In no uncertain terms, the Santa Barbara Planning Commission rejected the proposal to overhaul Paseo Nuevo, throwing a wrench into the city staff’s effort to cut a deal with the downtown mall’s leaseholder.

Members of the commission called for a full stop on the city staff’s proposed idea to turn over the land underneath the mall to the developer as a way to sweeten the deal.

They also objected to the location of the proposed affordable housing, calling it “undignified,” amid a litany of other concerns.

“This sounds like we are desperate,” Commissioner Brian Barnwell said. “I don’t ever remember such an ill-defined proposal coming in front of me. I am quite shocked.”

Barnwell spent four years on the City Council and five years on the Planning Commission.

The meeting marked a rare moment of uniform public defiance of a city staff proposal to transform one of Santa Barbara’s most iconic pieces of land.

In public meetings so far, City Administrator Kelly McAdoo, and Rebecca Bjork before her, have contended that the mall is failing and that it needs to be re-envisioned.

So they have hooked up with the mall’s leaseholders, AB Commercial, an investment firm, and the Georgetown Company, a developer, to build 233 market-rate housing units and 80 affordable units.

The plan calls for the demolition of the old Macy’s store on West Ortega Street to build the market-rate units and the elimination of 186 parking spaces to build affordable housing.

In addition, the city wants to give away the land underneath Paseo Nuevo, and a portion of property tax revenue, at a total value of $32 million to $39 million, to the developers.

McAdoo has repeatedly stated that giving away the land is the only way to incentivize the developers to the deal.

“I am flatly opposed under any circumstances to give them the land,” Barnwell said.

Barnwell is a real estate appraiser, and said that land will be far more valuable years from now, and giving it away would be fiscally irresponsible. He also opposes giving up parking spaces downtown because that also is a public asset.

“This doesn’t sound like planning,” Barnwell said. “I am deeply disturbed by the foundational material out of which this entire discussion has grown.”

Barnwell was offended that the architect Duncan Paterson, from the Gensler architecture firm, didn’t label the names of city streets correctly, and didn’t understand that the housing was proposed for “West” Ortega, and not Ortega.

Gensler is based out of San Francisco.

Commission Chair Lucille Boss agreed, and said it didn’t make financial sense to give away land that the city has invested so much into.

“I am concerned that this is a gift of a public asset,” Boss said. “Giving it away is really concerning to me.”

She also sounded the alarm about the proposed housing. The plan clearly favors market-rate units at the expense of lower-income renters.

“I am concerned about the segregation and lack of dignity for affordable housing,” Boss said. “It is proposed next to an alley and over a parking lot, and that is not dignified.”

“I am really concerned about the lack of dignity and care put into the affordable housing component of this project,” Boss said.

Commissioner Lesley Wiscomb re-enforced Boss and Barnwell’s concerns. She also objected to the market-rate housing, suggesting that it looked too “upscale” for what Santa Barbara needs.

She also said the plan favors out-of-the-area, world-class brands for the retail spots. Instead, she said, Santa Barbara should favor local businesses.

Wiscomb suggested that rather than giving away the land, the city should just give the developers a 99-year lease through a charter amendment that would go before voters. The developers currently have 40 years left on the existing lease.

City officials have said AB Commercial would have difficulty selling the mall in its present form because 40 years is not enough time to pay off an amortized loan.

McAdoo said it is technically possible to put a charter amendment before voters, but that it would kill the whole project.

“If that is the direction that the council chose to go with this project, this project would not happen,” she said.

The commissioners also said they would want to see the affordable housing integrated with the market-rate units because the affordable housing needs to be treated with “dignity and character.”

Toward the end of the meeting Assistant City Attorney Dan Hentschke said many of the Planning Commission’s comments about the viability of the project were not appropriate.

Commissioner Lesley Wiscomb disagreed, noting that McAdoo and the city staff have repeatedly interjected finances and the economic viability of the project into the discussion, so the door is open, and it is appropriate for the commission to comment on giving away the land.

“My feeling is we have every right to discuss and to comment . . . if it is in the agenda, if it is in the staff report, it is open game for commenting,” Wiscomb said.

The proposal is set to go before the City Council in December to decide whether to give away the land.