It’s time to take the relationship to the next level.
The flirty conversations between the City of Santa Barbara and the owners of the Paseo Nuevo Mall are moving toward the commitment level this Tuesday at Santa Barbara City Hall.
The City Council is expected to approve a project agreement, consummating plans to build 500 apartments and 85,000 square feet of retail space at Paseo Nuevo. Parts of the development will reach seven stories.
The expected agreement is not the final decision, but a formal commitment to try to make the relationship work.
The owners of the mall, Alliance Bernstein Commercial and its partner developer, the Georgetown-Company, need some form of assurance before investing further into the project, and the agreement is intended to offer more certainty.
“The redevelopment of Paseo Nuevo is likely to be the most transformative, impactful project undertaken since the creation of the mall itself,” said councilwoman Meagan Harmon. “This project agreement is one such milestone, though certainly an early and important one, and I’m pleased to see the process forging ahead.”
The latest plans call for 500 rental units comprised of studios, 1-bedroom, 2-bedroom
and 3-bedroom units. The city and the developer have not said how many below-market rate units would be part of the project.
The 85,000 square feet of retail will be focused on smaller restaurant and shop space, with a possible grocery and gym, according to the city.
The new urban center would include 96,700 square feet of open space, of which 49,600 square feet will be public space, owned and managed by Paseo Propco. The development will include a mix of two- to seven-story structures, and one level of underground parking, with about 640 parking spaces.
If the Council approves the project agreement, staff and AB Commercial will work together on a final project description, leading to a formal application and environmental and land use review.
“There are still many critical specifics to finalize, including ultimate affordability levels and project aesthetics to name just two, but Tuesday’s vote will put us on a path to fully and finally negotiating these issues,” Harmon said. “I believe deeply in the necessity of bringing more housing to the downtown core. I see this agreement as an opportunity to make explicit our commitment to that effort.”
The mall has fallen on retail hard times in recent years, with the loss of Nordstrom and Macy’s and anchor tenants.
The previous owners of the mall defaulted on a $120-million loan, and Alliance Bernstein took back the property in 2022. The company could have flipped it to another retail developer, but instead, at the request of the city, decided to develop housing.
The city could not buy the mall outright itself because it would cost at least $120 million.
With Santa Barbara facing a housing crisis, the big battle over the development is likely to be over the number of below-market units.
