City staff outlines Paseo Nuevo redevelopment: 233 market-rate units, 80 affordable units and reduced public parking

The Santa Barbara City Parking Committee on Oct. 1 heard a presentation on the proposed Paseo Nuevo redevelopment, which would demolish the former Macy’s building at State and Ortega and create 233 market-rate rental units and 80 income-restricted rental units on a portion of Parking Lot 2.

The project presentation came from Tess Harris, master planner in the City Administrator’s Office. “The city is really excited to bring this project forward,” Harris said, and described a proposal that would include a new 20,000-square-foot retail corner, 28 additional parking spaces tied to the market-rate building, and a removal of one of three bays in Parking Lot 2 equal to about 186 spaces to make room for the affordable building.

Why it matters: committee members pressed staff and the city attorney on how the plan would change downtown public parking supply and what legal and contractual constraints limit other options. Assistant City Attorney Dan Henschke and staff explained the project must navigate existing reciprocal easement and parking covenant agreements among the city, AllianceBernstein (the leaseholder), and Nordstrom’s property owners; those documents, and the city charter’s lease rules, shape what can be done with Lots 1 and 2.

Key facts and commitments

- Site and buildings: The proposal would demolish the Macy’s parcel and construct 233 market-rate residential units at that location and a separate six‑story building on Lot 2 with 80 income-restricted units. Harris said Lot 2’s affordable building is planned at roughly a 25 percent mix of studios, one-, two- and three‑bedroom units.

- Parking: Harris said Lot 1 would contain 600 spaces under…