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Local News

Developers Breathe New Life Into La Entrada Project

Mountain Funding, which acquired the Lower State Street property in 2007, submits revised plans for the long-vacant lots

After years of inactivity, a bankruptcy and an all-but-forgotten lot on some of Santa Barbara’s best real estate, plans are bubbling just below the surface at the city Planning Department: La Entrada is back.

And its backers are hoping to wow the public with a new approach to the property’s previously approved plans for the long-vacant area.

In 2001, the city approved plans for a project proposed by developer Bill Levy for 62 timeshare condominiums. To finance the project, Levy took out a $25 million land loan from financiers Mountain Funding Santa Barbara LLC. The project, as approved, turned out to be financially unsustainable for Levy, and he declared bankruptcy in 2006.

Mountain Funding acquired the property through bankruptcy court in March 2007, and it submitted revised plans earlier this summer.

The group has been looking at various designs for the past 18 months and settled on one that would utilize ground retail space in an open-air plaza as well as hotel rooms. It has been working with the city for the past nine months, looking over the new plan.

The result is a 123-key hotel, and nine of the units have the option of becoming timeshares. In addition, the plans include about 19,300 square feet of commercial store space and 243 parking spaces, including a 120-space public parking garage underground that reduced the building height.

Just about everyone can agree that something needs to happen on the property’s three parcels, but what the city will approve for the lots remains to be seen.

It now has to be proven that the project can substantially conform to plans made by Levy, including all of the environmental requirements.

Mountain Funding development consultant Ray Wicken maintains that the project not only conforms to the older project requirements, but improves on them.

“It was way overdesigned and bad for the city,” Wicken said of the original project.

He said the new proposed plan is 25,000 square feet less than the original project, and the footprints and elevations on two of the sites are the same as previously approved plans. If the project goes forward, the likely outcome would be selling the ground lease in a joint venture with a major hotel chain. The bed taxes from the hotel alone could be a boon for city revenue, he said.

While the economy still struggles and investors for the project remain hesitant, plans for the underground parking garage are going forward.

Construction has slowed considerably at the vacant lots on State Street, although plans for the underground parking garage are going forward.
Construction has slowed considerably at the vacant lots on State Street, although plans for the underground parking garage are going forward. (Lara Cooper / Noozhawk photo)

Wicken maintains that things such as traffic trips taken by visitors to the center will remain the same as Levy’s plans.

“This is clearly in the best interest of the city,” he said. “The issue is not whether this is a better project.”

But not everyone agrees.

Tony Romasanta, owner of the nearby Harbor View Inn, is scathing about Mountain Funding and Wicken, calling him an “out-of-town developer who couldn’t care less about us.”

He called the former project “magnificent,” and the result of dozens of community meetings.

“The developer is a lender who foreclosed and wiped out local investors,” Romasanta said. “This project is nothing like what the community approved.”

For Romasanta, it’s one of two options: follow through and build Levy’s plans on the property, or turn the lot into a city parking lot for high-speed rail commuters at the nearby train station.

Romasanta sees Levy as the victim in the situation, a developer who fell for predatory lending. “He was wiped out by a bigger shark,” he said.

Wicken said his group has suffered from the consequences of Levy’s unwieldy plans. “We made a bad loan and we got burned,” he said.

He maintains that his group didn’t come into the project as a developer, and that it has spent a lot of money trying to propose a project that will work for the city.

Determining how well the design will work is up to Paul Casey, the city’s community development director.

What’s left is a substantial conformance determination, or SCD, which basically means that the blueprints of the project Mountain Funding is proposing will have to conform to all of the environmental and building standards that Levy put forward. Casey said the city has policies and procedures that go along with an SCD, and they’re in the process of being evaluated now.

Approval rests with Casey, even though the Planning Commission is expected to look at the project and hear public comment in early October.

Casey said it’s not a unilateral decision, however, and that if the Planning Commission determines the project doesn’t conform to previous plans, he’ll consider that.

Levy carried out his project deadlines and worked to get approval for a building permit and pay fees, including a $1 million mitigation fee for the California Hotel, placed as a condition of approval by the Coastal Commission for the loss of low-cost accommodations since the hotel was going to be converted to timeshares.

“In the building world, that’s a big deal,” Casey said. “It presents a very strong legal entitlement.”

After starting construction of the three parcels, construction has slowed considerably. “No one’s really happy with that,” said Casey, adding that multiple projects around town have turned sluggish because funding has all but dried up.

“It’s something you never saw before this economic crisis,” he said.

Casey said that writing off the project all together could present “a real legal risk” to the city.

“This one is a tough one,” he said.

Noozhawk staff writer Lara Cooper can be reached at .(JavaScript must be enabled to view this email address).

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