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Petaluma Council Repeals Downtown Overlay, Ending Hotel Battle

The long-running battle over a luxury hotel in downtown Petaluma has ended not with a vote of the people, but with a unanimous council repeal.

According to the Petaluma Argus-Courier, on March 3, city leaders scrapped the controversial “overlay” district that would have allowed a six-story building, officially making a pending citizen referendum moot.

The move follows a compromise by developers to build a smaller, four-story hotel that fits within existing height and density rules. While nearly 6,500 residents signed a petition to block the original plan, those critics joined council members in supporting the repeal to save election costs.

Mayor Kevin McDonnell praised the return to “peace,” though he noted the city must now find new ways to fund services without the revenue from denser development.

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