Santa Barbara City Council
December 2, 2025

ADMINISTRATIVE AGENDA

2. PASEO NUEVO REDEVELOPMENT PROJECT
RECOMMENDATION: That the Committee receive a presentation on the Paseo Nuevo redevelopment project, provide comments, and consider a motion to formally adopt and transmit the Committee’s comments to staff and City Council.

DOCUMENTS:
- PowerPoint presentation prepared and made by staff.
- “Paseo Nuevo Redevelopment Open House” Community Flyer.

SPEAKERS:
- Staff: Tess Harris and Daniel Hentschke.
- Members of the public: None.

DISCUSSION:
- Staff gave the Committee a presentation regarding the Paseo Nuevo Redevelopment Project.

The Committee’s questions were answered. The Committee provided comments to staff. The Committee requested the following for the next DPC meeting:
o The concept plan of the proposed changes to Lot 2.
o Parking demand data from Housing Authority projects to analyze the impacts of Lot 2. o Information about the market rate proposal for mixed units. o A long-range parking study looking 5 to 20 years ahead in a scenario of increased housing Downtown and parking demand.

MOTION:
- Committee members La Brie/McRae move to recommend the Chair and Vice Chair work with staff to draft a formal position letter of the DPC to be discussed and approved at the DPC meeting of November 2025 with the intention to present to City Council at the earliest opportunity thereafter.

VOTE:
- Unanimous roll-call vote (Absent: Pratt).

REPORTS

3. UPDATE ON E-COMMERCE IMPLEMENTATION
RECOMMENDATION: That the Committee receive an update on the implementation of E-Commerce for Downtown Parking customers.

DOCUMENTS:
- PowerPoint presentation prepared and made by staff.

SPEAKERS:
- Staff: Edward France.
- Members of the public: None.

DISCUSSION:
- Staff gave the Committee a presentation of an update on the E-Commerce implementation.

The Committee’s questions were answered.

ADJOURNMENT
Vice-Chair Newkirk adjourned the meeting at 9:49 a.m.
1 November 13, 2025
Honorable Mayor and City Councilmembers
City of Santa Barbara
735 Anacapa Street
Santa Barbara, CA 93101
Via Email
Subject: Transmittal of Downtown Parking Committee Comments on the Proposed Redevelopment of Paseo Nuevo
Dear Mayor and Councilmembers:

At our meeting on October 9, 2025, the Downtown Parking Committee (Committee) received a presentation on the proposed redevelopment of Paseo Nuevo, including the proposal to demolish a portion of City Lot 2 to construct affordable housing. The Committee appreciates the opportunity to review the proposal and ask questions of staff. We wish to formally transmit the following comments for Council consideration in advance of action on the Disposition and Development Agreement (DDA).

1. Redevelopment and Revitalization
The Committee supports the redevelopment of Paseo Nuevo and the construction of highdensity housing on the Macy’s site. Such development would support and align with the City’s goals for Downtown revitalization and housing production.

2. Impacts to Parking Supply and Demand
The Committee is extremely concerned about the significant net reduction in public parking associated with this proposal, both through the removal of a portion of Lot 2 and reservation of spaces in Lot 1 for residential use. The parking demand analysis for the project presented to the Committee simply reflected compliance with an unenforceable parking standard of one space per unit and may not reflect actual demand. This is of particular concern if the market-rate residential units include a meaningful share of two- or three-bedroom units. We request additional information regarding the anticipated mix of unit types and the actual, site-specific parking demand. Such information would help the Committee to better understand the added demand the market-rate housing portion of the project would place on the reduced parking that would be available in Lot 2 and associated impacts on Lot 1. We also do not have a clear understanding of the estimated below marketrate housing parking demand and what impact that would have on the remaining spaces available in Lot 2.
2 The above-referenced information and an analysis that considers both current utilization and future parking demand within the downtown parking system over a five-to-twentyyear horizon is needed, given that new Downtown housing will likely rely on City parking and will add to cumulative demand.

3. Structural, Operational, and Circulation Impacts to Lot 2 The Committee is concerned about the specific physical impacts to Lot 2, including the loss of a bay, structural work, circulation changes, and changes to access. More information is needed, both to inform development of the project and to understand potential impacts to parking operations within Lot 2. We request that the developer provide a clear layout, circulation plan, structural feasibility assessment, and plan for funding the associated work, including any needed reconfiguration of the remaining parking structure, before Council takes action on the DDA.

4. Impacts to Future Development
The Committee believes that the actual loss of public parking capacity in the proposed project will exceed the 390 spaces currently estimated. The loss of capacity in Lot 1 and Lot 2 may limit the City’s ability to provide sufficient parking to support future redevelopment and intensification of uses Downtown. The Committee encourages the City and developer to fully evaluate alternative sites for affordable housing that would not impact capacity in Lot 2. This would include nearby City surface lots.

5. Banking or Crediting Affordable Units
The developer’s ability to receive “credit” or “bank” affordable units for future development materially affects the overall public value proposition of the proposed project.

The Committee encourages Council to resolve this question clearly and explicitly within the DDA.

6. Concerns with the Limitations in the City Charter
The trade-offs needed to purportedly make this project financially viable stem from the City’s own Charter - the need to rely on the State Density Bonus to achieve the necessary building height and the need for the City to relinquish the underlying land to the developer due to limitations on the lease period allowed for City property. The Committee wants to highlight the challenges that are created by such detailed development limitations embedded in the Charter. The Committee suggests considering whether Charter amendment(s) may be appropriate to facilitate development on the Paseo Nuevo site without necessitating tradeoffs where the City loses valuable land, infrastructure, and parking capacity. Such amendment(s) may also prove valuable for additional development on other City sites, including future redevelopment of City-owned parking lots. 3 The Committee appreciates the opportunity to comment on this project. We respectfully request that Council consider these comments before adopting a DDA and direct staff to return to the Committee with the requested technical information (Items 2 and 3 above) prior to final action.

Thank you for your consideration.

Respectfully,
Downtown Parking Committee
Trey Pinner, Chair
Andy Newkirk, Vice Chair
Joseph Evers
Matt LaBrie
Wesley McRae
Sean Pratt
Anita Stahl
c: Kelly McAdoo, City Administrator
Sarah Knecht, City Attorney
Anthony Valdez, Deputy City Administrator
Tess Harris, State Street Master Planner
Holly Perea, Assistant to Mayor and City Council
Planning Commission
Historic Landmarks Commission

PLANNING COMMISSION

STAFF REPORT
REPORT DATE: October 2, 2025
AGENDA DATE: October 9, 2025
PROJECT ADDRESS: 701 State Street et al. & 914 Chapala Street (PRE2025-00121) Paseo Nuevo Redevelopment Conceptual Review
TO: Planning Commission
FROM: Planning Division
Megan Arciniega, Senior Planner
Patsy Price, Contract Planner
I. PROJECT DESCRIPTION
The project consists of redevelopment of a portion of Paseo Nuevo Mall including demolition of approximately 135,000 square feet of existing retail space formerly occupied by Macy’s (APNs 037-400-002, 037-400-003, 037-400-004), and the development of 233 residential rental units over Parking Lot 1 (the underground and above ground parking structure at Paseo Nuevo Mall), a new approximately 20,000-square foot retail space at the corner of State and Ortega Streets, and the addition of 28 parking spaces. The project also includes demolition of approximately 186 parking spaces in Parking Lot 2 (adjacent to Paseo Nuevo Mall, APN 039-321-047) and replacement with approximately 80 units of income-restricted, affordable rental housing units.

The project proposes utilizing the City’s Average Unit-Size Density Incentive Program and State Density Bonus law. The maximum height of new construction at the former Macy’s site would be approximately 75 feet and the maximum height of the new residential construction at Parking Lot 2 would be up to approximately 70 feet. See Exhibits A and B for project plans and applicant letter, respectively.

II. PURPOSE OF HEARING
Planning Commission Conceptual Review is required because the project site is greater than 15,000 square feet, the project is proposed under the Average Unit-Size Density (AUD) Incentive Program Priority Housing Overlay, and the project as currently proposed does not require another discretionary approval by the Planning Commission (SBMC §30.150.060.A). The purpose of the hearing is for the Planning Commission to review the proposed conceptual project and provide the applicant, staff, and the Historic Landmarks Commission (HLC) with comments regarding the design, overall project improvements, and consistency with the City’s General Plan (SBMC §30.150.060.E).

The Planning Commission’s comments on the project will also be considered by the City Council in its consideration of entering into a Disposition and Development Agreement (DDA) for redevelopment of Paseo Nuevo Mall. The DDA will include a project description that will be the basis for a formal application submitted to the Community Development Department for processing land use entitlements. The DDA will also establish the terms and conditions for I9
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ATTACHMENT 5
Planning Commission Staff Report
701 State Street et al. & 914 Chapala Street (PRE2025-00121) Report Date: October 2, 2025

development of the project, including, but not limited to, the overall height, number of units, the number of affordable units, open space, project construction schedule and phasing, the community benefits provided, and public financial support. The DDA is scheduled to be considered by City Council on December 2, 2025. If the DDA is approved, the applicant can move ahead with a land use entitlement application and review, expected to occur by Spring 2026.

III. BACKGROUND
In 1987, the former Redevelopment Agency of the City of Santa Barbara (RDA) and Paseo Nuevo Associates entered into a Disposition and Development Agreement that provided for the development of the Paseo Nuevo Mall, which included the in-line mall shops, two anchor tenants, and associated on-site and off-site parking. In 1989, 75-year term ground leases were entered into between the RDA (as landlord) and Santa Barbara Associates (as tenant for the in-line shops main mall parcel (“Paseo Nuevo Parcel”)), Carter Hawley Hale Stores (as tenant for the now the vacant Macy’s parcel (“Macy’s Parcel”)), and Nordstrom’s, Inc. (as tenant for the now vacant Nordstrom’s parcel (“Nordstrom’s Parcel”)). The Paseo Nuevo Parcel lease, the Nordstrom’s Parcel lease, and the Macy’s Parcel lease have remaining terms of approximately 40 years. The last expiration date is December 31, 2065. The RDA dissolved in 2012, and in 2016 ownership of all property underlying the ground leases transferred to the City of Santa Barbara. The City assumed the leases and all the obligations and restrictions of the many easements and restrictive covenant agreements relating to use of the leased property.

Ownership of the Paseo Nuevo Parcel lease and Macy’s Parcel lease have changed hands many times over the years until in 2022 AB Commercial Real Estate Debt Fund (“AB”) acquired the two leases through a deed-in-lieu of foreclosure agreement with Paseo Nuevo Owner LLC and Paseo Nuevo Owner II LLC. AB assigned the two leases to Paseo Propco LLC, a Delaware limited liability company, an affiliate of AB. For convenience and to avoid confusion both AB and Paseo Propco LLC are referred to in this report as “AB Commercial.” AB Commercial has continued management of the mall property, except for the Nordstrom’s Parcel, and, in consultation with the City, has evaluated the potential for redevelopment of the property. The Nordstrom’s Parcel is not owned or controlled by AB Commercial and is not part of this development proposal.

The City owns the property underlying the ground leases, but all development rights are vested in the ground leases. Therefore, implementation of the proposed project requires transfer of the fee title for the land to AB Commercial.

Residential Development Potential
Various commercial uses have been considered for Paseo Nuevo, and particularly the building formerly occupied by Macy’s. However, those uses were determined to be infeasible or not economically viable, long-term uses that would provide a substantial community benefit on Cityowned property.

The Paseo Nuevo, Macy’s, and Nordstrom’s Parcels are encumbered by a Reciprocal Easement Agreement (REA), parking covenants, and lease restrictions. These restrictions create a situation where redevelopment of the property requires agreement by all the interested parties.

Additionally, the ground leases and REA prohibit residential uses on the property. Nonetheless, Item IV Page 2 of 41
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given the critical need for housing, AB Commercial approached the City in 2023 to discuss the potential for a redevelopment project that included housing.

Independent of this conceptual review, the leaseholder of the Nordstrom’s Parcel recently submitted a preliminary proposal to convert the existing Nordstrom building into housing.

Adaptive reuse of the former Macy’s building for housing was also considered. However, in the case of the former Macy’s building, meeting residential development standards and building code requirements was determined infeasible in the existing building.

Initial Residential Proposal
On March 14, 2024, City Council approved a Project Agreement with AB Commercial for redevelopment of Paseo Nuevo Mall that envisioned a 500-unit project requiring full demolition of the mall (excluding the Nordstrom building) and construction of a new foundation. Costs rendered that project economically unviable.

Second Residential Proposal
On August 5, 2025, City Council approved an amendment to the Project Agreement to retain key existing structures such as the in-line shops, Museum of Contemporary Art, and Center Stage Theater, while demolishing only the functionally obsolete Macy’s building. The revised plan is the subject of this Conceptual Review.

The revised plan would replace the most functionally obsolete building within the Paseo Nuevo Mall with housing, which is expected to serve as a catalyst for Downtown revitalization by increasing property values, adding new residents, and strengthening support for local businesses.

The revised plan also preserves the opportunity for future residential development on the remainder of the Paseo Nuevo site.

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Vicinity Map – Project Site outlined in yellow includes APNs 037-400-002, 037-400-003, 037-400- 004), addressed as 701 State Street, 739 State Street, 716 Chapala Street and 914 Chapala Street (Parking Lot 2).

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IV. SITE INFORMATION AND PROJECT STATISTICS
A. SITE INFORMATION
Applicant: Edward Gellert, Paseo Propco, LLC
Property Owner: City of Santa Barbara
Site Information
Parcel Number: 037-400-002,
037-400-003, 037-400-004, 039-321-047
Lot Area: ~5.57 ac
(700 Block Parcels = 5.29 ac,
Parking Lot 2 Parcel =
~0.28 ac out of 1.17 ac parcel)
General Plan: Commercial-High Density
Residential Zoning: C-G (Commercial General)
Existing Use: Shopping Mall, Parking
Structures Topography: < 2%
Adjacent Zoning and Land Uses
North: C-G (Commercial General) Commercial, Hotel, Transit Center East: C-G (Commercial General) State Street and Commercial, Multi-family Residential
South: M-C (Manufacturing
Commercial)
Ortega Street and Commercial
West: C-G (Commercial General) Chapala Street and Commercial, Multi-family Residential
B. PROJECT STATISTICS
Existing Proposed
Market Rate Units
(replacing Macy’s building) 0 233
Affordable Units (replacing
portion of Parking Lot #2) 0 80 (24 required)
Commercial Floor Area
(excluding Nordstrom) 240,000 sf 125,000 sf
Community Uses Art Museum/Theater Art Museum/Theater
Parking Spaces
Lot 1
Lot 2
572
569
600
383
Residential Parking n/a 1 space/unit (market rate only) Building Height ~66 ft 75 ft (Macy’s site)
70 ft (Lot 2 site)
Residential Density n/a 56 du/ac
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V. MUNICIPAL CODE CONSISTENCY ANALYSIS
A. ZONING STATISTICS
The conceptual plans provided for the pre-application are not at a level of detail that allows an analysis of consistency with applicable development standards such as setbacks, open space, etc. The applicant anticipates seeking a waiver under State Density Bonus law to allow building heights of up to approximately 75 feet at the former Macy’s site and up to approximately 70 feet at the Parking Lot 2 site. The following table lists the standards applicable to the project site for an AUD project.

Standard Requirement/Allowance
Setbacks
-Front
-Interior adjacent to nonresidential zone
0 feet
0 feet
Building Height 48 feet (up to 60 feet for Community
Benefit Housing)
Open Yard 15% of lot area; one area with dimensions
of 20 feet long and 20 feet wide
Vehicle Parking Maximum 1 space per residential unit in Central Business District
Bicycle Parking Minimum 1 covered & secured space per
residential unit
Average Unit Size Maximum 811-970 square feet
B. ZONING ORDINANCE CONSISTENCY

1. AVERAGE UNIT-SIZE DENSITY INCENTIVE
The project is proposed under the City’s AUD Incentive Program. The project site has a land use designation of Commercial/High Density Residential with a Priority Housing Overlay allowing 37-63 du/ac. Proposed unit sizes are not included in the pre-application materials so staff cannot confirm consistency with AUD density standards. However, the project proposes an overall density of 56 du/ac (313 units/5.57 acres) including market rate and affordable units.

Although the project is not being built out to the maximum density allowed, the density is concentrated in two areas, which leaves the in-line portion of the mall potentially available for future housing development.

2.AFFORDABLE UNITS
The AUD Incentive Program requires rental housing developments of 10 or more units to provide at least 10 percent of the total residential units at a rent affordable to moderate-income households (SBMC §30.150.110). Based on the 233 market rate units proposed, the inclusionary requirement is 23.3 moderate-income units.

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The project applicant is also proposing to utilize State Density Bonus law by providing units affordable to low- or very low-income households at Parking Lot 2.

The applicant is proposing approximately 80 deed restricted affordable units at Parking Lot 2. However, the project would only require 24 low-income units to qualify for State Density Bonus law (233 units x 10% low-income units = 24 units rounded to the next whole number).1 Additionally, these 24 affordable low-income units may also be counted toward meeting the City’s inclusionary requirement.2 If the average unit size of the project is 811 square feet or less, the project would qualify for a base density of 63 du/ac.

Base Density = 63 du/ac x 5.57 ac project site = 351 units The project proposes 313 total units and therefore does not need to use a density bonus but is still eligible to use concessions and incentives available pursuant State Density Bonus law.

Please note that the numbers provided in the staff report are example/theoretical calculations that could change depending on the average unit size and proposed affordability level.

3. HEIGHT
The maximum height allowed for AUD projects in the Central Business District developed at the Priority Housing Overlay tier is 48 feet. Additionally, the City can approve heights up to 60 feet for Community Benefit Housing, and this project would be considered Community Benefit Housing (SBMC 30.140.100). However, waivers from development standards are afforded by State Density Bonus law if the development standard would preclude the project from building at the density entitled by state law, and concessions/incentives must be granted unless the City finds that it would not result in cost reductions or would have a health and safety impact. The project proposes heights of approximately 75 feet at the Macy’s site and up to approximately 70 feet at the Parking Lot 2 site.

4.VEHICLE PARKING
The project site is in a 100% parking “zone of benefit” due to its proximity to the City’s public parking lots. Accordingly, there are no spaces required for the proposed nonresidential use (SBMC §30.175.050.B). The project site is also located in an area subject to AB2097 (2022), which removes required parking for both proposed residential and nonresidential land uses based on proximity to the transit center and train station. AB2097 still allows for optional parking. However, the AUD Program limits any optional residential parking to a maximum of one space per unit (SBMC §30.150.090.F.1).

The project proposes allocating 233 parking spaces within Parking Lot 1 (below the new residential development) to the 233 residential units. A new surface parking 1 Per State Density Bonus law, all fractions are rounded up to the next whole number. 2 The applicant could alternatively provide 12 very low-income units (5%) to qualify for State Density Bonus law. In this case, an additional 12 moderate-income units would be required to fully satisfy the City’s inclusionary requirement.

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area, accessible from Ortega Street and connected to the existing parking structure, would provide parking for the proposed new commercial/retail space at State and Ortega Streets. These new spaces as well as restriping and other modifications within Parking Lot 1 would result in approximately 28 additional parking spaces in Parking Lot 1.

One bay of Parking Lot 2 would be demolished to accommodate the proposed 80 new income-restricted affordable units. This would result in a reduction of approximately 186 spaces in Parking Lot 2. Parking is not proposed for the 80 affordable units, but residents would be eligible to purchase monthly Downtown parking passes to park in Parking Lot 2 or other City parking lots.

5. BICYCLE PARKING
Bicycle parking for residential uses is required at a rate of one covered and secured space per residential unit for both affordable and market-rate units.

In addition, sites that are nonconforming to the minimum number of bicycle parking spaces are required to provide conforming bicycle parking when projects include a change of use, substantial exterior remodel, or alteration to existing parking areas (SBMC §30.175.020.B.3.c). Therefore, this project will be required to provide compliant bicycle parking for all existing and proposed nonresidential development on the property. For nonresidential uses on State Street and in the first block east or west of State Street, only the required number of long-term bicycle spaces must be provided on-site (§30.175.050.B.2).

6. NONRESIDENTIAL GROWTH MANAGEMENT PROGRAM
The Nonresidential Growth Management Program (SBMC Chapter 30.170) guides the amount, location, and type of nonresidential growth in the City. It identifies where nonresidential development should occur and establishes a citywide cap on nonresidential floor area. Development is limited to existing qualifying entitlements, and any new floor area beyond those entitlements must receive an allocation through the program.

The project includes the construction of a new 20,000 square foot retail space at the corner of State and Ortega Streets. However, the proposal also includes the demolition of 135,000 square feet of the obsolete Macy’s building. Since the demolition square footage exceeds the new nonresidential square footage, the project would result in a “demolition credit” of nonresidential square footage, and would not require any nonresidential square footage allocations or entitlements under the Nonresidential Growth Management Program.

C. PUBLIC IMPROVEMENT ORDINANCE CONSISTENCY
The pre-application materials do not provide details on proposed public improvements.

Terms in the DDA will ensure the project is consistent with public improvement ordinance requirements.

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VI. POLICY CONSISTENCY
Through the AUD pre-application process, the Planning Commission provides comments and recommendations regarding the project’s consistency with the City’s General Plan, which includes policies established in the Land Use Element, Housing Element, Economy and Fiscal Health Element, Historic Resources Element, Environmental Resources Element, Circulation Element, and Safety Element.

Per the Land Use Element, the project is located within the Downtown Neighborhood. The Land Use Element states that the primary land use for the Downtown Neighborhood is commercial and residential at the highest densities in the City to encourage workforce and affordable housing that is close to transit, employment, shopping, cultural, recreational, and government facilities. A complete list of policies that apply to the project, situated within the Downtown Neighborhood, is attached as Exhibit D.

A. LAND USE &HOUSING ELEMENTS
The Land Use Element includes Principles for Development (Policy LG4) which encourages workforce and affordable housing within a quarter mile of transit and commercial services; a mix of land uses, particularly in the Downtown, to maintain its strength as a viable commercial center; and promoting active living by encouraging compact, vibrant, walkable places, encouraging the use of bicycles and reducing the need for residential parking. The Land Use Element also includes a policy (LG6, Location of Residential Growth) to encourage new residential units in multi-family and commercial areas of the City with the highest densities to be located in the Downton and a policy (LG5, Community Benefit Housing) to encourage new residential development in commercial zones to include affordable housing. The City’s AUD Program and Priority Housing Overlay implement these policies. Another policy (LG15, Sustainable Neighborhood Planning) encourages preservation and enhancement of a sense of place and providing opportunities for healthy living and accessibility, while reducing the community’s carbon footprint.

Similarly, the Housing Element encourages infill development near transit and jobs, particularly redevelopment sites suitable for housing (Policy H1.2) and ensuring housing development and related infrastructure include strategies that encourage community revitalization and are consistent with the City’s sustainability initiatives for energy efficiency and active transportation goals (Policy H1.1). Policy H2.5 continues to encourage small rental housing units close to transit and within easy walking and biking distance of commercial and recreational opportunities. Housing Element policies also prioritize the production of deed-restricted affordable housing (Policies H2.1 and H2.2) and call for pursuing partnerships with nonprofit developers to develop affordable housing on City-owned sites (Policy H2.4).

The project is consistent with the General Plan Land Use designation which supports high density residential including affordable, rental housing as part of mixed-use development in the Downtown, near transit, employment, services, and cultural and government facilities.

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B. CIRCULATION ELEMENT
The Circulation Element includes a policy (CE8.5) stating that the city shall promote/facilitate the development of housing to decrease the need for parking though an increased walking/biking population that lives, works, and shops in the Downtown.

Policies also call for integrating goals of the Circulation Element in land use decisions and encouraging the development of projects that combine and locate residential uses near areas of employment and services and along major transit corridors (CE8.2.10, CE13.1, CE13.1.1, CE13.2). The element includes policies (C1, C1.1, CE4.2.3, C7.7) addressing the need for high quality pedestrian and bicycle infrastructure, including bicycle facilities in development projects. Other policies address the need to manage the Downtown public parking supply to support the economic vitality of the Downtown business district while sustaining and enhancing its historical and livable qualities (CE8.1). Policies also address the need to maintain and improve storm water and flood control facilities, water supply systems, and wastewater collection and treatment systems prior to approving new development (CE16.3.1-CE16.5.3).

The project would locate new residential development Downtown as called for in Circulation Element policies. The project design should include high quality pedestrian and bicycle infrastructure within and surrounding the project site consistent with Circulation Element policies. The project would reduce parking in the Downtown by approximately 158 spaces, while reducing retail floor area by approximately 115,000 square feet and bringing 313 new housing units, including 80 affordable units to the Downtown. The terms of the DDA will ensure that the project provides upgrades to existing public utility infrastructure if necessary to serve the project or as required by the Municipal Code.

C. ENVIRONMENTAL RESOURCES ELEMENT
The Environmental Resources Element includes polices requiring new development to contribute to the City’s strategy for addressing climate change and conserving resources (ER1, Climate Change and ER5, Energy Efficiency and Conservation, and W2.1, Water Resources). Other policies require compliance with the City’s Storm Water Management Program (ER20, Storm Water Management Policies) and floodplain management programs (DF2.0, Drainage and Flood Control).

With its location in the Downtown in a high-quality transit corridor and near employment and services, the project will contribute to the City’s strategies for addressing climate change, including reducing vehicular emissions. The project design will be required to comply with applicable storm water management, floodplain management, and energy efficiency requirements.

VII. ENVIRONMENTAL REVIEW
Under the California Environmental Quality Act (CEQA), environmental review must be completed before the City takes discretionary action on a decision that would allow the project to move forward. Typically, environmental review is completed with the formal Planning Application processing, immediately preceding the decision-maker action (land use entitlement) Item IV Page 10 of 41
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on a project. However, in this instance, the project is contingent upon City Council approval (as the landowner) of the DDA in order for the project to proceed with a formal Planning Application. City Council approval of the DDA is also subject to environmental review under CEQA. Considering this, the environmental review for both the DDA and the project will be completed prior to City Council action on the DDA.

While additional study is still warranted, there are a number of exemptions and streamlining measures under CEQA aimed at streamlining environmental review for housing development, particularly infill development within an urbanized area that could apply to the DDA and project.

Per the City of San Diego vs. Hilltop Development (2024), if an exemption or streamlining measure applies, a local agency cannot impose additional CEQA review beyond what the exemption or streamlining provision allows. In other words, the City cannot require additional environmental review if an exemption or streamlining provision applies. As such, and consistent with CEQA Guidelines Sections 15006, 15061(a), and 15300.4, the City will first seek to confirm whether the DDA and project qualify for any of the exemptions or streamlining provisions. This is required to be completed prior to Council approval of the DDA and prior to submittal of the formal Planning Application.

VIII. DESIGN REVIEW
This project was reviewed by the HLC on September 24, 2025. Draft meeting minutes are attached as Exhibit C.

IX. HOUSING AUTHORITY REVIEW
On September 10, 2025, the City Housing Authority received an update from the City Administrator on the status of Paseo Nuevo redevelopment and provided comments regarding Housing Authority’s potential involvement in the construction, management, and eventual ownership of the affordable housing component of the project on Parking Lot 2. The Housing Authority also voted to authorize its Executive Director to proceed with exploring the feasibility of the conceptual project and commencing preliminary negotiations with the City and AB Commercial.

X. RECOMMENDATION
Staff recommends that the Planning Commission review the project and provide comment and recommendation by majority vote regarding (1) the proposed design and improvements of the project, and (2) the project’s consistency with the City’s General Plan.

XI. NEXT STEPS
Staff and the applicant team will host public outreach events at 707 Paseo Nuevo on October 15, 2025 from 6-7:30pm, and October 16, 2025 from 12-1:30pm. Planning Commission’s minutes will be forwarded to City Council when it considers the DDA on December 2, 2025. The DDA will include a project description that will be the basis for a formal Planning Application submitted to the Community Development Department for processing land use entitlements. If the DDA is approved and executed by all parties, the applicant can move ahead with a land use Item IV Page 11 of 41
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entitlement application and review, which is expected to occur by Spring 2026. Planning Commission’s minutes will also be forwarded to HLC for consideration in reviewing the project.

EXHIBITS
A. Project Plans
B. Applicant's Letter, dated August 28, 2025
C. HLC Draft Minutes, September 24, 2025
D. Applicable Policies
E. City Council Project Update Council Agenda Report, August 5, 2025 Contact/Case Planner: Patsy Price, Contract Planner
([email protected])
630 Garden Street, Santa Barbara, CA 93101
Phone: (805) 564-5470 x 4582
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EXHIBIT A
City of Santa Barbara
California
Exhibit A: Project Plans Dated for the October 9, 2025 Planning Commission Meeting, are available electronically for view online at: SantaBarbaraCA.gov/PC and will be transferred the city’s Archived Agendas & Documents system after the hearing.

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EXHIBIT B
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City of Santa Barbara

HISTORIC LANDMARKS COMMISSION

MINUTES
SEPTEMBER 24, 2025
1:30 P.M.

David Gebhard Public Meeting Room
630 Garden Street
SantaBarbaraCA.gov
COMMISSION MEMBERS:

Anthony Grumbine, Chair
Robert Ooley, Vice Chair
Keith Butler
Dennis Doordan
Michael Drury
Cass Ensberg
Ed Lenvik
Sheila Lodge
Charles McClure
ADVISORY MEMBER: Dr. Glenn Russell
CITY COUNCIL LIAISON: Kristen Sneddon
PLANNING COMMISSION LIAISON: Donald
DeLuccio
STAFF:

Tava Ostrenger, Assistant City Attorney
Ted Hamilton-Rolle, Acting Design Review
Supervisor
Nicole Hernandez, Architectural Historian
Heidi Reidel, Assistant Planner
Jasper Carman, Commission Secretary

CALL TO ORDER
The Full Commission meeting was called to order at 1:30 p.m. by Chair Grumbine.

