[{"_1":2,"_87":-5,"_88":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},"mediaId",6500710,"mediaKeyId","5548343-88771d8e2cd648ccb7793498e93c3286","parentId",5548343,"title","Council OKs framework to continue negotiations on Paseo Nuevo redevelopment; staff asked to negotiate DDA, exempt Lot 2 from surplus lands act","audioSeconds",2352,"startMs",11225000,"endMs",13577000,"viewUrl","/Search/View?dp=1&key=5548343-88771d8e2cd648ccb7793498e93c3286&start=11225&end=13577","thumbnailUrl","https://assets.pipeline.soar.com/5548343-88771d8e2cd648ccb7793498e93c3286/thumbnail_11225000.jpg","articleUrl","/articles/6500710/Santa-Barbara-City/Santa-Barbara-County/California/Council-OKs-framework-to-continue-negotiations-on-Paseo-Nuevo-redevelopment-staff-asked-to-negotiate-DDA-exempt-Lot-2-from-surplus-lands-act","mediaUrl","https://secure.pipeline.soar.com/6500710-ff97488a75d28dff1801a6ddc46194e3/orig.mp4?Expires=1771026455&Signature=C4rYdCmFm-uQy3Sf52xjC13R1~jHk8KjzccBIvXKz2Oknholaf6V91ccS4tKoekZUsUAZiQhJsK0zztpuHwbXXKSweviMLZj8qntKV56GGR54~EMndibdynnCbq9CupLhp2p9iw3JQnSF~DaLVI0B-Hf95Zbt~yzCIT5bzvZcjDNDTm1eFYYmCsnEHHdDQUa7n4A5~BhzxnJ8mY2~kQr5QfVccxTnBTtcitSgWVCWlLjuH0gX2rrWRX4g3bHO9fBYCsLdPbIPRLq78YPZqzBXsTtoG5O487WaZtIoovWyJmJzYDpc9c7K359N~FP890KGY26QIi5UWfFqVU2gO9BLg__&Key-Pair-Id=KUT5TJCACFTXG","author","City Council of Santa Barbara, CA","date","2025-08-07T01:24:11.193Z","article","The Santa Barbara City Council on Aug. 5 authorized staff to continue negotiations on a revised Paseo Nuevo redevelopment framework and adopted a resolution to exempt part of Parking Lot 2 from the California Surplus Land Act so the project can proceed to feasibility study and housing discussions.

City staff presentation and project summary

Laura Bridal, a planner in Community Development, told the council that AllianceBernstein (AB), which acquired the Paseo Nuevo properties after a borrower defaulted, has proposed a revised plan that retains most of the mall's in-line retail and community uses while demolishing the Macy's building to make room for housing and refreshed public spaces.

Under the plan outlined at the meeting, AB proposes:

- A new housing component on the current Macy's site with about 233 market-rate dwelling units;
- A separate, stand-alone affordable housing project of roughly 80 units proposed for part of Parking Lot 2 to be developed concurrently with the market-rate work;
- About 175,000 square feet of retail and food-and-beverage space that would include a specialty grocer at State and Ortega;
- Retention of the Museum of Contemporary Art and Center Stage Theater uses in the mall core rather than full demolition of that central portion; and
- A reconfiguration of parking: Lot 1 would be increased to an estimated 600 spaces with an allocation for retail and 1.0 residential space per housing unit; Lot 2 would be reduced to an estimated 383 spaces; Lot 10 would retain about 546 spaces for retail support.

Bridal emphasized the plan is a revised, more financially feasible alternative to an earlier, larger proposal AB offered in 2024 that would have required demolition of the entire center and substantially higher upfront foundation costs.

Why the city is involved and legal constraints

Staff and the city attorney explained the redevelopment is complicated by the city's ownership of the land under long ground leases and by charter limits on lease extensions. The city's charter generally limits leases to 50 years; the ground leases under Paseo Nuevo now have only about 40 years remaining. That structure restricts the property's market value and makes private purchases or straightforward development deals unattractive to many investors.

To permit the proposed affordable housing on Lot 2 as part of a coordinated redevelopment, staff asked the council to adopt a resolution amending an earlier action to declare Lot 2 exempt from the Surplus Land Act for purposes of affordable housing. Department staff said the California Department of Housing and Community Development has preliminarily approved earlier related surplus-lands exemptions for the mall parcels.

Finance and the developer's economics

Staff presented preliminary pro forma materials provided by AB and reviewed by city consultants and independent reviewers. Key financial points reported to council:

- AB took ownership through foreclosure of the mall improvements after a prior owner defaulted; as an institutional investor (an investment management firm rather than a traditional real estate developer), AB does not routinely build retail/housing projects but has assembled a development team for this site.

- City land contributions under the draft framework could have a value in a range AB and staff estimated at roughly $32 million to $39 million once encumbrances are removed.

- AB's modeled developer returns on the revised project ranged from roughly 4.3% to 6.8% under scenario assumptions, below the typical market-return target of around 8%.

