Alliance Development Proposes Flats at Terramar to Convert Hotel into 98 Affordable Homes

The City of Carlsbad's Planning Commission meeting on August 20, 2025, spotlighted a significant development project aimed at transforming an outdated hotel into much-needed multifamily housing. The proposal, presented by Alliance Development Services, seeks to convert the Studio 6 extended stay hotel into 98 rental homes, including 15 affordable units, strategically located near local businesses and the coast.

During the meeting, the applicant, Jim McMenemin, emphasized the project's alignment with the city’s general plan and its potential to revitalize an underutilized property. The redevelopment is designed to enhance community living, featuring amenities such as pickleball courts, bike storage, and improved landscaping. Notably, the project will maintain 123 parking spaces, addressing concerns about parking shortages often associated with affordable housing developments.

Commissioners raised questions about the conditional use permit's duration, with staff clarifying that these permits no longer have fixed expiration dates, allowing for a more stable development process. The project also complies with the city’s inclusionary housing ordinance and qualifies for a CEQA class 32 infill exemption, indicating it meets environmental standards for urban development.

The commission expressed support for the project, recognizing its potential to provide affordable housing while integrating seamlessly into the existing commercial landscape. The next steps involve a recommendation for city council approval, with hopes that this initiative will set a precedent for future developments in Carlsbad.