Montage Healdsburg resort developer fined record $6.4 million for water violations


State water quality regulators have fined the developer of Montage Healdsburg, the ultra-luxury resort set to open Saturday, more than $6.4 million for environmental violations tied to hotel construction during the stormy winter months of late 2018 and early 2019.

The fine — the largest environmental penalty of its kind on the North Coast — was approved Friday by the Santa Rosa-based North Coast Water Quality Control Board following a nearly eight-hour virtual hearing.

The board’s 5-0 vote affirmed a fine recommended by agency prosecutors as part of a two-year enforcement action against Sonoma Luxury Resort, a subsidiary of Encinitas-based developer the Robert Green Co.

“Today, the prosecution team proved that there were widespread, persistent stormwater violations at the discharger’s construction project,” Dan Kippen, prosecuting attorney for the State Water Resources Control Board, told the regional body Friday. “Ordering the discharger to pay the proposed liability will send a message not only to this discharger that its conduct was unacceptable and must be avoided for its future projects, but will also send a message to all future developers that they flout the (construction general permit) and other water laws at their own peril.”

The 38 violations put forward by regulators included woefully and repeatedly inadequate erosion control measures documented over several months by water quality investigators at the 258-acre resort property at Healdsburg’s northeastern edge, last estimated to cost $310 million. Prosecutors said nearly 9.4 million gallons of prohibited runoff and sediment-filled stormwater escaped the heavily sloped construction site and into streams of the Russian River watershed, leading to two forced work stoppages. The affected tributaries included Foss Creek, a steelhead trout stream.

“I can stand here before all of you right now and tell you in my 20 years, I’ve yet to see a site this nasty,” Jeremiah Puget, senior environmental scientist with the regional board, said Friday. “If you take this case in its entirety, we believe that we went above and beyond our role — as did the city of Healdsburg — in trying to return this site into compliance.”

The decision Friday followed almost a year of financial negotiations that failed to reach a settlement between representatives of the regional board and the developer, Robert Green Jr., the firm’s president and chief executive officer. Green told The Press Democrat by email as recently as September that he and his company still hoped to settle the matter after prosecutors upped their recommended fine this fall from $4.9 million to more than $6.4 million.

Reached by phone Friday night, Green declined a chance to comment on the judgment or say whether he and his attorneys would appeal the decision to the state board. He said he was in the middle of another call and hung up. He did not respond before deadline to a voicemail left for him about an hour later.

But on Friday, while testifying under oath during the hearing, Green defended his firm’s approach to limiting unauthorized discharges at the site, including its decision to restart construction after the pair of stoppages ordered by the water quality board. He said the company lost roughly $4 million during the halts to construction in late 2018 and early 2019, and spent another $2 million-plus through the winter of 2019 to bring the project into compliance.

“Anybody that says that we were completely negligent or not cooperating or turning a blind eye to anything we were being told, nothing could be farther from the truth,” Green told the board Friday. “We were taking everything very seriously and working with them to get our project turned back on again. … Even though we had done everything we possibly could do, we took a lot of hits, and there were mistakes made.”

The Robert Green Co. also holds exclusive rights to negotiate a contract for a Civic Center redevelopment project in Windsor, estimated in the hundreds of millions of dollars. The project imagines a 151-room boutique hotel on the Town Green, plus new municipal offices, housing and commercial retail space.

Meanwhile, Montage Healdsburg, the 130-room five-star resort — in the works for more than 15 years and formerly named Saggio Hills — is on track to open for overnight stays on Saturday. The day marks the first under the county’s coronavirus stay-at-home order, which restricts lodging guests to those with essential business, including medical responders.

Rooms will run between $895 and $1,695 a night, plus a single presidential suite at $10,000 a night. Future plans also call for 70 villa-style homes on the rolling, oak woodland property, among other city amenities.