Riverfront development rendering
A rendering of the still-to-be-named 175-unit riverfront development in downtown Santa Cruz.
(Rendering courtesy city of Santa Cruz)
Development

Big riverfront development in downtown Santa Cruz withstands appeal, setting stage for construction

The California Coastal Commission found “no substantial issues” with the development, which will add 175 housing units, new commercial space, and public plazas to downtown along the San Lorenzo River.

A mixed-use development in downtown Santa Cruz along the San Lorenzo River could break ground next year after withstanding an appeal to the California Coastal Commission on Friday.

The commission — an independent, quasi-judicial state agency that regulates land use along the Pacific coast — found “no substantial issues” with the development, which will add a total of 155 market-rate condominiums, 20 affordable-housing rentals, new commercial space, public plazas and a basement and ground-level parking garage to downtown. The Santa Cruz City Council already had signed off on the project, to be built between Front Street and the river south of Soquel Avenue.

The developer, Owen Lawlor of SC Riverfront LLC, is set to demolish three existing buildings and construct a trio of seven-story buildings totaling a 188,694-square-foot project. That’s the equivalent of 18 Abbott Squares, the city’s popular downtown gathering spot.

A group called Santa Cruz Tomorrow appealed the city’s approval to the coastal commission, saying in part that the development had too few housing units for low-income people. On top of that, “the Riverfront project will significantly affect coastal resources, access and protections” and set “a worrying precedent” for other developments, wrote the group’s chair, Ron Pomerantz.

Indeed, the project sets aside 20 of its 175 units — 11% — as rentals to low-income and very-low-income people, leaving the development slightly shy of the city’s 15% affordable-housing threshold. That lower-than-average proportion of low-income apartments was due to overlapping local and state laws, city staff explained to council members. When the riverfront project was first proposed, it had 133 condominiums.

But because Lawlor at that time had vowed to make 20 units available to low-income renters, he won approval to make the project larger. The riverfront development grew by 42 units, for a total of 175, and that made the proportion of affordable units smaller.

The rent for the most affordable riverfront units will range from $963 per month for a studio to $1,200 per month for a two-bedroom apartment. That’s for very-low-income renters who make 50% of the area median income. For low-income units (those making 80% of the area median income), the rents will be between $1,700 per month for a studio and $2,300 per month for a two-bedroom apartment.

In letters to the city, the coastal commission had previously said it wanted the project to provide greater “public benefit.” In response, Lawlor pledged $500,000 in donations to city projects, including:

  • A contribution of $400,000 to the city’s Affordable Housing Trust Fund, used to finance the creation and preservation of affordable housing.
  • An additional contribution of up to $100,000 to the city’s Affordable Housing Trust Fund if the city finds funding to help pay for improvements to the Front Street signal near the project. Previously, the developer was required to cover the full cost of the signal upgrade.
  • A contribution of up to $50,000 for the city’s upcoming San Lorenzo River management, maintenance and enhancement plan, which will “address activation, public amenities, environmental habitat restoration, and climate adaptations along the river.”

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However, those donations would be “null and void” if the project was sidetracked by a coastal commission appeal, according to the terms of the agreement.

Ultimately, coastal commission staff concluded that the development met city and state laws.

“Staff has concluded that the project as a whole both adequately addresses affordable housing requirements (through the 20 affordable units and the monetary contribution) and it includes significant public benefits (river and Riverwalk enhancements),” staffers wrote in their report.

During Friday’s coastal commission meeting, commissioners and staff acknowledged some concerns with the project. Vice-chair Donna Brownsey said the $50,000 contribution to the river management plan seems “pretty meager,” and added that “in Santa Cruz, four hundred to five hundred thousand dollars to an affordable housing account doesn’t even buy you a house.”

Coastal commission program analyst Colin Bowser conceded that, “while it is an important question as to whether there should be more than 20 affordable units,” this is “probably a question for the state legislature to take up.”

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Overall, the commissioners all appeared to share the sentiment expressed by Commissioner Dr. Caryl Hart, that “the driving concern is the absolute need for housing.” Hart also expressed support for the city’s decision-making process in approving the project.

“The local people made the decision that this is the best project, that this is the way to open up the community to the river,” Hart said.

In an email to Lookout on Friday, Lawlor wrote, “we are pleased to now have the opportunity to both connect downtown to the river and provide badly needed deeply affordable and market rate housing to the community that has suffered from an acute shortage for far too long. I’m grateful that the Commissioners and staff of the California Coastal Commission understands how critical it is to increase the supply of housing in our community.”

A start date for construction remains unclear. Lawlor said he hopes to break ground in the first quarter of 2022, but that that timeline is “not certain” yet.