Six months ago, Santa Barbara City Hall was tense over housing negotiations involving Paseo Nuevo, but on Tuesday, the City Council was singing a tune of praise over new redevelopment plans.

The council enthusiastically supported Yardi Systems’ proposal to move its headquarters into the former downtown Macy’s and a proposal from DSP — a joint venture of Dune, Shopoff Realty Investments and Praelium — to redevelop the former Nordstrom into 80 to 112 apartments.

Councilwoman Meagan Harmon said the city should take the “miracle” that is the proposal.

“The bottom line is that these two concepts present a generational opportunity to revitalize our downtown core,” Harmon said. “To jump-start this vision that we’ve all been fighting for on State Street and to do it now — not with more plans, not with more consultants.”

As part of the deal, Yardi and DSP would contribute $5.7 million to the local housing trust fund to support affordable housing development, $700,000 from Yardi for parking garage maintenance and $1 million from DSP for downtown improvement.

Councilwoman Wendy Santamaria asked whether Yardi would consider higher contributions or make ongoing contributions to the local housing trust fund.

City staff also estimates that the project would bring in a $180,000 increase in transient occupancy tax revenue, $95,000 annual in sales tax, $120,000 in property tax and $320,000 in parking revenue.

In December, the City Council directed the developer — an entity of AllianceBernstein, a Nashville-based global investment company — 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.

Harmon said the December proposal lacked the promise of affordable housing, but the new proposal promises workers spending time downtown, money for affordable housing and that Macy’s won’t be bulldozed.

“Unlike the prior proposal, which meant saying goodbye to the mall as we know it, these proposals allow us to retain a lot of the look and the feel of the parts of Paseo Nuevo that this community knows and loves and is rightfully attached to,” Harmon said.

Lots of praise was given to Yardi on Tuesday, from public comments praising how the company treats its workers to the City Council thanking the company for stepping up to the plate.

For the software company, the return to Santa Barbara would be somewhat of a homecoming after moving its headquarters to Goleta in the early 2000s.

The company plans to use the second and third floors as office space but would use the first floor to host events.

Kevin Yardi, the son of the founders and the company’s senior vice president, said they are willing to work with nonprofit organizations to use the space as well.

“For us, it is focused on community outcomes and it’s a community-oriented perspective,” Yardi said. “If we felt that this was only good for us and not good for others, we wouldn’t consider pushing forward.”

The deal means that 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.

Ryan Mai, the owner of the Poké House in Paseo Nuevo, said he supported the redevelopments and was excited about the potential boost to the economy.

“As a small-business owner, I believe both of these pieces are equally important,” Mai said. “Yardi will bring hundreds of employees downtown who will eat at local restaurants, shop at local stores and support the businesses that make Santa Barbara unique.”

DSP proposes developing 80 to 112 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.

Units would range in size from studio apartments, one-bedroom apartments and two-bedroom apartments.

The biggest change to the building that DSP proposes is to cut a hole in the roof to create a courtyard in the center of the building, according to Beth Collins, DSP’s attorney.

While public opinion during Tuesday’s meeting was nearly entirely positive, Lisa Sands expressed a desire to have more affordable housing. 

“Who’s going to afford to live in these units?” Sands said. “Nowhere is affordable housing even considered. Nowhere is poverty housing even considered.”

Bob Stout, owner of the Wildcat Lounge, said he’s excited about the redevelopment but agreed that there is a need for housing for low-income workers.

“If that was possible, I think that would be the best thing possible, because so many of my employees make that price range,” Stout said.

Councilwoman Kristen Sneddon asked that the project include a dedicated space for Chumash cultural heritage, and for there to be a local-first leasing priority for the retail spaces owned by Yardi.

The proposals are expected to return to the City Council on June 16 for official approval.