- AB asked the city for a 20-year annual payment equal to the city's share of the property tax generated by the project (staff estimated the city's share at roughly $300,000 per year as a planning-level estimate). Staff said the city also currently pays maintenance and related costs under the reciprocal easement agreement (roughly $150,000 per year), which would end if the city's ground-lease interest is restructured as part of a redevelopment agreement.

Affordable housing and \"banked\" units

Under the proposed arrangement, 12 to 25 units of the proposed Lot 2 affordable building would satisfy the city's immediate affordable-housing requirements for the Macy's-site housing. The affordable project would be delivered as a stand-alone deed-restricted building so it can access tax-credit financing and other subsidy sources; staff said AB would also seek to \"bank\" additional affordable units as credit toward any future market-rate development on the site, which staff and council discussed will require explicit limits and documentation.

Public comment and stakeholder concerns

Shopoff (the owner of the former Nordstrom property) and other nearby property owners urged the city and AB to coordinate closely and treat Shopoff as an equal negotiating party because the reciprocal easement agreement and shared parking affect redevelopment options. The Museum of Contemporary Art and local arts advocates asked that the city preserve arts uses and for the developer to include a percent-for-art or artist-residency component. Nearby institutions, including the Music Academy of the West, requested earlier notice and outreach about a possible reduction in Lot 2 parking capacity. Neighborhood speakers urged a strong public engagement plan and careful review of traffic, parking and public-safety implications.

Council action and direction

Councilmember Harmon moved and Mayor Pro Tem Friedman seconded a motion to approve staff recommendations: to approve the amendment to the project description and to adopt the resolution to exempt the portion of Lot 2 from the Surplus Land Act, and to direct staff to continue negotiations with AB on a disposition and development agreement consistent with the terms outlined in the staff report. The motion passed at the meeting. Councilmembers emphasized the need to:

- Protect the museum and theatre uses in the core unless replacement spaces are guaranteed;
- Require concurrent delivery of the affordable units before or at the same time market-rate units are occupied;
- Limit and memorialize any use of banked affordable-unit credits (council asked staff to return with clear caps and rules);
- Keep the public process robust and to coordinate closely with Shopoff and other parcel owners; and
- Explore whether the county could participate in property-tax sharing given regional benefits.

Next steps

Staff said they will continue negotiating a draft disposition and development agreement with AB and other parcel owners, begin feasibility and engineering analysis for Lot 2 affordable units once council has declared Lot 2 exempt, meet with the housing authority and other affordable-housing providers about financing and delivery, and continue coordinated outreach with stakeholders. The project will return to Council for final approval of any DDA and entitlements once the negotiations and design are further developed.

Ending note

Council's August 5 action authorizes negotiations and a surplus-lands exemption that enable feasibility work and housing-finance discussions. Council members and several public speakers stressed that substantive public outreach and clarity on parking, affordable-unit banking and guarantees for arts uses remain priorities as the negotiations proceed.","mediaType","Video","parentTitle","City Council - August 5, 2025","oneSentenceSummary","The Santa Barbara City Council on Aug. 5 authorized staff to continue negotiations on a revised Paseo Nuevo redevelopment framework and adopted a resolution to exempt part of Parking Lot 2 from the California Surplus Land Act so feasibility work and housing-finance discussions can proceed.","taxTitle","Santa Barbara City, Santa Barbara County, California","taxId",4209,"location","headline","","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},6500715,"Santa Barbara council hears enforcement update, directs staff to draft short-term rental ordinance",2370,1280000,3650000,"/Search/View?dp=1&key=5548343-88771d8e2cd648ccb7793498e93c3286&start=1280&end=3650","https://assets.pipeline.soar.com/5548343-88771d8e2cd648ccb7793498e93c3286/thumbnail_1280000.jpg","/articles/6500715/Santa-Barbara-City/Santa-Barbara-County/California/Santa-Barbara-council-hears-enforcement-update-directs-staff-to-draft-short-term-rental-ordinance","https://secure.pipeline.soar.com/6500715-b274d4873bbc748a99b14b9355e481d5/orig.mp4?Expires=1771026455&Signature=GwMJVrVBIYZtfjg0yavcbop4AewrBsuuRLVERUwxGfmatZPvhXKxXj1nBu437vMh8zXn6Qts6L6lB~VCajmg-Sjb7Tn4bXi72jD48bgTTa1eUs2CwUFY5bZ03DiH~ix-VtX~-O0pAcG0YL-GzYuigj6EKz7EAsbP~VUd8lk9kUjxst5r76RF0v4hsEFKmybjLzVbePxVam-XvVFIIAxMgyPotTx-ZNZfIFERhHLO3Jk3mknTUCwqmdptEKsoKSfr~J-zeHQYdKQ-29NqMZQqeBdp~kE~acUA7ZcRHIr6LYzsXt5J93clOG6f7J~uCplMIQRS3qscFZ59Q2mEPLr21w__&Key-Pair-Id=KUT5TJCACFTXG","The Santa Barbara City Council on Aug. 5 heard a progress report on the city's short-term rental (STR) enforcement program and directed staff to draft an ordinance to regulate STRs citywide.

