The next chapter in Paseo Nuevo’s history may be beginning on Tuesday.
After months of negotiations, the Santa Barbara City Council will be reviewing proposals for new housing and office space at the downtown shopping center site, city officials announced Thursday.
The Tuesday City Council presentation will include Yardi Systems discussing its proposal to move its corporate headquarters into the former Macy’s and DSP discussing its plan to build 80-112 housing units in the former Nordstrom building.
Transforming the Macy’s building at 701 State St. into offices would be a shift from the most recent plan to build housing at the site, Noozhawk previously reported.
This proposal also has Yardi Systems purchasing AB Commercial’s interests in Paseo Nuevo.
“After weeks of collaborative work amongst the parties, staff are bringing forward a potential plan to breathe new life into the center of our downtown while respecting Santa Barbara’s character through adaptive reuse of the former Macy’s and Nordstrom buildings,” said Kelly McAdoo, city administrator, in a statement Thursday.
“The ultimate decision rests with the City Council, and we look forward to engaging with residents and stakeholders as more details come forward.”
Santa Barbara has been discussing a Paseo Nuevo redevelopment plan for years and the previous proposal included demolishing the Macy’s building to build a large housing development. Separately, the city has been discussing the plan to convert the Nordstrom building to housing.
DSP, a joint venture of Dune, Shopoff Realty Investments, and Praelium, proposes developing 80 to 112 new apartments at the former Nordstrom, at the corner of Chapala and West Canon Perdido streets. The city said 10% of the units would be considered affordable for moderate-income households earning 80% to 120% of the area median income.
The company would also contribute $1 million for downtown enhancement, and $700,000 to the city’s local housing trust fund, which funds affordable housing development, according to city spokesperson Bryan Latchford.
The city would transfer ownership of the land under the Nordstrom’s building to DSP.
In December, the City Council had its latest look at the plan for the Paseo Nuevo redevelopment.
They directed AB commercial and Shopoff Realty to come back with a plan to build more affordable housing after an unsatisfied reaction to the proposal for 209 market-rate apartments and 24 affordable housing units at the former Macy’s site.
In order for Yardi to take over the building instead, the company would acquire all of Paseo Propco LLC/AB Commercial’s interests at Paseo Nuevo. That would include the Macy’s building, the inline shopping center and the mall’s parking Lot 1, Latchford said.
However that agreement is subject to further private negotiations between the two entities, according to Latchford.
The city would also transfer ownership of the land underneath the former Macy’s and inline shopping center to Yardi.
As part of this proposal, Yardi would also contribute $5 million to the city’s local housing trust fund and $700,000 to support the city’s downtown plaza and parking program, Latchford said.
Ben Romo, a spokesperson for Yardi Systems, told Noozhawk earlier this month that the company was in negotiations with the city over this deal.
Yardi Systems, a real estate software company, has its current headquarters at 490 S. Fairview Ave. in Old Town Goleta.
The city claims that the deal could significantly increase activity on State Street and the rest of the downtown business district.
With Yardi Systems employees downtown, the city expects more customers at restaurants, cafes, and other businesses. Additionally Latchford noted that Yardi events and conferences bring in thousands of visitors each year.
If the council directs staff to continue working on this deal, staff will return on June 16 for agreement approval.
From there the project would advance into the design and entitlement phase, according to the city staff report.
The discussion will be held on Tuesday at the Santa Barbara City Council meeting which starts at 2 p.m. at City Hall, 735 Anacapa St.
Public comments can be made in person or sent to Clerk@SantaBarbaraCA.gov before the start of Tuesday’s meeting.
