State awards more than $40 million to spur Santa Cruz County public transit and housing projects

Officials from a variety of government bodies and agencies were on hand in downtown Santa Cruz for Monday's announcement.
Officials from a variety of government bodies and agencies were on hand in downtown Santa Cruz for Monday’s grant announcement.
(Kevin Painchaud / Lookout Santa Cruz)

Zero-emission buses, groundbreaking on the downtown Santa Cruz transit center and 60 units of downtown Watsonville housing are among the projects to be funded by a grant announced Monday, part of more than $690 million the state of California is spending on transit in 2023.

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Santa Cruz Metro officials have long known their goals of an emission-free bus fleet and a pair of new transit-plus-housing developments would be made easier with free money. So when state government officials arrived in town Monday with tens of millions to hand out, it was cause for a celebration.

The $38.6 million award from the California State Transportation Agency will help Metro buy 24 zero-emission, hydrogen-fueled buses (about 25% of its 94-bus fleet), push the 120-unit Pacific Station North redevelopment across the finish line, and infuse the 60-unit Watsonville Transit Center project with money needed to complete the transit infrastructure piece. Both development projects tie transit and housing access together, a strategy experts say is crucial for aspirations of equitable housing and getting more cars off the road.

The award, which the state paired with a separate $3.5 million grant to finance planning for the proposed coastal rail & trail project, is part of a $690 million pool of funding to 28 transit projects across the state. The announcement of Santa Cruz’s portion of the award brought top brass from around the state to the parking lot adjacent to the existing downtown Metro station.

“To see projects that combine zero-emission buses, bus service and affordable housing … that’s a win-win,” Toks Omishakin, California’s transportation secretary, said. “When staff was briefing me on the awards that the governor’s announcing today, when I saw [in Santa Cruz’s plan] the word ‘affordable’ and I saw the words ‘zero-emission buses,’ of all the 28 projects that are being announced, I said, ‘We gotta go [to Santa Cruz] first.’”

Toks Omishakin, California’s transportation secretary, speaks at Monday's news conference at the Santa Cruz Metro depot.
Toks Omishakin, California’s transportation secretary, speaks at Monday’s news conference at the downtown Santa Cruz Metro depot.
(Kevin Painchaud / Lookout Santa Cruz)

Bonnie Lipscomb, the head of the city’s economic development department, told Lookout that the award, coupled with upcoming tax credits, means all the funding is in place for the 120-unit Pacific Station North project, the housing development built in conjunction with the new downtown Metro station. Lipscomb said groundbreaking for the project will likely take place in the first quarter of 2024.

“It’s a really big project,” said Lipscomb. “We have a lot of staging that we have to do, to have a plan for the Metro buses [while the project is under construction]. We have a lot of logical pieces to finalize with public works and with Metro, but we’re full steam ahead now.”

The grant also reflects a belief by the state and the local transit agency that hydrogen fuel technology is a key piece of a zero-emissions public bus system. Michael Tree, Metro’s CEO, said current electric bus batteries require longer and more frequent recharging than hydrogen-fueled buses. Metro plans to put the 24 buses (which will replace existing buses) in circulation within the next 18 months. Metro will also build a hydrogen fueling station at the existing operations center on River Street.


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