ATTENDANCE
Commissioners present: Grumbine, Ooley, Butler, Doordan, Drury, Ensberg, Lenvik, and Lodge
Commissioners absent: McClure
Staff present: Hernandez, Reidel, and Carman

GENERAL BUSINESS
A. Public Comment:

No public comment.

B. Approval of the minutes of the Historic Landmarks Commission meeting of September 10, 2025.

Motion: Approve the minutes of the Historic Landmarks Commission meeting of September 10, 2025, as submitted.

Action: Drury / Ooley, 7/0/1. (Ensberg abstained. McClure absent.) Motion carried.

EXHIBIT C
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Historic Landmarks Commission Minutes September 24, 2025 DRAFT Page 2 of 4 C. Approval of the minutes of the Historic Landmarks Commission Consent meeting of September 10, 2025.

Motion: Approve the minutes of the Historic Landmarks Commission Consent meeting of September 10, 2025, as submitted.

Action: Butler / Drury, 7/0/1. (Ensberg abstained. McClure absent.) Motion carried.

D. Ratification of action taken on the Consent Calendar of September 24, 2025.

Consent Calendar September 24, 2025:

REVIEW TYPE & ADDRESS APN/PLN/ZONE OWNER/APPLICANT ACTION A. Project Design Approval and
Final Approval
735 Anacapa St
APN: 037-092-037
PLN: 2024-00418
Zone: C-G / P-R
City of Santa Barbara /
Maja Adamski
Postponed
indefinitely.

Motion: Ratify the Consent Calendar of September 24, 2025, as reviewed by Vice Chair Ooley.

Action: Ooley / Drury, 8/0/0. (McClure absent.) Motion carried.

E. Announcements, requests by applicants for continuances and withdrawals, future agenda items, and appeals:

1. Commissioner Drury announced a show from artist John Comer, running October 2, 2025 to February 28, 2026.

F. Subcommittee Reports:

Commissioner Ensberg reported on the State Street Interim Working Group. The Commission requested a discussion item on the pedlets at the 500 block of State Street. (1:45PM) NEW ITEM: CONCEPT REVIEW

1. 330 STATE ST
Assessor's Parcel Number: 037-254-014
Zone: M-C
Application Number: PLN2025-00399
Owner: Jeffrey Wilkins, 9 Muses LLC
Applicant: Clay Aurell, AB Design Studio, Inc.
(This is a revised project description. Located in El Pueblo Viejo Landmark District, Part I and designated a Structure of Merit, the Andalucia Building/Seaside Oil Company Building was designed in 1926 by Lionel Pries in the Spanish Colonial Revival style, and the tower at the corner of State St. and Gutierrez St. was designed in 1937 by Carlton Winslow and R.H. Pitman. Proposed exterior alterations including: removal of the existing parking lot to replace with plaza and outdoor dining area, new hardscape, landscape, trees, fences, gates, trash enclosure, transformer, bike enclosures, door and window alterations, new steel canopies, and new vestibule elements. Project originally received Project Design Approval under PLN2021-00104 on July 21, 2021.) Item IV Page 19 of 41
Historic Landmarks Commission Minutes September 24, 2025 DRAFT Page 3 of 4 No final appealable action will take place at this meeting. Project Compatibility Findings and Minor Alterations Findings will be required for Project Design Approval.

Actual time: 1:41 p.m.

Present: Clay Aurell, AB Design Studio and Graham Goldich, Bosky Landscape Architecture.

Staff comments: Ms. Reidel stated that the laptop used for applicant presentations is experiencing a technical issue so the staff computer will be used for presentations.

Public comment opened at 2:10 p.m., and as no one wished to speak, it closed.

Motion: Continue indefinitely with the following comments:

1. Thanks the applicant for finishing up this wonderful project and for adding to the beauty of Santa Barbara.

2. The Commission is appreciative of the historic sensitivity and study of the original design as elements are being restored.

3. Study steel trellis and structure, noting that the fluted columns and Santa Barbara traditions of wrought iron and steel are appreciated. Recognizes that proximity to the funk zone may incorporate some industrial qualities as well.

4. Simplify the geometry of the landscaping, reducing some of the curvy free-form design and considering a more formal and urban open design.

5. The Commission is split on the acceptability of the boulders in the planters.

6. Study the hardscape with the suggestion of incorporating a darker brick or stone into the cobble entries off of Gutierrez and State streets.

7. The Commission requests more information on the lighting and to consider various strategies regarding building and park lighting.

8. Return with a photometric plan.

9. The Commission finds the Project Compatibility and Minor Alterations findings to be generally supportable at this time.

Action: Doordan / Ooley, 8/0/0. (McClure absent.) Motion carried. (2:30PM) ONE-TIME PRE-APPLICATION REVIEW

2. 701 STATE ST ET AL. & 914 CHAPALA ST
Assessor's Parcel Number: 037-400-002, -003, -004, and 039-321-047 Zone: C-G
Application Number: PRE2025-00121
Owner/Applicant: Edward Gellert, Paseo Propco LLC
(Located in El Pueblo Viejo Landmark District, Part I. Proposal to demolish 135,000 square feet of existing retail space to construct 233 rental housing units over the existing underground and aboveground parking structure, as well as new retail space at the corner of State and Ortega Streets. Project also includes demolition of 186 parking stalls in City Lot #2 to construct an additional 80 affordable rental housing units.)
No final appealable action will take place at this meeting. Project Compatibility Findings will be required for Project Design Approval.

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Historic Landmarks Commission Minutes September 24, 2025 DRAFT Page 4 of 4 Actual time: 2:54 p.m.

Present: Kelly McAdoo, City Administrator; Sarah Knecht, City Attorney; Dan Hentschke, Assistant City Attorney; Allison Debusk, Community Development Director; Tess Harris, State Street Master Planner; Patsy Price, Contract Planner; Graham Lyons, Mullen & Henzel L.L.P.; Duncan Paterson, Gensler Architecture; and Clay Aurell, AB Design Studio.

Public comment opened at 3:25 p.m.,
The following individuals spoke:

1. Pedro Toscano

2. Thomas Foley
Written correspondence from Cheryl Rawlings was acknowledged.

Public comment closed at 3:28 p.m.

Commission Comments:

1. Thanks the applicant team for the extensive work on this project.

2. The Commission is excited to provide comments on the project, understanding the great constraints and challenges of the site.

3. Continue to develop the detailing of the workforce housing building to ensure it has equal dignity and character to the market rate building, while keeping it appropriate to the site.

4. The Commission is concerned with the massing and size of the building and the ability to make the necessary compatibility findings while also understanding the need for housing and revitalization in the area, the benefit the project will provide, and the state laws that apply.

5. Study shifting the actual or apparent massing to make it appear more like a 5 or 6 story building rather than 6 or 7 stories from the areas most visible from the public right-of-way.

6. Study design to add more poetry with buildings to read more as a village or collection of buildings rather than one or two large buildings.

7. Study ways to incorporate a paseo around midblock on Ortega.

8. Consider integrating arcades and other public benefit design elements.

9. Maintain continued consideration for the flow of the public through the property. * MEETING ADJOURNED AT 4:37 P.M. *
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EXHIBIT '

APPLICABLE POLICIES
Paseo Nuevo Redevelopment
701 State Street et al. & 914 State Street
PRE2025-00121
October 2, 2025

GENERAL PLAN POLICIES
LAND USE ELEMENT (2011)

GROWTH MANAGEMENT AND RESOURCE ALLOCATION
LG1 Resource Allocation Priority. Prioritize the use of available resources capacities for additional affordable housing for extremely low, very low, low, moderate, and middle income households over all other new development.

LAND USE
LG4 Principles for Development. Establish the following Principles for Development to focus growth, encourage a mix of land uses, strengthen mobility options and promote healthy active living.

Focus Growth. Encourage workforce and affordable housing within a quarter mile of frequent transit service and commercial services through smaller units and increased density, transit resources, parking demand standards, targeted infrastructure improvements, and increased public areas and open space. Incorporate ideas as a result of an employee survey.

Mix of Land Uses. Encourage a mix of land uses, particularly in the Downtown to maintain its strength as a viable commercial center, to include retail, office, restaurant, residential, institutional, financial and cultural arts, encourage easy access to basic needs such as groceries, drug stores, community services, recreation, and public space.

Mobility and Active Living. Link mixed-use development with main transit lines; promote active living by encouraging compact, vibrant, walkable places; encourage the use of bicycles; and reduce the need for residential parking.

LG5 Community Benefit Housing. While acknowledging the need to balance the provision of affordable housing with market-rate housing, new residential development in multi-family and commercial zones, including mixed-use projects, should include affordable housing and open space benefits.

LG6 Location of Residential Growth. Encourage new residential units in multi-family and commercial areas of the City with the highest densities to be located in the Downtown, La Cumbre Plaza/Five Points area and along Milpas Street.

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APPLICABLE POLICIES
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OCTOBER 2, 2025
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COMMUNITY DESIGN
LG11 Healthy Urban Environment. Consider health in land use, circulation and park and recreation decisions.

LG15 Sustainable Neighborhood Planning. Neighborhoods shall be encouraged to preserve and enhance the sense of place, provide opportunities for healthy living and accessibility, while reducing the community’s carbon footprint.

HOUSING ELEMENT (2023)

CREATE NEW HOUSING
H1.1 Sustainable and Livable Neighborhoods. Ensure that new housing programs, housing developments, and related infrastructure improvements include community-led strategies that encourage community revitalization in areas of lower opportunity to meet the needs of lowerincome residents and are consistent with the City’s sustainability initiatives for energy efficiency and active transportation goals.

H1.2 Infill Housing. Encourage development of housing on infill sites near transit and jobs, particularly redevelopment of sites suitable for housing, while continuing to limit residential density in High Fire Hazard Areas.

H1.4 Reduce Constraints. Reduce and, where feasible and practical, remove unnecessary Cityimposed constraints that impede housing development.

H1.7 Prioritize Housing and Community Benefit. Prioritize residential development and nonresidential priority projects with broad community benefit on sites zoned for both residential and other uses.

PRIORITIZE AFFORDABLE HOUSING
H2.1 Prioritize Affordable Housing and Community Priority Projects. Prioritize production of deedrestricted affordable housing and nonresidential community priority projects with broad community benefits over all other land uses and housing types.

H2.2 Increase Production of Affordable Housing. Encourage and provide development opportunities and incentives to increase production of affordable housing.

H2.4 Nonprofit Partnerships. Pursue partnership opportunities with nonprofit developers to develop deed-restricted affordable housing on City-owned sites.

H2.5 Rental Housing. Continue to encourage smaller rental units close to transit, and easy walking and biking distance to commercial services and recreational opportunities.

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APPLICABLE POLICIES
701 STATE STREET ET AL. & 914 CHAPALA STREET
SEPTEMBER 29, 2025
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PROMOTE HOUSING STABILITY
H4.5 Affirmatively Further Fair Housing. Promote equal housing opportunities for all persons, increase access to opportunity and mobility to moderate and high resource areas, and facilitate housing that meets disproportionate housing needs.

ECONOMY AND FISCAL HEALTH ELEMENT (2011)

FISCAL HEALTH POLICY
EF26 Development Impact Fees. To the extent applicable, in order for the community to function more sustainably, new commercial and market-rate residential development and redevelopment shall either avoid impacts on community services and facilities, or contribute financially to the City or other community organizations to mitigate such impacts and costs of providing increased services and facilities.

EF28 Financing Capital Improvements. The City shall pursue a variety of financing sources for the maintenance and enhancement of capital improvement projects.

Possible Implementation Actions to be Considered
EF28.3 Impacts to City-Wide Service. Individual projects shall be evaluated for their impacts on the City’s ability to provide adequate services and facilities.

EF28.4 Timing. Services and facilities shall be available for developments prior to approving projects and/or issuing occupancy or use certificates.

HISTORIC RESOURCES ELEMENT (2012)

PROTECTION OF BUILDINGS,STRUCTURES,SITES AND FEATURES POLICIES HR1 Protect Historic and Archaeological Resources. Protect the heritage of the City by preserving, protecting and enhancing historic resources and archaeological resources. Apply available governmental resources, devices and approaches, such as the measures enumerated in the Land Use Element of this Plan, to facilitate their preservation and protection.

Possible Implementation Actions to be Considered
HR1.5 Protect archaeological resources from potential damage or destruction.

In the environmental review process, any proposed project which is in an area indicated on the map as "sensitive" shall receive further study to determine if archaeological resources are present and in jeopardy. Consider notification/consultation of most likely descendants of Barbareño Chumash whose names appear on the City of Santa Barbara archaeological monitors list; and local Native American associations and individuals for comment. A preliminary site survey (or similar study as part of an environmental impact report) shall be conducted in every case where archaeological resources could be threatened.

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701 STATE STREET ET AL. & 914 CHAPALA STREET
OCTOBER 2, 2025
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When making land use decisions, potential damage to archaeological resources shall be given consideration along with other planning, environmental, social, and economic considerations.

Publicly accessible areas known to contain significant archaeological resources should be preserved by limiting access and/or development which would involve permanent covering or disturbance of sub-surface artifacts.

HR2 Ensure respectful and compatible development. Seek to ensure that all development within the City respects rather than detracts from individual historic and archaeological resources as well as the neighborhood and the overall historical character of the city. Assure compatibility of development, respect for the historical context of historical resources, and consideration of sustainable design alternatives where compatible.

Possible Implementation Actions to be Considered
HR2.1 Protect historic resources from harmful development. Development on parcels in proximity to historic resources shall be designed, sited and scaled to be compatible with their historic neighbor and with public enjoyment of the historic site. Construction activity in proximity to historic resources shall not damage or adversely impact the historic resources, and new structures themselves shall not pose a threat of either short or long-term damaging effects upon the historic resources.

HR2.2 Consider impacts to historic resources comprehensively. Require the identification and analysis of potential impacts to historic resources as an integral component of the review process of all development applications. Evaluate the impacts of proposed development in proximity to historic resources. Review bodies shall not consider other existing incompatible development as a justification for additional potentially incompatible development.

HR2.3 Assess potential damage. Ensure that construction activities in proximity to a historic structure do not damage the historic resource. For projects involving substantial demolition and/or grading adjacent to such a resource, include any necessary measures as determined in consultation with the City Urban Historian, or in accepted Cultural Resources or Historic Structures Report recommendations. Such measures should include participation by a structural engineer and/or an architect knowledgeable in historic resources and their treatment, such as a historical architect.

ENVIRONMENTAL RESOURCES ELEMENT (2011, 1994, 1983, 1979) ENVIRONMENTAL RESOURCES (2011)

CLIMATE CHANGE
ER1 Climate Change. As applicable, private development and public facilities and services may be required to incorporate measures to minimize contributions to climate change and to adapt to climate changes anticipated to occur within the life of each project.

Possible Implementation Actions to be Considered
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APPLICABLE POLICIES
701 STATE STREET ET AL. & 914 CHAPALA STREET
SEPTEMBER 29, 2025
PAGE 5 OF 12
ER1.2 Greenhouse Gas Emission (GHG). Require new development, redevelopment and substantial remodels to demonstrate how the project will support the City in attaining regional GHG vehicular emissions reduction targets. The Santa Barbara region has targets of zero net increase (from 2005 levels) in per capita GHG vehicular emissions in 2020 and 2035. These regional targets were adopted in 2010 by the Santa Barbara County Association of Governments (SBCAG) and the California Air Resources Board (CARB) pursuant to SB 375.

ENERGY CONSERVATION
ER5 Energy Efficiency and Conservation. As part of the City’s strategy for addressing climate change, minimizing pollution of air and water, depleting nonrenewable resources and insulating from volatility of fossil fuel prices, dependence on energy derived from fossil fuels shall be reduced through increased efficiency, conservation, and conversion to renewable energy sources when practicable and financially warranted.

Possible Implementation Actions to be Considered
ER5.1 Energy Efficient Buildings. Encourage all new construction to be designed and built consistent with City green programs, the California Green Building Code, policies, and the goal of achieving “carbon neutrality” by 2030 in all buildings.

Further reduce energy consumption over time to “carbon neutrality” by 2030 in new building and through suggested retrofits. Establish a voluntary program and time line for increasing the energy efficiency and carbon neutrality of new buildings or additions, and of existing building stock. Provide:
a. Information on current energy use and conservation options; b. Incentives for voluntary upgrades;
c. Voluntary incremental upgrades may be encouraged at time of sale, and/or other methods for greening the existing building stock; and
d. Tools for self-assessment financing for energy efficiency upgrades and on-site solar and wind power generation through property taxes (in conjunction with AB 811).

ER6.6 Solar Energy. Encourage the use of solar photo-voltaic arrays on new construction, redevelopment, and significant remodel projects, as appropriate, taking into consideration project scale and budget, building size, orientation, roof type, and current energy use. a. For multi-residential projects of 3 or more units, require provision of a minimum 2 kw system per unit consistent with the City’s Solar Energy System Design Guidelines, if physically feasible.
b. For 1 or 2-unit residential projects require provision of 300 sq. ft. rectangular unobstructed roof area free of mechanical equipment and vents facing south, east or west in a manner that future photovoltaic installation would be consistent with the City’s Solar Energy System Design Guidelines, if physically feasible.

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APPLICABLE POLICIES
701 STATE STREET ET AL. & 914 CHAPALA STREET
OCTOBER 2, 2025
PAGE 6 OF 12
c. For commercial and industrial projects provide a minimum of 5 watts of photovoltaic panel systems for every new square foot of building net floor area; or a photovoltaic system sized to meet a minimum of 30% of the average projected energy demand for the structure, whichever is lower.

BIOLOGICAL RESOURCES
ER11 Native and Other Trees and Landscaping. Protect and maintain native and other urban trees, and landscaped spaces, and promote the use of native or Mediterranean drought-tolerant species in landscaping to save energy and water, incorporate habitat, and provide shade.

ER17 Water Conservation Program. The use of water conservation practices shall be both encouraged and required, as appropriate, for all development projects.

HYDROLOGY,WATER QUALITY AND FLOODING
ER20 Storm Water Management Policies. The City’s Storm Water Management Program’s policies, standards and other requirements for low impact development to reduce storm water run-off, volumes, rates, and water pollutants are hereby incorporated into the General Plan Environmental Resources Element.

Possible Implementation Actions to be Considered
ER20.1 Storm Water Guidelines. The City’s Storm Water Management Guidelines provide information on implementation measures such as ground water recharge, pervious surfacing, bioswales, detention basins, and green roofs. Update measures for street sweeping, storm-drain stenciling, and public outreach for inclusion in conditions of approval or as mitigation measures. Encourage the conversion of excess street paving between sidewalks and streets to bioswales.

AESTHETICS AND VISUAL RESOURCES
ER29 Visual Resources Protection. New development or redevelopment shall preserve or enhance important public views and viewpoints for public enjoyment, where such protection would not preclude reasonable development of a property.

CONSERVATION (1979, 1994)
VISUAL RESOURCES (“V”)
V4.0 Trees enhance the general appearance of the City’s landscape and should be preserved and protected.

V4.3 Major trees removed as a result of development or other property improvement shall be replaced by specimen trees on a minimum one-for-one basis.

BIOLOGICAL RESOURCES (“B”)
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APPLICABLE POLICIES
701 STATE STREET ET AL. & 914 CHAPALA STREET
SEPTEMBER 29, 2025
PAGE 7 OF 12
B2.0 Redevelopment and renovation of the central city shall be encouraged in order to preserve existing resources.

DRAINAGE AND FLOOD CONTROL (“DF”)
DF2.0 Floodplain management programs shall be implemented through the Building Officer of the Division of Land Use Controls, and the Flood Control Division.

WATER RESOURCES (“W”)
W2.1 Require all new development to incorporate water conservation features and devices into project design in order to minimize future increases in water demand.

W2.2 Encourage new development and redevelopment to consider innovative water conservation techniques such as gray water recycling.

CIRCULATION ELEMENT (2011, 1997, 1974, 1964)
CIRCULATION (2011)

CIRCULATION
C1 Transportation Infrastructure Enhancement and Preservation. Assess the current and potential demand for alternative transportation and where warranted increase the availability and attractiveness of alternative transportation by improving related infrastructure and facilities without reducing vehicle access.

Possible Implementation Actions to be Considered
C1.1 Pedestrian and Bicycle Infrastructure. Emphasize high quality public right-of-way infrastructure to include enhanced pedestrian and bicycle facilities.

Provide high quality pedestrian crossings as described in the Pedestrian Master Plan that result in a high rate of vehicle yielding at uncontrolled intersections.

Consider establishing bicyclist priority within some additional City right-of-way areas along major bicycle routes, as part of Bicycle Master Plan update including creating more bike lane connections Downtown by regulating curbside parking during peak travel periods working closely with Downtown stakeholders. Consider increased funding for bike-lane maintenance to encourage their use and maximize safety.

Continue implementing of the City’s Sidewalk Infill Program.

Install pedestrian amenities (e.g., pedestrian-scaled street lighting, benches, trees and other landscaping) along high volume pedestrian corridors, at other key pedestrian destinations (parks, schools, etc.) and, in coordination with MTD, around transit stops and stations (e.g. shade and rain structures, and space for newspaper dispensers).

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APPLICABLE POLICIES
701 STATE STREET ET AL. & 914 CHAPALA STREET
OCTOBER 2, 2025
PAGE 8 OF 12
Continue with the installation of corner curb ramps in compliance with federal and state universal access requirements for public rights-of-way.

Consider adoption of tiered development impact fees (with discounts for community benefit uses) as needed to fund improvements.

Improvements to bicycle travel-ways and parking are a priority use of rights-of-way throughout the City, therefore, carry out implementation of all of the recommended improvements within the City’s Bicycle Master Plan.

Improve coordination between City, County, UCSB, SBCAG, and other South Coast cities and entities to improve and expand regional bike paths and routes that cross jurisdictional boundaries.

PARKING
C7 Parking Management. Manage parking Downtown to reduce congestion, increase economic vitality, and preserve Santa Barbara’s quality of life.

Possible Implementation Actions to be Considered
C7.5 Residential Parking Requirements. Allow residential land development projects to “unbundle” parking (i.e., selling or renting residential units separate from parking stalls) within the commercial and high density residential land use designations to address affordability and development size, bulk, and scale.

C7.7 Bicycle Parking and Other Needs. Require all multi-family and commercial projects to be designed to meet the needs of bicyclists (e.g., secure parking, storage, lockers, showers, etc.) CIRCULATION (1997, 1964) (“CE”)

EQUALITY OF CONVENIENCE AND CHOICE
CE2.1.6 Manage the parking supply and work to increase the use of alternative forms of travel to increase the availability of parking and access to the Downtown area.

BIKEWAY SYSTEM
CE4.2.3 Encourage facilities for bicycle travel and parking in any future development, construction, or reconstruction projects during the review of new development and infrastructure improvements. Bicycle facilities can be achieved through methods such as:
• purchase, dedication, and other means of property acquisition, • conditions of approval,
• expanding the scope of maintenance projects, and
• enforcement of the Santa Barbara Municipal Code, Parking Section.

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APPLICABLE POLICIES
701 STATE STREET ET AL. & 914 CHAPALA STREET
SEPTEMBER 29, 2025
PAGE 9 OF 12

DESIGN STANDARDS
CE5.4.8 During the development review process, identify all sidewalk obstructions (e.g. fire hydrants, telephone poles, utilities, etc.) on development plans and, if feasible, locate or relocate them in such a way so as to remove the obstruction and to enhance visual aesthetics.

PARKING REQUIREMENTS AND STANDARDS
CE8.1 The City shall continue to manage the Downtown public parking supply to support the economic vitality of the Downtown business district while sustaining or enhancing its historical and livable qualities.

CE8.1.1 Operate and manage the Downtown public parking program in partnership with the Downtown community to reduce the need for employee parking and to increase available parking for customers and clients.

CE8.1.4 Operate and manage the Downtown public parking program in partnership with the Downtown community to meet existing public parking needs.

MANAGING DOWNTOWN PUBLIC PARKING
CE8.2.10 Implement the strategies contained in the Circulation Element, Land Use chapter, and the Land Use and Housing Elements pertaining to increasing housing in the downtown core and along major transit routes.

CE8.2.11 Parking structures shall be designed to be compatible with the surrounding area in terms of scale, materials, design, and color. The incorporation of commercial uses along the street level frontage should be encouraged.

CE8.2.12 The interior and exterior of parking structures shall be designed to facilitate the movement of pedestrians to and from their vehicles in a comfortable and safe manner. This may include reducing driveway entrances, improving pedestrian pathways, providing signalized mid-block pedestrian crossings, and allowing commercial or service uses on the bottom level (see Chapter 5, Walking).

INCREASED PUBLIC PARKING SUPPLY
CE8.3.2 Maintain the current supply and explore new opportunities for on-street parking Downtown.

DOWNTOWN HOUSING
CE8.5 The City shall promote/facilitate the development of housing to decrease the need for parking through an increased walking/biking population that lives, works, and shops in the Downtown (See Chapter 13).

CE8.5.2 Allow residential parking in public parking lots for mixed use development after ensuring that there is adequate capacity to serve existing uses.

IMPLEMENTATION
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APPLICABLE POLICIES
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OCTOBER 2, 2025
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CE11.1 The City shall facilitate the use of transit and alternative modes of transportation by emphasizing compact, pedestrian oriented development and connections among all forms of travel during the development and environmental review process. Within the Coastal Zone portion of the City, the provisions of Measure E shall not be used for the purpose of making findings regarding the consistency of any project with the certified Local Coastal Program until such time as the provisions of Measure E are certified by the Coastal Commission through an amendment to the City's Local Coastal Program.

BUSINESS AREA MOBILITY PLAN
CE13.1 The City shall integrate the goals of this Circulation Element with land use decisions.

CE13.1.1 Encourage the development of projects that combine and locate residential uses near areas of employment and services.

COMPACT DEVELOPMENT
CE13.2 Without increasing the City wide development potential as provided for in the existing Zoning Ordinance and General Plan, the City shall allow more compact, pedestrian oriented development along major transit corridors (see Traffic Standards Chapter, Implementation Strategy 11.1.1).

CITY UTILITIES
CE16.3.1 Maintain and improve, as necessary, the existing public storm drains and flood control facilities.

CE16.3.3 Ensure that adequate storm drain facilities are in place to serve new or expanded uses.

CE16.3.4 Encourage the use of methods, such as the use of pervious surfaces and percolation ponds, that help to reduce the amount of runoff.

CE16.3.5 Require structures located in designated flood hazard areas to comply with local, State, and Federal building and safety standards.

CE16.4 Provide an adequate water supply system to meet the needs of existing and future residents and businesses.

CE16.4.3 Ensure that there is sufficient water capacity and supply prior to approving new development projects or expansions to existing projects.

CE16.5 Provide a safe, efficient, and cost effective wastewater collection and treatment system that is able to meet the needs of permitted land uses.

CE16.5.1 Collect and treat wastewater to meet local, Regional, State, and Federal Standards.

CE16.5.3 Prior to allowing the development of new structures, ensure that adequate capacity exists. If capacity does not exist, identify means and costs involved in meeting the increased demand.

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SEPTEMBER 29, 2025
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SAFETY ELEMENT (2013)

DEVELOPMENT REVIEW
S7 Hazard Reduction. Identify, evaluate and implement risk reduction measures during the development review and permitting process to reduce the effects of hazards to an acceptable level of risk. Project design measures shall be implemented as applicable to avoid or reduce hazards and comply with associated regulations.

GEOLOGIC AND SEISMIC HAZARDS
S12 Ground Shaking. Reduce the effects of earthquake ground shaking through appropriate building design requirements for new buildings and retrofit measures for existing buildings. a. Minimize the Effects of Ground Shaking. The City shall implement applicable building code requirements and the recommendations of site-specific soil and geologic investigations to minimize the effects of ground shaking on new development. Building code requirements pertaining to essential and critical facilities (e.g., schools, emergency service facilities, and utilities) shall also be implemented to reduce earthquake-related hazards.
b. Building Code Updates. The City will minimize ground shaking-related hazards to structures by continuing to review, amend, and adopt updated provisions of the California Building Code to incorporate and implement building design requirements. c. Unreinforced Masonry Buildings. Implement existing building retrofit programs that address structural deficiencies in existing buildings that have the potential to result in significant safety hazards during earthquakes.

FLOOD HAZARDS
S46 Development in Flood Hazard Areas. The potential for flood-related impacts to health, safety, and property may be reduced by limiting development in flood-prone areas. New development or redevelopment located within a designated 100-year floodplain shall be required to implement appropriate site and structure designs consistent with regulatory requirements that minimize the potential for flood-related damage, and shall not result in a substantial increase in downstream flooding hazards.

S47 Localized Drainage Impacts. New public and private development or substantial redevelopment or reuse projects located in areas outside a designated 100-year floodplain, but in areas known to have experienced repeated property damage to due to poor storm water drainage, shall not contribute to existing drainage impacts by substantially increasing runoff volume or flow rates, or displacing runoff onto adjacent properties. Vegetation removal projects shall not contribute to existing drainage impacts by substantially increasing runoff volume or flow rates.

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OCTOBER 2, 2025
PAGE 12 OF 12

HAZARDOUS MATERIALS
S57 Contaminated Sites. The City shall continue to identify ways to facilitate hazardous waste site remediation, protect public health, and minimize environmental impacts resulting from the presence of waste material and from remediation activities.

