New luxury hotel at La Bahia, near Boardwalk, finally moves forward; aims to open in 2024

A 2019 rendering of the proposed La Bahia Hotel project along Beach Street in Santa Cruz.
(Via Leddy Maytum Stacy Architects)

Construction is already underway at the site where the developers, including Santa Cruz Seaside Company and the company that owns the Dream Inn, plan to build an upscale venue with 155 rooms and two restaurants. Late 2024 is the target date for the hotel, as yet unnamed, to open along Beach Street.

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After years in bureaucratic and development limbo, and after decades of sliding into decrepitude, the landmark La Bahia Apartments is finally poised for a dramatic rebirth as Santa Cruz’s answer to Hotel California.

Construction has already begun on a new luxury hotel on the site directly across the volleyball courts on Main Beach that will incorporate the last remaining Spanish Colonial structures of the old La Bahia, including the iconic bell tower.

The Santa Cruz Seaside Company, the longtime owner of the property, announced Monday that it has entered into a joint venture with Ensemble Investments — the owner of the Dream Inn Santa Cruz — to build the new hotel, which is estimated to open in late 2024, just two years short of the original hotel’s centennial. Ensemble, owner of a couple dozen hotels and other properties, will oversee the construction of the project and will manage the hotel once it opens. The new hotel will feature 155 rooms, as well as a meeting space, a spa and two restaurants.

“The project is happening,” Kris Reyes, the Seaside Company’s director of strategic development and external affairs, told Lookout on Monday. The Seaside Company has long owned and operated the Santa Cruz Beach Boardwalk.

“There are shovels in the ground, and this work has begun. We are now at a point where we can say, without question, that we are constructing a world-class hotel for the beach area in Santa Cruz. This project has a lot of starts and stops over many years. But it is now a full go, and it’s a very exciting time to see this project coming together.”

A 2019 rendering of the La Bahia complex fronting Beach Street.
(Via Leddy Maytum Stacy Architects)

The Ensemble project is only the latest in several earlier plans to redevelop the La Bahia. For years, Boardwalk visitors and locals have seen only a shadow of what was once envisioned as part of a Hollywood-style resort hotel known as the Casa Del Rey.

The La Bahia, with its bell tower, was originally built in 1926 as a kind of companion to the much larger and grander Casa Del Rey Hotel next door, which had been built 15 years before. What would eventually come to be known as La Bahia was originally called the Casa Del Rey Apartments, and offered more luxurious and/or longer-term stays than the bigger hotel. The Casa Del Rey Hotel, which had become a retirement home, was severely damaged by the 1989 Loma Prieta earthquake and was razed shortly after.

The apartment building, renamed La Bahia in 1964, was famous for its Juliet balconies overlooking its interior courtyards. Those courtyards were called Court of the Laurels and Court of the Mariners, and their design was reportedly inspired by the Spanish-style villas of Puerto Vallarta. The apartments served a number of purposes over the years. The U.S. Army leased them during World War II, before it returned to being an apartment complex after the war; over the years, Boardwalk workers lived there. Under a series of owners, the apartment building fell into disrepair and was even used in Clint Eastwood’s “Sudden Impact” as a set for a rundown hotel. It survived until its 2020 demolition.

Construction underway at La Bahia property along Beach Street in July.
(Kevin Painchaud / Lookout Santa Cruz)

New projects follows years of ups and downs

Only two years ago, another joint venture appeared to be on the fast track to a new hotel. At that point, the Seaside Company and Prime Group Inc., a real-estate developer from Chicago, evolved a plan, and got it through all the relevant government planning hoops, including what had been a 2014 Santa Cruz City Council go-ahead.

That project called for the demolition of most of the old building, which took place in the early months of 2020, at the beginning of the COVID pandemic shutdown. Only the bell tower and the front-facing southeast corner of the building were preserved. That project was put on ice during the pandemic.

The La Bahia complex in an undated file photo.
(Via Leddy Maytum Stacy Architects)

“Like all things relating to COVID,” said Reyes, “the economy changed the realities of development and construction, given what was happening in the world. And so we revisited the agreement with them and decided to part ways.”

The new Ensemble/Seaside joint venture largely adopts what the city council had approved for the development back in 2014, which means the new hotel is going forward without having to start over with a council vote and permits.

That go-ahead followed project that had come and gone over the years.

In 2009, the council approved another application. That hotel project included proposed heights that went beyond height limitations mandated by the California Coastal Commission. More than two years later, the CCC denied the project’s request for an amendment to suspend the height limitations, and that proposal died.

Six years earlier, the Santa Cruz City Council approved a proposal to develop a 118-room hotel on the site. After council approval, however, the developer backed out of the deal and the permit expired.