Santa Cruz City Council approves major, mixed-use Riverfront development

Two council members voted against the Front Street project, saying it lacked enough affordable units to be rented to lower-income people. But other council members saw it as a way to add a mix of housing and link the downtown business district to the San Lorenzo River.

A major mixed-use development in downtown Santa Cruz, along the San Lorenzo River, won City Council approval Tuesday by a 5-2 vote.

The project — which has been in the works for five years, according to developer Owen Lawlor — will add 175 condominiums, new commercial space, public plazas and a basement and ground-level parking garage to the downtown landscape.

“This really is that first step in connecting the downtown to our river, and does provide that new access and new activation of the river,” said council member Martine Watkins, who voted in favor of the project.

Beginning as early as the end of this year, SC Riverfront LLC is set to demolish three existing buildings and construct three seven-story buildings on the east side of Front Street near the San Lorenzo levee, according to the plans. The upper, residential portions of those buildings would have 53 studios, 89 one-bedroom units and 33 two-bedroom units.

Council members Sandy Brown and Justin Cummings both voted “no,” saying in part that they wanted to see more affordable housing. The project sets aside 20 of its 175 units — 11% — as rentals to low-income and very-low-income people, leaving the development a few units shy of the city’s 15% threshold, which was recently updated to require that one out of every five new units be affordable.

A rendering of the 175-unit riverfront development in downtown Santa Cruz
A rendering of how the development would fit in to the existing Santa Cruz downtown landscape.
(Courtesy city of Santa Cruz)

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 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 condos, and that made the proportion of affordable units smaller.

“We are woefully behind when it comes to low-income and very-low-income units that have been built,” Brown said. “It’s unfathomable to me that we would be supporting high-end, luxury development, which is likely to bring a new mix of residents to our community and likely contribute to increasing our area median income and exacerbating the issue for those who are working low-wage jobs that we depend upon as a community.”

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.

“I just have to emphasize the 15 very-low-income, deed-restricted permanent homes are so key and needed,” Vice Mayor Sonja Brunner said.

At street level, the development would include eight commercial spaces, and more than 15,000 square feet of “new public space” in the form of outdoor pathways and plazas between buildings. The goal is to attract restaurants and retail to the area, and maximize the San Lorenzo River as an attraction.

Mayor Donna Meyers, who voted for the project, said it would bring a mix of new housing to the downtown area — and help realize the city’s longterm vision of reenergizing the riverfront.

In letters to the city, the Coastal Commission — an independent, quasi-judicial state agency that regulates land use along and near the Pacific coast — said it wanted the project to provide greater “public benefit.” In response, Lawlor, the developer, sweetened the deal, pledging $500,000 in donations to city projects. They include:

  • 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.”
  • 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.

If the riverfront project’s approval were to be appealed to the Coastal Commission, the pledged donations would be “null and void,” according to the terms of the agreement.

Tuesday’s vote was “a major green light,” but the project could still withstand an appeal or challenge from the public, economic development director Bonnie Lipscomb told Lookout.

Lawlor pitched the project as a chance to “reconnect” the downtown area to the river, and make a natural asset part of people’s everyday lives, like it was before the levee was built in the 1950s. “This is a beginning of a change,” he said. “And as we come out of COVID, reinvestment in downtown is going to become doubly important to support our merchants and to find ways to revitalize downtown.”

A co-working space and fitness studio — accessible to building residents and to the public — are also part of the plans, as are 142 residential and 45 commercial parking spaces in a basement and ground-level garage.

The whole project will be 188,694 square feet, the equivalent footprint of the size of 18 Abbott Squares, the popular downtown gathering spot that Lawlor used as an example of how an underutilized space can be converted into a hub of activity.

Tuesday’s vote included demolition permits for three buildings, including historic buildings at 418 Front St. and 428 Front St., both occupied by businesses. City Historic Preservation Commission members recommended that the city approve demolition of the buildings “with a condition that the front facades of the historic buildings are replicated on the ground floor of the new building facing Front Street,” according to a report from city staff. That means the facades would still be torn down, but their design elements incorporated into the new structure.

The 418 Project, a dance studio in one of the buildings to be demolished, did not reach an agreement with developers to move into the new space, according to Lawlor. However, the studio was looking for other locations and would stay in business, Council member Renee Golder said Tuesday night.