S62 Development on Sites with Contaminated Soils and High Groundwater. New development in areas of high groundwater and high potential for contaminated soils or contaminated groundwater shall incorporate appropriate vapor control measures into the design of buildings.

Control measures may include measures such as vapor barriers, passive air ventilation systems, sealing of ducts and cracks, and depressurizing soil below the foundation. New development shall comply with all County, State and Federal regulations regarding contaminated soils.

Item IV Page 33 of 41

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: August 5, 2025
TO: Mayor and Councilmembers
FROM: City Administrator’s Office and City Attorney’s Office SUBJECT: Paseo Nuevo Redevelopment – Project Update [Resolution] RECOMMENDATION: That Council:

A. Approve the amendment to the project description contained in the Project Agreement dated March 14, 2024 between the City of Santa Barbara and Paseo Propco, LLC and direct the City Administrator and the City Attorney to negotiate a Disposition and Development Agreement for redevelopment of the Paseo Nuevo Shopping Center consistent with the terms outlined in the Council Agenda Report including the change in configuration of the project and the City’s financial contribution; and
B. Adopt, by reading of title only, a Resolution of the City Council of the City of Santa Barbara Supplementing Resolution No. 24-016 Declaring Designated Parcels of City-Owned Property to be Exempt Surplus Land Pursuant to Subparagraph (J) of Paragraph (1) of Subdivision (F) of California Government Code Section 54221 – Paseo Nuevo – by the Addition of City-Owned Property Commonly Referred to as Parking Lot 2.

EXECUTIVE SUMMARY:

Since City Council’s approval of the Project Agreement with Paseo Propco, LLC (AB Commercial) in March 2024, the Paseo Nuevo redevelopment proposal has been revised to create a more financially feasible and buildable project. The original 500-unit proposal required full demolition of the mall (excluding the Nordstrom building) and construction of a new foundation—costs that rendered the project economically unviable. In response, AB Commercial updated the proposal to retain key existing structures such as the in-line shops, art museum, and theater, while demolishing only the obsolete Macy’s building.

The revised plan includes 233 market-rate units, 80 affordable units, 175,368 square feet of retail space, and redesigned public areas, while maintaining adequate parking and

EXHIBIT E
Item IV Page 34 of 41
Council Agenda Report
Paseo Nuevo Redevelopment – Project Update [Resolution] August 5, 2025

increasing building height under California’s Density Bonus Law. According to the new proposal, Parking Lot 2, which is subject to existing covenants that reserve it as parking for Paseo Nuevo, would be added to the properties subject to redevelopment.

The updated program delivers more affordable housing than required, with 80 units proposed on Lot 2—far exceeding the 12–23 units needed to satisfy current obligations.

These affordable units, likely financed through low-income housing tax credits, would be delivered concurrently with the market-rate housing (located on the former Macy’s parcels), maximizing community benefit and addressing Santa Barbara’s housing needs.

The retail component includes a specialty food market at State and Ortega Streets, a large fitness or wellness anchor, and a refreshed mix of retail shops and restaurants. The overall parking supply would be reduced from 1,687 to 1,529 spaces but remains sufficient to support residential and commercial uses.

To improve project financial feasibility, City staff recommends a number of financial contributions to the project as outlined in this report. Pending Council direction at this meeting, staff would then proceed to finalize negotiations on a Disposition and Development Agreement for the project that would be brought back to Council for final approval at a future date.

BACKGROUND
In 1987, the former Redevelopment Agency of the City of Santa Barbara (RDA) and Paseo Nuevo Associates entered into a Disposition and Development Agreement that provided for the development of the Paseo Nuevo Mall, which included the in-line mall shops, two anchor tenants, and associated on-site and off-site parking. In 1989, 75-year term ground leases were entered into between the RDA (as landlord) and Santa Barbara Associates (as tenant for the in-line shops main mall parcel (“Paseo Nuevo Parcel”)), Carter Hawley Hale Stores (as Tenant for the now the vacant Macy’s parcel (“Macy’s Parcel”)), and Nordstrom’s, Inc. (as tenant for the now vacant Nordstrom’s parcel (“Nordstrom’s Parcel”)). The Paseo Nuevo Parcel lease, the Nordstrom’s Parcel lease, and the Macy’s Parcel lease have remaining terms of approximately 40 years. The last expiration date is December 31, 2065. The RDA dissolved in 2012, and in 2016, ownership of all property underlying the ground leases transferred to the City of Santa Barbara. The City assumed the leases and all the obligations and restrictions of the many easements and restrictive covenant agreements relating to use of the leased property.

Ownership of the Paseo Nuevo Parcel lease and Macy’s Parcel lease have changed hands many times over the years until most recently in 2022 when AB Commercial Real Estate Debt Fund (AB Commercial) acquired the two leases through a deed-in-lieu of foreclosure agreement with Paseo Nuevo Owner LLC and Paseo Nuevo Owner II LLC.

AB Commercial assigned the two leases to Paseo Propco LLC, a Delaware limited liability company, an affiliate of AB. For convenience and to avoid confusion both AB and Paseo Item IV Page 35 of 41
Council Agenda Report
Paseo Nuevo Redevelopment – Project Update [Resolution] August 5, 2025

Propco LLC are referred to in this report as “AB Commercial.” AB Commercial has continued management of the mall property and, in consultation with the City, has evaluated the potential for redevelopment of the property.

The City retained Strategic Economics and The Maxima Group to assist the City with an objective third-party evaluation of the City’s options regarding redevelopment of the Paseo Nuevo and the Macy’s Parcels. Both firms have extensive experience advising public agencies on real estate feasibility and complex redevelopment projects.

City staff, together with the consultant, evaluated the encumbrances and obligations restricting redevelopment of the Paseo Nuevo and Macy’s Parcels under the current ownership structure and assessed options available for redevelopment working in collaboration with AB Commercial. Those options were presented to the City Council on September 19, 2023. On September 19, 2023, the City Council authorized staff to negotiate a project agreement with AB Commercial for potential redevelopment of the Paseo Nuevo and Macy’s Parcels.

Implementation of the project (from a financial viability perspective) requires transfer of underlying fee title (transfer of ownership of the land to AB Commercial). Before the City may transfer title or otherwise dispose of the property, it must comply with the Surplus Land Act (California Government Code §§ 54220 et seq.) In this case, compliance was accomplished by adoption of Resolution 24-016 declaring the Paseo Nuevo Parcel, the Macy’s Parcel and the Nordstrom’s Parcel to be exempt surplus land pursuant to California Government Code § 54221(f)(1)(J). By letter dated March 18, 2024, the Department of Housing and Community Development, Division of Housing Policy Development notified the City that the Paseo Nuevo Properties qualify as “exempt surplus land” under Government Code Section 54221, subdivision (f)(1)(j), due to existing constraints under contractual rights.

At the March 5, 2024, meeting, the City Council approved the initial Project Agreement and the Surplus Lands Act Resolution. Since March 2024, AB Commercial explored multiple revisions to the project’s development program to work towards an economically viable project. This report includes analysis of the latest project package, including an updated development project and requested financial incentives, in anticipation of negotiations for a new Disposition and Development Agreement.

DISCUSSION:

Updated Development Program
City Council approved the Project Agreement with AB Commercial during the March 5, 2024, Council meeting; however, the project components have been updated to reflect a more financially viable and buildable project. The 500-unit project proposed in 2024 required demolishing the entire mall, excluding the Nordstrom’s building, and rebuilding Item IV Page 36 of 41
Council Agenda Report
Paseo Nuevo Redevelopment – Project Update [Resolution] August 5, 2025

a new foundation. The new foundation alone would be cost-prohibitive to build, making the project financially infeasible. To bring it closer to financial viability, AB Commercial revised the project to utilize existing parking, demolish only the most functionally obsolete building on the site (Macys), retain the in-line shops, art museum and theater, and create new public spaces. The table below details the current proposed development program as compared to existing conditions and the March 2024 proposal.

Program Existing March 2024 August 2025
Market Rate Units (replacing Macy’s
building)
0 450-475 233
Affordable Units (replacing some Lot
2 parking)
0 25-50 80 (12-23
required)
Retail/Food & Bev floor area
(excluding Nordstrom)
240,000 s.f. 79,759 s.f. 175,368 s.f.

Community Uses Art Museum/
Theater
N/A Art Museum/
Theater
Parking Spaces in Lot 1 572 640 600
Residential parking per unit N/A 1.1 per unit 1 per unit Building height ~66’ 75’ 75’
Residential density N/A 81 du/acre 38 du/acre
Parking spaces in Lot 2 569 569 383
AB Commercial is proposing affordability restrictions that qualify for a waiver of development standards pursuant to the provisions of California’s Density Bonus Law (Cal.

Gov. Code Sections 65915-65918), resulting in a project that will exceed the City’s height limit of 60 feet for community benefit projects.

Affordable Housing: The revised development program includes 80 affordable housing units on a portion of City Parking Lot 2, resulting in more affordable units built than required for a 233-market rate unit project. Between 12-23 of the affordable units will be used to satisfy the project’s current affordable housing requirements, and the remaining units will be banked by AB Commercial for potential future market rate housing development on the Paseo Nuevo site. This revised project reduces parking in Lot 2 by 186 parking spaces; however, it results in significantly more affordable units than the project requires and enables the City to receive all 80 affordable units at the same time as the market rate project. These units would likely be available to tenants with an income range not exceeding 80 percent Area Median Income (AMI) due to the probable use of low-income tax credits to finance the affordable housing component of the project.

Retail Program: In addition to market rate and affordable units, the development program may include the following planned retail strategy:
 An anchor tenant at the corner of State Street and Ortega Street (~17,000 s.f.)  A large lifestyle fitness and/or wellness tenant (~25,000 s.f.)  Repositioned retail shops and restaurants
Item IV Page 37 of 41
Council Agenda Report
Paseo Nuevo Redevelopment – Project Update [Resolution] August 5, 2025

Parking Program: The project will provide 1,529 parking spaces compared to the existing 1,687 spaces. This parking program includes:
 233 parking spaces (1 parking space for every market rate housing unit)  47 parking spaces dedicated to the anchor tenant
 320 spaces would remain to accommodate retail use and any dedicated spaces for redeveloping the Nordstroms building.
 Lot 2 would be reduced by 186 parking spaces to make room for the affordable housing project. Parking for the affordable units would be provided in Lot 2.

Project Economics
Based on a thorough review of the project financials, staff and the City’s consultant team concur with the basic assumptions identified in AB Commercial’s project pro forma. This includes a target 8% rate of return. Today, Paseo Nuevo is an encumbered asset due to the current easement and lease restrictions. These restrictions create a situation where neither the City nor AB can realize any value from the property without working together.

The City’s land would only have a monetary value if it were combined with AB’s ownership interest and all the restrictions are removed. However, even with the City transferring land to AB and removing restrictions, the proposed development project still yields a return well below market expectations.

As a result of the project’s financial performance, the encumbrances on the current properties, and the project’s potential to serve as a catalyst for the revitalization of Downtown Santa Barbara, staff recommends that the City provide support to the project through a combination of: the transfer of the Paseo Nuevo Parcels, including the Macy’s parcel; the contribution of the financial value of the Nordstrom’s parcel; the use of a portion of Parking Lot 2 for the affordable housing component; and an annual contribution equivalent to the City’s share of the project’s property tax obligation. The project also preserves the opportunity for future residential development on the Paseo Nuevo site, with affordable units developed on the Lot 2 site eligible to satisfy the City’s inclusionary housing requirements for that future phase.

AB Commercial has requested that the City also consider contributing a portion of the sales tax revenue generated by the project. However, sales tax revenues are a less predictable source of funding for the City’s General Fund, supporting core municipal services such as public safety, infrastructure maintenance, and community programs.

Committing a portion of this revenue stream over a 20-year period could limit the City’s ability to respond to future economic shifts or community needs. In contrast, a property tax-based contribution offers a more stable, project-tied mechanism that supports investment while minimizing budgetary risk.

Once the City and AB work together to remove the property encumbrances, the total value of the City’s financial contribution (land value and future tax revenues) to the project could range from $32 million to $39 million. Even with these proposed contributions, AB Item IV Page 38 of 41
Council Agenda Report
Paseo Nuevo Redevelopment – Project Update [Resolution] August 5, 2025

Commercial’s estimated rate of return on the project is between 4.47% and 6.83%, well below the target return of 8%.

Staff recommends proceeding with a Disposition and Development Agreement that includes these contributions in order to allow AB Commercial to advance this complex mixed-use development in a financially viable manner. The project is expected to serve as a catalyst for Downtown Santa Barbara’s revitalization by increasing property values, adding new residents, and strengthening support for local businesses.

Nordstroms
The leaseholder of the Nordstrom site, DSP Santa Barbara Sub LLC, has submitted a preliminary proposal to convert the existing building into housing. While this project is independent from AB Commercial’s development, both parties are bound by the Reciprocal Easement Agreement (REA) along with the City. As such, all three parties must reach an agreement to amend the REA to permit residential use on their respective properties before the City can finalize the Disposition and Development Agreement.

Surplus Land Act – Lot 2
Including Lot 2 in the development proposal requires adoption of a resolution under the Surplus Land Act. Parking Lot 2 was developed pursuant to and in reliance on the Paseo Nuevo Agreements referenced in Resolution No. 24-016 and is additionally subject to the Paseo Nuevo Lot 2 Public Parking Covenants, Conditions, and Restrictions Agreement recorded February 24, 1989 as document 89-012339, and amended by the Amendment to Parking Covenants and Parking Agreement, also recorded February 24, 1989 as document 89-012341 of the official records of the County of Santa Barbara (“Parking Covenants). The proposed resolution will make the necessary findings and declaration to include Lot 2 redevelopment as part of the project. The proposed resolution was submitted to HCD for review as recommended by HCD’s Surplus Land Act Guidelines.

HCD has confirmed that the “valid legal restriction” exemption applies to Lot 2.

Next Steps
If directed by Council, City staff and AB Commercial will continue to work cooperatively and in good faith to develop the Disposition and Development Agreement (DDA) based on the final project components as outlined in this Council Agenda Report. The final project description will be the basis for a formal application submitted to the Community Development Department for processing, including appropriate environmental and land use reviews. The DDA will establish the terms and conditions for development of the project, including such matters as the overall height, number of units, the number of affordable units, open space, project construction schedule and phasing, the community benefits provided, and public financial support. The DDA will include performance milestones to ensure the project is completed in a timely manner and in accordance with Item IV Page 39 of 41
Council Agenda Report
Paseo Nuevo Redevelopment – Project Update [Resolution] August 5, 2025

the City’s requirements. It also provides for the transfer of fee title to the property from the City to AB Commercial, contingent upon their commitment to deliver the final project as approved in the agreement. Approval of the DDA requires a public hearing by the City Council and adoption of an ordinance. Staff anticipate that this hearing for approval of the DDA will occur before the end of 2025. The DDA will also provide a requirement for design approval from the Historic Landmarks Commission. Once the DDA is complete, the applicant can move ahead with a land use entitlement application and review, expected to occur by Spring 2026.

BUDGET/FINANCIAL INFORMATION:

As outlined in this report, staff is recommending a financial contribution that includes land transfers and future tax revenues valued at between $32 million – $39 million. Given the current restrictions and financial status of the property, these contributions are necessary to generate a return on investment that is still well below regional market assumptions.

SUSTAINABILITY IMPACT:

The Paseo Nuevo Redevelopment project, which includes 233 market-rate units, 80 affordable units, and 175,368 square feet of retail space, presents opportunities to advance key sustainability goals within the community. The project will be subject to California’s Green Building Standards Code, which promotes energy efficiency, water conservation, and waste reduction during construction and occupancy. Incorporation of high-efficiency fixtures, drought-tolerant landscaping, and potential use of solar-ready infrastructure will support long-term resource conservation. Additionally, by integrating housing and retail in a walkable downtown location, the project supports transit use and reduces vehicle miles traveled, contributing to greenhouse gas reduction goals.

ENVIROMENTAL REVIEW:

The change in the project description is exempt from the California Environmental Quality Act (CEQA) because it does not have the potential for creating a significant effect on the environment and is not a “project” as defined in 14 Cal. Code of Regs. § 15378. The adoption of the proposed resolution is exempt from the California Environmental Quality Act because the designation of the subject property as exempt surplus land does not have the potential for creating a significant effect on the environment and is not a “project” as defined in 14 Cal. Code of Regs. § 15378.

Item IV Page 40 of 41
Council Agenda Report
Paseo Nuevo Redevelopment – Project Update [Resolution] August 5, 2025

ATTACHMENT: Updated Project Analysis and Conceptual Renderings PREPARED BY: Tess Harris, State Street Master Planner
Daniel S. Hentschke, Assistant City Attorney
SUBMITTED BY: Kelly McAdoo, City Administrator
Sarah J. Knecht, City Attorney
APPROVED BY: Kelly McAdoo, City Administrator
Item IV Page 41 of 41
City of Santa Barbara

PLANNING COMMISSION

MINUTES
OCTOBER 9, 2025
1:00 P.M.

City Hall, Council Chambers
735 Anacapa Street
SantaBarbaraCA.gov
COMMISSION MEMBERS:

Devon Wardlow, Chair
Lucille Boss, Vice Chair
Brian Barnwell
John M. Baucke
Donald DeLuccio
Benjamin Peterson
Lesley Wiscomb
CITY COUNCIL LIAISON:

Mike Jordan
STAFF:

Tava Ostrenger, Assistant City Attorney
Megan Arciniega, Senior Planner
Jasper Carman, Commission Secretary

CALL TO ORDER
Vice Chair Boss called the meeting to order at 1:00 p.m.

I. ROLL CALL
Vice Chair Lucille Boss, Commissioners Brian Barnwell, John M. Baucke, Donald DeLuccio, and Lesley Wiscomb

Absent: Chair Devon Wardlow and Commissioner Benjamin Peterson

STAFF PRESENT
Kelly McAdoo, City Administrator
Sarah Knecht, City Attorney
Dan Hentschke, Assistant City Attorney
Tess Harris, State Street Master Planner
Megan Arciniega, Senior Planner
Barbara Burkhart, Project Planner
Patsy Price, Contract Planner
Christopher Bell, City TV Production Supervisor
Janet Ahern, City TV Production Specialist
Jasper Carman, Commission Secretary
II. PRELIMINARY MATTERS
A. Requests for continuances, withdrawals, postponements, or addition of ex-agenda items:

Ms. Arciniega announced that the item at 816 Cacique Street regarding the PATH update, which was noticed for the October 16, 2025 hearing, has been continued to the November 6, 2025 hearing.

ATTACHMENT 6
Planning Commission Minutes October 9, 2025 Page 2 of 7 B. Announcements and appeals:

No announcements.

C. Review, consideration, and action on the following draft Planning Commission minutes and resolutions:

1. August 14, 2025 Planning Commission Minutes

2. August 21, 2025 Planning Commission Minutes

3. Planning Commission Resolution No. 008-25
3405, 3407, & 3425 Sea Ledge Lane and 3357 Cliff Drive

4. Planning Commission Resolution No. 009-25
3429 Sea Ledge Lane
MOTION: DeLuccio / Baucke
Approve the August 14, 2025 minutes as presented.

The motion carried by the following vote:

Ayes: 5 Noes: 0 Abstain: 0 Absent: 2 (Wardlow and Peterson) MOTION: Wiscomb / Baucke
Approve the August 21, 2025 minutes and resolutions as presented.

The motion carried by the following vote:

Ayes: 4 Noes: 0 Abstain: 1 (Boss) Absent: 2 (Wardlow and Peterson) D. Comments from members of the public pertaining to items not on this agenda:

Public comment opened at 1:03 p.m., and as no one wished to speak, it closed.

Written correspondence from Onalisa Hoodes and Steve Johnson was acknowledged.

III. CONSENT ITEM
ACTUAL TIME: 1:04 P.M.
102 W DE LA GUERRA STREET
Assessor’s Parcel Number: 037-042-038
Zoning Designation: C-G
Application Number: PLN2024-00246
Applicant: Greg Reitz / ReThink Development
Owner: Greg Reitz / 101 CP LLC
Revise Planning Commission Resolution No. 002-25, approved by the Planning Commission on May 15, 2025, to correct a clerical error.

Planning Commission Minutes October 9, 2025 Page 3 of 7 The action under the jurisdiction of the Planning Commission at this hearing is:

A. Approve revised Planning Commission Resolution No. 002-25.

Public comment opened at 1:04 p.m., and as no one wished to speak, it closed.

MOTION: DeLuccio / Wiscomb Assigned Resolution No. 002-25 Approve the revision to correct a clerical error on Resolution No. 002-25, outlined in the Staff Memo dated October 9, 2025.

The motion carried by the following vote:

Ayes: 5 Noes: 0 Abstain: 0 Absent: 2 (Wardlow and Peterson) IV. CONCEPT REVIEW
ACTUAL TIME: 1:05 P.M.
701 STATE STREET ET AL. & 914 CHAPALA STREET – PASEO NUEVO / LOT 2 Assessor’s Parcel Number: 037-400-002, 037-400-003, 037-400-004, & 039-321-047 Zoning Designation: C-G (Commercial General)
Application Number: PRE2025-00121
Applicant: Edward Gellert / Paseo Propco, LLC.

Owner: Paseo Propco, LLC
The project consists of redevelopment of a portion of Paseo Nuevo Mall including demolition of approximately 135,000 square feet of existing retail space formerly occupied by Macy’s (APNs 037-400-002, 037-400-003, 037-400-004), and the development of 233 residential rental units over Parking Lot 1 (the underground and above ground parking structure at Paseo Nuevo Mall), a new approximately 20,000-square foot retail space at the corner of State and Ortega Streets, and the addition of 28 parking spaces. The project also includes demolition of approximately 186 parking spaces in Parking Lot 2 (adjacent to Paseo Nuevo Mall, APN 039-321-047) and replacement with approximately 80 units of income-restricted, affordable rental housing units.

The project proposes utilizing the City’s Average Unit-Size Density Incentive Program and State Density Bonus law. The maximum height of new construction at the former Macy’s site would be approximately 75 feet and the maximum height of the new residential construction at Parking Lot 2 would be up to approximately 70 feet.

Kelly McAdoo, City Administrator and Patsy Price, Contract Planner gave the Staff presentation.

Sarah Knecht, City Attorney and Tess Harris, State Street Master Planner were available to answer questions.

Robert Ooley, Vice Chair of the Historic Landmarks Commission (HLC), was available to answer questions regarding the HLC’s comments on the project.

Duncan Paterson, Gensler Architecture, gave the Applicant presentation, and was joined by Graham Lyons, Mullen & Henzel L.L.P. and Seth Pantalony, The Georgetown Company.

Public comment opened at 1:41 p.m., and the following individuals spoke:

Planning Commission Minutes October 9, 2025 Page 4 of 7

1. Rob Fredericks

2. Pat Saley

3. Cameron Gray

4. Steve Johnson

5. Citizens Planning Association
Written correspondence from Paulina Conn, Anonymous, Patricia Saley, Rob Fredericks, Steve Johnson, Fred Sweeney, Grace Holbrook, Brian Miller, Brian Cearnal, and Mary Louise Days was acknowledged.

Public comment closed at 1:57 p.m.
* THE COMMISSION RECESSED FROM 3:47 TO 3:57 P.M. *
MOTION: Baucke / Wiscomb

1. The Commission is in support of:
a. The applicant advancing design elements that contribute to placemaking [Policy LG 15]. b. The increase in housing in the downtown area, especially the addition of affordable housing.
c. The HLC’s comments on the project.
d. The applicant pursuing HLC’s direction for a design that reads as a collection of buildings.

2. The Commission requests:
a. That a complete project proposal, including the Nordstrom site, be considered to help prevent the future disruption of additional construction. b. Connecting the paseos throughout the project.
c. The applicant provide an Floor-Area-Ratio analysis.
d. Addition of more articulation to the building design. e. The parking figures be corrected to be accurate.
f. The applicant create a landscape plan that includes open space and/or open yard. g. The financial feasibility or proforma documents are provided to aid in decision making. h. The affordable housing building is treated with the same dignity as the market rate building, including access to the amenities offered to the market rate units. i. Reconsider the implied upscale or exclusive retail inclusion in the project [to be consistent with Policy EF 14].
j. That Lot 2 is transferred directly to the Santa Barbara Housing Authority or another affordable housing developer.
k. That the Santa Barbara Housing Authority be included in negotiations. l. That the Disposition and Development Agreement (DDA) is brought before the Planning Commission for its review.
m. A condition is added in the DDA to incorporate local preference in occupancy. n. A condition is added in the DDA that the property can’t be sold until the project is complete and the city has approved of the transferee, and timing of the transfer to or ownership by the affordable housing developer.
o. That the DDA require the exploration of the impact on the nearby theatre and art museum if all of Paseo Nuevo is developed.
p. That Building Division staff or structural engineer analyze the build-type to confirm applicant assertions regarding feasibility.
q. That the public outreach and stakeholder interested party efforts be improved.

Planning Commission Minutes October 9, 2025 Page 5 of 7

3. The Commission has the following concerns:
a. It seems like this is an ill-defined proposal that is being rushed. b. The proposal is perceived as a gift of public funds which is contributing public land and assets to an investment company.
c. The height is a concern, despite being allowed under State Density Bonus law, as it exceeds the city charter height limit.
d. There are concerns that the project does not meet the EPV (El Pueblo Viejo) standards [Policy HR10.9].
e. The request to bank affordable units is concerning.
f. The location of the affordable housing building is concerning. g. Parking is proposed for the market rate units but not for affordable units, when neither is required by state law.
h. The goal is to provide more housing downtown, but if parking is not included, we’re relying on existing parking lots; study is needed to consider projected parking needs. i. It is concerning that environmental review under the California Environmental Quality Act must be completed before the DDA is made.
j. Decisions are being requested based on financial feasibility assertions that are not publicly available; this information should be made available before any decisions are made.
k. This proposal appears that we are helping an investment company recover a loss which is not a public purpose.
l. It is concerning that the financial feasibility study by Maxima and Strategic Economics did not study a charter amendment for a 99-year lease which would be voted on by the public in lieu of the transfer of the land to AB Commercial.

4. The Commission found the following items to be missing or indeterminable from the presentation:
a. The terms and conditions of the DDA for development of this project. b. Accuracy in elevation projections.
c. Whether there is a demand for retail space.
d. Whether the proposed unit size and unit mix is consistent with AUD (Average Unit-Size Density) standards.
e. Whether the transfer of land for Lot 2 will be to AB Commercial or to the affordable housing developer.
f. That all parties, AB Commercial, City of Santa Barbara, and Shopoff, will agree to the DDA; it is understood that this will be a condition prior to closing, but Shopoff has not agreed.
g. The parking to be dedicated to various parties, including the affordable residential, market residential, market/grocery store, and general public, is unclear. h. No current value available of Lot 2 portion to be demolished, concerned with the idea of destroying city parking infrastructure.
i. Long term parking needs have not been defined.
j. Analysis of State Density Bonus laws requiring inclusionary units in a contiguous manner. k. Assurances that affordable units will be built concurrent to the market rate units, which should also be a condition prior to the closing of the land transfer. l. Confirmation that the applicant’s contribution to the affordable housing development will be equivalent to at least the cost to build 24 units, including demo, or to cover the cost of all units if they are wishing to bank units.

5. Do not rush into this deal without the community’s full scrutiny and all questions answered as it is too important of a project.

Planning Commission Minutes October 9, 2025 Page 6 of 7 This motion carried by the following vote:

Ayes: 5 Noes: 0 Abstain: 0 Absent: 2 (Wardlow and Peterson) V. NEW ITEM (postponed to October 16, 2025)
404 MOFFETT PLACE
Assessor’s Parcel Number: 073-450-003
Zoning Designation: A-A-O/C-Z (Aircraft Approach and Operation/Coastal Overlay) Application Number: PRE2024-00162
Applicant/Owner: Brad Klinzing / City of Santa Barbara
The purpose of the hearing is a request to initiate a Zoning Map Amendment (“rezone”) to change the zoning of the subject site from A-A-O/C-Z (Aircraft Approach and Operation/Coastal Overlay) to the A-F/C­Z (Airport Facilities/Coastal Overlay).

The project is being presented to the Planning Commission to receive direction on the appropriateness of the request, and to either initiate further study or to decline the request. No discretionary action will be made at this hearing and there is no appealable decision.

PLEASE NOTE: Item V is postponed to October 16, 2025.

VI. ADMINISTRATIVE AGENDA
ACTUAL TIME: 4:35 P.M.

A. Committee and Liaison Reports:

1. Staff Hearing Officer Liaison Report
No report.

2. Other Committee and Liaison Reports
No reports.

B. Discussion on Subcommittees and Workshops
No discussion.

Planning Commission Minutes October 9, 2025 Page 7 of 7 VII. ADJOURNMENT
Vice Chair Boss adjourned the meeting at 4:35 p.m.

