Council denies appeal, upholds planning commission for 535–548 Ocean Street housing project

The Santa Cruz City Council voted to deny an appeal against the Planning Commission’s approval of a six‑story, 225‑unit mixed‑use housing project at 535–548 Ocean Street, upholding the Planning Commission’s findings and the city’s determination that the project qualifies for a CEQA infill exemption.

The appeal hearing, which ran through the evening, drew extensive public comment. Neighbors raised concerns about building massing, privacy, shadows on adjacent yards, the project’s proximity to Branciforte Creek and potential environmental impacts, and the presence of soil contaminants on the site. Labor and community representatives asked the council to require stronger subcontractor screening to avoid labor‑law violations on construction projects.

Appellants argued that the project should not have qualified for the state CEQA “infill” exemption because of two factors: the presence of site contamination that could pose health risks and the project’s proximity to the creek and neighboring residences. Appellant counsel also asked the council to rescind approval and require a more thorough environmental review under CEQA, arguing the contamination, endangered species and unusual site circumstances warranted a full initial‑study review rather than the infill exemption.

Staff and the applicant countered that contamination is not unusual for urban redevelopment sites, that the applicant had voluntarily sought oversight from the California Department of Toxic Substances Control (DTSC) and that DTSC will require an appropriate remediation plan. Staff presented a mapping overview that shows many city redevelopment parcels have prior contamination records. City planning staff concluded the project meets the infill exemption criteria: it is on previously developed land, complies with objective zoning standards, and does not present unusual circumstances indicating a reasonable possibility of a significant environmental effect.

The council’s debate focused on the legal standard for applying an infill exemption, the sufficiency of evidence about contamination and the appropriate measurement for proximity to transit (a separate point advanced by the appellant). Several council members said that state law has narrowed local discretion over certain land‑use requirements and that council authority was limited on matters governed by state housing statutes. Nonetheless, council members also pressed staff and the developer for follow‑up: additional mitigation of privacy impacts, further efforts to preserve adjacent heritage trees where feasible and a stronger commitment to subcontractor screening during formal bidding.

After questioning and discussion, Councilmember Renee Golder moved to deny the appeal and uphold the Planning Commission approval; Councilmember Cynthia Brunner seconded. The roll call vote was 5‑2 in favor of denying the appeal (Ayes: Golder, Brunner, O’Hara, Kalantari Johnson, Keeley; Noes: Tragero, Newsom). The council directed staff to incorporate the project’s voluntary mitigation measures as conditions of approval and to return with details on contractor screening measures and any outstanding tree mitigation requirements.

The developer will proceed toward finalizing its financing and construction documents. City staff will publish the list of follow‑up actions requested by council and return to the council with a status report once remediation, bid screening procedures and plan‑check cost estimates for remaining phases are available.