Quick Take

This week in local business, Jessica M. Pasko has the latest on a proposed mixed-use development in downtown Santa Cruz, a seismic development for South County apple growers and names, numbers and dates to know.

Each week, we’re taking a closer look at the movers and shakers, the growth of industries and what’s really driving the Santa Cruz County economy. I’ll be spotlighting some of the biggest areas for opportunity, updates on local development and all things underpinning the regional business scene each Wednesday.

Got ideas? Send them my way to news@lookoutlocal.com with “Business News” in the subject line.

Proposed residential project that calls for demolition of downtown Santa Cruz hardware store heads to planning department public hearing this week

A rendering of the mixed-use development planned for 201 Front St. in Santa Cruz. Credit: City of Santa Cruz

A proposal to build an eight-story, 245-unit mixed-use residential facility at Front and Laurel streets in downtown Santa Cruz will go in front of the city’s planning commission on Thursday.

The project, for which the pre-application was filed last year, calls for demolishing the building that currently houses the Ace Hardware store and the adjacent restaurant space (previously the longtime home of Saturn Cafe and, later, Cruz Kitchen & Taps, which closed in late 2024.) In addition to 245 residential units, it would include 12,000 square feet of ground floor retail, two-story live/work spaces and one level of underground parking. It would mark one of the first developments in the area south of Laurel Street that city officials have dubbed SoLa. The applicant is Owen Lawlor, a major local developer involved with other downtown projects, including the planned Cruz Hotel nearby.

To move forward, the project needs what’s known as a nonresidential demolition authorization permit, a heritage tree removal permit to remove 16 trees, a coastal permit and a design permit for the mixed-use development. 

The planning commission will determine whether to move forward with those permits at Thursday’s meeting, after hearing from city staff and the public. The meeting is set for 7 p.m. in the city council chambers at 809 Center St.

ICYMI: As Martinelli’s cancels contracts, Watsonville apple farmers lose their biggest buyer – and a way of life

Peter Knego Watsonville apples Martinelli's
Peter Knego began tearing out trees at the family orchard along Freedom Boulevard after Martinelli’s informed him it wouldn’t renew its contract for his farm’s apples. Credit: Natasha Leverett / Lookout Santa Cruz

Watsonville-based S. Martinelli & Co.’s decision to end contracts with some Pajaro Valley apple farmers marks a significant change for many multi-generational farmers who have long relied on the cidermaker as their primary buyer. 

For some farmers, the lack of renewed contracts with Martinelli essentially means the end of their apple-growing days. Fourth-generation farmer Peter Knego, for one, will soon stop growing apples in the orchard his family planted in the 1920s and lease the land for berry growing. 

Like many apple farmers in the area, Knego long relied on the 158-year-old S. Martinelli & Co. to purchase the majority of their apples. But the company recently told Knego and others in the Pajaro Valley that it plans to stop renewing their contracts within the next few years. 

Read Lily Belli’s full story here.