Submitted by,
__________________________________________
Jasper Carman, Commission Secretary
Community Survey Responses – Paseo Nuevo
The City invited the community to share feedback on the proposed Paseo Nuevo Redevelopment Project. The survey was open from October 15 through November 1, 2025, and was available during the Open Houses (October 15 and 16, 2025), online, via paper copies, and was available in English and Spanish. 167 total survey responses
Do you support the Paseo Nuevo Redevelopment project, which includes 233 new market-rate units at the former Macy’s site and 80 affordable units in a portion of the City Parking Lot 2 location?
Yes: 42 (25%)
Maybe: 38 (23%)
No: 85 (52%)
Which Open House event did you attend?
Wednesday, October 15th from 6-7:30pm: 19 (11%)
Thursday, October 16th from 12-1:30pm: 19 (11%)
I attended both public Open House events.: 2 (1%)
I did not attend an Open House event.: 126 (76%)
Would you like to be kept informed about the project?
Yes: 130 (81%)
No: 31 (19%)
ATTACHMENT 7
Community Survey Responses – Paseo Nuevo
The City invited the community to share feedback on the proposed Paseo Nuevo Redevelopment Project. The survey was open from October 15 through November 1, 2025, and was available during the Open Houses (October 15 and 16, 2025), online, via paper copies, and was available in English and Spanish.

What Aspects of the Paseo Nuevo Redevelopment Project Do You Like? • The varied architecture, thoughtful mixed use, improving the currently depressing Paseo Nuevo Mall, providing more housing thus more people, and more energy to the entire downtown corridor. Most important is making good use of empty rundown buildings and retail environments. • I like the idea of a nice grocery store coming to the property. I like the idea of housing in general at the mall. I like the fact that there is dedicated parking for the residents.
• More people living downtown, more affordable housing
• Downtown density; reuse of existing structures; consistent design • I like affordable housing and the access to affordable transit from the new housing units. I think it's great that this is being proposed as long-term housing instead of hotels. I would vehemently oppose the development of a hotel. • I love the idea of a more integrated residential and commercial area downtown.

I think bringing people downtown will be wonderful.
• I love it because you will be building 80 affordable units in that big empty building. I moved to Santa Barbara back in 2007 to go to school and have stayed ever since. Today I am an elder millennial, married, and working at an executive level for a Goleta based nonprofit. I have seen the housing crisis rise to extreme levels since I first moved here. Getting a rental is hard enough, but buying a home is out of reach - even though I am making a great salary. Every affordable home is a victory and prevents a local family from being priced out of the area.
• All of it! It appears to be an extraordinary plan and idea for redevelopment.

Let's make this happen ASAP!
• I am thrilled to see affordable housing a part of the plan and a housing project in general. I don’t think SB needs another hotel approval. My husband and I are born and raised in SB. We need the folks that live in SB and support the Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Aspects of the Paseo Nuevo Redevelopment Project Do You Like?

SB community to have housing available! My husband is 10th generation. We never go downtown except the block where Joe’s Cafe is and Holdren’s is! I’m excited to see people back downtown, clean up the homeless, power wash more frequently so downtown smells better. My biggest concern is non-locals renting these units as second homes and VRBO’s. Can you half a strict policy for working and living full time in Santa Barbara to avoid this trap? I think of the Public Market Place aka Theatre District and how excited they were to have those units sold to locals. Majority are not occupied full time by locals!! Get moving on this approval process, I would like to see this in my lifetime! • More housing yay! We need all the housing we can get, especially mixed-use projects like this in a walkable neighborhood!
• I am in favor of replacing the large vacant commercial space into Residential space.
• Housing, which would provide rental and small efficiency or 1BR units to own.

No fancy units and no large units.
• I like all aspects of the project. I think it is well considered by City Staff and the Design Team, appropriate for our community and will add much needed housing that will enhance State Street and our Downtown Corridor. Bravo. • Mixed use space downtown
• I like the increased density in the downtown corridor. We need more housing so that downtown is vibrant even after work hours. It will help local businesses and make the area feel safer (more people out at all hours). We cannot continue to complain about high housing costs and a stagnating downtown if we don’t build more high-quality housing and encourage the development of high-quality retail that residents ACTUALLY want.
• Grocery and housing
• Affordable housing
• That it will provide downtown housing using an already built but underutilized building.
• All of it.
• I like that there are so many units being built to address the shortage, and more residents in the downtown area will create more vibrancy and services for Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Aspects of the Paseo Nuevo Redevelopment Project Do You Like?

those residents. I also like that they are rentals, which make them accessible to more people, not just the affordable units. Paseo Nuevo is kind of sad right now and feels like a relic/ghost town — excited for these changes. • I appreciate that the project includes affordable housing units alongside market-rate homes, which can help support a more inclusive downtown community. I also see potential in the plan to revitalize retail activity and bring new life to underused areas, which could strengthen the long-term social and economic vitality of the area.
• I think it is absolutely CRITICAL to develop more housing downtown. SB needs housing for all downtown-for all levels of income/means. We need to encourage the live, work, and recreate downtown lifestyle to revitalize downtown and drive healthy growth. There is SO much potential in SB. It could be a dream city/very future minded, given it’s already very walkable and accessible layout, with beach and town so integrated. If we can build housing, and encourage growth downtown in this manner, we can make this City so vital. A nice grocery (mid to high end) would be a huge boon to growing downtown. People will want to live there. We already have a Ralph's walkable nearby, so a more upscale option would be very attractive to bring people to this area to live/shop. If we must give away the land to make all this happen, do it, if there is an alternative, then explore it. But don't do nothing. SB has been in a state of planning and nonaction for all long as I can remember. It is a wasted opportunity.
• We like adding housing to the downtown State Street District. We love the idea of a nicer grocery store in this neighborhood, and a nice gym would be a bonus as well. The architectural detailing feels appropriate for the community. • Making use of an underused area is great. I like the grocery store on the ground floor.
• That it will provide needed housing and help revitalize State Street for locals and tourists
• Bringing a large number of new housing to the city’s downtown core, both market rate and affordable units. I also like keeping many of the commercial and cultural aspects of the existing Paseo Nuevo with some revitalization.

Having many more people living downtown will improve the business, cultural, and community vitality of our downtown.
• I like that this project gets us closer to the 2,000 to 4,000 new apartment units that are needed downtown to provide the critical mass that is needed for the Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Aspects of the Paseo Nuevo Redevelopment Project Do You Like?

State Street economy to self-sustain. Live-Work-Play is the future, and this project embraces that.
• I like that housing will be provided close to shopping, reducing traffic impacts. • Housing
• I appreciate that City Staff and the development team are doing their best to keep costs of construction low and optimize financing by separating the two buildings - this allows housing to be MORE affordable and possible in Santa Barbara. I also support the multi-story buildings above what is typical for Santa Barbara. This and future buildings at greater heights will allow more affordable and available housing downtown. Thank you for your work! • I like the concept but would prefer more low-income housing and less retail. • Housing downtown is a great thing.
• I like the idea of new housing and bringing back quality Retail • Good use of the empty Macy's store.
• I like the idea of having a good market downtown (like Erewhon) and look of building is good.
• Housing but should be more on the affordable side
• Tearing down the Macy's building and providing housing. That building can't be torn down soon enough.
• - Conversion of the large retail space downtown to living space - Adding a grocery store is much needed
- Revising the stores to have more restaurants and local establishment vibes - Keeping decent amount of retail
• Revitalization and something new.
• Housing and key retail, food mkt
• something is moving forward
• Looks like a reasonable compromise of mixed use to re-vitalize a once vibrant mall property.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Aspects of the Paseo Nuevo Redevelopment Project Do You Like?

• I can see the need for revitalization. I think housing will do that. “Retail follows rooftops”
• I like having mixed uses downtown. We need a diverse mix of all types of housing and supportive retail and transportation for our local residents. • Bringing upscale people who can afford "market rent" downtown. • I like the revitalization of the Paseo Nuevo Mall area with housing and commercial
• Adding housing and another grocery store downtown. It will make State Street more of a neighborhood instead of a place people only go to visit and go out to eat. Reutilizing giant vacant retail spaces. I feel neutrally about the height, I think it's realistic as an in-fill project in an already constrained urban area. • More housing! Mixed use! Thinking through parking in advance! • Obviously, our city needs more housing. The location downtown should help reduce vehicle traffic. The project includes "affordable units". • I am excited to see a development that will revitalize State Street. We live in a world-class destination city, and our central shopping and dining area should reflect that. The current condition of State Street has been an appalling embarrassment for decades, now. Other cities are managing this balance so much better that we are. San Luis Obispo, San Diego, Orange County all have exemplified what could be done with better planning. Please keep the focus on beauty, style, unique shops, excellent dining, and desirable, eye-catching, elegant, traffic-friendly, style-appropriate housing additions that will only help grow our economic strength.
• That affordable housing is included- the number of affordable units should be increased and yes to keep the charm and magic of our downtown we should not build high. Give us affordable walkable units- but don’t blot the city in the process.
• More housing for Santa Barbara. Spanish architecture. • I like the fact that ANY redevelopment of the Paseo Nuevo project will force the community to come to grips with 40+ yrs of failed understanding--and, therefore, failed response to--what is called "homelessness" or "the homeless problem." Leaders, now long dead or in other ways off the political stage, Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Aspects of the Paseo Nuevo Redevelopment Project Do You Like?

promoted an orthodox narrative concerning vagrant/homeless behaviour that required the entire community to accept the outlandish costs and deleterious social impacts associated with the activity of a few. There has not been a constructive, full political spectrum conversation about this in my 50 yrs of active participation in the community life of Santa Barbara. Without an honest consensus of the tradeoffs the community is willing to accept on this topic, it will plague and retard any vibrancy hoped for...regardless of the specific redevelopment project.
• That rental units are being built downtown. Great idea. Let's do more of them, here and there. Not huge and ugly buildings.
• That we can get some housing downtown (and especially 80 units of affordable housing), that we will have a chance to move forward with improvements to the ambience and community instead of the depressing vacancies we have had for a while.
• I like the idea of a market and lower income units.
• N/A
• Affordable units.
• The concept of downtown living
• Housing development for parts of the mall
• Mixed use residential/commercial is good.
• The revitalization of the area and use of a existing structures as well as keeping the design in line with the existing SB downtown style. • Reasonable rentals for SB residents
• I support the new housing development on the Paseo Nuevo site. There should be more rental homes, both market rate and affordable. Building height up to 75 feet is acceptable so long as the massing increases in height towards the middle of the block. The redevelopment should cover the entire Paseo Nuevo site – including the former Nordstrom’s. It should be re-thought from the basement parking up – limitation should not be imposed because of the structural condition of the existing parking. There should be no reason to build housing on top of Lot 2, with the associated loss of parking. All the housing should be built on the Paseo Nuevo site. It should not include any retail space Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Aspects of the Paseo Nuevo Redevelopment Project Do You Like?

other than on the State Street frontage. Any market should be a market serving all downtown residents, not just the high-end rentals. The city should extract equivalent value for the fee interest in the land it proposes to surrender (whether in a transfer of the fee or a new long-term lease) in the form of extra development exactions – this development should pay for a rational remodeling of State Street since it will serve as the retail base of the city. • I love the idea of more housing downtown, especially low-income housing (assuming it is actually LOW INCOME). I think it will bring new life to downtown and will help the businesses. I think it would be great to have a grocery store in the heart of downtown; this will benefit all the downtown employees as well as residents to have a place to easily walk to.
• We need more “affordable” housing in Santa Barbara and need to do something to revitalize the downtown area. It takes advantage of vacant space and generates tax revenue.
• not sure
• More people living downtown which will naturally revitalize State Street • The loss of parking spaces especially and low-income housing on lot 2 • Utilizing an empty space for more housing. The plans are cohesive with the architectural style of the city we know and love.
• Multi use
• More housing added to downtown, opportunity for retail and amenities to better serve residents rather than over emphasis on tourist shops and restaurants • new housing
• Putting real estate to good use and increasing housing density downtown which can support a more vibrant commercial and leisure area. • The 80 units of affordable housing
• Much needed housing, including deed restricted housing • Building housing is good for our community
• The reuse and the mixed use
Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Aspects of the Paseo Nuevo Redevelopment Project Do You Like?

• If there is a grocery market confirmed for State St such as Sprouts or Lazy acres, I like that. I want to see more causal takeout like sweet greens and health food stores with hot food bars. I also like the fact that there is a proposal for housing in these severely underutilized spaces.
• NONE
• The housing construction downtown is I believe a positive. I do believe along State Street is the right place to increase density. I am simply not in favor of waiving the city charter height restriction.
• Cannot think of anything...
• Turning unused commercial space into housing.

Living and working around existing parking structure
• Housing option
• I don't like it!
• All apartments should be affordable units. Agree that it looks horrible that the affordable units are built in a less desirable location than the non- affordable ones.
• None.
• None
• The provision of affordable housing and mixed use.
• Adds housing
• Renovating a commercial space to residential housing
• I don’t like the plan, but if it’s going to happen regardless of what the community thinks, then Affordable units would be essential. There should also be a requirement for renewable energy powering all lighting in public areas. • None
Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Aspects of the Paseo Nuevo Redevelopment Project Do You Like?

• None. It's too high, too many units, low price units are a boon to greedy developers who just want to ruin our town. And Erewhon is an overpriced joke for the super wealthy.
• I don’t know we don’t have any real plans for review
• Very little
• Architecture
• Housing for both market rate and for middle-to-low income, but I think condos would be better for ownership and for people to build wealth so they can ultimately buy what they really want: a house with a yard for a family. • The architectural style.
• the conversion of some office space to housing
• NONE
• None of it - I'd like to see the mall revitalized and be used as a space for the community to use. The proportion of affordable units isn't enough and appropriating a parking lot that is heavily used by tourists, and the community seems foolish.
• The general idea of housing over commercial/office at State Street. • Retail revitalization and some reasonable amount of housing units. • Concept of living units okay, just too many.
• Mixed use. It is a concept used in other countries.
• I would love to have more housing downtown
• I agree that housing at Paseo Nuevo is the absolutely crucial for the revival of State Street.
• Colonial Spanish
• Hardly anything, but the style is in keeping with our City style. • Not sure
Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Aspects of the Paseo Nuevo Redevelopment Project Do You Like?

• That they are going to incorporate residential with retail. It's really good that they are repurposing a Macy's store, etc. to a more useful function. The architectural style is in keeping with SB.
• Nothing as stated
• In principle, I like the idea of adding residential over commercial retail space. • None
• Architecture style
• None
• The retail portion
• Too big
• bringing housing to State Street
• Style
• I like the idea of additional housing BUT this project is way TOO ambitious. • Housing, Art Museum, Theater
• None.
• Only 2 floors the most
• None.
(For the record: I support adding income restricted housing in principle, just NOT in this form or at this scale at this location)
• Not much too tall
• I like that the City owns prime real estate on State Street, even if it is encumbered by a lease. Encumbrance is temporary; ownership is permanent. I like that the City owns a parking lot that is a real, appreciating asset — the kind of asset that protects public interest across generations.

And I appreciate that Brian Barnwell had the courage to speak the truth: you do Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Aspects of the Paseo Nuevo Redevelopment Project Do You Like?

not give away public land to solve a developer’s financial problem.

The losses embedded in this deal — the land, the long-term tax revenue, the public parking asset — are wildly disproportionate to the benefit of 80 affordable units. It is a shameful proposition that should never have advanced this far. I have no idea what city staff thought they were accomplishing by being led along by this plan; the result is not merely bad policy; it is a shameful embarrassment.
• I like the idea of drawing people back downtown.
• None
• Nothing.
• None
• The idea of mixed-use concept.
• Don’t know of any.
• None of It
• Only the housing
• None
• I think the idea of having living space above the retail space in the Paseo Nuevo mall is a great idea.
• None. First and foremost, it feels like a waste of money. If the City can’t attract popular retail shops now, what makes you think that after spending all this money, they’ll suddenly start coming back? Will retail rents be lowered? It also seems like the building will be somewhat high, which could change the look and feel of the area.

As for housing, the issue isn’t just housing—it’s affordable housing. That’s what our community truly needs, not 233 units that local residents can’t afford.

The current mall is beautiful, but with the high cost of rental spaces and leases not being renewed for certain shops to make way for this project, we’ve lost quality places to shop. Now, many of us have no choice but to shop online or go out of town.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Aspects of the Paseo Nuevo Redevelopment Project Do You Like?

• Nothing.
• The general style of the building
Making use of the property since the original intent of the property is no longer useful.
• None
• Obey the city height limits of 3 stories tall. Keep Spanish design, need more night lighting and security. Make sure parking has security. • I like the development and housing part!
• None
• I like that Sb is getting something new. Change is good. • New housing downtown, plus I think the Macy's building doesn't look great. • The concept of affordable housing if there is any.
• Creating some affordable housing
• None, other than it might be possible to provide some "affordable and workforce housing" that we need downtown.
• Nothing. There are few places where the average adult or teenager can shop for everyday things at reasonable prices.
• The mixed-use aspect.
• We are opposed to all aspects of this plan.
• I really don't like the plan overall and find that it is not in the public's interest to upscale downtown.

Community Survey Responses – Paseo Nuevo
The City invited the community to share feedback on the proposed Paseo Nuevo Redevelopment Project. The survey was open from October 15 through November 1, 2025, and was available during the Open Houses (October 15 and 16, 2025), online, via paper copies, and was available in English and Spanish.

What Concerns, If Any, Do You Have?
• Why does everything in this town take so long to decide on!?? I’ve been in SB 23 years… I so hope a decision is made and something completed in my remaining time here!
The designs seem thoughtful, and I imagine they will go through a rigorous approval process…bidding process etc.
• Need to add more public restrooms to the property; need to fix the slippery tile, need to fix the broken escalators. Both residential buildings are too tall and bulky.
• Bulk at State and Ortega, flat facade on Chapala
• Lack of connectivity between Paseo Nuevo; the new development and particularly Ortega Street.
• I'm concerned that there will not be enough affordable housing, and local Santa Barbarans will be priced out of these apartments.
• I think the idea of keeping the original middle piece of them all is really great. I also understand and support the need from a financial perspective to have the low-income housing separate. It's great that there will be low income! That is a lot more than what was going to come under the original proposal. • Way too tall. One or two stories should be knocked off the top. • Who is the developer and what exactly does affordable mean? Who is making the money off the rentals? Have you considered including an affordable childcare center in the building plans? I know nonprofit LEAP (leapcentralcoast.org) would be happy to operate it. Affordable homes and free childcare seem like a great combo!
• It has taken FOREVER for this plan to get to where it is. Let's not screw around any longer, and let's get this plan into action. Pronto! Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

• Concerns above
• Please don't reduce number of housing units to add more parking... If people complain "not enough parking" (as they tend to do), how about adding a carshare element to reduce need for car-ownership for the residents? • None
• Making luxury units which can only be afforded by the same suspect - the rich and famous from out of town.
• I have a recommendation to develop a way to create some form of community activity or amenity on all sides of the buildings where they meet the paseo and street. Activity and community connectivity is always good. • None
• Time it will take to build.
• Height of building
• That it will take forever to get built.
• None
• Just want to make sure that downtown starts to have more shops/services for residents, not only tourists. Hope that this development goes in that direction. • I would like the project team to continue prioritizing equity and community engagement as the project moves forward.
• I am a little concerned about losing parking options, so I think considering ways to bring back some spots (anywhere downtown should suffice) and improving transportation alternatives in the downtown corridor. Also, we need desperately to bring back quality stores to Paseo Nuevo. Having more people living there should help, but right now the options are looking sadder and sadder. I understand why for financing reasons the affordable housing building is separate, and I think as long as it is as equally aesthetically pleasing as the other building, it is ok. The reasoning beyond the separation should be communicated to the public as recent bad publicity makes this seem somehow meaner than it is in reality. Also, it is really standard to build garages under buildings, so that is not a real issue. We need it!
Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

• Our major concern is the massing of the new construction. It is too tall along all streets and pedestrian corridors. The way it is currently configured you have sheer vertical walls which will eliminate any expansive vistas for pedestrians and merely create impersonal wind tunnels. We would prefer seeing no higher than four stories at the tallest point even if this means turning more of the area set aside for retail into housing in order to accommodate the number of housing units you are trying to create. A secondary concern is that there is not enough parking. One spot per unit is not enough. It is a folly to think that households will only get by with one car. You are trying to force people into using public transportation and that will most likely never be a viable option in a town the size of Santa Barbara. We just can't afford to create a public form of transportation that is viable. Finally, you should think long and hard before you 'give' this land to a developer. You will never, ever, never be able to retain control of the property. If you must give it away the developer should pay a fair market price for the land.
• I think all new housing should include co-located childcare centers or at least make sure that a community room is of the proper size and with bathrooms so that it can be turned into childcare because it meets the basic licensing regulations for room size.
• The mass on the state street frontage is to overbearing • The seven-story building mass along Ortega Street is a concern. This facade needs to be varied. To contain costs, I would suggest a variety of strategies:
native canopy trees along both sides of Ortega St., balconies, moveable awnings, planter/window boxes, and some flags. This could be a model for other large housing projects being considered for our city.

Another concern is that there be no reduction in the number of 80 affordable units. The entire project should be reconsidered if the affordable component is reduced.

I encourage an almost equitable mix of studio, one-, two-, and three-bedroom units.

I would also like to suggest that the food market considered for the corner of State and Ortega NOT be a high-end market but a more popular one, for example, like Trader Joe’s.
• Santa Barbara is too Ad Hoc in its approach to City development and would great benefit from a long-term strategic economic development plan. There is some discussion about the height of the development being 70-75 feet - I am Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

not for or against this. What I would like to see is a plan that shows how SB will achieve 2-4k downtown housing units.
• I hope construction will be swift and as many trees as possible will be left standing, and more planted.
• How soon we can have housing
• Concerned about possible construction activity along State Street - as long as the Contractor ensures proper signage and traffic control along State St, pedestrians and bikers should be well protected.
• I wish it were one story shorter.
• I’m concerned that people on the committee or one person thought:

1. Quality of housing was too nice. Not sure of the actual quote but the quality should reflect the nature of the street.

2. It was stated that we need local tenants. Local tenants will not bring customers to shop.
• Empty retail space.........

More housing won't help unless State Street gets cleaned up, move the homeless off of State Street and make State St. more desirable for new retail businesses. There are SO MANY empty retail spaces on State St. now, who would want to move downtown in an environment like that? • Traffic to freeway impacting west Ortega Street.
• More affordable housing
• I have some concerns about giving the property away. I think the city could improve messaging about how loss in value to the City can be mitigated over time. Otherwise, my main concern is that handwringing will kill this opportunity. • That it won't happen. We need to move fast.
• I could not understand if there will be an increase in parking spaces. This is not clear: Over 1,500 Parking Spaces across Lots 1, 2, and 10 (Lot 1 adds 28 spaces; Lot 2 reduced by 186)." Does this mean an increase of 1500 spaces? It sounds like a decrease. Definitely need to add more space if you're adding housing. My concern about housing: will housing density increase crime? Especially concerned about crime in density of lower income residents. I'm sad we are not getting a roller rink...

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

• Why does it take so long?
• Tall height on corners instead of interior will shade sidewalks • Many. Why the ground floor retail? There’s enough retail in the area. Adding retail to this project will come at the expense of surrounding retail. Why the height variance? Height restrictions are there for a reason. A variance establishes a precedent for another variance. No variance should be made nor requested— eliminating ground floor retail will solve that problem. Again, I see the need for housing but do it without sacrificing the architectural integrity of a city known for its architecture, especially when a component of the added height is cannibalizing existing retail. If you need more units, increase density, not height.

Finally, my understanding is that this parcel is on a ground lease from the city of Santa Barbara. Why give it away? Put it on the market and sell it to a developer who can play by the rules. Revenue to the city from the sale of the parcel will be needed to offset the revenue drain from the utility surplus required to service all these units.
• I am concerned that all affordable housing is in one area away from the market rate housing. All neighborhoods and housing should be inclusive. • This will not help provide housing for the normal working people of Santa Barbara. Probably most of the units will be rented to folks from out of town looking for a weekend spot in Santa Barbara.
• Traffic will be significant especially since State Street continues to be closed. It precludes functional downtown traffic circulation. I work on this block, so I am very attuned to the traffic.

Additionally, although this parking lot was privately run, it was publicly funded (through RDA) and the underground parking "belongs" to the city, not this development. Building housing without providing parking continues to be the short-sided development problem. Although this looks high, couldn’t it be 2 stories shorter? it will dwarf the area.
• Concern about the affordable units on Lot #2. Cramming 80 units in that footprint is an expensive and inefficient proposition. It would be better to have the units integrated on Paseo Nuevo proper or find a more suitable lot for the affordable.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

• I am concerned that they are taking parking away. I am also concerned that they will not provide enough parking for the people who live there. It is already a challenge to find street parking, so I only go downtown once a week. Make sure that they have at least two parking spaces assigned per apartment. If it's three bedrooms, it needs at least three parking spaces.

It's a shame that Paseo Nuevo could not fill Nordstrom or Macy's with other shops. Ventura has so many more malls and Targets and Walmarts than Santa Barbara. I find it odd that Santa Barbara cannot attract more stores. I wish I did not have to go out of town to go to department stores. • The project needs to do something good for the average downtown resident or employee. Please don't bring in a "luxury" grocery tenant, or another "high-end" fitness club. Provide realistic options for local residents. Continue to apply pressure to the developer to provide as many affordable units as possible-- if the City is letting them use this prime real estate, we (the city and its residents) better be getting something beneficial out of it.

As much as I LOVE public transit, it's not realistic at this time that each unit will only have one car. The city should consider parking mitigation programs.

Maybe a parking program for residents of this project that offers a discount/makes it free to park their cars overnight at other City lots nearby.

Maybe free bike rentals.
• 80 affordable units is nowhere near enough. Those numbers should be flipped - give us 233 affordable units and 80 market rate ones. "Market rate" is a nice way of saying unobtainable to the vast majority of longtime residents and the people whose labor make our local economy viable. At this point even "affordable units" in reality mean most people are paying a huge percentage of their monthly income in rent and utilities. These guidelines have not kept up with reality, inflation and the cost of existing post-2020.

People deserve to live where they work. We deserve not to be priced out of our own communities by corporate-backed real estate and hotels. We all deserve housing that doesn't bankrupt us and is still safe and livable, no matter how nice and desirable our location is. Care for your locals, the people who make tourism and the destination mystique of SB possible.

I would also love to see incorporation of third spaces that don't require you to spend money to exist in them. That is the real keystone to revitalizing our downtown and our local community that is oft ignored. We need places to exist and share space with our neighbors that don't require we justify our presence by paying money.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

• Santa Barbara housing prices have escalated so dramatically I worry the market rate units will not be affordable for our workforce (teachers, cashiers, servers, cooks, first responders, nurses, doctors, housecleaners). Covid introduced a large influx of remote workers that have displaced our middleclass workforce. There will come a time when our workers commuting from South and North tire of the traffic and time lost and decide to work where they are forced to live because the cost of Santa Barbara has become too high. We are losing our most vulnerable workers and housing costs are a major problem.

In the long term, this will negatively affect diversity, workforce stability, recruitment and undermine the Santa Barbara Community. I know development costs are enormous and there has to be incentive for a developer to take on these projects. However, the city (and county) needs to recognize a teacher making 130k/year spending 7k/month on housing costs alone cannot afford to live here.
• Housing below market rate should not be the focus in this particular development, in my opinion. Being that this is very heart of Santa Barbara, we want the housing to be high-end and elegant. Affordable housing is important, but there are many other properties outside of this central location where lowincome housing can be given fair focus and emphasis. • The proposed height is too high- it will feel imposing and dark. And more importantly the number of market-rate units does not reflect the desperate need we have to prioritize affordable housing. We need to go well beyond minimum requirements and actually respond to what our community needs, not developer profits.
• Too tall, too bulky. Please don’t take away our Riviera views. It’s one of the reasons our little city is so special…and once you lose them, they are lost forever
• My chief concern is that retail reality in the 21st century no longer fits within the dreams and hopes of what was the "Santa Barbara vibe" and the hopes to resurrect it with housing. In my opinion, the only way to restore vibrancy to downtown would be to build a multi-event stadium/center that provides a REASON for tourists and residents--and therefore shops, larger stores and restaurants--to come and be downtown.
• How can I see the architectural plans, please?
• The peons are next to the parking structure and all its fumes while the rich are safely away from it with beautiful views and an expensive grocery store handy.

Honestly, do you never think about the image you are presenting.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

• I don't like the design of the Ortega/Chapala corner. I would like to see an opening off Ortega to continue the Paseos through the property. I am not someone who is worried about having a high-end grocery store. Family members in LA who are not wealthy liked the Erywon (sp?) they visited to get food for a date night. If we are going to have anything special and examples of luxury items they should be at that location. State Street should serve all parts of our community and serve the tourism industry as well as residents of all ages and incomes.
• Parking. My store is next to lot 2. This project adds 80 residential units to lot 2 - this will add at least 160 cars to the lot, while taking away 182 spaces for the project. How many parking spaces will be left for retail? Will our parking assessment be adjusted down because of the diminished parking availability? • Higher density. Building height. No expansion of amenities with public access. • The height!!!!! It doesn't matter to me that the Bonus Density Law allows for a higher height than what Santa Barbara is known for, loved for, why people WANT to come here and pay the high rents and high cost of housing. I believe the City should ENGRAIN the current height restrictions for everything. • Not focusing on the average renter/consumer as far as pricing • I don't agree that the developers should receive city property (parking structures) so that more affordable housing can be created. The affordable housing sho8be built into the main mall not across the streets. Too big a gift of public property
• Sufficient affordable housing and access (walking distance?) to nearby grocery stores for residents.
• First, I am grateful to see efforts being made to address the current issues in downtown SB. As a property owner of a luxury condo on the third floor in the Paseo Chapala complex whose unit includes views of the parking structure from most rooms, I have several concerns. I understand some of my concerns are truly unique to me and a few others, and decisions are made for the greater good of the community and appreciate the opportunity to share.

1.) Parking allocated to accommodate the new units in the old Macy's building - parking in this particular area is already a challenge. Street parking is rarely available and there many of the small businesses on Chapala that rely on parking in lot 2 to serve their customers, as do the shops in Paseo Nuevo.

