Upvalley battles continue over Pacaso houses

JESSE DUARTE and CYNTHIA SWEENEY

A few dozen people attended an anti-Pacaso protest outside a Riesling Way home recently listed by the company.

Jesse Duarte, Star

ST. HELENA — Active in her church and service clubs, Midge Burns loved to entertain friends and paint nature scenes behind her creekside home on Riesling Way.

Two years after Burns’ death at the age of 101, that house has become the latest flashpoint in a war between Pacaso and St. Helena residents who say the company's co-ownership model is hollowing out communities by commercializing residential areas and replacing homeowners like Burns with part-timers who disrupt neighborhoods with rowdy parties and other nuisances.

A few dozen St. Helenans and members of an anti-Pacaso group based in Sonoma staged a protest over the weekend outside the house, which is being extensively remodeled by Belle Maison, a company that has acquired several other St. Helena homes before selling them to Pacaso.

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Pacaso establishes a limited liability company to hold the title to a house, and then allows co-owners to buy up to eight shares in the LLC.

Pacaso is already listing Burns’ former house on its website: $455,000 for a 1/8 share. The price includes the three-bedroom, two-bath house, plus an accessory dwelling unit.

“Pacaso is not buying these big wine country villas with six bedrooms,” St. Helena resident Susan McWilliams said during Saturday’s protest. “They’re buying modest residential family homes.”

In Calistoga, where Pacaso has not yet been active, meanwhile, city officials are reviewing their own regulations after discovering that the company has acquired a house not far outside city limits.

The city is reviewing its regulations and preparing for a possible home-sharing application within the city limits.

Pacaso has posted a property for sale at 3380 Highway 128, in the vicinity of Bennett Lane. Because the property is located outside city limits, any permitting issues would have to go through Napa County. However, the city is keeping a close eye on the situation, said Planning Director Zac Tusinger, as any proposal from Pacaso within Calistoga would have to go before the city’s planning commission.

Planners are working with the city attorney’s office, and also taking a look at how other jurisdictions are dealing with the fractional home ownership startup.

“To some degree, it’s an open question as to how to regulate it,” Tusinger said. “It’s an evolving situation, and we’re monitoring it very closely.”

Records show that 3380 Calistoga LLC. was incorporated in April 2018, the same date the property was sold. At that time, the property was listed as a 3-bed, 2-bath, 1,004-square-foot single-family home in need of restoration. It sold for $1,050,000.

On Pacaso’s website, the property is now listed for sale as an 8,300-square foot, 7-bedroom, 8-bath home, with the price tag of $10.5 million, “or you can own an eighth of the property for $1,480,000 … Prospects are whole home listings that meet Pacaso’s highly selective criteria: epic homes in amazing locations. If enough buyers are interested in co-owning this home, we’ll buy the home and turn it into a Pacaso.”

In response to criticism in the past, Pacaso has said they would limit the properties they are interested in to $2 million, which limits the number of available properties within city limits, Tusinger said.

In June, Pacaso said in a press release it would abandon its plans for a home it recently purchased in a north Napa neighborhood, citing “community feedback” from neighbors and elected officials.

In July, St. Helena won the first round of a lawsuit against Pacaso. A judge dismissed part of a lawsuit brought by the home-sharing company against the city in a dispute centering on a definition of a timeshare.

Pacaso owned or managed five St. Helena homes at the time the suit was filed.

The local opposition group stoppacasonow.com is collaborating and strategizing with other communities to oppose what they see as an existential threat. Their website states, “Pacaso is the newest way for Silicon Valley bros and venture capitalist vultures to make a quick buck at your expense.”

Pacaso critics have often focused on what they see as commercial intrusion into residential neighborhoods, but in St. Helena, their concerns about the Riesling Way house go further. They claim the work currently underway violates building codes and setbacks and intrudes into the seasonal creek next to the house.

Neighbors claim workers removed vegetation and soil from the creek and built a deck and fence too close to the creek, raising concerns about erosion and contamination.

“There’s a list of building codes that the city is not enforcing, and the question is why,” said next-door neighbor Sarah Park.

Ernest Harmon, senior project manager for Belle Maison, categorically denied the neighbors’ accusations.

“Everything that we’ve built has been approved and inspected by the city and fire marshals,” Harmon said. “The game warden even came out, and nothing was cited or requested for us to remove. Our neighbors can continue to make allegations about things they don’t agree with, but everything has been approved.”

City Manager Mark Prestwich said the new deck was adjusted so it wouldn’t conflict with a city storm drain easement. He said the city is following up on one other issue involving the property.

Chief Building Official Philip Henry has inspected the property. He declined to comment on all of the neighbors’ allegations, but he said Belle Maison is working under an active building permit.

“As far as I know they’ve met all the setbacks, so I don’t think there’s an issue with that,” he said.