Capitola staff say mall block could take hundreds to thousands of units; zoning changes proposed to meet RHNA

Community and Economic Development Director Katie Hurley told the Nov. 20 town hall that the Capitola Mall block is a focal point of the city’s housing‑element planning and zoning updates. “We are anticipating about 1,100 more units” on the primary mall site, Hurley said, and staff noted combined block capacity estimates up to about 1,777 units when adjacent parcels are included.

Hurley explained that the city revised some assumptions after the mall owner (identified in the presentation as Malone Geyer) told state reviewers the initially proposed affordability mix was infeasible. Staff said they maintained the target of roughly 350 deeply restricted affordable units but increased the number of market‑rate units to achieve financial feasibility on the site.

As part of implementing the housing element, staff are drafting objective, measurable standards for height, setbacks and design to give developers clarity. Hurley said the city has committed in its housing element to allow building heights up to 75 feet on the mall site and is considering incentive tiers that could permit up to 85 feet when projects include specified community benefits such as hotel and retail uses; the planning commission recently discussed a 100–125 foot buffer from 41st Avenue where heights would be lower.

Hurley emphasized the city is not the developer and has not received a formal project submittal; the work underway is to update zoning and objective standards so the city can review any future proposal predictably. Staff expect to present a first draft of objective standards at a planning commission session in December and bring zoning amendments to the City Council in January or February, with adoption anticipated in early 2026.