Allocating 1 spot for the new units and taking away existing parking will only Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

exasperate the problem. I am curious if there were any parking studies done.

Additionally, the new building of studio apartments and storage units planned for the corner of De la Guerra and Chapala will have no parking and will add to the existing parking challenges. It doesn't seem reasonable that all those residents will forgo vehicles.

2.) The additional height that is being proposed will diminish a fair amount of mountain views from my unit, which is one of the unique qualities of my location and a reason I bought 3 years ago.

3.) I was informed (at the open house) the project construction would take at least two years. I happen to work from home, and two years of construction noise while trying to work and hold meetings will be problematic. I am concerned that my property value will be diminished during this time period and will be difficult to sell.

4.) Adding a high-end grocery store to a building that is occupied by renters is not the answer. I assume that will be worked out when looking for a tenant and the company looks at the demographics of the area. We do need a market in the area, but something along the lines of Lazy Acres or even Whole Foods would be a better option.
• Outrageous rents, the affordable rentals need to increase in proportion to the market rate.
• The proposal doesn't include the former Nordstroms. City not receiving equivalent value for its residual interest in the fee in the form of exactions over and above typical development exactions. Retail should only be on State Street frontage.
• Parking is my biggest concern. Parking downtown, specifically for residents, is already terrible. It makes no sense to bring 300+ new apartments and REDUCE the amount of parking spaces downtown. I don't understand why you are removing spaces from Lot 2, when the rest of the housing could be at the Nordstrom building or elsewhere. This City already has a parking problem, don't make it worse. Keep the buildings to 4-5 story's max, don't make our downtown have "skyscrapers" that will take away from the historic feel. I also really hope that the grocery and other retail put in aren't high end like being discussed, we need things like a Trader Joe's.
• The HEIGHT of the structure is of primary concern. Anything over 50 feet that close to State Street will negatively impact the aesthetics that make Santa Barbara so special. History shows that 70 feet now will lead to 100 feet for the Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

next project, and so on. Height Restrictions require more creativity from city leaders-but it is a key element going forward.
• Putting low-income housing and market priced housing in two distinct areas is a terrible precedent, an obvious insult to people who have less. • I'm concerned about the height of the buildings, the density of residential units (too many in a small space) and the impact it will have on traffic, especially if State Street remains closed in that area. I wish some of the units could be affordable-rate condos so residents can own their home. • It’s way too tall and it won’t ever work without state street opened to vehicles in both directions. The pandemic is over!!!! Open everything back to prepandemic. We spent millions on our nice sidewalks and now they’re for restaurants WTF!!! No higher than 60 feet! That has a chilling effect on the temperature downtown as well we are losing all our views all over town!!! Cut the crap and open State Street. There wasn’t a bike problem until the horrible city council turned it into Disneyland north. Bring the parades back and extend the parking back to 90 minutes!!!
• 80 “affordable” is a joke. We need accessible housing for the young professionals who actually work in this city!
• Why are the 80 affordable housing units all rentals? Why aren’t there some that are a part of the city’s assisted home purchase program? There aren’t enough homes in that program, ask those that work in it.
• City selling the land to the developers, risk of city losing claim in the development, all units listed as rental units which means very few current residents will be able to afford the ever-increasing market rate rents and further pushing out community members.
• This project should be designed and built as a net-zero energy all electric highperformance building to align with city council’s goal of carbon neutrality. It should also perform a full LCA and explore all opportunities to reduce embodied carbon.
• Giving away the land to the developers. If we do this, it should be in exchange for meaningful economic value back to the residents of the city. This can be over some period of time. What will the value be back to the voters in specific terms, e.g. $x over y years? If we can't quantify that then what's the point? On the affordable housing, it's a key aspect of the project, but how is eligibility determined? If it is just income, then I do not support the project. These Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

homes should be made available to people that work in the community; caregivers, nurses, city workers. Making these available to people working remotely where there is no community impact I would disagree very strongly with.
• The re-build of the old Macy’s is too massive! It is not to scale of the surrounding neighborhood.

I’m very concerned about the additional traffic on Chapala St that this project will create.
• 1. Concern with City land giveaway; 2. concern with location of deed restricted housing and its separation from market rate units;

3. concern that this will be upscale development with many amenities that will be very expensive rentals; 4. concern with lack of emphasis on local businesses at presentations; 5. enormous concern that process to get this far has been clothed in secrecy and public input opportunities are limited to 2 open houses and a 15-day comment period; 6. finally concern with this survey's questions and direction - very limited in scope
• All housing should have residency requirements. If a unit is not occupied, the owners should pay additional fees that can be used to create other housing.

The summer 2020 grand jury report found there are more unoccupied units in SB City than there are homeless people. That is a policy failure. • None it’s consistent with Newsom‘s new law
• I am skeptical that the affordable housing unit size and plans for amenities and parking are not disclosed. I’m concerned that the units may be too small because I think people, and for me personally, deserve to have space and not be in a crammed apartment. Another concern is lack of specificity around parking supply and how the agreement offsets the parking spaces removed.

Where will the housing units park? Will replacement parking be provided for the City Lot spaces that are removed? The following was not discussed at the workshop but I heard at the PC hearing that the commercial owner, AB, intends to only provide parking spaces to the market rate units and none for the affordable units. I find that unethical and I am concerned that the affordable units, whose households do not have a lot of money, will have no where else to park except for the City Lots where parking costs either $165/month or $250/month per the City’s website. Another concern of mine is that the city lots are not prepared for the increased volume and that Carrillo and State Street especially with the road closure are not prepared for the increased traffic. • To The Planning Commision,
Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

My name is Elliott Lanam, I'm the owner of Hidden City Studios located at 924 Chapala St. in downtown Santa Barbara. I'm a local SBCC then UCSB student that started my own recording and rehearsal studio back in 2013. My mission from the beginning has been to offer professional recording and rehearsal services to the music, tv, and film industry, at a grassroots price, something that has been a tremendous addition to Santa Barbara. I've hosted students, field trips, lessons, and local artists, and now have grown the business into a recording studio for all demographics, beginner to professional, and now work with all of the biggest celebrities in the city, becoming the #1 recording studio in Santa Barbara. I also record the majority of the local musicians and talent in the area spanning from Santa Barbara to SLO and LA. I've been an asset to the city with what I offer to local musicians and celebrities who don't have to travel to LA to do their work. This development would eliminate my presence in this city and cause all of these musicians and celebrities a lot of issues. Some of my clients include: Meghan Markle, Rob Lowe, Jeff Bridges, Josh Brolin, Ellen Degeneres, Kathy Ireland, and countless more. These are essential figures in the city and would all be tremendously affected by this development.

In addition to that, the reasons this development cannot occur is for many reasons listed hereafter:
1) The noise and construction would simply put me out of business (since many of my recordings require quiet and no construction / demolition sound). 2) These units would only exacerbate the homeless issue in this area, which is often affected by the homeless and drug addicts who drink and do drugs around this area. Not only that, but it would spill onto State Street which will then affect your tourism and general outlook on the city, not to mention the effect it has on business owners.
3) The sheer cost and lack of value this adds to the city is not worth the money, time, and effort. These parking lots are essential to businesses like mine and those around me, including The Canary Hotel, Gold's gym, and numerous others.
4) I have invested close to $1M of my own personal money into my business and this would cause me to burn all of that money. I'm currently in the process of developing a new studio in the same location (above my current one) and have already invested thousands of dollars into it, which would all be for nothing if this development occurred.

In summary, I implore you to take into serious consideration the clientele and industry that you have in this town that's only growing. With more and more celebrities moving to Montecito and Santa Barbara, you need to be able to Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

offer them a comfortable place to be able to record at. That is my business. If they need to constantly drive to LA, that will make them want to move back to LA, and you will lose their tax dollars and contributions to the city. You will also eliminate a music and student hub from the city, which I am one of the only and certainly the main.

What I offer is the solution and this solution adds more to this town than a few low income housing units that will deteriorate the city. The local business owners work hard to make State St. what it is, and this development will only lead to more doors closing and an inevitable recession to follow with countless vacancies, which is again far more detrimental to this city than the benefits of this low income housing.

Thank you for keeping the heart of Santa Barbara the priority. I appreciate your understanding and consideration on this decision.

Sincerely,
- Elliott
• I am strongly opposed to waiving the city charter height limitation for this project. The height limitation is a key part of the fabric of our city. If the project is in need of additional economic incentive to make it feasible, the number of affordable units should be decreased and/ or the developer should be allowed to decrease the amount of retail on the ground floor and have more market rate units on the ground floor. There is a lot of retail already on state street that is struggling, so I believe that the key part of this project is additional dwelling units. Let's allow the developer to have more market rate units if we have to do make it pencil for them, but let's not change the fabric/ identity of our city and make this apartment complex the defining building in our skyline. • I have to agree with the Planning Commission. This project, as proposed, is hideous. It needs twice as much housing and half the retail. It needs to integrate the affordable units and the market-rate units and probably double the percentage of affordable units. The City should not be gifting land for this project, as is. Any food market in this should be local, such as an extension of Tri-Counties or the Isla Vista coop. We don't need a high-end market here.

Info about this part of State Street should include some content on possible adaptive reuse of the Nordstrom's building and perhaps the Balboa building.

We need to see the bigger picture.
• To big, limit height to 5 level above ground 60 feet. Include affordable housing units to Macy project. No on 80 units on City Parking lot.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

• Housing does not belong in a mall on State St. It should be a shopping corridor, not mixed with housing, and certainly not over 300 units. Also, many concerns about giving away land. Public land should not be given away to a developer or otherwise in any type of exchange.
• The massive size of the housing development in the old Macy's site is too much for Santa Barbara. It will overwhelm the scale of downtown which is one of our city's attributes - buildings that do not overpower or shadow the streets and sidewalks. As a longtime resident this development will erode at the beauty and desirability of our town. We also do not have the natural resources for all the housing development that is taking place.
• Way too large, way too much building in our once sweet smallish town. "Build it and they will come?" Yup!
• The units are going to be too expensive for most people that need housing.

This project has high potential of becoming landlord money making machine at the expense of the working people. People who will live in the apartments should be able to own them, no rent allowed. You move out - you have to sell to another person who will live in the apartment.
• The City should sell their interest in the land and have private ownership of this entire project. That is where actual tax revenues come from. Stop the socialism. End it. Now.
• In 2015, after 4 years of extreme drought, the city of Santa Barbara declared a stage III drought emergency. Please let me know where the city is getting water from for all of these units and all of the other units being proposed and already being built.

How can you assure the citizens of Santa Barbara that we will have water when another drought occurs.

Please let me know!!
It’s not if another drought will occur, it will happen again. • 1. Population density

2. Building Height

3. Lack of Water

4. Lack of Parking

5. Impact on quality retailers on state street

6. Increase in homeless on state street

7. Makes it even more undesirable to go to State Street

8. A bad idea all around

9. Unless you do it right (like in Europe) and lay stone pavers on all the streets it will just continue to look like an undesirable eyesore on State Street and Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

surrounds

10. Makes no fiscal sense to give away the parking lot for free Conclusion: Either do it right and maintain the culture and quality of Santa Barbara (heights/density/water impacts, etc.), stone pave or open State Street, have fiscal responsibility or don't do it at all!
• The rushed nature of the project and all the other concerns raised by the Planning Commission. Alliance Bernstein does not deserve the transfer of a 32 million dollar public property. The City needs to allot much more time to seek a public/private partnership that would allow the City to retain much more control over the development. In addition, the City needs to ensure the right of residents to operate their own businesses from home, and to install lifts in any studio apartments. Restrictions in other complexes within the City are far too onerous and have parented the growth of a productive, artisanal community.

Please seek other partnerships with non profit developers willing to buy out Alliance Bernstein and build with much more consideration of the local community and its values, and with retention of City ownership. • Land transfer to a private entity and tax revenue sharing with a private entity.

Unacceptable that it gives away public assets. A high end grocery store is also not what the city needs.
• The project is completely oversized, removes parking, and the City has no real detail on the project.
• The El Paseo mall is less than 50 Years old. Other solutions should have been seriously considered to increase the number of shoppers rather than destroying the mall. For example, what about providing adequate parking uptown and a free shuttle into downtown State Street. This could benefit many other merchants in downtown also. Allowing the housing plan for El Paseo is merely a surrender to developers who only care about turning an easy profit. • If property owners were not so greedy, regular businesses there owned by locals would thrive. It's the same on State Street. Only the chain stores remain since they can afford the losses here with profits from their other locations in 'real' towns. Horrible landlords would rather have vacancies than provide affordable rents. They could afford it. The real estate industry has destroyed this town for the last 30 years or more.
• Too high, too dense, too many affordable ruin all for all. • The effect on neighborhood street parking in our downtown neighborhood The size bulk and scale affordable housing and the clash of living in the entertainment district of SB noise and livability
Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

• The fact that this is a 6-7 story building project with hundreds of new residences.

I thought Santa Barbara had a low building height limit. We once were a nice, beautiful town where you could actually see why you live here. Now, we are beginning to become a large city with views blocked, traffic jams almost 24/7, more people, more polluting, no decent transportation, and on and on and on... • Lack of transparency regarding other options. The Nordstrom project proposes adaptive reuse. I would like to see calculations that show adaptive reuse (based on latest City ordinance) is financially infeasible. • Way, way, way too tall and bulky for our town. I think we are heading toward San Francisco and the Marina District up there. Expensive, no parking, but not nearly as lovely as some of the old SF historic buildings. Don't give away City property!! Ever!!
• Too large. And the whole development should be owned, built, and managed by the county or city. Why are we giving away this valuable spot to developers? If there’s to be rentals and condos, let them be govt owned for local employees. Every single unit, if owned by developers, will end up being short term rentals. That’s not what we want in that spot! • The size and design. This is a corridor adjacent to the 'old town' Santa Barbara. It will be a large over-bearing contemporary building within only a few yards of the Covarrubias&Historical Museum, Pueblo de la Guerra and other historical buildings. The need for housing # must NOT override the historical context of the location.
• The damage the City Hall did years ago to the city which is supposed to represent with the extremely idiotic Paseo Nuevo has No solution. And I suspect that any plan you come up with, will be as bad as any other of your plans.
• Loss of parking downtown is a concern since that lot always has cars parked - those of tourists, shoppers, and other visitors.

The closure of more businesses in the mall is also a huge concern - I understand we are living increasingly in a digital world but I love the in-person shopping experience and it being a space for community.

Lastly, while I understand we are in a housing crisis, the percentage of "affordable" units is still dismal. Santa Barbara is one of the most expensive Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

cities to live in and I'd rather we do something about rent control and tenancy laws instead of trying to inject more units into the market. • This may be a case where the private sector needs to take a loss. Paseo Nuevo has been largely vacant for years, the public should not pay for that mistake. The public and small businesses would have used the facilities, just as they are, if the rent had been lowered at the time and kept at rates supported by this current market.

It is not at all clear that there is a market for Erewhon and a high end sports club. Grocery shopping is a very competitive industry, if there was a need for Erewhon, the would have been here already. A high end market is a particularly bad fit for downtown Santa Barbara with its delivery and car parking (even valet parking?). That isn't any vision of Santa Barbara I've ever heard.

I advise developers - there are many other nearby sites that are better and cheaper for housing development. This site may just have to wait until development is complete on those competing sites. There success will ultimately raise the value of this site until it is feasible. In the meantime, reduce the rents and use the existing premises.
• The height is overpowering for the site and will forever change the look of the town we moved here for 33 years ago.
• Height — no special height allowance for this project, please. Also, don’t need high-end specialty stores — bring back actual useful retail that caters to middle class.
• Increased density and traffic snarls, especially with State Street closed. Too many units. Do NOT violate the height restrictions!!!!! • The size. It should be no higher than four stories and it should have levels that are set back from State Street so it doesn't seem as tall. The building behind Cantwell's (Isla Vista Co-op) is a nice example of a pretty Mediterranean style building that blends in well with its surroundings.

The parking. We should not lose parking. The parking structure across from Nordstrom's, next to Canary Hotel is a good lot. It is next to the Farmer's Market. We cannot expect everyone to ride a bike or take the bus, especially when shopping. Plus, senior citizens should not be expected to use these alternative forms of transportation unless a better system is set up. Example would be the electric golf cart-type vehicles running around the complex with frequent pick-up and drop off at at nearby parking place. Perhaps other areas Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

could be converted into parking structures, such as the county parking lot behind the administration building.
• the physical size of the project... and the land give away • 1. The City should not give this land away. Instead it could possibly offer land in another location, if it is needed for construction of housing at Paseo Nuevo or a long lease.

2. The current design is too big for its area. This isn't LA. It should be more of a courtyard or terraced design that will not look like a behemoth. Maybe having smaller buildings would also allow to build over the entire mall.

3. More of an effort should be made to include the Nordstrom building.

Otherwise you will face the same conundrum as with the Sears building (possibly non-cohesive build).

4. Once again, you are building for upper middle class. Why not build more smaller units? No swimming pool.

5. Don't split up upper income and lower income units. Combine both in both locations.

6. Is it possible to rebuild the parking lot underground? It would allow for a better design in that location.

7. This is a huge opportunity to build a cohesive living space. More effort should be made to include every-day shopping stores for the residents. No expensive supermarkets, but affordable shopping, day-care centers, doggie day care, green spaces, smaller stores (butcher, bakery, gym, hardware store, beer garden, etc). The City should strive to recreate an entire social network in the downtown core. This will keep residents in the State Street are and liven up the entire core.

8. Would it be possible to find funds that would allow the Housing Authority to build here? Maybe State funding?
• WAY TOO BIG!!!
• It is far too tall and massive for our small town. Why should they have an exemption over our established height limit? It would overshadow all of downtown and take away from the historic ambiance. They should increase parking, not decrease it. And a huge problem is the City 'giving away' the land and income generation it produces. We are already short of funds, why would our government officials even consider this??
• It’s too big!
• Seven stories is too high. It will overpower other buildings on State Street and lose the local feel. It should not exceed four stories or other buildings in the same district. It isn't worth destroying the beautiful architectural integrity that Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

downtown SB could have, to create rental units just to try to comply with state laws regarding housing. That kind of density can be developed in other areas of SB, such as upper State at the other Macy's site! In the Funk Zone, or in the old warehouse districts. It can be better achieved by encouraging developers to build smaller projects with less units, dotted throughout SB that blend well and better serve the people. We really need to focus on units that can be purchased by people, not just rental units owned by large corporations who will increase the rents and keep people enslaved to those payments. Owning a home gives stability to families, people who work in SB. Renting is a short term fix! By allowing corporations to use all of the allowable multi-housing land to build rental units, we remove the opportunity for people to be able to purchase a unit and enjoy home ownership. Firstly, I would not support this project at this height. Secondly, even if it was lowered, I would not support it, unless it offered the units for sale, not rent. The need for "Housing Units" can be satisfied by units for sale, just as easily as it can be with units for rent. The cost to build is the same and the time to build is the same. It's time that SB stood up for its residents and insist that investment companies build homes, not "cash flow" units for their investors!
• The height is destroying Santa Barbara
• There is way to many housing structures and is taking away from the quaint charm this city is. It seems like it is all about financial aspect. Soon more trouble will multiply. All of the journalism(Paparazzi) will start harrassing the popular(Famous) Homeowners who live here to get away from the hussle of LA. The beauty of State Street is the open air of it.
• I object to the height of the proposed building. Too many units. • Too large and too tall
• No higher than 4 stories high to keep the look and feel of State Street. • The whole point of new housing crowding our city is to make it affordable. I want every unit to be affordable to our local workers, not just the wealthy who are the only ones who can afford market rate housing. Subsidize the builders to make it affordable.
• State Street is still locked down---not good---Nordstroms gone. vibrant shopping---gone!
• The size of the apartment buildings is enormous and not in scale w/ the rest of SB. Questions: Has there been any impact study on the effects on the surrounding areas and infrastructure from housing several hundred people in a Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

relatively compact area downtown? Has anyone done a survey of tenants to get a sense of who is most likely to occupy these units and whether people want to live in a densely designed building in a designated commercial district? • Too big
• Way, way overbuilt. Gift of public funds.
• It’s to tall
Does not fit in SB
• Parking, first of all. Even though it is adding some to the Ortega/Chapala lot it's taking away more from the De La Guerra/Chapala lot for a net loss.

Second, and most important, is the height of the project. It needs to conform to Santa Barbara standards NOT what the State is allowing.

Third, DO NOT give away OUR land to accommodate making it happen. That is a BAD decision!
• Giving away public owned land, demolishing parking in a much needed area, Restricted income housing separation, Giving away public lands, partnering a global investment firm who calculated risks when making the initial investment, giving away public owned lands, not considering a charter, giving away public owned land to a global investment firm
• Not everyone gets to live in Santa Barbara. Stop wringing your hands over housing. The market will dictate what happens with local supply and demand.

We have crumbling infrastructure, draught conditions (no water for 313 units downtown plus the 1000+/- at La Cumbre), not enough life safety (for our population) especially with adding so much housing stock. • Is horrible if we allow to have buildings in our beautiful Santa Barbara • Santa Barbara’s enduring appeal isn’t accidental. It’s instead the outcome of a century of design discipline: scale, massing, and Spanish inspired form. All used to enhance an already naturally stunning place. That balance is fragile.

Pushing downtown buildings to 75 feet at Paseo Nuevo breaks from the city’s long standing height framework and the human scale fabric that makes Santa Barbara, Santa Barbara. Even supporters of redevelopment should be alarmed at the crazy massing now proposed.

My concerns:
1) Excess height and mass: proposal reaches up to 75 ft via State Density Bonus, a step change from the 60 ft charter norm.
2) Program split and site planning: 233 market-rate units on the former Macy’s Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

site and 80 affordable units on Lot 2 isolates the income restricted homes rather than integrating them. Social equity should be carried out by integration, not segregation
3) Public parking loss: Lot 2 reduced by 186 spaces, with additional reallocation of spaces to serve private residential use, meaningfully shrinking publicly accessible supply in the urban core.
4) Advisory bodies’ red flags: the Historic Landmarks Commission asked for reduced massing; Planning Commission criticized the plan as ill-defined, questioned the public-land transfer, and called the proposed placement of the affordable building “not dignified.”
5) Net effect on welfare and place quality is negative. Housing supply matters, but form matters too. Eight stories in the historic core to “buy” affordability degrades the very amenity value, beauty, human scale, and walkability, that residents and businesses in Santa Barbara depend on.
• Much too tall . Lower it, it will channelize downtown and block views also it appears there will be a parking shortage.
• Under no circumstances should the City surrender public land to private equity.

The developer’s claimed “6% profit” is not a constraint — it is a negotiating posture. They can (and will) raise rents later, or re-paper their projections, or flip the asset at a higher valuation once public concessions have been secured.

That is the private-equity playbook.

Once public land is gone, it is gone forever.

The fixation on the Macy’s building is exaggerated; most visitors don’t register it at all. Its condition is not a public emergency. If the leaseholders mispriced their investment, that is their loss to absorb — not the taxpayers’. • - I don't like the clear segregation between the below-market rate housing and the market-rate housing. Even if they're separate buildings, it feels wrong to have the below housing face another building and be away from the life of the plaza.
- I'm concerned that there won't be greenspace and that the Santa Barbara vibes will not be consistent in this new space. I understand that luxury draws people, but I also hope it remains inviting. Already I feel like the architecture is not consistent with Santa Barbara. It feels very out of place especially from the top, which is important given that this building is so tall. - Additionally, I worry that if downtown is revitalized and housing is made on site, then parking will be extremely limited especially given that some of it is put towards building the housing.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

• I'm concerned that SB builds more houses that the working class(teachers, support staff, nurses,) cannot afford. To add, we don't need more houses purchased by people who live out of town and utilize these as a second or third home. This city need housing affordable to locals with salaries ranging from 70- 100k.

Market rate in SB is approx. 1.8 million which exceeds most salaries of average or median income families. This model does not address the housing deficiencies for average income families.
• How on earth can you count city/public parking lots for this project! You could count the parking spaces underneath the shopping mall but not ones blocks away.
• This would completely change the look and feel of State St and would be quite a loss for Santa Barbara. :(
• Any reduction in public parking is not acceptable. Neither is the fact that the affordable units are not integrated into the project throughout the site. I'm also not in favor of giving away City land or parking for a private developer where the City does not remain part ownership of the project. There are already concessions being made on height. They should also find a way to reuse the building instead of proposing to demolish it.
• The height and density of these buildings will be a monstrosity. The City is GIVING the land to developers for RENTALS?! Who do you think will actually rent these very expensive dense apartments? That’s not the lifestyle Santa Barbara is known for. They couldn’t lease out the market rate very expensive 80 unit building on E Gutierrez this year so they sold the whole thing to UCSB.

Your business model is flawed. The apartments were on the market for months.
• No parking, your reducing parking by taking other lots to accommodate your short coming on parking, This is retail shopping stop lying about affordable housing in Santa Barbara.
• Not thought through. This is an incredibly valuable piece of real estate and we can not afford to make a mistake at this location.
• Many concerns and am disturbed by this plan and how it has been brought.

We have now learned this has been going on for 3 years! Where is the "open book" and community inclusion? This is uncreative - too big, not local, not Santa Barbara. I know local designers who could do true Santa Barbara - not this out of scale fancy housing with too much high end and not enough Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

Affordable. Plus the affordable is shoved over between an alley and a parking garage. AND - more expensive (unaffordable) housing will be coming all along State Street now with adaptive reuse. Include affordable housing IN THE MALL separate from the expensive Macys rebuild - put it in the center of the Mall. 80 affordable units crammed up against Lot 2 is a terrible idea and unrealistic. And it makes zero sense to lose parking that will be needed with more expensive downtown housing - and people with expensive cars.

Modifications to Lot 2 = expensive structural rework - parking garage construction is super expensive. Put the retail on the streets and housing in the mall.
• Overdevelopment in downtown, where I live.
• too much density, giving away city land
• The height of this project is a very big problem. It is out of scale with the rest of the neighborhood and the density is inappropriate.

I also have concerns about the financial aspect of this project. Why is the city of Santa Barbara effectively donating a valuable asset to a private developer? • How much money was spent redoing the tile and “revamping” Paseo Nuevo just a few years ago? My concern is the ongoing financial waste. I’m not sure if the City is funding part of this new project or not, but it feels like money keeps being spent without any real improvements to the downtown area. • This project destroys one of the few successful businesses at Paseo Nuevo:

Tondi Gelato.
• I live in the downtown area and it is already heavily congested and overcrowded and there are far too many construction projects already going on.
• Too dense
Too tall
• High end units , and out of town buyers
• Project is way too big need to downside the size, bulk and scale. Not enough open space, park space, water fountains, trees, outdoor seating with natural gas fire pits for nighttime gatherings and other public amenities.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

• I do not like that the city is selling land.

The city is being short-sighted in selling this priceless land. The current leadership needs to take sober look at this deal - it's no good. This land could fund our budget if used correctly. Pretty surprising that the city council is ready to give it away. This asset could be used for so many things over generations of Santa barbarans. Let's get more creative!
Listen to your planning commission. Please inform your constituents of the plan to give away land and see what they say. I don't think voters will support giving away land in the heart of town to a private developer.
• Lack of parking, expense to the taxpayers, height of prospected buildings, poor design of the affordable units, etc.
• There is not a lot of consideration for sb locals. Just money hungry people who want more housing units for people who can’t even afford it. A lot of us are from here. You’re gonna run us out to build a mini LA?
• There should be more affordable housing, 40% affordable • 1. Don't away the land. It should be a new ground lease instead. 2. The market and affordable housing should be blended in the same complex, rather than segregated housing. If the market housing is "luxury" units, I'm opposed to that.

New housing downtown should be for regular people who will live there, rather than second or third homes for the wealthy.
• Too tall, too white, boring facade.
• I am concerned that we continue to build market-rate housing when we have been exceeding our goals in that realm but have been falling far short of goals in terms of affordable housing. I suspect that more market-rate housing promotes the need for more affordable housing because market-rate consumers require services from workers who require affordable housing (many who now have to live out of SB and commute, and hence exacerbate transportation, air quality, and climate change issues). I fear that more marketrate housing without adequate increases in affordable housing simply worsens are housing crisis. I also think it creates a bizarre and unhealthy community dynamic when market-rate people are located in one area and affordable people in another. I am also concerned that these new market-rate units will just be bought up as 2nd homes by people from outside the area. If local preference is not a requirement, then I see no reason to build these. We do not need more out-of-town people living here part-time. We need housing for people who live and work in Santa Barbara and for those who work in Santa Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
What Concerns, If Any, Do You Have?

Barbara but have been forced to live far away because of housing costs and lack of affordable housing. Can't we do better than this? • The motion made by the October 9, 2025 planning commission must not be sanitized or changed. That motion and vote represent my thoughts.

Housing that is affordable should be integrated in a dignified and equitable way in the center Paseo Nuevo. Do not tear down a very expensive parking structure that we taxpayers paid for. Do not give away the land!!! • That many of the units will be bought up by people or companies that have no intention of living in Santa Barbara, they will become high-cost vacation rentals. • I have concerns over density, height, and lack of a reasonable amount of resident parking spaces. Overall lack of aesthetic appeal. The tiny sizes of the apartments. Lack of green spaces. I also have concerns over the target demographic.
• It is out of scale, we shouldn't give up vital city parking, and we are very concerned with the idea of the city "gifting" the property to developers. • The applicant should not be allowed to separate market rate from affordable housing. Exactly the wrong approach in a city that has so little affordable housing. The affordable Soviet style boxes in the shadow of the Canary Hotel are an embarrassment. We should not give away the parking structure. The lack of plan analysis and data on economics provided by staff is subpar. We should not commit to this "vision" of our downtown. It's not Santa Barbara.

