Planning commission upholds approvals for 225‑unit Ocean Street project after contested appeal

The Santa Cruz Planning Commission on May 1 denied an appeal and upheld the zoning administrator’s approvals for a six‑story, 225‑unit mixed‑use development at 535, 542 and 548 Ocean Street, voting unanimously to reject arguments that the project should face further environmental review or different conditions before permits are issued.

The project — proposed by Oakland‑based Riaz Capital and described in staff materials as a mixed‑use building with 225 residential units and ground‑floor commercial space — would replace four commercial buildings, combine three lots into one parcel, remove several heritage‑sized trees and add a courtyard and 84 parking spaces. Staff said 39 units would be deed‑restricted as affordable (including 17 very‑low, five low and 17 moderate units) and that the plan relies on state density bonus provisions. Commissioners voted 5‑0 to deny the appeal and uphold the approvals granted by the zoning administrator.

The decision matters because the project sits adjacent to Branson 40 Creek and abuts low‑density single‑family homes on May Avenue, where neighbors raised concerns about hazardous soils, creek setbacks, tree removal, privacy, shadows and parking. Appellant Eric Rabiel told the commission he believed the site had contamination he said exceeded residential screening levels and urged the commission to require an initial study and an environmental impact report. Project planner Bridal told the commission staff was aware of contamination and added two new conditions that require the developer to obtain Department of Toxic Substances Control (DTSC) approval of remediation activity and site management before demolition or building permits are issued.

Staff presentation and legal context

Project planner Bridal summarized the project and the approvals at issue: a nonresidential demolition authorization, lot line adjustment, watercourse development permit, design permit, heritage tree removal permit, density bonus requests and a sign permit. She told commissioners the project qualifies for a CEQA Class 32 categorical exemption (infill development) and noted state laws that apply, including state density bonus law, the Housing Accountability Act and AB 2097 (parking). Bridal said the city treats the request for reduced setbacks near the creek as a watercourse development permit matter and that staff had circulated revised conditions after learning the applicant had…