrades to infrastructure [required]. We made sure we put into the document that it would be at no cost to the district, and we’ve got agreement with Mr. Kramer on that. I’m ready to move forward with this.”

Benzonelli asked Kramer for one more assurance that he won’t change the plan for services. He said he has no issues with it.

Director Julie Ryan asked whether that plan for services could be altered by a future board five or 10 years down the road in such a way that the district takes on some additional costs. Williams said it’s possible, depending on various factors. However, Gardiner noted that it’s equally possible that grant funding could pay for some of it. 

“We simply don’t know,” he said.

When it came time for the vote, Gardiner made the motion to puruse annexation, and there was a long, dramatic pause before any of his colleagues offered a second. Finally, with a sigh, Benzonelli offered the second. 

The unanimous vote in favor of the motion effectively directs staff to prepare a resolution to annex the property. That resolution will come back to the board at a future meeting for approval.

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