Community Survey Responses – Paseo Nuevo
The City invited the community to share feedback on the proposed Paseo Nuevo Redevelopment Project. The survey was open from October 15 through November 1, 2025, and was available during the Open Houses (October 15 and 16, 2025), online, via paper copies, and was available in English and Spanish.

Please provide any other public comments that you would like to convey to the City and the applicant team.
• Let’s just DO something! Do the work and diligence it takes to get a decision made…there sometime feels like there is a sense in town that the city has to please everyone…perhaps that’s the reason State Street is still struggling and this mall is an embarrassment
• Although I support the redevelopment project, I do not support the city giving away the land and decreasing taxes. We already have a budget deficit, and this will ultimately lead to higher taxes for the residents of SB. This will cause too much traffic on Chapala so please open State Street to cars. please have them start the project by having housing above the retail in the offices that already exist on property. find a way to let everyone know what is happening at the Nordstrom building so all together the redevelopment makes sense. • Move quickly!
• This appears to be a good project and should be approved expeditiously.

There is lots of discussion about State Street and its environs and the principal challenge, that I perceive, is the unwillingness to allow market forces to cure these issues. More studies, more pedlets, more discussion are simply distractions - if you let Developers build density many of these issues will cure themselves. The forced addition of the affordable component is the biggest issue that I see here - although it does allow for more density, which is helpful.

All the science (studies) show that forcing developers to include affordable components just stops projects from being built; thereby increasing costs for all. I understand that it "feels" good, but ultimately it's counter-productive. I hope that the City gets this one across the finish line; Paseo Nuevo/Downtown/Santa Barbara needs it.
• I support any housing development in the city. I am just glad that it's not another hotel.
• There has been a lot of talk about the city giving away the land. The city is not in the business of making a profit, it's in the business of providing the best it can for its community. The city has frequently given away land. Recently the city conveyed land to the housing authority for a moderate-income property. I Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

think this use of land that was condemned to reinvigorate downtown Santa Barbara is completely consistent with the original intent of building Paseo Nuevo in the first place
• We've seen the need for this type of population density, we've been fighting retail vacancies, and this plan was proposed years ago. So far, we've done nothing about it. Let's quit stalling and address this issue. • Retail as we've known it is not coming back. The current location is ideal for mixed use residential and commercial. It may revitalize an otherwise underused and distressed downtown and reduce car trips. • The entire State Street from Gutierrez to Anapamu should be a garden of herbs, vegetables, flowers and small fountains and lots of benches. It only be interrupted in cross sections for the cars to pass. If you want to attract residents of Santa Barbara and the tourists to State Street, make the whole area a walking promenade through a beautiful garden with drip system and no bike, no skateboard or cars. Walk your bike only. Ask me for details. • I just want to commend City Leadership, City Staff and the Design Team of a world class firm and local firm representation to skillfully balance the sometimes complex and sometimes competing needs of all of our city's stakeholders. Bravo.
• I’m anxious to see the finished product!
• More projects like this, please! Thank you for bringing Santa Barbara into the future while maintaining some of its aesthetic of the past. • I support efforts to increase rental housing availability in downtown Santa Barbara. I encourage the project team to continue listening to community feedback and to ensure the development includes equitable, accessible spaces for all residents, including those who may be housing insecure. • I think a huge issue here is the property developers influencing the process because it is not in their interest to put money into the project to make this productive change. This should not influence SB decision making. Property owners have been on State St have been directly responsible for keeping rents high and storefront vacancies. They need to not hold up what we need to do - it is time the interest of the community are centered. Not theirs. If they aren't going to contribute to the community freely by reducing rents-find a way to incentivize them to do so. Also find ways to make approvals for restaurants and Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

businesses faster (renovation, etc.). Make it easier for businesses to open.

Everyone has heard the horror stories about this forever. FIX IT! How can we keep doing the same thing wrong?
• Don't be afraid to target higher income households. This includes all of the retail and the housing. Cookie shops and t-shirt stores do not provide enough of a tax base to keep this community strong and vibrant. Look at where people are spending money - Coast Village Road, Montecito Mart, The Post, Linden Square, and other boutique environments. We don't need to support retail for teenagers to hang out in front of on their e-bikes. We need beautiful boutiques, galleries, and shops which cater to upwardly mobile households. We need this tax base and that's what the current crop of residents is looking for. • I believe the State Street frontage should be cut down in height by 2 stories. the change is too drastic and will impact the charm and small town feel that we enjoy and brings tourists in. I think the 2 stories from the state street frontage should be relocated to on top of the currently (per your design) open parking garage on Chapala Street.
• We need housing of all configurations and cost levels, but especially at the affordable end of the scale. This project will made a difference, so I support it.

In keeping with the City’s climate goals, the units should be all electric with as many solar PVs and battery backup as possible. It is worth considering creating a microgrid.
• State Street should be a High Street district with mostly market rate rentals.

Lower income units should be developed in surface City lots that are peripheral to the CBD, and in other appropriate areas e.g. the West Side. An economic plan that lures (with incentives) companies with well-paid 30-somethings would a) restore a declining 25–40-year-old SB demographic, b) justify real estate development AND the State Street Master Plan, c) provide $100m economy for State St to thrive, including providing jobs for lower income residents. Opening or Closing State to vehicular largely (not entirely, because there are some good analyses that contextualize the discussion) misses the problem on State...if you open State to cars, you will not solve the problem...if you build a beautiful new State St per the Master plan, you are rolling the dice for a City that is running deficit...what is sorely missing is a viable economic plan that addresses our City's challenges while providing a path to a return on investment. I am in involved in these issues by sitting on several different Santa Barbara boards. • I hope the project construction company chosen will be competent and efficient, so that traffic impacts will be minimal. Also the company should be able to complete work in a short period of time
Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

• HOUSING!!!!!!!!
• This is an amazing project and I hope it can succeed. • I don't understand why the City doesn't follow both New York City and Mexico City in opening our main street (State St) to traffic on weekdays and closing it on weekends.
• When will you provide another Open House like the ones in October as I was out of town when they happened?
Will you be able to get business owners to commit to leasing the retail space? We have lost SO much shopping downtown, we need good retail business to be part of this to draw more people to want to live downtown. • More afford \able housing
• I understand why and do not have a problem with the location for the affordable units.
• I think its ridiculous people have a problem with where low-cost housing will be.

ITS LOW COST SUBSIDIZED HOUSING. They don't get to have premium views or space. They need an affordable place to live not something amazing. • Bikes on State Street need to be slowed down. It might as well be a street with eBikes and bikes zooming by. This will increase with more housing. Consider an outdoor roller rink downtown.
• Please cut the red tape and get this started. This is good for every person who lives in SB
• include mixed use at sidewalk level
• Why the ground floor retail? There’s enough retail in the area. Adding retail to this project will come at the expense of surrounding retail. Why the height variance? Height restrictions are there for a reason. A variance establishes a precedent for another variance. No variance should be made nor requested— eliminating ground floor retail will solve that problem. Again, I see the need for housing but do it without sacrificing the architectural integrity of a city known for its architecture, especially when a component of the added height is cannibalizing existing retail. If you need more units, increase density, not height.

Finally, my understanding is that this parcel is on a ground lease from the city Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

of Santa Barbara. Why give it away? Put it on the market and sell it to a developer who can play by the rules. Revenue to the city from the sale of the parcel will be needed to offset the revenue drain from the utility surplus required to service all these units.
• I would like to see more creative alternatives described for the decision makers. Will there be every day neighborhood conveniences for residents of all incomes, such as, grocery stores, drycleaners, bakeries, dedicated bus lanes, parks, playgrounds, childcare centers, etc.? More public input is needed. • I don't think the city should even consider giving away the land. • Please open State Street already. Even if it's one way with on street parking. • Keep the parking lot. You will need a lot more parking with over 300 new units.

They need a minimum of 600 parking spaces--900 if any units have three bedrooms.
• I live downtown. While not directly tied to this project, I think this project would benefit greatly from a State Street that continues to be pedestrian and bike only. This way, State Street can function as "backyard" and leisure space for residents that otherwise have limited access to yards/open space. It would also reduce the amount of noise reaching the residences from State Street. • Business owner and landlord interests are time and time again overrepresented and coddled by public projects. The average resident is tired of this. Tax the vacant storefronts on State Street, stop giving negligent property owners tax breaks for charging rents no one can afford. Hoarding empty rentals is stifling local economic entrepreneurship and until that is addressed we will never see downtown revitalized.
• I would need to see the design and the actual rental costs in order to support the "affordable unit" portion. If marketed to young professionals starting out in life, I'd support that. I'd also want to see that there would be guardrails in place to prevent units, at any cost, being overtaken as short-term rentals, at least within a certain limited number.
• Who will make this viable for the needs of our residents? • We all want more housing but fill in noleta and areas where there are empty lots.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

• Rather than give away public property, perhaps some other form of publicprivate partnership (one that isn't neutered financially by having to be bound by the strictures of union labor) would better serve the community. California Redevelopment Law and the local agency it created and funded allowed the City to buy or condemn several blocks of what we now call Paseo Nuevo. After that enabling law was abandoned and the local agencies terminated in 2011 (thanks to Gov Jerry Brown), it made orphans out of projects all over the state, including Paseo Nuevo. My suggestion would be for the City to petition the state for "opportunity status" for this specific project, in addition to finding a way to partner with a significant private developer who not only brings capital and expertise to the table, but tenants that will commit to the deal out the outset, based on the relationship with that developer.
• Make this project more democratic and less imposing.
• We should get the 80 affordable units and 233 market rate units and not add only market rate if additional units are added. It remains to be seen if the demolition of the parking garage will be a cost-effective answer. I trust the Housing Authority - HACSB - to create a nice building. You cannot tell the difference between luxury condos and HACSB properties - at least from the outside. I don't agree that the current site plan for the affordable units appear to be "undignified". That will not happen if HACSB is in control. • The city has been pretending that people no longer drive cars. I am afraid that we are going to end up like Newport Beach with no parking, causing even more blight to State Street retail and restaurants.
• I would like to know what the Nordstrom leaseholder thinks of this proposal. I request more details of the planned "revitalization" of the publicly accessible spaces, including the museum and theatre.
• Break up the massing of the old Macy's building. And for the question below, I did not attend the Open Houses, but I am well aware of the project and the needs of the City.
• See above
• I'd like to know what sort of market will be at the corner... Will it be a tiny 7-11- type place or will it be more of a small grocery store? And can you provide a comparison of how many square feet of retail we have currently vs what's proposed. Also a similar comparison of available parking spaces currently vs Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

proposed? And how many of the proposed parking spaces will be set aside for the new residents vs for the public (e.g., shoppers)?
• Give priority to longtime residents and seniors
• I urge you to really think this through before voting yes. Don't get blindsided by the good, the City needs more housing, yes, but we need housing that is actually affordable for the residents that work in this town, and we need more parking.
• If we are serious about creating more affordable housing, then more than 25% the units should be in that price range.
35% should be the minimum with 50% being preferred.
• Please start considering all people as equals and stop increasing the divide between the haves and have nots. Why on earth are you putting the affordable units in their own area and not as part of the overall development? Please rethink this strategy. It's so wrong and only serves to benefit those who will profit from building the units.
• Those of us who have been locals for many years would like our city's culture and architecture to continue. We do not want to take on the characteristics of Los Angeles-area coastal cities.
• Don’t force the low-income units on the developers and it might work with a sane city council. However if we have district elections we will never again have a sane city council!!!
• More affordable housing for locals. More affordable housing for young professionals. More affordable housing for new families. Oh and did I mention more affordable housing?! We don’t need more LA landlords snatching up places and renting them for absurd prices (especially when the salaries in this city have yet to catch up to the cost of living).
• I would like to see the existing height restrictions honored and I’d like more homes included in the city purchase program
• I do not agree with the city giving away any land to developers • I want to see financial impact statements and how the money would be used as a byproduct of the project, as well as a list of community benefits. I would like Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

to see some creative deal making done as well as the specific criteria used to determine eligibility for the low-income housing components along with the outcome of other low-income housing projects. For example, if a low-income housing project was completed in 2020, what is occupancy, rent relative to market, occupation of residents five years later - e.g. has the project fulfilled its goals?
• I would love to see an anchor store like a Bloomie’s - Seattle’s University Village has a great mix of retail & restaurants that, in spite of poor weather, is a successful outdoor mall.
• I don't believe that the majority of community members understand the proposed land giveaway by the City. The project as proposed only recently was made public and the poorly advertised open houses failed to convey the terms of the proposed project, especially the City donation of valuable land to an $800 billion global asset manager.
• Do not give City land to the developer. Gifts of public goods for private profit is wrong and should never have been suggested by staff.
• Not really in favor of losing parking consider converting the Nordstrom store to affordable housing and maintaining parking lot two
• I urge the City to use their leverage to negotiate a 100% affordable housing deal for diverse incomes, including a significant amount for moderate- & middle-income category based on the City’s AMI data. The City has other State Density Bonus Law projects in the pipeline that are providing plenty of market rate housing units. This site is perfect for 100% affordable housing because of the proximity to employment, groceries, recreation and shopping and for the developer (AB) they have the once in a lifetime opportunity to acquire the City’s land with immense development potential and to offset affordable housing costs with State Density Bonus Law and with the revenue from their commercial space which is currently a significant amount: 125,000 square feet of retail/commercial space. It could be more retail if they wanted to and fewer overall units to get to a greater percentage of affordable units. Please consider these suggestions. You have very bright people working on this and I think this DDA could be so much better and bring in more than 25% affordable housing.

Check out this recently approved 100% affordable development project in Santa Barbara County: https://www.readysbc.org/4776/Orchard-TerraceApartments-Development-P Call me crazy but thats the level I want this project to be at.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

• My business and I have been a significant asset to the city for over 12 years, and this development will cause me to go out of business, lose my job, and eliminate the ability for musicians and celebrities to be able to record and rehearse. Many celebrities are moving here because they know this town has everything they need, including a place to record their movies, tv shows, audiobooks, podcasts, voiceovers, and this parking structure will cause them all to need to travel to LA every single time they need to record anything, which will make them want to move back to LA. Please understand the vitality of my business to the city of Santa Barbara and how drastically this renovation will negatively affect the local community. Thank you.
• I am in support of the project IF we can limit the height of the project to be in compliance with the City Charter. I am strongly opposed to bending on that. I believe the onus is on the city to make the project work for the developer within the guardrails of that height restriction. If the developer needs to be allowed more market rate units so that the project is feasible at the 60 foot height limit, then the city needs to provide flexibility there. The city should not bend their own rules on height just so they can force the developer to build affordable units. I do believe the project would be positive for the downtown community as long as we keep the height under the 60 foot max limit. • In her book, Santa Barbara: An Uncommonplace American Town, Sheila Lodge details several consequential planning decisions by the City, hard decisions made with feedback from concerned residents. Combined, these hard decisions made Santa Barbara the place we all love to live within. THIS is another such decision space. Be bold. Follow a vision. Create a new neighborhood that can blossom in the heart of downtown! Be great to see a playground in here somewhere too. Note: I will stay informed. • Paseo Nuevo is an asset to the city, it should not be given away • Please deny this rape of our great town.
• I understand we have a housing shortage, but this project is ridiculously oversized. • Make Santa Barbara housing affordable. Do not give on developers and landlords. Let the apartments be owned and enjoyed by the citizens. • I have lived in Santa Barbara for over 50 years. Open State Street to cars again. Now. Hurry up. I'm done with your BS.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

• 1. Population density

2. Building Height

3. Lack of Water

4. Lack of Parking

5. Impact on quality retailers on state street

6. Increase in homeless on state street

7. Makes it even more undesirable to go to State Street

8. A bad idea all around

9. Unless you do it right (like in Europe) and lay stone pavers on all the streets it will just continue to look like an undesirable eyesore on State Street and surrounds

10. Makes no fiscal sense to give away the parking lot for free Conclusion: Either do it right and maintain the culture and quality of Santa Barbara (heights/density/water impacts, etc.), stone pave or open State Street, have fiscal responsibility or don't do it at all!
• Please see above.
• Please do not give away our public assets. There are better ways to add housing without a public giveaway.
• Listen to the Planning Commission! Why is the City granting 39 million dollars of City land and granting 20 years commercial tax-free to a billionaire developer's project that gives so little to the City and is completely oversized (75 feet+)? We need to ask more of these developers as they try to override zoning regulations in the name of profit.
• There is NO housing shortage in SB. There are more houses, apartments, condos, and backyard units than there should be in a totally limited physical area that this city is. The problem is overpopulation and that everyone wants to live here. I'm not sure on how to deal with that real problem, but this project and all others like are only dealing with the symptom. It's very short-sighted and blind thinking. Look at the reality of the big picture. There are TOO MANY people in this town. And the quality of life here is going to continue to deteriorate continually as it has for the past 50 years. Have you tried driving and parking a car downtown lately just to run a quick errand? It's exasperating.

You can drive around the same blocks looking for a space for 20 minutes and then have to drive off in failure. TOO many people and you want to add more and more and more cars, too? This insanity has to stop. Sadly, the real estate and building developers make all the money and don't live downtown, or near here. The city council is totally controlled by them. So the damage only affects the lifestyle of others trying to make a living here. Open your eyes and mind Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

and think outside of the box you've been living in for a long time. Please NO MORE housing. Converting precious parking lots to more housing is just simply wrong. And stop continuously using the word 'affordable'. It's just a deceptive ploy to get city building approvals. Affordable for who? Those who already own homes? Those who can afford to pay cash and the price is not that important? Or for investors who gobble the units up and then rent them to working class people who struggle to stay up with the payment while the investment companies continue to amass their empires of properties? This is not a rant, it is real. I know a lot of these people, and I hired many of them at my business (a REAL business, not a real estate company). Sadly, too many were forced to leave town to afford to raise a family. Now there's no skilled labor available in this town. Take a closer look and step outside of your pretend normal comfort zone.
• I’m concerned that the city is giving away the land value to private developers • Scale it back!
Yes we need housing, yes we need a revitalization of that shopping center.

But! Whoever the developer is, they are going to make a fortune and still offer very little reasonably priced housing. We talk the talk, but no one is willing to walk the walk. Let's get creative so we can actually build affordable housing for those people who work here but can't afford to live here. • I think all units (market rate and otherwise) should be part of the Macy's site project (assuming adaptive reuse is infeasible). I would also like to see a financial analysis of an AB1287 project (666 studios)
• I like the idea of housing downtown with commercial underneath, but this project is way too big. On top of that, I do not support giving away the land to developers--AT ALL! I really can't believe the City would do that! • We will not be able, ever, to build enough supply of housing to meet the demand. Ever. Look at Manhattan. Two ways to address the housing crisis in SB—prohibit short term rentals in our residential neighborhoods and supply more, better public transportation for employees who live outside of the city. • This much housing needs to be found elsewhere in the city. Just because the building site is there, does NOT mean it should 'maxed-out' to its density opportunity.

The city must not sell its property to a developer on these terms. That land is extremely important to be retained in city ownership hands, and oversight.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

• Resign
• This is a terrible idea
• Not every deal is going to go forward. The slice of the market for premium rental apartments is also a limiting factor. This particular two block portion of downtown is not so different or better than another adjacent two block segment that can be built and rented for less. This deal is a losing proposition at this time, that is why the developer wants to grab the land, the parking garage, and a portion of the future property tax. We have never done this, even for affordable housing. Let's not make a deal like this with high-end developers. • That is a very dense number of housing units in a small area. Furthermore, why would anyone want to live on or near State Street currently when it is so derelict. When we first moved here, we wanted to be as close to downtown as possible. Now we never venture past Victoria St.
• See response 4
• We don't need market rate units. We need affordable units for full-time workers of lower salary status. When you build market rate units you automatically create a need for workers to accommodate the increased population. So your net gain on this and all of these projects is probably close to ZERO in the "affordable" need. At some point, the "elevator is full." Perhaps a cry for ZPG before the ability for the earth to support us is exhausted. • There needs to be a balance of function and aesthetics. I understand that the cost of building is a challenge, but once built, this structure will be around for a long-time way after developers have moved on to their next project. The residents of SB will have to look at it all the time. Make it nice.

As far as a market is concerned, let’s have a market that everyone can get behind. Erewhon is too high end. Trader Joe's or even a Pavilions or Bristol Farms style market would be better. It should be affordable for all shoppers. • Would like to see the developers numbers and cost analysis. Would like to see a non-city appraisal of the land under the project.
• The goal MUST be to create housing for lower and middle income. We have to stop inviting high-income out of towners and start catering for the Santa Barbara residents. This is a once-in-a-lifetime opportunity to create a living and breathing downtown core, make it happen!
Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

• As above - you never give away land!!!!!
• Downsize the project. More low-income units. Local businesses only! Walking, bike lanes!
No cars on State Street.
• Please look into building units for purchase, not rent. So many people would love to be able to purchase, so that they have future security. The investors can retain the income from the commercial components and the HOA fees and maintenance. That's a win, win, isn't it?
• The out-of-town Developers and the money and elements from out of town are raping Santa Barbara and the City Council has been utterly ineffective in keeping SB what it is ...they are far more comfortable in working with developers and opportunist
• In my Opinion , State Street should open back up and get rid of the teenagers harassing the store owners & pedestrians.
• Maker the entire project affordable housing.
• Santa Barbara
• Too big
• Way, way overbuilt. Gift of public funds.
• We need to keep our small town feel
You are ruining our city with these large developments. We don’t want Santa Barbara to turn into Los Angeles. This is ridiculous.
• It's TOO big, TOO high and at a cost of giving up OUR land, not feasible! • Giving away public owned land, demolishing parking in a much needed area, Restricted income housing separation, Giving away public lands, partnering a global investment firm who calculated risks when making the initial investment, giving away public owned lands, not considering a charter, giving away public owned land to a global investment firm
Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

• Answer how the water usage will be accomplished with our existing infrastructure and regular draught conditions.
• No more building
• Do NOT approve this as proposed.

If necessary, and demolition must proceed, make it civic and reasonable:
replace superblock bulk with a public square/cultural center: a "Casa del Popolo", or people’s house, that brings culture, arts, and civic programs to everyone, including working class residents. Program the ground level with a shaded plaza and performance space; inside, include a flexible hall for concerts and lectures, gallery and maker rooms, after school and adult ed classrooms, and a very low-cost café/co-op/restaurant with good quality food.

Wrap this with modest, Spanish influenced mixed use buildings that respect El Pueblo Viejo massing and height discipline (real stepbacks, broken frontages, human scale). All of this would strengthen everyday community life, generates all day foot traffic without a wall of height, and aligns with Santa Barbara’s Spanish Colonial Revival identity rather than fighting it, delivering social value without overpowering the historic core.

Regarding income restricted housing: deliver integrated low income homes within right scaled mixed use buildings: same entrances, finishes, and amenities as market rate. Add affordability through adaptive reuse of downtown offices/retail, and Housing Authority motel/small apartment conversions rather than an 8 story bulk in the historic core.
• The entire arrangement has the character of a back-channel transaction rather than a transparent public negotiation.
• I feel like saying "adding 80 affordable units" is misleading and that the credits usage needs to be explained in more detail. If only 15 units will be used for this project and the rest will be used as credits to avoid adding below-market rate housing during a future project, then that should be emphasized because it is currently being portrayed as a noble deed and that's not the case. • see #4
• You need to stop destroying Santa Barbara. Tell UCSB and City College to stop over-enrolling.
• You hold the responsibility to safeguard the heart of Santa Barbara.

Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

• Any reduction in public parking is not acceptable. Neither is the fact that the affordable units are not integrated into the project throughout the site. I'm also not in favor of giving away City land or parking for a private developer where the City does not remain part ownership of the project. There are already concessions being made on height. They should also find a way to reuse the building instead of proposing to demolish it.
• The height and density of these buildings will be a monstrosity. The City is GIVING the land to developers for RENTALS?! Who do you think will actually rent these very expensive dense apartments? That’s not the lifestyle Santa Barbara is known for. They couldn’t lease out the market rate very expensive 80 unit building on E Gutierrez this year so they sold the whole thing to UCSB.

Your business model is flawed. The apartments were on the market for months. You are going against the will of the local citizens. • Stop giving public property away for future profits to developers. Open up State street and go back to pre covid designs and zoning. The leaders of this city have failed and continue to fail its citizens. We need to slow your roll go back and revitalize downtown responsibly and with voted approval by the people not special interest driven city council members. Sidewalks are extra wide planned and built by past council for tourism and flow. kick the restaurants back to there buildings and off our sidewalks. work on filling shop space with retail no multi use garbage. Stop lying to your citizens.
• Why would we spend City resources to fund an out-of-town investor who made a bad financial investment? If there are vacancies, they need to reduce rents. It is not the City's responsibility to save them. If anything, they should be fined for allowing vacancies. Also, we do not need a high-priced grocery store downtown or another gym. We have local gyms in the area already. Please rethink this design to work for people who live and work in Santa Barbara. The current plan is not compatible.
• Let's see other design options WITH full disclosure and input - not a "baked" plan behind closed doors! Seems like the one choice option - a giant building fancy grocery store and confusing weak answers to many questions. I thank Planning Commission for saying what we are all thinking. And I watched the rent stabilization at council last week and give high 5 to Councilwoman Harmon who said the community has lost trust and is angered and frustrated - Paseo Nuevo is another example.

Last minute, not publicized open houses seemed more like a way to keep the community away and to say the box was checked. I heard about it after and missed both This is not ok especially for a project like this. Mayor, council, city administrator and staff are hired BY and are supposed to work FOR the Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

people. More solutions need to be looked at with community input to find the best answer to this puzzle. Maybe Santa Barbara needs to going another direction and let AB go their own way. I suspect AB would sell their 40 year arrangement. No way do I support giving land away and other $ breaks.

We need to work -with the right SB creatives - a much better outcome is possible.
• Do NOT want high rise and congestion in SB. We are a LOW rise town, that’s one of the keys to its magic. Everyone has views of the mountains and sun.

This is the path to canyonisation of our town and serves as green litto MORE overdevelopment.

No, no, NO!
• Why are the planners so intent on giving away to a nonlocal agency development rights and the design.
• This project destroys one of the few successful businesses at Paseo Nuevo:

Tondi Gelato.
• Forget the density bonus and reduce the overall size of the project. • Why doesn’t the city move all their administrative offices into the mall and develop housing for city employees on present administrative offices into the space
• Too many homeless/bums on State Street, reopen State Street to parades and cars, need more security/police on State Street. Need to trim tress, clean sidewalks get rid of trash and graffiti. Need more public meetings and open house.
• Listen to the planning commission. Let's build a better Santa Barbara now without selling off our inheritance.
• Please let the voices of the SB residents be heard and ACTED upon. • There should be consideration taken for SB Locals! A lot of us are born and raised here. Outsiders are taking over jobs and homes. There should be affordable housing for local residents. For people that have been here since before the reconstruction of state street and SB as a whole. • It would be amazing if the new building had a second story patio overlooking the corner of State and Ortega for a beverage/food operator. It would ease the Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

building's massing at the corner, and be a great attraction/meeting place for people in the heart of downtown.
• Downsize!!!
• You have a financial institution that is holding this lease that they do not want.

Then they hired a developer who is pursuing a high-end retail profile and highend market rate housing units. Gensler is the wrong firm to represent this project. You already made significant mistakes hiring the incorrect architectural firms. We are Santa Barbara in part because in the early part of the last century our wealthy residents understood the importance in hiring the very best designer and architects. You need to allow the HLC be part of that process. And city leadership and staff need to regain their respect of the work that HLC provides for this city.
• We do not need to overbuild in this area. Where do the developers expect everyone to park? How many sightlines and streets need to be ruined in this City before we all start paying more attention? How about focus on residences that are designed for newly graduated professionals who are also struggling with housing? Potentially young families with two working professional parents. R.N.s, Physician Assistants, young J.D.s, new professors, school administrators, etc. The middle of downtown Santa Barbara is a highly desirable area and it is not inappropriate to focus on housing for young professionals who are key to the future of Santa Barbara. It is not inappropriate to focus on residences that are designed for long term occupancy. Long term occupants want and need green spaces-and more interior square footage. There must be a way to legally avoid renters/owners who are buying up new construction for investment rentals and/or second homes.
• Please, consider more common-sense proposals for this area. Encourage an effort to expand the paseo or courtyard theme for shopping, dining and entertainment. If there must be housing involved limit the building to the current height, or better yet refurbish the existing.

Consider a novel idea to create small business opportunity by way of "condo like" ownership. Incorporate the idea of live / workspaces for artists and craftsman.

What about entertainment, we loved the idea of the first ground floor being used as a roller rink. Give our young and active residents something to enjoy! We all enjoy a popular eatery (think BBQ like Firestone brewery in San Luis Obispo) with a large covered outdoor patio.

Please bring more ambiance and desirable features, not a high-rise apartment in the center of our town!!
Community Survey Responses – Paseo Nuevo Redevelopment
October 15, 2025 – November 1, 2025
Please provide any other public comments that you would like to convey to the City and the applicant team.

