An approved design for the downtown mixed-use facility.
(Via City of Santa Cruz)
Civic Life

Latest funding piece for downtown Santa Cruz library project ‘an enormous step forward’

The $33.5 million awarded by the state brings the Downtown Library and Affordable Housing Project closer to reality, but Santa Cruz Mayor Fred Keeley said the city still has a way to go before all three project components — housing, library and parking — are fully funded.

The City of Santa Cruz’s downtown mixed-use library project is one step closer to becoming a reality after receiving a multimillion-dollar grant from the state. But Mayor Fred Keeley says the project still has a long way to go before breaking ground.

The city received a $33.5 million award from the California Affordable Housing and Sustainable Communities Program toward the eight-story project planned for Lot 4 — bounded by Cedar, Lincoln and Cathcart streets — in downtown Santa Cruz. The project is set to include a new downtown library, at least 124 income-restricted housing units, a 243-space parking garage and room for commercial tenants, 258 bike parking spaces and a child care facility.

The state grant is “an enormous step forward,” Keeley said. “This was a critical piece of funding and a huge infusion of capital into realizing the project,” he said.

Out of the $33.5 million, Keeley said $22 million will go toward plans to build 124 affordable housing units. The other $11.5 million will go toward a number of related public infrastructure pieces within a quarter-mile of the project site such as improved bike paths and lighting.

“There’s a number of smaller expenditures that help enhance the overall attractiveness of the project,” said Keeley, adding that the Santa Cruz Metro Transit District will get $3 million for a number of projects, including upgraded bus stops.

Although the funding is a big step forward for the project, Keeley said that there is still a lot of work left to be done. The housing component is still not fully funded despite last week’s funding announcement. According to Keeley, the city is planning to apply to the state for tax credits to close the funding gap; city staff are still calculating what amount they will seek from the state.

Keeley added that the city expects to hear from the state librarian’s office about whether its $10 million grant application for the library component has been approved. But even if it is, the city would need more money than that to complete all three of the housing, library and parking components.

“That would then let us know what the city would need to do based on the outcome of that grant application,” said Keeley. “So we’re still a ways away from having all three fully funded.”

A tentative timeline published by the city said it aims to have additional funding sources secured by January and a construction loan approved by June 2024, with a goal of breaking ground next November or December. It expects construction to finish in January or February 2027, with the library opening in April of that year.

Further, the city is seeking a demolition permit for Toadal Fitness, the only commercial structure currently on Lot 4. Bonnie Lipscomb, the city’s economic development director, was not immediately available for comment on where negotiations with Toadal Fitness stand, and if the recent funding changes the project timeline.

In February, Lookout reported that negotiations to purchase the property were not yet finalized, citing a staff report.

“The City team is in active negotiations on acquisition with Toadal Fitness and are working through two development plans for their future fitness center,” city officials wrote in a project update published Aug. 2.

Have something to say? Lookout welcomes letters to the editor, within our policies, from readers. Guidelines here.