City Attorney Investigator William Elva said the enforcement program, made permanent in July 2024, investigated 230 properties in fiscal year 2025 and won voluntary compliance at 182 of them. Since the program began in 2023, Elva said, investigators have identified roughly 1,298 suspected illegal STR listings; 324 properties have been fully investigated and about 974 remain to be verified. \"So far this fiscal year the program was able to collect approximately $1,800,000 in back taxes, penalties, fees and interest,\" Elva told the council. He said the program's costs for the year were about $230,000 and that total recoveries since inception are approximately $2.6 million.

Why it matters

Council and staff framed the item as part of the city's housing-preservation strategy and downtown/ coastal management obligations. City planning staff and the city attorney's office said unchecked STR growth reduces long-term housing stock, increases neighborhood nuisance complaints and can sidestep the permitting and tax obligations that hotels and other visitor-serving uses follow.

What staff recommended

Laura Bridal, senior planner in the Community Development Department, outlined options and a proposed program framework. Key points in staff presentations and discussion:

- Enforcement record: Elva described the current enforcement approach, including use of an electronic monitoring service (Rentalscape) and complaint hotline. Prosecutors pursue criminal cases when evidence supports criminal prosecution; municipal penalties and tax enforcement apply in other instances.

- Revenue and distribution: Staff reported the program's recovered funds are distributed under the existing code: 74% to the general fund, 11% to the Tourism Business Improvement District and 15% to the city's creek/related fund as listed in the report. Staff said they are auditing closed court cases to confirm ongoing compliance.

- Ordinance options: Staff asked whether the council wanted full-unit STRs to remain treated as a hotel-use conversion (the current approach in zones that allow hotels) or whether the council preferred a new, potentially easier permit path that would treat permitted STRs as a dwelling use with specific operational standards.

- Zoning guidance requested by council last year: staff said council-level consensus in June 2024 favored prohibiting STRs in inland single-family and duplex zones; allowing a coastal-zone permit area for limited STRs (the proposed coastal permit area runs approximately from Castillo to Los Padres Way, plus existing visitor-serving areas); and exploring an owner-occupied \"hosted home share\" model in most residential zones while discouraging non-hosted whole-unit STRs because of enforcement difficulties.

- ADUs and affordability: Staff repeated a recommended policy not to allow accessory dwelling units (ADUs) or deed-restricted affordable units to operate as short-term rentals.

- Operational standards proposed for any permit path: occupancy limits, on-site contact/owner responsibilities, nuisance and noise rules, a 24/7 nuisance response plan, permit numbers required in listings, platform delisting agreements, and higher administrative fines for noncompliance.

Council reaction and direction

Council members pressed staff on enforcement effectiveness, penalties and options to increase administrative fines. Councilmember Freeman asked whether criminal prosecution was the primary deterrent for repeat offenders; Elva said the city prosecutes where evidence supports a criminal case and that the administrative fine structure has been insufficient in prior pilots. City attorneys and enforcement staff told council that state law raises the maximum administrative fines available to local jurisdictions and that the council could ask staff to return with an amended administrative-fine schedule.

Council members expressed general support for the staff direction reported at the meeting: to prohibit STRs in inland residential zones, to pursue a limited coastal STR permit area and to allow a hosted-owner home-share model rather than unhosted whole-unit STRs. Multiple council members asked staff to draft an ordinance that would:

- Create a clear, publishable permitting path for STRs where they will be allowed;
- Require permit numbers in all online listings and give staff authority to request platform delisting for noncompliant listings;
- Build in higher administrative penalties or a property-tax rebate structure only after a careful legal review; and
- Preserve long-term housing by continuing to prohibit ADUs and deed-restricted affordable units from STR use.

Public comment and enforcement details

Speakers during the public comment period included short-term rental operators, neighborhood residents and representatives of local hospitality and labor organizations. Neighborhood residents described recurring noise, parties and enforcement delays; industry speakers said responsible management can mitigate impacts and warned that further constraints would not necessarily add housing stock. The Downtown Santa Barbara Improvement Association and the League of Women Voters each urged careful drafting of permit rules and robust enforcement.

Staff commitments and next steps

Staff said the next steps are drafting an STR ordinance that incorporates council direction, running additional public outreach with stakeholders (including Visit Santa Barbara, housing advocates and neighborhood groups), and returning the draft ordinance to the Planning Commission and later to council for adoption. Staff also said they will consider an updated administrative-fine schedule, platform data-sharing agreements and additional measures to speed enforcement audits.

Ending note

Council did not adopt a final ordinance on Aug. 5; it directed staff to draft an ordinance for formal review and to continue enforcement work while outreach and legal drafting proceed. The item will return to the Planning Commission and city council later in the ordinance-adoption process.","The Santa Barbara City Council on Aug. 5 heard a progress report on the city's short-term rental enforcement program and directed staff to draft an ordinance to regulate STRs citywide.","actionData","errors"]

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Council OKs framework to continue negotiations on Paseo Nuevo redevelopment; staff asked to negotiate DDA, exempt Lot 2 from surplus lands act

Santa Barbara council hears enforcement update, directs staff to draft short-term rental ordinance