• There needs to be much more public input. This is not the vision most residents have for downtown. I viewed the Planning Commission meeting and was appalled by what we don't know and the cavalier manner that staff responded to questions from the Planning Commission. We deserve better! SLA0000370
STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM., Governor

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov
March 18, 2024
Elias Isaacson
City of Santa Barbara
735 Anacapa Street
Santa Barbara, CA 93101
SENT VIA EMAIL TO: [email protected]
Dear Elias Isaacson:

RE: HCD’s Review of the City of Santa Barbara’s Determination of Certain Real Property as “Exempt Surplus Land”
Thank you for notifying the California Department of Housing and Community Development (HCD) of the City of Santa Barbara’s (City) determination of 701 State Street, 739 State Street, 817 State Street, and 716 Chapala Street, Assessor’s Parcel Numbers 037- 400-001, 037-400-002, 037-400-003, 037-400-004, 037-400-005, 037-400- 006, and 037- 400-019 (Properties), as “exempt surplus land.” HCD reviewed Resolution No. 24-016 and supporting documents (Documents) pursuant to Section 400 of the Surplus Land Act Guidelines. As explained below, HCD finds that the Properties qualify as “exempt surplus land” under Government Code section 54234.

Analysis
According to the Documents, the Paseo Nuevo Agreements (Agreements) include 75-year ground leases with different parties that have a remaining term of approximately 42 years, expiring on December 31, 2065, that restrict the use of the Properties to commercial retail, office, and service establishments. The Agreements also include a Construction, Operation, and Reciprocal Easement Agreement (COREA) that restricts use of the Properties to commercial retail, office, and service establishments for a duration that is coterminus with the leases. The Agreements, including the Ground Leases and COREA, were not imposed by the City and make housing prohibited on the Properties as existing constraints under ownership rights or contractual rights or obligations that prevent the use of the Properties for housing as agreed to prior to September 30, 2019.

Conclusion
Based on the documentation provided, HCD finds that the Property qualifies as “exempt surplus land” under Government Code section 54221, subdivision (f)(1)(J), due to existing ATTACHMENT 8
Elias Isaacson

SLA0000370
constraints under contractual rights that prohibit housing. These restrictions were agreed to prior to September 30, 2019.

If you have any questions or need additional technical assistance, please contact Lisa Krause, Senior Housing Policy Specialist, at [email protected].

Sincerely,
Laura Nunn
Senior Manager, Housing Accountability Unit
Housing Policy Development
RESOLUTION NO. 24-016

A RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA
BARBARA DECLARING DESIGNATED PARCELS OF CITYOWNED PROPERTY TO BE EXEMPT SURPLUS LAND PURSUANT TO SUBPARAGRAPH (J) OF PARAGRAPH (1) OF
SUBDIVISION (f) OF CALIFORNIA GOVERNMENT CODE
SECTION 54221 - PASEO NUEVO
WHEREAS, the City of Santa Barbara is the owner in fee simple of multiple parcels of real property, which together are commonly known as the "Paseo Nuevo Properties," that it acquired from the Successor Agency of the Redevelopment Agency of the City of Santa Barbara pursuant to Successor Agency Resolution No. 15-099, City Council Ordinance No. 5731, and Grant Deed No. 61-456 recorded February 19, 2017 as Instrument No. 2016-0007814 in the Official Records of the County of Santa Barbara; and WHEREAS, the addresses and Assessor Parcel Numbers of the Paseo Nuevo Properties include: 701 State Street, 739 State Street, 817 State Street, and 716 Chapala Street, Santa Barbara, CA 93101 ; Santa Barbara County Assessor Parcel Numbers 037- 400-001, 037-400-002, 037-400-003, 037-400-004, 037-400-005, 037-400-006, and 037- 400-019; and
WHEREAS, the City of Santa Barbara is the assignee of the Successor Agency's rights and obligations under the "Paseo Nuevo Agreements" as identified in the Assignment and Assumption of Paseo Nuevo Documents, recorded in the Official Records of the County of Santa Barbara as Instrument No. 2018-001378, a copy of which is attached to and made a part of this Resolution; and
WHEREAS, the Paseo Nuevo Agreements include 75-year ground leases with different parties that have a remaining term of approximately 42 years, expiring on December 31, 2065, that restrict use of the Paseo Nuevo Properties to commercial retail, office, and service establishments ("Ground Leases"); and WHEREAS, the Paseo Nuevo Agreements also includes a Construction, Operation, and Reciprocal Easement Agreement that restricts use of the Paseo Nuevo Properties to commercial retail, office, and service establishments for a duration that is co-terminus with the leases ("COREA"); and
WHEREAS, the Paseo Nuevo Agreements, including the Ground Leases and COREA, are valid legal restrictions not imposed by the City that make housing prohibited on the Paseo Nuevo Properties because they are existing constraints under ownership rights or contractual rights or obligations that prevent the use of the Paseo Nuevo Properties for housing that were agreed to prior to September 30, 2019; and WHEREAS, the Paseo Nuevo Agreements are valid, legally binding agreements that constrain the use of the Paseo Nuevo Properties; and WHEREAS, the Paseo Nuevo Properties have been developed under the Paseo Nuevo Agreements as a first class, high-quality, outdoor retail shopping center including anchor department stores, retail shops, restaurants, and commercial uses ("Paseo Nuevo Mail"); however, market conditions have substantially changed, the anchor stores have closed, the Paseo Nuevo Mall requires redevelopment, and the City of Santa Barbara and the lessees under the Ground Leases desire to redevelop the Paseo Nuevo Mall to achieve the highest and best use of the property; and
WHEREAS, to make redevelopment of the Paseo Nuevo Mali economically feasible, the City of Santa Barbara must convey the Paseo Nuevo Properties to the lessees under the Ground Leases under terms and conditions that will be established by the City Council during the course of a public process that includes review under the California Environmental Quality Act and necessary land use and other approvals; and WHEREAS, there is no feasible method to redevelop the Paseo Nuevo Mall without conveyance of the Paseo Nuevo Properties to the lessees under the Ground Leases or to avoid or mitigate the Paseo Nuevo Agreements without agreement among all the parties thereto; and
WHEREAS, it is infeasible for the City to acquire the rights of the lessees under Paseo Nuevo Agreements, including the Ground Leases and the COREA, and such acquisition of rights is not required under applicable law; and WHEREAS, this Resolution is adopted pursuant to Subparagraph (J) of Paragraph (1) of Subdivision (f) of California Government Code Section 54221.

NOW THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SANTA BARBARA THAT:

1. The Paseo Nuevo Properties are no longer necessary for City use and are exempt surplus land as defined in Subparagraph (J) of Paragraph (1) of Subdivision (f) of California Government Code Section 54221 for the reasons stated above in this Resolution.

2. The City Council may dispose of the Paseo Nuevo Properties to the lessees pursuant to the Ground Leases for their respective leased parcels upon such terms and conditions as the City Council may establish following a public process for the review and approval of such disposal in accordance with applicable law, land use entitlements, and agreements necessary or convenient for the redevelopment of the Paseo Nuevo Mali.

3. This Resolution is exempt from the California Environmental Quality Act because the designation of the subject property as exempt surplus land does not have the potential for creating a significant effect on the environment and is not a "project" as defined in 14 Cal. Code of Regs. § 15378. Environmental review will be performed on any proposed redevelopment project and completed before any disposal of the property declared exempt surplus land by this Resolution.

RESOLUTION NO. 24-016

STATE OF CALIFORNIA
COUNTY OF SANTA BARBARA ) ss.
)

CITY OF SANTA BARBARA )
I HEREBY CERTIFY that the foregoing resolution was adopted by the Council of the City of Santa Barbara at a meeting held on March 5, 2024, by the following roll call vote:

AYES: Councilmembers Eric Friedman, Alejandra Gutierrez, Oscar Gutierrez, Meagan Harmon, Mike Jordan, Kristen W. Sneddon, Mayor Randy Rowse.

NOES: None
ABSENT: None
ABSTENTIONS: None
IN WITNESS WHEREOF, I have hereto set my hand and affixed the official seal of the City of Santa Barbara on M^j-.c.t^6, 2024.
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German, MMC
Clerk Services Manager
HEREBY APPROV^'thr^fy^n^solution on March 6, 2024.
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Mayo
SLA0001890
STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM, Governor

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

DIVISION OF HOUSING POLICY DEVELOPMENT
651 Bannon Street, Suite 400, Sacramento, CA 95811
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov
August 20, 2024
Daniel Hentschke, Assistant City Attorney
City of Santa Barbara
740 State Street, Suite 201
Santa Barbara, CA 93102
SENT VIA EMAIL TO: [email protected]
Dear Daniel Hentschke:

RE: HCD’s Review of the City of Santa Barbara’s Proposed Determination of Certain Real Property as “Exempt Surplus Land”
Thank you for notifying the California Department of Housing and Community Development (HCD) of the City of Santa Barbara’s (City) proposed determination of Paseo Nuevo Lot 2, Assessor’s Parcel Numbers APNs 039-321-045, -047, -048, -051, -054, -055 and -056 (Property), as “exempt surplus land.”
HCD reviewed the draft resolution, Resolution No. 24-016 (Resolution), the Paseo Nuevo Lot 2 Public Parking Covenants, Conditions and Restrictions Agreement, and Amendment to Parking Covenants and Parking Agreement (Agreements) pursuant to Section 400 of the Surplus Land Act (SLA) Guidelines. As explained below, HCD finds that the Property would qualify as “exempt surplus land” under Government Code section 54221, subdivision (f)(1)(J).

Analysis
According to the SLA, property may be exempt from standard SLA noticing procedures if the surplus land is subject to a valid legal restriction that is not imposed by the local agency, makes housing prohibited, and if there is a feasible method to satisfactorily mitigate or avoid the prohibition on the site.1 Valid legal restrictions include, but are not limited to “[e]xisting leases, or other contractual obligations or restrictions, if the terms were agreed to prior to September 30, 2019.”2 Feasible methods to mitigate or avoid the restriction do not include a requirement that the local agency acquire additional property rights or property interests belonging to third parties.3 1 Gov. Code section 54221(f)(1)(J)
2 Ibid., (ii)(III)
3 Ibid., (iv)
Daniel Hentschke, Assistant City Attorney

SLA0001890
According to the City’s documentation, the Property was initially developed pursuant to the Agreements, both of which were recorded on February 24, 1989. The Agreements limit the use of the Property, and no feasible method exists to redevelop the Property without conveyance of the Property, or interests therein, to one or more of the lessees of the ground leases or to avoid or mitigate the Agreements without concurrence among all the parties. Furthermore, the Agreements include a 75-year ground lease with a remaining term expiring on December 31, 2065. The City and the lessees of the ground lease now desire to redevelop the Property to achieve the highest and best use of the Property. The Property does not meet any of the characteristics listed in Government Code section 54221, subdivision (f)(2) and therefore would not require noticing for open-space purposes to qualify for an SLA exemption.

Conclusion
If the submitted documentation and assertions by the City are complete and accurate, HCD finds that the Property would qualify as “exempt surplus land” under Government Code section 54221, subdivision (f)(1)(J), due to existing constraints under contractual rights agreed to before September 30, 2019, and there is no feasible method to mitigate or avoid the legal restriction.

HCD requests that the City provide the adopted resolution when it becomes available and to contact Lisa Krause, Senior Housing Policy Specialist, at [email protected], if you have questions or need additional technical assistance.

Sincerely,
Laura Nunn
Accountability Unit Chief
Housing Policy Development
RESOLUTION NO. 25-090
A RESOLUTION OF THE CITi' COUNCIL OF THE CITY OF
SANTA BARBARA SUPPLEMENTING RESOLUTION NO.
24-016 DECLARING DESIGNATED PARCELS OF CITi'-

OWNED PROPERTY TO BE EXEMPT SURPLUS LAND
PURSUANT TO SUBPARAGRAPH (J) OF PARAGRAPH (1)
OF SUBDIVISION (f) OF CALIFORNIA GOVERNMENT
CODE SECTION 54221 - PASEO NUEVO - BY THE
ADDITION OF CITt'-OWNED PROPERTY COMMONLY
REFERRED TO AS PARKING LOT 2
WHEREAS, on March 5, 2024, the Council of the City of Santa Barbara adopted Resolution No. 24-016, A Resolution Of The City Council Of The City Of Santa Barbara Declaring Designated Parcels Of City-Owned Property To Be Exempt Surplus Land Pursuant To Subparagraph (J) Of Paragraph (1) Of Subdivision (F) Of California Government Code Section 54221 - Paseo Nuevo;and
WhlEREAS, the recitals and findings of Resolution No. 24-016 are incorporated herein by this reference; and
WHEREAS, the properties subject to Resolution No. 24-016 are referred to therein and in this Resolution as the Paseo Nuevo Properties; and
WHEREAS, by letter dated March 18, 2024, the Department of Housing and Community Development, Division of Housing Policy Development notified the City that the Paseo Nuevo Properties qualify as "exempt surplus land" under Government Code section 54221, subdivision (f)(1)0), due to existing constraints under contractual rights; and WHEREAS, the City is also the owner in fee simple of parcels of real property, commonly known as Parking Lot 2, which together the parcels referred to in Resolution No. 24-016, were acquired from the Successor Agency of the Redevelopment Agency of the City of Santa Barbara pursuant Grant Deed No. 61-415 recorded July 15, 2013, as Instrument No. 2013-0048015 in the Official Records of the County of Santa Barbara; and WHEREAS, Parking Lot 2 is described as: Those certain tracts of real property located within Block 158, in the City of Santa Barbara, State of California, as shown on the Official Map thereof, particularly described as follows: Lot 1 and Lot 2 of Parcel Map 20, 51 1, according to the map thereof recorded on October 10, 1989, filed in Book 44 of Parcel Maps, at Pages 35 through 41, inclusive, records of said County; and referred to herein for convenience only as Santa Barbara County Assessor's Parcel Numbers APNs 039- 321-045, -047, -048, -051, -054, -055 and -056; and
WHEREAS, Parking Lot 2 was developed pursuant to and in reliance on the Paseo Nuevo Agreements referenced in Resolution No. 24-016 and is additionally subject to the Paseo Nuevo Lot 2 Public Parking Covenants, Conditions and Restriction Agreement recorded February 24, 1989 as document 89-012339, and amended by the Amendment to Parking Covenants and Parking Agreement, also record February 24, 1989 as document 89-012341 of the official records of the County of Santa Barbara ("Parking Covenants); and
WHEREAS, the Paseo Nuevo Agreements and Parking Covenants are valid legal restrictions not imposed by the City that make housing prohibited on the Paseo Nuevo Properties and Parking Lot 2 because they are existing constraints under ownership rights or contractual rights or obligations that prevent the use of the Paseo Nuevo Properties and Parking Lot 2 for housing that were agreed to prior to September 30, 201 9; and WHEREAS, the Paseo Nuevo Agreements are valid, legally binding agreements that constrain the use of the Paseo Nuevo Properties and Parking Lot 2; and WHEREAS, the Paseo Nuevo Properties and Parking Lot 2 have been developed under the Paseo Nuevo Agreements and the Parking Covenants as a first class, high-quality, outdoor retail shopping center including anchor department stores, retail shops, restaurants, and commercial uses ("Paseo Nuevo Mail"); however, market conditions have substantially changed, the anchor stores have closed, the Paseo Nuevo Mall along with Parking Lot 2 require redevelopment, and the City of Santa Barbara and the lessees under the Ground Leases desire to redevelop the Paseo Nuevo Mali and Parking Lot 2 to achieve the highest and best use of the property; and WHEREAS, to make redevelopment of the Paseo Nuevo Mall economically feasible, the City of Santa Barbara must convey the Paseo Nuevo Properties along with Parking Lot 2, or interests therein, to one or more of the lessees under the Ground Leases under terms and conditions that will be established by the City Council during the course of a public process that includes review under the California Environmental Quality Act and necessary land use and other approvals; and
WHEREAS, there is no feasible method to redevelop the Paseo Nuevo Mall without conveyance of the Paseo Nuevo Properties and Parking Lot 2, or interests therein, to one or more of the lessees under the Ground Leases or to avoid or mitigate the Paseo Nuevo Agreements and the Parking Covenants without agreement among all the parties thereto; and
WHEREAS, it is infeasible for the City to acquire the rights of the lessees under Paseo Nuevo Agreements and the Parking Covenants, and such acquisition of rights is not required under applicable law; and
WHEREAS, this Resolution is adopted pursuant to subparagraph (J) of paragraph (1) of subdivision (f) of California Government Code section 54221.

NOW, THEREFORE, THE COUNCIL OF THE CITi' OF SANTA BARBARA RESOLVES AS FOLLOWS:

SECTION 1. Resolution No. 24-016 is supplemented to add Parking Lot 2, which along with the Paseo Nuevo Properties are no longer necessary for City use and are exempt surplus land as defined in subparagraph (J) of paragraph (1) of subdivision (f) of California Government Code section 54221 for the reasons stated above in this resolution.

SECTION 2. The City Council may dispose of Parking Lot 2, or interests therein, in connection with disposal of the Paseo Nuevo Properties upon such terms and conditions as the City Council may establish following a public process for the review and approval of such disposal in accordance with applicable law, land use entitlements, and agreements necessary or convenient for the redevelopment of the Paseo Nuevo Mali.

SECTION 3. This resolution is exempt from the California Environmental Quality Act because the designation of the subject property as exempt surplus land does not have the potential for creating a significant effect on the environment and is not a "project" as defined in 14 Cat. Code of Regs. § 15378. Environmental review will be performed on any proposed redevelopment project and completed before any disposal of the property declared exempt surplus land by this Resolution.

RESOLUTION NO. 25-090

STATE OF CALIFORNIA )
)
COUNPi' OF SANTA BARBARA ) ss.
)
C\TY OF SANTA BARBARA )
I HEREBY CERTIFY that the foregoing resolution was adopted by the Council of the City of Santa Barbara at a meeting held on August 5, 2025, by the following roll call vote:

AYES: Councilmembers Eric Friedman, Oscar Gutierrez, Meagan Harmon, Mike Jordan, Wendy Santamaria, Kristen W. Sneddon; Mayor Randy Rowse
NOES:

ABSENT:

None
None
ABSTENTIONS: None
IN WITNESS WHEREOF, I have hereto set my hand and affixed the official seal of the City of Santa Barbara on August 5, 2025.
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HEREBY APPROV^:theftfi;eg^ogr resol . August 5, 2025.
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Successor Agency to the Redevelopment Agency of the City of Santa Barbara Long-Range Property Management Plan for the Paseo Nuevo Leased Fee Interest As Amended
This Long-Range Property Management Plan ("LRPMP") is prepared for the fonner Redevelopment Agency of the City of Santa Barbara's ("Agency") leased fee interest in the real property which is currently encumbered by three (3) seventy-five (75) year ground leases, a Construction Operation and Reciprocal Easement Agreement, Paseo Nuevo Parking Agreement and Public Parking Covenants, among others, all of which comprise the Paseo Nuevo Shopping Center ("Paseo Nuevo"), Paseo Nuevo is located within the former Agency's Central" City Redevelopment Project Area ("CCRP") withm the downtown core of the City of Santa Barbara.

This LRPMP necessarily includes all of the elements required pursuant to Health and Safety Code § 34191.5(c). Documents referenced in this LRPMP are available for review at www. santabarbaraca. qov/Govemment/Boards and Commissions N-Z/Oversiaht Board/Agendas under the heading "Paseo Nuevo Report". For ease of reference, the statutory and state Department of Finance ("DOF") elements for an appropriate LRPMP are listed below in italics and addressed in the order they are listed in the relevant LRPMP statute.

The "Real Property Inventory" (Health and Safety Code § 34191.5(c)(l):

1. Real Property Description - The "real property" in question is the former Redevelopment Agency's reversionary fee interest in the Santa Barbara Paseo Nuevo Shopping Center and Parking Lot 1 Stmcture which property is encumbered with the following long-tenn ground leases, related parking agreements, and contractual covenants:

Three (3) sqiarate 75 year ground leases for the Paseo Nuevo Shopping Center where each 75 year lease term began on January 1, 1990 and which will end on December 31, 2065, including: 1. Paseo Nuevo Center Ground Leasehold Interest ("Developer Lease"), 2. Carter Hawley Hale Stores, Inc. Ground Leasehold Interest, and" 3.

Nordstrom Inc. Ground Leasehold Interest (2 and 3 are collectively hereinafter referred to as, "Majors").

Lot 1 Parking Structure Tract (sq»arately leased by fhe Agency to the Developer) and related reciprocal operating agreements and contractual covenants with concun-ent 75 year terms that began on January 1, 1990 and will end on December 31, 2065.

The contracmal covenants of the Agency (now the Successor Agency), as the Paseo Nuevo ground lessor, under those contractual and leasehold rights and leasehold obligations, reciprocal easements, contractual obligations, and contractual covenants are contamed within the following Paseo Nuevo Shopping Center Agreements (among other related Project agreements):

1. A ground lease for each of the three leaseholds referenced above as recorded on February 24, 1989, with related attachments and amendments, among the Developer, the Majors, respectively, and the Agency.

February 2015
Successor Agency to the Redevelopment Agency of the City of Santa Barbara Long-Range Property Management Plan for the Paseo Nuevo Leased Fee Interest As Amended

2. The "Paseo Nuevo Parking Agreement", as amended, as entered into on Febmary 24 1989 among the Developer, the Majors, the Agency and the City of Santa Barbara ("City").

3. The "Paseo Nuevo Lot No. 1 Parking Covenants, Conditions, and Restrictions Agreement" as recorded on Febmary 24, 1989 among the Developer, the Majors and the Agency.

4. The "Paseo Nuevo Lot No. 2 Public Parking Covenants, Conditions, and Restrictions Agreement" as recorded on Febmary 24, 1989 among the Developer, the Majors, the Agency and the City.

5. The "Paseo Nuevo Lot 10 Parking Covenants, Conditions, and Restrictions Agreement" as recorded on Febmary 24, 1989 among the Developer, the Majors, the Agency and the City.

6. The 'TSTonvacated De La Guerra Plaza Street Easement Agreement" recorded on Febmary 24, 1989 among the Developer, the Majors, the Agency and the City.

7. The "Constmction, Operation and Reciprocal Easement Agreement" (the "Paseo Nuevo REA") recorded on February 24, 1989 among the Developer, the Majors and the Agency.

8. The "Amendment to Parking Covenants and Parking Agreement" recorded on Febmary 24, 1989 among the Developer, the Majors, the Agency and the City.

9. Various recorded "reciprocal easement agreements" with neighboring property owners and related to the Paseo Nuevo Shopping Center, particularly with respect to the storage and disposal of trash and the maintenance of tt-ash enclosures and commercial loading areas.

10. The "Disposition and Development Agreement" (the "DDA") dated as of 1987 among the Developer, the Majors and the Agency.

11. Downtown Retail Revitalization Project Cooperation Agreement ("Cooperation Agreement") dated as of 1987 between the Agency and the City.

2. The Paseo Nuevo Shopping Center Legal Descriptions: The legal description of the real property is as attached to the long tenn leases referenced above - (the Paseo Nuevo Shopping Center, Macys, Nordstrom, and the Parkmg Structure) as follows:

1. The Paseo Nuevo Shopping Center Leasehold: "Parcels 2 and 12 of City of Santa Barbara Parcel Map 20, 504 in Ae City of Santa Barbara as per map recorded m Book 42, Page 86 through Page 98 as recorded in the official records of Santa Febmary2015
Successor Agency to the Redevelopment Agency of the City of Santa Barbara Long-Range Property Management Plan for the Paseo Nuevo Leased Fee Interest As Amended
Barbara County on Febmary 24, 1989. (Santa Barbara County APNs 037-400-002, 037-400-004, 037-400-019, 037-400-006)
2, The Macy^s (originally the "Broadway") Leasehold: Parcels 3, 9, 10, and 11 of City of Santa Barbara Parcel Map 20,504 in the City of Santa Barbara as per map recorded in Book 42, Page 86 through Page 98 as recorded in the official records o'f Santa Barbara County on Febmary 24, 1989. (Santa Barbara County APN 037-400- 003, APN 037-400-004, 037-400-005)

3. The Nordstrom Leasehold: Parcels 1, 7, and 8 of City of Santa Barbara Parcel Map 20, 504 in the City of Santa Barbara as per map recorded in Book 42, Page 86 through Page 98 as recorded in the official records of Santa Barbara County on February 24, 1989. (Santa Barbara County APN 037-400-001, 037-400-004.)

4. The Parking Lot No, 1 Leasehold: Parcels 4, 5, 6, 13, and 14 of City of Santa Barbara Parcel Map 20, 504 in the City of Santa Barbara as per map recorded in Book 42, Page 86 through Page 98 as recorded in the official records of Santa Barbara County on February 24, 1989. (Santa Barbara County APN 037-400-004.)

3. The Paseo Nuevo Shopping Center Physical Description: The Center consists of the following buildings/stmctures/and open retail areas:

1. Paseo Nuevo Center - "Major" Buildings/Stmcture Floor Area Tabulations:
o Macy's Leasehold Building: 135,000 square feet on 3 levels; o Nordstrom Leasehold Building: 189,000 square feet on 3 levels + basement; o Parking Lot No. 1 Parking Stmcture - 572 On-site parking spaces.

2. Paseo Nuevo Mall Leasehold Building Area Tabulations:
o Shopping Center RetaiVOffice Mail Building Space: 102, 000 square feet; o Open Space Retail Area Tabulations: 208,000 square feet.

A. The date of the acquisition of the property and the value of the property at the time of acquisition, and an estimate of the current value of the property.

Date of Acquisition: Febmary24, 1989.

Februaty2015
Successor Agency to the Redevelopment Agency of the City of Santa Barbara Long-Range Property Management Plan for the Paseo Nuevo Leased Fee Interest As Amended
Acquisition Value: The land assembled by the Agency and constructed as the Paseo Nuevo Mali had a value (land only) at time of acquisition (February 1989) - approximately $18 million dollars. The bulk of the land assembled by the Agency and which formed the Shopping Center had fonnerly been Cityowned real property - primarily the City-owned surface parking lot known as City Parking Lot No. 1 in the 800 block of State/Chapala and the former City street known as De La Guerra Street between State and Chapala Streets. The City conveyed its real property to the Agency without compensation to the City prior to the Shopping Center closing in February 1989.

Estimate of Current Value: The Agency's leased fee interest in the Paseo Nuevo Center is encumbered by the three long-term ground leases, by Parking Lot No. 1 (572 parking spaces) and by public parking covenants and with requirements obligating the Agency to pay fees and provide subsidized public parking for mail customers until the year 2065.

Additionally, the Agency and the City of Santa Barbara are obligated through the Paseo Nuevo Parking Agreement to provide 1, 115 public parking spaces withm a two block radius of the Paseo Nuevo Mail until the year 2065. The parking requirement is satisfied through the provision of 1, 115 public parking spaces in City Parking Structures Nos. 2 and 10. The obligation to provide these parking spaces on a non-preferential basis and at subsidized parking rates is set forth in the Paseo Nuevo Lot 2 and Lot 10 Public Parking Covenants. These Parking Agreements jointly bind the City of Santa Barbara and the former Agency, now the Successor Agency, to their requirements.

The sharing of obligations between the City and Agency is memorialized in the Cooperation Agreement.

Allan D. Kotin an experienced real estate economist, has prepared an analysis of the value of the Agency's fee interest in the Paseo Nuevo Center. Mr.

Kotin's analysis dated July 25, 2013 is attached hereto and is available on the Successor Agency's webpage. According to Mr. Kotin, the value of the Agency's fee interest in the Paseo Nuevo Center is substantially, if not entirely, diminished by the existing long-term monetary and parking requirements. In large part, this is because the Developer and Majors pre-paid rent to the Agency when the Paseo Nuevo Center was constructed so that the Agency could fund its obligations for land acquisition. On-going rent was also offset by an additional loan made to the Agency.

Furthennore, the Agency (currently the Successor Agency), as owner of the leased fee, is required to pay to the City of Santa Barbara that portion ofPaseo Nuevo's annual Parking and Business Improvement Area fee that exceeds $100, 000. The average amount of the Agency's obligation is $77, 000 per year. Payment of this amount has, however, been offset by the benefits received by the City in the operation of Parking Stmctures Nos. 2 and 10. As February 2015
Successor Agency to the Redevelopment Agency of the City of Santa Barbara Long-Range Property Management Plan for the Paseo Nuevo Leased Fee Interest As Amended
required by the Cooperation Agreement, and as set forth in the Annual Parking Operations Agreement, the City is responsible for the operation, maintenance and replacement of Parking Structures Nos. 2 and 10 and those Stmctures must, in accordance with the Paseo Nuevo Agreements, be available to provide 1, 115 parking spaces for public use at subsidized rates.

In return for operation of the two parking structures, the City is entitled to receive revenue generated by parking rates and, it was contemplated, ultimate ownership of the parking stmctures.

B. The purpose for which the property was acquired:

The property was acquired by the Agency between 1987 and 1989 through transfer firom the City of Santa Barbara to the Agency, by negotiation by Agency staff and through the use of condemnation actions filed by the Agency. For the most part, the land was assembled from real properties formerly owned by the City of Santa Barbara (City surface parking Lot No. 1 and the City's De La Guerra Street). The balance of the land was acquired from private property owners of those real properties along the eastside of the 700 and 800 blocks of State Street.

The real property was expressly acquired for the purposes of redevelopment in the form of an urban open-air retail shopping center within the City's central business district - i.e., to develop a 400,000 square foot central business district shopping center with all of the necessary and requu-ed public parking as a redevelopment project under the State Redevelopment Act by and between the Agency and a qualified and experienced private shopping center developer and operator, two major department stores and the City.

C. For each property the plan includes the parcel data, including address, lot size, and current zoning in the former agency redevelopment plan or specific, community, or general plan.

Address: 701 - 817 State Street, Santa Barbara
Lot Size: Two City blocks
See Lease Exhibit 1, Field Paoli Site Plan dated January 20, 1990, Site Plan sheets pages 1 -3. ()
Current Zoning is C-2 - Mked Commercial.

