City Council approves downtown library financing, wharf repairs, public-safety fees and housing grants

The Santa Cruz City Council on May 21 approved multiple budget, permitting and program actions intended to accelerate infrastructure and housing projects and to shore up city public-safety resources.

The council adopted a multi-part financing package to move the downtown library, 124-unit affordable-housing project and associated parking garage toward construction, voted to proceed with wharf repairs up to the structurally damaged bents, approved updated development impact fees for police and fire, and awarded federal CDBG and HOME grants to local programs and projects. Council also approved a new downtown vibrancy package that includes alleyway activation work, expanded downtown vacant-storefront leasing tools and a pilot for theater parking support.

Why it matters: The approvals pave the way for major capital projects that the city says will anchor downtown’s multi-decade renewal — a net-new library, affordable housing tied to transit and a parking structure — and provide revenue and policy tools the city will use to respond to growth and rising service needs. The public-safety fee change increases the one-time developer contributions the city can collect to equip police and fire as growth adds calls and denser development to existing neighborhoods.

What the council approved (high-level): - Downtown library / affordable housing / parking: The council approved a series of related items to finalize state and local funding commitments (action on items listed in the agenda as 14, 16, 19 and the TEFRA/conduit financing action, item 32). The staff package included execution authority for state grant agreements, a resolution to issue parking revenue bonds, and conduit financing steps to allow tax-exempt bond proceeds to be used in combination with state loans and grants.

- Wharf repair and recovery: Council gave direction and accepted funding commitments for repairs of the Wharf up to the damaged structural bent (bent 171/172 depending on the item) and accepted Cal OES and other grant commitments identified in staff reports that staff said remove the need for a new local tax to pay for the work.

- Public-safety (police and fire) development impact fees: After a staff-led nexus study, the council adopted updated impact-fee schedules that raise the maximum allowable per-square-foot and per-room fees for new development to recover a larger share of capital costs for public safety facilities and equipment. The council adopted fee levels intended to capture most of the service cost while directing staff to monitor market effects and return with a review in a year.

- CDBG / HOME allocations and Consolidated Plan actions: Council released draft documents and authorized the city to publish the 30-day public comment versions of its HUD annual action plan (CDBG and HOME allocations), approving recommended program and project awards for public services and capital repair projects contingent on HUD allocations.

- Downtown vibrancy and vacant-storefront program changes: The council approved a pilot and ordinance-level changes to create a storefront registry for long-term vacancies on Pacific Avenue, strengthen minimum maintenance standards for empty storefronts, expand the city’s POPS (pop-up storefront) activation tools and direct staff to pursue alleyway activation and permitting streamlining.

Votes & outcomes (at a glance): - Downtown library / conduit financing (item 32 and associated items): Approved (roll calls recorded on the agenda; motions carried). Staff noted that multiple funding sources — state AHC/ASSEC awards, local bond proceeds, and fundraising — must close in sequence; documents will be finalized on receipt of formal state and lender approvals.

- Wharf repairs / WARF items (bonding and grant acceptance items appearing in consent and separate motions): Approved; council and staff said Cal OES committed full funding for the repair as part of the recovery package presented.

- Public-safety impact fees (police and fire): Approved. Council adopted the nexus study-based schedule and set the initially recommended collection level with direction to monitor effects and report back. (See the separate article in this package on the nexus study and the vote.)

- CDBG/HOME annual action plan and related HUD submissions: Council released draft plans for 30-day public review and approved the recommended program awards and project allocations to be finalized pending HUD’s formal allocation.

- Downtown vibrancy ordinance, alley activation and POPS updates: Approved; staff authorized to implement the pilot, coordinate alley improvements and return with a program for public activation events and permit streamlining.

Context and next steps: Several items voted on today require follow-up steps — state and lender approvals for the downtown financing, Caltrans agreement and school-district right-of-way discussions for Bay Street projects, HUD’s final allocations, and formal changes to the city’s ordinance text (second readings or ministerial steps). Staff told the council that they would return with timely updates and implementation schedules for the items approved.

Public input: Multiple public speakers addressed the downtown projects, the Wharf repairs and the public-safety fee study at length. Speakers ranged from housing and retail advocates to neighborhood residents and downtown property owners; several urged faster marketing and tenant assistance for vacant storefronts and greater transparency on bond details for parking revenue bonds.

Staff contact: Economic Development, Finance, Public Works, Police and Fire departments provided the staff reports and presentations associated with these votes.