274-unit development includes single-family and townhomes on hillside Homesto be on market in '07

KB's Mr. Kusnick said by the time the Petaluma Quarry goes to market in 2007, he thinks the market will pick up.

"We're looking at the market every week," Mr. Kusnick said. "We have a lot of open communities currently. Obviously there's been some correction in the marketplace over the last few months. But I still think the underlying dynamics in the market are solid. Petaluma has been a traditionally underserved market for new homes. And it continues to be a great place to buy and a great place to live."

The 274-unit project gives KB, mostly known for single-family home construction, a chance to flex its muscle in the higher-density housing arena, a byproduct of the lack of available developable land in the area, Mr. Kusnick said.

The 40-acre site, just off Petaluma Boulevard South and visible from U.S. 101 to the west, will include 132 single-family homes ranging in size from about 1,700 square feet to just more than 2,350 square feet and 142 townhomes that span 1,875 square feet to 2,315 square feet.

KB Home is negotiating the purchase of the property from developers who originally bought the quarry and won't be able to complete the sale until the reclamation of the quarry is complete ? likely this fall ? and the property is annexed from the county to the city.

KB filled in the quarry site where Dutra had mined asphalt and base rock until the property was sold in 2003. This presented special challenges to the homebuilders, though not atypical for other hillside developments, Mr. Kusnick said.

KB Home contractors moved 1 million cubic yards of dirt ? about 50,000 standard dump truck loads. Soil engineers for KB and the county have been monitoring the site consistently and making sure KB followed a strict reclamation plan.

"There were challenges associated with the reclamation of the quarry, but at the end of it, we get outstanding homes and fantastic views across valley," Mr. Kusnick said."