Foreach Pr°Perty the plan includes an estimate of the current value of the parcel including, if available, any appraisal information.
. The current assessed value for property tax purposes for the Paseo Nuevo "Center" lessee leasehold improvements are:
$44, 002, 902 for property tax year 2102/2013 as provided by the Santa Barbara County Clerk, Recorder and Assessor.

February 2015
Successor Agency to the Redevelopment Agency of the City of Santa Barbara Long-Range Property Management Plan for the Paseo Nuevo Leased Fee Interest As Amended
. The current assessed value for property tax purposes for the Macy's lessee leasehold improvements are:
$9, 522, 888.00 for property tax year 2102/2013 as provided by the Santa Barbara County Clerk, Recorder and Assessor.
. The current assessed value for property tax purposes for the Nordstrom lessee leasehold improvements are:
$14, 500,000,00 for property tax year 2102/2013 as provided by the Santa Barbara County Clerk, Recorder and Assessor.
. The current assessed value is for the Parking Lot No. l"s leasehold improvements are:
[No Assessed Value.]
. The current estimated value of the Agency's encumbered leased fee real property interest is provided in the attached memorandum prepared by Allan D. Kotin dated July 25, 2013.

E. For each property the plan includes an estimate of any lease, rental, or any other revenues generated by the property, and a description of the contractual requirements for the disposition of those funds..

Original Paseo Nuevo Center Ground Lease rent amount was $7, 780,000; this amount was pre-paid in full at closing (February 1989) with additional $2 000, 000 loan made to the Agency which loan was secured and repaid using only an offset against any "Annual Participation Rent" due and payable to the Agency.

Annual Participation Rent: - As Required by Section 3.2 of Paseo Nuevo Ground Lease. [Note: No "Participation Rent" has ever been paid to the Agency to date - 1989 - 2013 nor is it anticipated during the term of the leases.]
Original "Majors" Lease Base Rent - $1. 5 million in "base rent" each for the Nordstrom and Macy's Ground Lease was due at closing; both lease "base rent" amounts were prepaid to Agency at closing in Febmary 1989 and no "base rent" is or will be payable to the City or the Agency under the Major leases for the remaiiiing tenn of those lease.

Parking Lot No. 1 Parking Lease: Base rent of one dollar due at February 1989 closing - no rent due thereafter.

February 2015
Successor Agency to the Redevelopment Agency of the City of Santa Barbara Long-Range Property Management Plan for the Paseo Nuevo Leased Fee Interest As Amended
F For each property the plan includes the history of environmental contamination, including designation as a Brownfleld site, any related environmental studies, and history of any remediation efforts.

Paseo Nuevo Property had contaminated soil and ground water which was fully remediated as part of the constmction of the Paseo Nuevo Shopping Center between February 1989 and November 1990. The Redevelopment Agency was a defendant is a class-action lawsuit filed and preliminarily resolved years ago by the U.S. Environmental Protection Agency regarding the uow-closed Casmalia Landfill site where some contamination soil removed from Paseo Nuevo site was disposed of. The Agency and the Successor Agency (as the current fee owner) remain subject to contingent future liability for disposal of contaminated Paseo Nuevo soil by virtue of die lawsuits entitled U.S. Environmental Protection Agency (EPA) (Casmalia Landfill) v.

Seinsom Hydrocarbons, Inc., et. al.

G. For each property the plan includes a description of the property's potential for transitoriented development and the advancement of the planning objectives of the successor agency.

As a leased fee interest in the three separate ground leaseholds and parking reqiurements - which leaseholds will not terminate until December 31, 2065, this property has no potential for "transitoriented development".

H. For each property the plan includes a brief history of previous development proposals and activity, including the rental or lease of property.

The Paseo Nuevo Shoppmg Center property fonneriy consisted of small retail buildings with common or "shared" walls constructed along State Street m the 1930s, 1940s and 1950s on somewhat fragmented and small land parcels adjacent to a City surface parking lot which began operations in the 1960s Smce February 1989, upon its acquisition by the Redevelopment Agency through negodation and the use of eminent domain, and with its redevelopment as a shopping center, the real property now consists of a central business district type open air shopping center "mail" with two major department store buildings as part of the center - the "majors" (Nordstrom and Macys) occupy buildings totaling approxunately 300, 000 square feet of 3 level space) along with approximately 100, 000 square feet of Center mail "shops" and 9, 000 square feet of second floor office space which is also managed and leased by the Center owner.

Parking for the Mail is provided through 572 on-site parking spaces in Parking Lot No. 1 and through a combined total of 1, 115 spaces in Parking Structures Nos. 2 and 10.

L ^°.r each propertythe plan identifies the use or disposition of the property, which could include 1) the retention of the property for governmental use, 2) the retention of the property for future development 3) the sale of the property, or 4) the use of the property to fulfill an enforceable obligation.

The Agency's fee interest in the Paseo Nuevo property is encumbered with obligations that continue until the year 2065. Because of the dissolution of the Agency, and the inability of the Successor Agency to, over the long term, fulfill the existing monetary and non-monetary Februar)^2015
Successor Agency to the Redevelopment Agency of the City of Santa Barbara Long-Range Property Management Plan for the Paseo Nuevo Leased Fee Interest As Amended
enforceable obligations applicable to the Paseo Nuevo Center and tfae underlying property, the property should be transferred to the City of Santa Barbara to ensure the continued fimctioning of the Center in accordance with the Paseo Nuevo Agreements. The operation of the Center is inseparably tied to the provision of 1, 115 public parking spaces at subsidized rates and without preference to any particular retail customers. The City, a party to the Paseo Nuevo Parking Agreements is the only entity that has the legal authority and practical ability to provide the required public parking in accordance with the Paseo Nuevo Agreements. Further, in 2065 when Ihe existing agreements expire, the property will obviously need redevelopment and renewal and only the City of Santa Barbara will have the police and regulatory power to eflfect the redevelopment that will be necessary in 52 year's time.

J. The plan separately identifies and list properties dedicated to governmental use purposes and properties retained for purposes of fulfilling an enforceable obligation.

The leased fee interest in the Paseo Nuevo Center property owned by the fonner Redevelopment Agency should be transferred to the City of Santa Barbara for the purpose of fulfilling the enforceable obligations contained in the leases and other related agreements such as the obligation to pay PBIA fees and to provide subsidized public parking until the year 2065 when the ground leases and other agreements will tenninate.

During the term of the 75-year leases, the Parking Lot No. 1 Parking Agreement requires that 572 on-site public parking spaces be provided on a non-preferential basis; in other words, no parking preference or discount is provided to Paseo Nuevo Shopping Center customers and. as a result, any member of the public may use the Parking Lot No. 1 parking structure to park a vehicle. The Parking Lot No. 1 Parking Agreement also mandates that the Shopping Center operate the Parking No. 1 Structure with a period of free parking equivalent to that period of free parking offered by the City at the majority of the City's Central Business District (CBD) parking lots and structures (currently 75 minutes free) and that the hourly parkmg rates in the Lot No. T Stmcture (i. e., those rates charged after the period of free parking) must be equivalent to the parking rates charged by the City at its CBD parking lots and parking stmctures. Further, the 75- year lease agreements, along with the Parking Agreement and the Parking Covenants, require that the Agency and/or the City provide 1, 115 parking spaces witfain a two block radius of the Paseo Nuevo Center which are available to the public on the same non-preferential basis and with the same period ofj&ee parking and at the same hourly rates charged by the City at its CBD lots for the temi of the leases which extends to the year 2065, Use and Disposition (Health and Safety Code § 34191. 5(c)(2):

Address the use or disposition of all of the properties in the trust. Permissible uses include 1) the retention of the property for governmental use pursuant to subdivision (a) of Section 34181, 2) the retention of the property for future development, 3) the sale of the property, or 4) the use of the property to fulfill an enforceable obligation. The plan shall separately identify and list properties in the trust dedicated to governmental use purposes and properties retained for purposes of fulfilling an enforceable obligation.

Febniaty2015 g
Successor Agency to the Redevelopment Agency of the City of Santa Barbara Long-Range Property Management Plan for the Paseo Nuevo Leased Fee Interest As Amended
Use and Disposition of Property (Health & Safety Code § 34191. 5(c)(2)) By way of submitting this Long-Range Property Management Plan, the Successor Agency to the Redevelopment Agency of City of Santa Barbara determines that the properties" should be transferred to the City of Santa Barbara to fulfill the enforceable obligations contained in the existing long-term Paseo Nuevo ground leases and the other public parking covenants and requirements contamed in the related Paseo Nuevo easement and other agreements. In accord with the recommendation of the Oversight Board, transfer of the Agency's fee interest in Paseo Nuevo to the City of Santa Barbara is expressly conditioned upon the City's assumption of all Agency obligations, both monetary and non-monetary, created under the Paseo Nuevo Agreements. At the termination of the 75-year Leases, on December 31, 2065, the City of Santa Barbara, as property owner, wiU evaluate the needs of the property and assess its condition as a South Coast retail shopping center. If, at any time, the City of Santa Barbara decides to dispose of its ownership interest in the property, the City will enter into a compensation agreement with the appropriate taxmg entities pursuant to California Health and Safety Code Section 34180(f)(l).

Attachment: Kotin Memorandum dated July 25, 2013
February 2015
flDK&n
Allan D. Kotin & Associates
Real Estate Consulting for Public Private Joint Ventures 949 South Hope Street, Los Angeles, CA 90015
213.623.3841
Cell213.369.3841
Fax866.685. 1377
akotln@adkotin. corn
www. adkotin, corn
TO: Sarah Knecht, Assistant Agency Counsel, City of Santa DATE: July 25, 2013 Barbara
CC: Stephen Wiley, Agency Counsel
FROM: Allan D. Kotin
RE: WHY THE PASEO NUEVO GROUND LEASE REPRESENTS AN OBLIGATION RATHER THAN AN

ASSET TO THE SUCCESSOR AGENCY
In the preparation of the long range property management program (LRPMP) for the Successor Agency to the Redevelopment Agency of the City of Santa Barbara, it was natural to assume that the 6-acre site on State Street owned by the Redevelopment Agency and subject to a long-term ground lease to the shopping center owner was a potential real property asset. The piupose of this memorandum is to review some of the history that leads to the conclusion that at least through the year 2065, this is not an asset but rather an obligation of the Successor Agency to the Redevelopment Agency.'
Briefly stated there were a series of sequential changes which converted this project from being a revenue-generaling asset to being an expense-requirmg obligation:

1. The draft lease originally provided for both minimum and percentage rent where the percentage rent was called Participation Rent, The provision for miniinum rent paid to the Agency was waived entirely in consideration for the developer advancing $7. 8 million in additional funds to permit the Agency to pay for its parking and land acquisition obligations after Agency funds were exhausted.

2. The provisions for Participation Rent (the percentage rent portion of ground rent) provided that Participation Rent would be paid equal to 20% of the amount by which income from the center exceeded a defmed Base Income threshold in the Establishment Year. Due to slow lease up, this Base Amount was not even set until 1997 nor was it actually achieved for many years thereafter.

3. At the very end of the development period the Agency unexpectedly required an additional $2 million to meet its obligation. As there were no public sources for this funding, the $2 million was advanced by the Developer in the Fiscal Year 1989-1990 with the understanding that it would accrue interest at 10% and would be repaid only by crediting Annual Participation Rent when and if such rent was due to the Agency as Landlord.

The author of this memorandum has been involved in the Paseo Nuevo transaction intermittently since 1986 when the city/Agency first considered issuing an RFP for development of the center. As the project manager for the Agency's economic consultant, Kotin, Regan & Mouchly, Allan Kotin actively panicipated in developer selection, lease negotiation, and support services to the Santa Barbara redevelopment Agency. Many years later when the property was changing ownership for the second time, Allan Kotin was again engaged by the Agency to review the percentage rent clause and to then opine on whether or not there was any meaningfiil prospect for payment of participation rent to the Agency.

BDKsfl
Confidential Memorandum
Re: WHY PASEO NUEVO IS AN OBLIGATION NOT AN ASSET

4. 6.

7. In the absence of high enough income to warrant any payment of Participation Rent, the $2 million grew to approximately $3.7 million by the end of 1997.

An analysis by the Agency's consultant in 1997 concluded that because the interest on the loan was then accruing at a rate of roughly $370, 000 year and no Participation Rent was likely for several years, it was extremely unlikely that the Agency would ever receive any actual cash payments of Participation Rent except in the event that two very unlikely events occun-ed: (1) retail space rents at high occupancy levels would grow continuously at a relatively high rate; and (2) the lessee as the owner of the shopping center would not incur capital costs for which the interest charges were to be added to the Base Amount thereby shrinking or eliminating any Participation Rent otherwise due.

In the period since that analysis neither of the two conditions has applied; rental growth has been slow and uneven combined with periodic vacancy; re-tenanting has required significant capital investment not recovered by "excess" rents and therefore causing the Base Amount to increase and furtfaer deferring any Participation Rent.

The project opened at a time of unprecedented real estate recession, as a consequence of which it was sold at a significant loss from its original cost a few years after'opening.

Notwithstanding this lower cost to the new buyer, the accrual of interest on the now'almost $4 million loan (1997) at 10% continued causing the threshold for the receipt of any actual Participation Rent continue to rise.

8. A set of presumably "minor and technical" obligations from the Agency as landlord to the lessee were negotiated into the ground lease These included the provision that the Agency would pay local assessment fees in excess of a defmed threshold and obligations to maintain available parking for the shopping center.

9. The center and its tenants are charged annual fees known as Parking and Business Improvement Area (PBIA) fees to partially offset the cost of providing extensive public parking. These fees have ranged from $155,000 to over $206,000 between 2003 and'2012.

Under the terms of the ground lease the lessee's obligation is capped at $100,000 with the balance payable by the landlord (fonner RDA and now Successor Agency). In the ten year period ending in 2012, total fees were almost $1. 8 million leaving the landlord with a total payment of $769,000 or an average of roughly $77, 000 per year. Note that fees, which are tied to shopping volume, declined sharply in 2008 and 2009 but are again recovermg, suggesting that this amount may increase over time.

As a consequence of this series of events, the obUgations of the landlord to the lessee, as noted in item 5 above, continue in the complete absence of any net rent payment to the Agency by the lessee.

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Confidential Memorandum
Re: WIIY PASEO NUEVO IS AN OBLIGATION NOT AN ASSET
What had apparently been a potential asset has in fact become an ongoing fmancial drain to the Agency and the Successor Agency which will continue on until the lease tenninates in 2065.

Some limited elaboration on each point is probably important.

Initial Cost Over-runs
The parking garages on the opposite side of State Street are widely admired for their design. The land acquisition cost and the construction cost for these garages were much higher than antidpated.

Combined with the acquisition costs for the property underneath the shopping center, tlie obligations of this project completely exhausted the available funds of the Santa Barbara Redeve'bpmeat Agency project area. The first series of overruns amounted to $7. 8 million which was advanced by the developer in consideration for the elimination of any fixed miiiimum rent. As is so often the case, costs continued to increase and to meet this increase, the developer was asked late in the ProJect developmmt cycle to provide an additional $2 million in cash to the Agency so it could pay for its final costs. The only source ofrqiaymentofthat $2 million-because the Agency had nottung else to pledge was a credit against Participation Rent when and if such Participation Rent was actually payable to the Landlord. Since that time, the loan balance continues to grow at 10% per year compounded.

The Absence of Participation Rent
Participation Rent was set at a share of revenue in excess of an income to the developer which itself was subject to upward adjustment makmg Participation Rent something of a retreating horizon. This retreating horizon is created by a rising threshold of Base Income making the possibility of earned Participation Rent for the landlord less and less likely. That possibility has effectively been eliminated by the continuing accmal of interest at 10% per annum on an origmal $2 million loan balance which, without any payments, doubles every seven years. The project opened into a very depressed economy and failed to make any profit in the first several years which allowed the loan balance to grow and has generally generated less income than the threshold for participation Since then.

Opening in a Poor Market Environment
Beginning in the early '90"s the California and national real estate markets went into along decline from which they did not recover until after 2000. TUs was just when this center was opening.

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Confidential Memorandum
Re: Wm7 PASEO NUEVO Is AN OBLIGATION NOT AN ASSET
A few years after the project opened, it was sold for $34 million at a very substantial loss.

Notwithstanding this loss, the terms of the ground lease required that the tb-eshold rent continued to be calculated on the original cost basis.

To be surethere was some significant recovery in the early 2000's but virtually all of that was wiped out in the major recession which began in 2008.

The Landlords Financial Obligations under the Lease
Even in the 1980s, developers were concerned about the prospect of steadily rising local fees. To that end, the deye loper/lessee negotiated a provision by which fees in excess of $100,000 per year would actually be borne by the Agency so as to "cap" the developer/lessee risk. Those fees' have risen shaiyly and now the Successor Agency is obligated to pay almost $80, 000 per year in fulfillment of these obligations.

Furthermore for the entire time that the shopping center is open during the term of this lease, the Agency, and now the City, is required to maintain adjacent public parking at favorable cost to the shoppers.

Combined, these two obligations represent a significant ongoing obligation of the landlord whether that landlord be the original Redevelopment Agency, the Successor Agency or at some pomt in tune perhaps the city There are no net rent revenues to offset these costs nor is there any prospect there will ever be such rent.

While it may reasonably be argued that the reversionary interest in the land when the lease terminates in 2065 could have a high value, that value is more than fuUy offset by the ongoing obligations of the landlord under the terms of the lease and the huge uncertainties associated with potential re-use in 52 years.

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COUNCIL INTRODUCTION DRAFT 12/02/25
1 ORDINANCE NO. _______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA

BARBARA FINDING THE PROJECT EXEMPT FROM THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT UNDER PUBLIC
RESOURCES CODE SECTION 21080.66 AND APPROVING AND

AUTHORIZING EXECUTION OF THE PASEO NUEVO

REDEVELOPMENT PROJECT DEVELOPMENT AND

DISPOSITION AGREEMENT BETWEEN THE CITY OF SANTA

BARBARA AND PASEO PROPCO, LLC

THE CITY COUNCIL OF THE CITY OF SANTA BARBARA DOES ORDAIN AS FOLLOWS:

SECTION 1. Background and Purpose.

A. The City is the owner of multiple parcels of real property associated with the Paseo Nuevo Shopping Center in downtown Santa Barbara that it acquired from the Successor Agency of the Redevelopment Agency of the City of Santa Barbara pursuant to Successor Agency Resolution No. 15-099, City Council Ordinance No. 5731, and Grant Deed No. 61-456 recorded February 19, 2017 as Instrument No. 2016-0007814 in the Official Records of the County of Santa Barbara (“Paseo Nuevo Property”). The Paseo Nuevo Property is currently developed with an outdoor regional shopping center and parking facility commonly referred to as the Paseo Nuevo Shopping Center. However, due to changed economic circumstances, including closure of two anchor tenants (Macy’s and Nordstroms), the Paseo Nuevo Shopping Center no longer provides the financial or community benefits originally envisioned by the City.

B. The City is also the owner of an ancillary parking site located adjacent to the Paseo Nuevo Shopping Center commonly known as “Parking Lot 2” that it acquired COUNCIL INTRODUCTION DRAFT 12/02/25
2 from the Successor Agency of the Redevelopment Agency of the City of Santa Barbara pursuant Grant Deed No. 61-415 recorded July 15, 2013, as Instrument No. 2013- 0048015 in the Official Records of the County of Santa Barbara.

C. Paseo Propco, LLC is the current ground lessee of portions of the Paseo Nuevo Property including the Inline Retail Parcel, the Parking Lot 1 Parcel, and the Former Macy’s Parcel. The Paseo Nuevo Property is also subject to a separate ground lease for the Former Nordstrom Parcel, for which Paseo Propco, LLC is not the current ground lessee.

D. On March 5, 2024, the City Council adopted Resolution No. 24-016, A Resolution Of The City Council Of The City Of Santa Barbara Declaring Designated Parcels Of City-Owned Property To Be Exempt Surplus Land Pursuant To Subparagraph (J) Of Paragraph (1) Of Subdivision (F) Of California Government Code Section 54221 – Paseo Nuevo, pertaining to the Paseo Nuevo Properties.

E. On August 5, 2025, the City Council adopted Resolution No. 25-090, A Resolution Of The City Council Of The City Of Santa Barbara Supplementing Resolution No. 24-016 Declaring Designated Parcels Of City-Owned Property To Be Exempt Surplus Land Pursuant To Subparagraph (J) Of Paragraph (1) Of Subdivision (F) Of California Government Code Section 54221 – Paseo Nuevo – By The Addition Of City-Owned Property Commonly Referred To As Parking Lot 2, pertaining to Parking Lot 2.

COUNCIL INTRODUCTION DRAFT 12/02/25
3 F. By letters dated March 18, 2024, and August 20, 2025, HCD notified the City that the Paseo Nuevo Property and Lot 2 Parcel qualify as “exempt surplus land” under Government Code section 54221, subdivision (f)(1)(j), due to existing constraints under contractual rights.

G. On March 14, 2024, the City and Paseo Propco, LLC entered in a Project Agreement for the redevelopment of the Paseo Nuevo Shopping Center wherein the Parties agreed to commit to good faith cooperation for the negotiation of a Disposition and Development Agreement for the transfer of fee title to the Paseo Nuevo Properties from the City to the Paseo Propco, LLC for the development of a multi-family, mixed use residential project as described in Project Agreement.

H. At its meeting of August 5, 2025, the City Council unanimously approved an amendment to the proposed project description contained in the Project Agreement and directed the City Administrator and the City Attorney to negotiate a Disposition and Development Agreement for redevelopment of the Paseo Nuevo Shopping Center consistent with the terms outlined in the Council Agenda Report for the Paseo Nuevo Redevelopment – Project Update Agenda Item No. 10.

I. At its meeting of September 24, 2025, the Historic Landmarks Commission (“HLC”) conducted a Concept Design Review of the proposed project under Section

30.150.060 of the Santa Barbara Municipal Code and provided comments and recommendations based on that review. The Project described in the Development and COUNCIL INTRODUCTION DRAFT 12/02/25
4 Disposition Agreement approved by this ordinance incorporates some proposed responses to those design comments and recommendations. The City Council has considered the HLC’s comments and has determined that the size, mass, bulk, height, and scale of the Project is generally appropriate for its location and its neighborhood, and that the existing and proposed landscaping and open space within the area are appropriate for the Project.

J. At their respective meetings of October 9, 2025, the Downtown Parking Committee and the Planning Commission reviewed the proposed project and provided comments and recommendations. The City Council has considered the Downtown Parking Committee’s and Planning Commission’s comments and recommendations.

K. At its meeting of December 2, 2025, the City Administrator and City Attorney submitted the Paseo Nuevo Redevelopment Project Development and Disposition Agreement between the City Of Santa Barbara, California And Paseo Propco, LLC (“DDA”) consistent with the City Council direction given on August 5, 2025. A copy of the DDA was contained in the agenda packet for the meeting and is also on file in the City Clerk’s Office.

SECTION 2. CEQA Findings and Determinations.

A. The Project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (“CEQA”) (Public Resources Code COUNCIL INTRODUCTION DRAFT 12/02/25
5 Sections 21000 et seq.), the State CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq.), and the environmental regulations of the City. Based on that assessment the City Council that the Project as described in the DDA qualifies for a statutory exemption pursuant to Public Resources Code (“PRC”) Section 21080.66.

Specifically, the Project meets all of the following site and development criteria under PRC Section 21080.66(a) as follows:

1. Project Site Size (PRC Section 21080.66(a)(1)(A)): The Project site is less than 20 acres in size.

2. Project Location (PRC Section 21080.66(a)(2)(A)): The Project site is located within the incorporated boundaries of the City of Santa Barbara.

3. Urban Uses (PRC Section 21080.66(a)(3)): The Project site has been previously developed with an urban use and over 75 percent of the perimeter is developed with urban uses.

4. General Plan and Zoning Consistency (PRC Section 21080.66(a)(4)(A), (C)): The Project is consistent with the City’s General Plan and Zoning Ordinance.

5. Minimum Density (PRC Section 21080.66(a)(5)): Pursuant to Government Code Section 65583.2(c)(3)(B)(iii), as a suburban jurisdiction, the City must permit at least 20 units per acre. The statutory exemption requires a minimum density equal to one-half of that amount, or 10 dwelling units per acre. The Project meets this requirement.

6. Environmental Conditions (PRC Section 21080.66(a)(6)): Pursuant to Government Code Section 65913.4(a)(6), the Project site is not located in any of the following areas nor contains any of the following characteristics: a coastal zone; prime farmland or farmland of statewide importance; wetlands; a very high fire hazard severity COUNCIL INTRODUCTION DRAFT 12/02/25
6 zone; a hazardous waste site which has not received a uniform closure letter or has otherwise not been determined to be suitable for residential use or residential mixed uses; a delineated earthquake fault zone; a special flood hazard area; a regulatory floodway; lands identified for conservation; habitat for protected species, or; land under conservation easement.

7. Historic Resources (PRC Section 21080.66(a)(7)): The Project does not involve the demolition of any structure listed on a national, state, or local historic register prior to the date of preliminary application submittal.

8. Hotel or Transient Use (PRC Section 21080.66(a)(8)): The Project does not include a hotel or other transient lodging or transient use component.

B. PRC Section 21080.66(b) requires the City to provide formal notification via certified mail and email to each California Native American tribe that is traditionally and culturally affiliated with the project site as an invitation to consult on the Project, its location, and the project’s potential effects on tribal cultural resources. The City provided said required notification via certified mail on September 15, 2025 and email on September 16, 2025, to five Native American tribes and received a consultation request from one tribe, the Santa Ynez Band of Chumash Indians. The City concluded the tribal consultation process on October 27, 2025. Development requirements relating to Native American concerns as expressed during the consultation are included in the DDA as express conditions of development.

COUNCIL INTRODUCTION DRAFT 12/02/25
7 C. A Phase I Environmental Assessment will be completed for the Project in compliance with PRC Section 21080.66(c)(1)(A). If a recognized environmental condition is found, the Developer must complete a Preliminary Endangerment Assessment, as defined in Section 78095 of the Health and Safety Code. If a release of a hazardous substance is found to exist on the site or if a potential for exposure to significant hazards from surrounding properties or activities is found to exist, the release and effects of the potential exposure will be properly mitigated to levels required by current federal and state statutory and regulatory standards before the local government issues a certificate of occupancy.

D. The design requirements under PRC Section 21080.66(c)(2) do not apply because the Project is not located within 500 feet of a freeway. In addition, the labor standards set forth in PRC Section 21080.66(d) do not apply because the Project is not 100 percent affordable to lower income households, will not exceed 85 feet in height, and is not within the City or County of San Francisco.

SECTION 3. Approval and Authorization for Execution and Implementation.

A. The DDA on file with the City Clerk is approved. The City Administrator is authorized and directed, for and in the name of the City, to execute and deliver the DDA in the form and content submitted to the City Council in the agenda packet for its meeting of December 2, 2025, with such minor changes, insertions and omissions as the City Administrator may require or approve as necessary or convenient to implement the action COUNCIL INTRODUCTION DRAFT 12/02/25
8 of the City Council at its meeting of December 2, 2025, and as approved as to form by the City Attorney.

B. The City Administrator, in consultation with the City Attorney, is authorized and directed to implement the DDA according to its terms and this paragraph. Whenever the DDA references City approval, consent, or waiver, the written approval, consent, or waiver of the City Administrator shall constitute the approval, consent, or waiver of the City, except where City Council approval is expressly required by the DDA. The City Council authorizes the City’s Administrator to deliver such approvals or consents as are contemplated by the DDA, or to waive requirements under this Agreement, on behalf of the City, except where City Council approval is expressly required by the DDA. Any material amendment or modification to the DDA as determined by the City Attorney shall require approval by the City Council.

C. As used in this Section, City Administrator and City Attorney includes an Assistant City Administrator or Assistant City Attorney or any City officer or employee designated in writing by the City Administrator or City Attorney, respectively.

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: December 2, 2025
TO: Mayor and Councilmembers
FROM: Finance Department and Human Resources Department SUBJECT: Fiscal Year 2026 First-Quarter Review [Resolution] RECOMMENDATION: That Council:

A. Receive a report from staff on the status of revenues and expenditures in relation to budget for the three months ended September 30, 2025; B. Accept the Fiscal Year (FY) 2026 Interim Financial Statements for the three months ended September 30, 2025;
C. Adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Amending Resolution No. 25-102 to Approve Proposed First-Quarter (Q1) Adjustments to FY2026 Revenue and Expenditure Appropriations as Detailed in the Attached Schedule of Proposed Q1 Adjustments;
D. Adopt, by reading of title only, a Resolution of the Council of the City of Santa Barbara Amending Position Salary Control Resolution No. 25-117 for Authorized Positions for Fiscal Year 2026. Changes are Effective November 15, 2025; and E. Provide direction to staff regarding revenue generating and expenditure control options to balance the General Fund budget in FY2026 and forecast for FY2027.

EXECUTIVE SUMMARY:

The FY2026 interim financial statements for the three months ending September 30, 2025, are presented to the Finance Committee and the City Council. The report also includes staff revenue and expenditure projections for the General Fund and Enterprise Funds. Staff is projecting an operating deficit in the General Fund of $6.8 Million requiring additional use of reserves to balance the budget. In order to address this additional financial pressure, staff worked to develop a comprehensive set of revenue generating and expenditure reduction/control options for the Finance Committee to consider. More Agenda Item No. 13
File Code No. 230.04
Council Agenda Report
Fiscal Year 2026 First-Quarter Review [Resolution]
December 2, 2025