Plans for a new community of 3,200 homes at the former Napa Pipe plant are calling into question the prevailing wisdom that the city is for houses, the county for grapes.

Sued four years ago because it didn’t have enough land zoned for housing, Napa County is now thinking about turning the industrial site into a new urban community outside the city of Napa.

City officials have been doing a slow burn. Was the county about to consider a mega-development on 152 acres, surrounded on three sides by city, without first consulting them?

“I keep waiting for the phone to ring,” Mayor Jill Techel said a week ago.

Last week the phone did ring. County officials agreed to begin talks about the future of Napa Pipe and other issues threatening to undo the 2003 blueprint for city-county cooperation.

A project the size of what is proposed at Napa Pipe “kind of screams for a collaborative approach,” City Manager Mike Parness said. The city and county should first decide what makes planning sense for Napa Pipe before entertaining a developer’s dreams, he said.

Supervisor Diane Dillon admits allowing a new community for thousands of residents in the unincorporated area sounds like “crazy planning.”

After all, the city is in the business of providing the kinds of urban services — police, fire, water and all the rest — that such a concentrated population would require, she said.

Unfortunately, life is not so simple, Dillon said.

Dillon and other county supervisors say the county is under constant pressure to find land for new housing, as required by the Association of Bay Area Governments.

In 2003, the county was sued for not having set aside enough land. The suit threatened to stop all development in the unincorporated areas.

Under duress, the county struck separate deals with Napa and American Canyon — the now famous Memoranda of Understanding.

In the deal between Napa County and the city of Napa, the city agreed to take much of the county’s housing allocation.

In exchange, the county agreed to help build a downtown parking garage, support affordable housing, keep tourist development out of the airport area and pay the city in perpetuity for the cost of servicing “county” homes built in the city.

That MOU has cost the county $10 million to date and will cost far more in coming decades, Supervisor Mark Luce said. The county can’t afford to have the city continue to take its housing allocations under such financially onerous conditions, he said.

The closure of Napa Pipe’s manufacturing plant, and developer Keith Rogal’s plan for a large-scale residential development, are like “God’s gift to our frustration,” Luce said. Future housing allocations could be assigned to Napa Pipe, eliminating the need for the county to pay the city, he said.

This would be insurance against a housing lawsuit like the one in 2003 that cost the county $400,000 to settle, Luce said. In the future, the county wouldn’t have to attempt to squeeze housing into sensitive areas like Monticello Road, where neighbors rallied in opposition, he said.

Because housing opportunities now present themselves at Napa Pipe, the 2003 MOU is essentially defunct, Luce said. “The wheels have come off,” he said.

Supervisor Bill Dodd agreed that the MOU “has run its course.” The county can’t afford to have Napa take its housing allocations under those 2003 terms, he said.

This doesn’t mean the county will approve housing that is opposed by the city, Dodd said. “At the end of the day we have neighbors we make sure we take care of,” he said.

Supervisors are not of one mind about the future of Napa Pipe or even when to consider Rogal’s request for a general plan amendment that would allow a riverfront community.

“I think the right place for that property to be planned is in the city,” Supervisor Brad Wagenknecht said. “The city is the urban planner.”

“If the county does it, we’re approving a process good for our housing credits, but it may not fit any of the other urban issues,” Wagenknecht said.

The city and county need to sit down, renegotiate the county’s housing needs, then turn the property over to the city, he said.

“I just imagine that any development will eventually go into the city limits,” said board of supervisors Chairman Harold Moskowite. “It’s just common sense and makes for good government. I just don’t know how we’ll do it.”

“The door is wide open to make it work for everyone,” Luce said. If the city took the county’s housing share without financial compensation, a revised MOU could be approved, Luce and Dodd said.

Techel and Councilman Jim Krider will meet with Luce and Dillon in coming weeks to talk about Napa Pipe and other common issues, including a planned downtown garage and the city’s proposed redevelopment project along Soscol Avenue.

Because of criticism by county staff, the city is redoing a portion of the environmental studies for the Soscol project. County officials have questioned its size, saying the county would lose excessive property tax revenues.

“I think we’re getting back on the same page,” Techel said Friday. Failure to meet until now has resulted in a “lot of miscommunication,” she said.

Talking now, not later, is what’s needed, Councilman Krider said. “It’s going to be complicated,” he said.

Anything that slows down the Napa Pipe project so the city and county can collaborate is good, Councilman Peter Mott said. From his vantage point, the county had been moving too fast, he said.

Ideally, the city and county will agree on what belongs at Napa Pipe before entertaining the developer’s proposal, Councilwoman Juliana Inman said. “In the city of Napa, we tend to not let developers do the general planning,” she said.

Howard Siegel, the county’s community manager, said it’s still early, with plans for Napa Pipe having to run a lengthy planning gauntlet. After Rogal’s plans are scrutinized by environmental and fiscal studies, “maybe everyone, even the developer, sees the development impacts are beyond what is manageable,” he said.

If the county ends up processing Rogal’s development plan, Luce predicted many twists and turns. “I can tell you it won’t go through as he envisions it,” he said.

Councilman Mark van Gorder said he had faith that the city and county could resolve their differences over Napa Pipe and find a way to renew the MOU.

Luce may be right that the wheels have come off, van Gorder said, “but we’re just rotating the tires and rebalancing the wheels. We’re going to put the wheels back on.”