Rue Furch, SONOMA COUNTY GAZETTE
The latest assault on the social fabric of our rural neighborhoods has arrived. The Pacaso LLC business model sells a “fractional ownership” to eight parties, providing access to a rural mansion multiple times a year. There is no limit on the number of people occupying the timeshare and the model skirts the obligation to pay Transient Occupancy Tax. Pacaso’s “party pads” are now found in Santa Rosa, Dry Creek Valley and Napa County, with more timeshare sales underway.
Pacaso is just the latest destructive element in “Tourism’s Faustian Deal” – the term coined at a 2015 NapaVision2050 Conference, where tourism and economic experts presented compelling data about Napa’s tourist-based economy and its unintended consequences both to communities and public trust resources.
Organizations have formed across Sonoma County including in Sonoma Valley (StopPacasoNow) and Dry Creek Valley (S.C.A.T. – Sonoma County Against Timeshares). Preserve Rural Sonoma County presented data to Sonoma’s decision makers demonstrating that the “Arm’s Race” for winery use permits was resulting in destructive competition, and that the inevitable economic course correction would result in harm to our signature small, family wineries.
Despite subsequent disruption from fire, flood and drought, Napa and Sonoma officials ignored expert advice and gave in to the lure of “Tourism’s Faustian Deal” – seemingly ignoring tourism’s external costs. The 2020-21 pandemic brought the economic realities home to tourist-oriented businesses.
Meanwhile, cities continued permitting hotel rooms and large-scale restaurants, while County officials opened ag and forest lands to accessory dwelling units, with no restrictions limiting their use as vacation rentals. New residents are building massive water and energy-intensive structures for use a few weeks each year, or for the short-term rental market.
Read more at https://www.sonomacountygazette.com/sonoma-county-news/pacaso-you-cant-unring-a-warning-bell/
Greg Rosalsky, NPR
On a sleepy cul-de-sac amid the bucolic vineyards and grassy hills of California’s Sonoma Valley, a $4 million house has become the epicenter of a summer-long spat between angry neighbors and a new venture capital-backed startup buying up homes around the nation. The company is called Pacaso. It says it’s the fastest company in American history to achieve the “unicorn” status of a billion-dollar valuation — but its quarrels in wine country, one of the first regions where it’s begun operations, foreshadow business troubles ahead.
Brad Day and his wife, Holly Kulak, were first introduced to Pacaso in May after a romantic sunset dinner in their yard. “And we just saw this drone, coming up and over our backyard,” Day says. “And we’re like, what is that?”
Pacaso denies directing or paying a drone operator to film the neighborhood. But its website does have drone photos of the house in question, located at 1405 Old Winery Court. It says it bought the photos after the fact.
Nonetheless, after the drone incident, Day and Kulak got suspicious about what was going on in their neighborhood. About a week later, their neighbors told them they were moving and selling their house to a limited liability corporation, or LLC. But they were super vague about it.
Day and Kulak began speaking with other residents on their cul-de-sac. One of them, Nancy Gardner, had learned from a friend in nearby Napa Valley about a new company called Pacaso that was buying houses in the area. The company was co-founded by a Napa resident, and it converts houses into LLCs. Pacaso then sells shares of these corporate houses to multiple investors. Gardner Googled Pacaso, and, sure enough, the house on their cul-de-sac was on its website. The company had named the house “Chardonnay” and was now selling investors the chance to buy a one-eighth share of it for $606,000.
Read more at https://www.npr.org/sections/money/2021/08/24/1030151330/a-unicorn-startup-is-turning-houses-into-corporations