Santa Cruz planning commission advances ambitious plan to reshape downtown with taller, denser buildings

The city of Santa Cruz sits on the brink of a generational change to its downtown after the city’s panel of land-use experts advanced a project to extend downtown south by 29 acres, connecting the city center to its coastline with a dense, walkable entertainment district. 

The Downtown Plan Expansion, as it’s officially known, seeks to rezone the neighborhood south of Laurel Street, known as SoLa, to attract dense, tall, mixed-use redevelopment. 

The 29-acre area has long been occupied by single- and two-story buildings and Kaiser Permanente Arena. The city wants to connect downtown to the beach through a walkable and bike-friendly entertainment district, with a new Santa Cruz Warriors arena, a public plaza and buildings up to 12 stories tall, with a total of 1,600 new housing units. 

The proposal marks the most significant land-use change in the city of Santa Cruz since residents voted to create the greenbelt in 1979. Yet, outside of changing the streetscape and public infrastructure, the city government will have no hand in actually developing the neighborhood — that will require the private sector. Through these proposed rule changes, the local government can try to entice private developers into the area only by creating regulatory conditions that attract redevelopment. 

For some local leaders, such as Mayor Fred Keeley, the prospect of bringing 1,600 new units into downtown is seen as an urgent issue, as the state has mandated the city permit thousands of new housing units by 2031 as part of an effort to boost supply and dampen escalating housing costs. 

Others see the expansion as an attractive and sustainable vision for downtown into the future. Cities across the country are working to figure out how to keep their city centers vibrant even as downtown life is being quickly reshaped by e-commerce and remote work. And still, for others, a downtown that builds tall and dense represents an unwelcome “San Jose-ification” of a beloved beach community. 

On Thursday, the planning commission — which acts as the city’s land-use advisory committee on large projects — voted 4-1 in favor of the city’s SoLa plans. District 4 Commissioner Rachel Dann was the lone dissenter, arguing for more time with the plan and advocating to soften the proposed redevelopment intensity. 

Familiar faces dotted the commission’s chambers Thursday evening, including longtime local activists John Hall, Rick Longinotti and Gillian Greensite, developer Owen Lawlor and Frank Barron from last year’s Housing for People campaign, which sought to restrict the city’s ability to increase building heights. 

In public comments and emails to the city, many of those who disagree with the idea of intense redevelopment of the neighborhood voiced two familiar chief concerns: building height and the speed of the process. 

The current proposal aims to increase the development height limits on four blocks at the corners of Front and Spruce streets from 35 feet to 85 feet. However, in California’s housing landscape, height restrictions hardly matter thanks to state density bonus laws that allow developers to increase the number of units in their projects by 50 to 100% as long as they reserve a certain number for low-income tenants. 

That means a project initially proposed with 100 units could increase to 150 or 200 units through use of a density bonus. As further encouragement for developers to include affordable housing, the density bonus essentially eliminates local height restrictions. 

In light of the density bonus (the 100% option became available only at the start of 2024), residents who resist the downtown expansion worry that increasing the height limits to 85 feet on some parcels could produce buildings much taller than 12 stories. On Thursday, the upstart group Santa Cruz for Responsible Development, led by Barron and Longinotti, pressed the commission to adopt an alternate proposal that would maintain existing heights limits, which, in their view, could still allow 12-story buildings through a density bonus. 

“Why are you pursuing increasing the zoning on top of the state’s density bonus?” Longinotti asked commissioners. “That question needs to be answered to the public.” 

In increasing the height limits in SoLa, the city planning staff has also developed its own local density bonus program which it says will offer a more economically attractive option for developers and commit them to keeping their projects between eight and 12 stories tall.

The main thrust of the program, which Lookout has analyzed previously, is to have developers commit to height restrictions. Developers would also have to reserve 21.3% of a project’s units as below-market-rate and agree to submit their development plans to a newly formed architectural review board. In turn, the developer doesn’t have to subsidize its units as deeply as the state requires, and is entitled to build a larger, though not taller, project thanks to allowances in floor-to-area ratio. 

Some residents had pushed the planning commission to postpone Thursday’s vote, pointing to foul play by the city for waiting until Tuesday afternoon to post the project’s 371-page environmental impact report (EIR). The timing gave residents only 24 hours to make comments before the noon Wednesday deadline, and commissioners less than 72 hours to examine the document before voting to advance it to city council. 

“This is really one of the most major planning decisions one can imagine for the city of Santa Cruz,” said John Hall, a member of Our Downtown, Our Future, a local urban planning advocacy group. “You want to do it right once rather than getting it wrong and trying to do a redo.” 

Longinotti said the staff timing amounted to disrespect of the public and planning commission. 

“Do you guys even matter?” Longinotti said, challenging the planning commissioners: “48 hours to read through a 371-page EIR, does anyone care about your opinion?” 

In a Wednesday letter to the planning commission, the group’s attorney, Mark Wolfe, said the “truncated review time is simply inadequate,” and pressed commissioners to postpone. However, he said if commissioners still wanted to advance the downtown expansion plan, Santa Cruz for Responsible Development supported an alternative in which the south of Laurel parcel’s zoning remained the same. 

Although city staff was asking the planning commission to recommend that the city council approve the final EIR, city planner Sarah Neuse explained that, legally, the planning commission is not required to weigh in on the final EIR. Regardless, commissioners Pete Kennedy, Michael Polhamus and John McKelvey said they had enough time to at least skim through the report, and said they felt comfortable advancing the project. 

“I feel like people have been saying the same up here for 30 to 40 years,” Kennedy said. “It’s super annoying to hear, ‘What’s the rush?’ The rush is that people need places to live and we need a better town. And, yup, the buildings are bigger, and nope, I don’t want it to look like Santa Barbara.” 

The Santa Cruz City Council could vote on the downtown plan expansion project as soon as May 13, though no date has yet been set.

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FOR THE RECORD: A previous version of this article incorrectly stated that state rules mandate Santa Cruz “build” thousands of new housing units by 2031. State rules only require local jurisdictions to permit new housing units, not actually construct them.

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