A Santa Barbara-based developer’s plan to add multiple six-story, mixed-used buildings in Santa Maria received the City Council’s approval after debate about the highly discounted purchase price and reduced fees for the project designed to revive downtown.
The council voted 4-1 Tuesday night to approve the sales and disposition agreement with The Vernon Group for four city-owned lots deemed surplus land. Councilman Carlos Escobedo voted against the motion.
Decades ago, then-council members voted to demolish blocks of downtown buildings to make way for the indoor mall, with an eye toward attracting shoppers from the wide swath of the Central Coast.
As indoor malls fell out of favor across the country and Santa Maria’s downtown became stagnant, the city crafted the Downtown Specific Plan, which included incentives to spur development and business in the area around Main Street and Broadway.
“When I talk to people, they want to see that charm coming back to Santa Maria. They want to see downtown built. They want to see it vibrant, and it’s been dead dead for a long time,” Mayor Alice Patino said.
“I believe that rejecting the project would be really shortsighted of this council,” Councilwoman Gloria Soto said. “The project, from what I’m seeing, will bring in long-term revenue through new property and sales tax from the housing, businesses and public spaces.”
Escobedo said he opposed giving the developer incentives for the project, saying he didn’t think it would be fair and noted the city’s financial condition.
“I think it’s not the right direction we need to go,” he said. “This is going to be a huge development.”
City Acts to Revive Downtown Core
In 2020, the city solicited proposals from developers for the surplus land and ultimately selected Vernon to draft a new use for the sites.
“We’re excited to be here after a long process,” Brad Vernon, a Vernon Group partner, said Tuesday. “What we came up with is a transformative, very unique, forward-thinking plan for downtown. It’s very bold, and we don’t see it in a lot of places.”
The approval Tuesday night occurred after the item stalled last month amid questions about the financial deal and whether it would cover the city’s costs to supply services such as public safety for the new facilities.
In total, Vernon would pay $120,000 per lot, a severely discounted price for property that otherwise is estimated to be worth at least $2 million.
The deal also includes a 50% discount on assorted planning and building fees plus growth mitigation fees, concessions amounting to approximately $2.3 million and tied to project timing and milestones for three of the lots.
The council’s approval included a condition for the developer to pay $266,000 more in development impact fees for the police and fire departments.
Vernon still would pay more than $8 million in fees to the city, Assistant City Manager Chuen Wu said. However, the city would recover the amount of incentives within a couple of years because of the increased property taxes and new sales taxes, he added.
“The idea of this project is to be a stimulus and a catalyst for the central part of Santa Maria,” Wu said.
Vernon also would have to pay roughly $7 million in one-time school development fees for two local districts, a standard expense for building projects.
Supporters contend that the development would boost city coffers by increasing land value and, thus, property taxes. New businesses would generate additional sales tax.
“With our plan and what we’re planning to eventually develop is an active, vibrant downtown,” Vernon said.
Development Draws Support, Opposition
Tere Paredes, owner of the downtown Maya Mexican Restaurant, said the project will create the perfect environment for small businesses to thrive.
“With the added foot traffic from new residents, workers and visitors, local shops, businesses and restaurants will flourish, making downtown the beating heart of our city once again,” she said.
She also spoke out against misinformation spread by council candidates on social media sites, including groups focused on Chisme or Spanish for gossip.
Several large employers in the Santa Maria Valley also continued to call for more housing, noting that the crunch affects their workers and efforts at recruitment.
However, resident Carly Castillo urged the council not to approve the agreement.
“I think that offering these supremely valuable parcels for such a low price is insulting to people who work for every piece of whatever they have, who have to accept the answer no,” she said.
Vernon Plans for Surplus Land, Other Lots
Specifically, the sites and plans are:
- Lot 1, the northerly parking lot adjacent to the former Fallas/Mervyn’s building and Broadway, for a six-story, mixed-use structure with up to 375 units, with 150 being a hotel plus parking and commercial space. Residential units would be condominiums.
- Lot 2, the northeast corner of Main Street and Broadway and now home to the Perlman Park, a six-story apartment building with up to 160 affordable housing units.
- Lot 3, the southeast corners of Main and Broadway. The project calls for a six-story, 75,340-square-foot, mixed-use building with ground-floor commercial area and 82 apartments. A relocated and expanded firefighters memorial also is planned. The Alvin Newton Apartments is named for the city’s fallen firefighter. The already approved project is undergoing a building plan check, and groundbreaking could occur later this year or in early 2025.
- Lot 4, the parking lot east of the Ruffoni building adjacent to Lincoln Street. It remains an option depending on the outcome of the first three sites.
Vernon previously received approval to convert the former Mervyn’s/Fallas building at Santa Maria Town Center West into apartments for the Heritage Walk Lofts project with work to begin by the end of 2024.
The firm also has purchased the building housing the recently closed Boot Barn on the southwest corner of Main Street and Broadway for future development.
Other Santa Maria Valley projects by Vernon include the Elements and the Skyway Center, north of Skyway Drive and west of Highway 135.