Ch-ch-changes

  • Full Steam Dumpling to close in July: Full Steam Dumpling will close next month after seven years of serving dumplings, ramen and more. According to a post on the business’ Instagram, the last day of service will be July 18. The business has operated out of the Santa Cruz Art Center (and former Food Lounge) for the past several years. 
  • New workwear store opens in Midtown: Santa Cruz Workwear is now open at 1119 Soquel Ave. in Santa Cruz, selling brands such as Dickies and Ben Davis. The new shop takes over the former home of Amoureuse Lingerie & Gifts, which has moved to Aptos Village.
  • Land Trust of Santa Cruz County opening mini museum: The Land Trust of Santa Cruz County will hold a grand opening Friday, June 5, from 5 to 8 p.m. for the organization’s new miniature museum, which features local natural history specimens. The display is at the organization’s new downtown Santa Cruz location at 911 Center St. 
  • Santa Cruz city promotes deputy chief of police: Wes Morey, who joined the Santa Cruz Police Department in 2001 as an officer, was named the city’s new deputy chief of police. Morey has served as a lieutenant since 2021, and has served in a variety of assignments including patrol, field training officer, detective of investigations and more. In his new role, he will oversee the administration section of the department.
Watsonville Community Hospital CEO Stephen Gray speaking in front of the hospital entrance. Credit: Tania Ortiz / Lookout Santa Cruz
  • Watsonville Community Hospital leader to step down: Stephen Gray will leave his role as CEO of Watsonville Community Hospital next month. The move comes as the healthcare facility grapples with ongoing financial challenges stemming in part from a decline in patient numbers and changes to state and federal funding. Hospital leaders said they will first identify an interim CEO to replace Gray, with a search for a permanent leader expected to launch in the fall. Read more from Tania Ortiz here.
  • Santa Cruz Mountains winegrowers launch World Cup wine passport: The Santa Cruz Mountain Winegrowers Association is getting in on the FIFA World Cup action with a special wine-tasting passport for soccer fans who will be in the area for the Bay Area games. The digital Sip & Explore adventure passport is available from June 6 through July 15, corresponding with the six World Cup games scheduled for Levi’s Stadium in Santa Clara. The $25 pass grants the holder one free tasting at each of more than 30 participating wineries. 

Got hires, promotions or departures to report? Send them to news@lookoutlocal.com with the subject line “Career changes.”

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Looking at the numbers

  • 24: That’s the number of new business licenses the City of Santa Cruz issued in April, marking one of the highest monthly totals in more than two years, according to the city’s economic development department. Most of those licenses were for non-home-based businesses. 
  • 67.4%: That was the hotel occupancy rate for April, according to Visit Santa Cruz County. That was a slight dip from March, when the rate was 68.6%, and it marked a small decrease from April 2025. Average daily room rate, however, was up to $191 from $183 in March. As the region moves into what’s typically the busiest tourism season – late spring through early fall – local tourism professionals are preparing for a year that could see some impacts from high gas prices.

Save the date 

  • Thursday, June 4: The Pajaro Valley Chamber of Commerce and Pajaro Valley Arts will hold a ribbon-cutting and grand opening for the arts organization’s new offices from 5 to 7 p.m. The new spot is located at 280 Main St., Watsonville.
  • Thursday, June 11: The Santa Cruz Area Chamber of Commerce will host a business after-hours event with Lookout. Attendees will get to tour the newsroom, meet the staff and learn more about Lookout. Tickets for chamber and Lookout members are $10; $20 for non-members. The event takes place at 1523 Pacific Ave., Santa Cruz, from 5 to 7 p.m. Details and registration here.
  • Thursday, June 11: The Pajaro Valley Chamber of Commerce will host a mixer at the Watsonville Family YMCA from 5 to 8 p.m. at 27 Sudden St., Watsonville. 
  • Thursday, June 11: All Things Meetings and Visit Santa Cruz County will host a daylong workshop for corporate, association and social event planners, featuring networking with representatives from local venues, hotels and more. The event takes place at The Grove (formerly the Cocoanut Grove) from 10 a.m. to 2:30 p.m. Registration here.
  • Friday, June 12: Santa Cruz Works will host a company spotlight breakfast at the headquarters of Future Motion, the company behind OneWheel. The event takes place from 8 to 9:30 a.m. and includes a tour of the studio at 1201 Shaffer Rd. in Santa Cruz. Attendance is free for Santa Cruz Works members and $10 for non-members. Registration and additional details are here.
  • Friday, June 12: A ribbon-cutting is planned for 11 a.m. to noon at Si Se Puede Behavioral Health Center at 161 Mills Lane, Watsonville. Register here.

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Business news worth reading

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Jessica M. Pasko has been writing professionally for almost two decades. She cut her teeth in journalism as a reporter for the Associated Press in her native Albany, New York, where she covered everything...