Two blocks from the beach, in an eclectic area near downtown Santa Barbara that’s been dubbed the Funk Zone, a true transformation is beginning to take shape.

A group of stakeholders has dedicated a lot of time, money and love to revitalize the neighborhood — once easily forgotten and slightly run down, and yet primed for development.

That development has taken form as the Anacapa project, a group of nine businesses set to occupy 16,700 square feet of refurbished warehouse space at 131 Anacapa St., formerly the site of the Bay Café and the Santa Barbara Fish Market.

Local tenants for the project were hand-selected by Katie and David Hay of Central Coast Real Estate LLC, the developers put in charge of the enterprise by a group of local investors who purchased the property more than two years ago.

“It’s really great to be able to take something that is floundering and dilapidated, and work with people to come up with something that is such a great reuse of an old building,” Katie Hay told Noozhawk. “We feel like we’ve found a great mix of local Santa Barbara people.”

The block-long development along Yanonali Street between Anacapa and Helena streets is poised to create new jobs, new energy and a new sense of community for locals and visitors alike.

All purveyors should open by the middle of August, while some already have.

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Hay recently took Noozhawk on a tour of the project site, beginning with its keystone: the Lark and Lucky Penny restaurants.

A lack of food options has historically plagued the Funk Zone, part of which is located along the Urban Wine Trail.

The Lark is a sit-down restaurant that will focus on a “shared-plate” model, while Lucky Penny is a separate vendor that will offer take-away sandwiches, wood-fire pizzas, coffee and more in an outdoor seat-yourself area, according to Sherry Villanueva, a principal of the restaurant venture.

When fully completed next month, nine businesses will share the new Anacapa project site on Yanonali Street in the heart of Santa Barbara’s Funk Zone. (AB Design Studios rendering)

The Lucky Penny is literally covered in hand-glued pennies, which local high school student volunteers placed on tiles. Villanueva said the design idea was used as a fundraiser in which investors donated money —$3,000 overall — to a student’s charity of choice.

Repurposed materials are seen throughout what was once a raw warehouse site, where work by Young Construction crews was still in full swing last week.

Les Marchands Wine Bar & Merchant is directly behind the Lark, a vision of two young wine sommeliers who will focus tasting and education on Santa Barbara County and European varietals.

Originally to be called Caveau Wine Bar & Merchant, Eric Railsback and Brian McClintic recently changed the name because the former was already in use.

Avelina Wine Company, a production winery and tasting room, occupies the warehouse space beside the wine bar, with Oreana Winery proprietor Christian Garvin at the helm.

Across the concrete courtyard is the already opened — and already popular — Figueroa Mountain Brewing Co.

The Buellton-based brewery has production on site, as well as a tasting room that fills up every weekend and weekday after 5 p.m.

“It’s fun to be a part of it,” said general manager Tony Grimes, who added that a waiting list was started for the brewer’s sold-out “Mug Club” since its June 2 opening.

Eclectic and artsy touches are seen throughout the Funk Zone’s Anacapa project, with these light fixtures included in the new Les Marchands Wine Bar & Merchant. (Gina Potthoff / Noozhawk photo)

Local Ian Cutler has opened up shop next door, producing American-style whiskey, apple pie and more at his distillery, Cutler’s Artisan Spirits.

“This has really always been my passion,” said Cutler, who comes from a family of distillers.

Adjacent to Cutler is Riverbench Vineyard & Winery, which hosted a grand opening in early June and has another tasting room — specializing in chardonnay and pino noir — along the Foxen Canyon wine trail.

Brothers Martin and Michael Brown put a funky twist on their Kalyra Winery brand when they open their latest venture, Area 5.1, the second week of August.

The Santa Ynez winery, which has had a tasting room in the Funk Zone the past six years, has undertaken another project to play off the sci-fi Area 51 theme and offer “out of this world” blends of their own and from other winemakers.

A Guitar Bar on the corner of Anacapa and Yananoli streets rounds out the collection of neighbors.

Guitar Bar owner Jamie Faletti, who was born and raised in Santa Barbara, said his store would include an instructional element (and no alcohol) when it opens the third week of August.

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Everyone involved in the venture seems genuinely excited and dedicated to making it work, not only for themselves but for each other and the neighborhood around them.

Hay said tenants were selected to forge collaborations and create programs that give back and add value to the area. Beach cleanups and other charitable enterprises are already in the works, as well as a number of partnerships between businesses to complement fare with beverage.

AB Design Studio Inc. also included an artistic element that stays true to the Funk Zone: six perforated metal doors that can hang the artwork of locals when open or closed along Yanonali Street.

Hay said visitors would begin to feel the full effect of the project after the restaurants and wine bar host a grand opening in early August.

“I think it’s a win for everybody in Santa Barbara, frankly,” she said. “The city needs to encourage more of that.”

Noozhawk staff writer Gina Potthoff can be reached at gpotthoff@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.