Planning Commission backs concept review of Paseo Nuevo redevelopment, urges more clarity on DDA, parking and affordable housing

The Santa Barbara Planning Commission on Oct. 9 reviewed a conceptual proposal to redevelop the Paseo Nuevo mall that would demolish the former Macy’s building to build 233 market-rate rental units and would place up to 80 income‑restricted units on a portion of municipal Parking Lot 2. The commission voted by majority to forward written comments and recommendations to City Council as it continues negotiations on a disposition and development agreement (DDA).

The commission’s action was advisory; City staff described the DDA as a real‑estate transaction that would be considered separately by City Council. Kelly McAdoo, City Administrator, told commissioners the city has negotiated with the property owner for more than three years and that the DDA being negotiated would transfer underlying city-owned land to the developer if a set of closing conditions — including design approvals, financing, and covenants on affordable units — are met.

Staff said the project would remove about 115,000 square feet of existing commercial space (reducing current commercial floor area on the site from roughly 240,000 square feet to about 125,000), demolish the 135,000‑square‑foot Macy’s building, and replace it with roughly 233 market‑rate units. The project proposes 80 affordable units on Lot 2; staff and the applicant said 24 low‑income units would be required to meet a combination of the city’s AUD (Average Unit Density) rules and the state density bonus law. Patsy Price, the project planner, said the combined proposal yields roughly 56 units per acre and requests height waivers beyond the Central Business District standard (the proposal listed up to 75 feet at the former Macy’s site and up to 70 feet at Lot 2, though the applicant later said Lot 2 massing had been reduced in response to community feedback).

The plan includes changes to downtown parking. Staff…