Petaluma Developer Leaves City With Nearly $10M in Cost Overruns, Then Reneges on Promise to Recoup Money Through a Tax

Petaluma paid $17 million to develop the Theater Square District, more than twice the money allocated for it, moving funds from other projects such as pothole repair, flood mitigation and the railroad depot construction to cover the shortfall, according to an expose in this week's issue of the Bohemian.

Meanwhile, the city council was kept in the dark about the overruns (which by the end totaled more than $9 million) by developer Basin Street Properties, which the company promised to remedy with a tax increment. But once the project was completed in 2007, Basin Street Street reneged on its promise, leaving the city of Petaluma to foot the bill, according to the article.

In another revelation, the founder and CEO of North Bay Construction, which was contracted by Basin Street Properties to build the shopping and entertainment complex, is one of single largest investors of Basin Street Properties, a potential conflict of interest city officials who approved the deal said they never knew about.

Click here to read the complete investigation.