Staff hearing officer Tess Harris approves 53‑unit project at 335 South Milpas, retaining Tri County Produce

Staff Hearing Officer Tess Harris approved a coastal development permit, a tentative subdivision map and a CEQA streamlined determination under Section 15183 for a mixed‑use project at 335 South Milpas on April 15, 2026, subject to conditions including completion of a corrective action plan for site contamination and specific construction and parking requirements.

The project would retain and modify the existing Tri County Produce market and construct a four‑story residential building with 53 units, a roof deck and ground‑level parking. City staff and the applicant described the plan as a two‑lot subdivision that keeps the market on one lot and places the new residential building on the other. Tess Harris read findings on consistency with the city general plan, the local coastal program and the California Coastal Act before announcing approval and noting a 10‑calendar‑day appeal period.

"So with those findings, I will go ahead and approve the project," Harris said after a multihour staff presentation, applicant overview and public comment period. The decision is subject to conditions listed in the staff report, including completion of remediation overseen by the Central Coast Regional Water Board and Santa Barbara County Environmental Health Services and demonstration of agency clearance where required.

Staff presentation and project materials described the site as a roughly 107,285‑square‑foot property at the northeastern corner of Milpas Street and Calle Puerto Vallarta with two APNs, one of which contains a Union Pacific Railroad easement. City staff told the hearing the project invokes state density bonus law and proposes 53 units, including income‑restricted units to qualify for the bonus; staff also said the proposal seeks concessions and waivers for parking, height, front setback and certain outdoor‑living‑space requirements.

City traffic and parking analysis, and a third‑party peer review, found no anticipated significant impacts to intersection operations, queuing or site access. "We did a pretty exhaustive analysis of the traffic impacts for policy consistency as well as the queuing on Milpas Street," said Scott Shell of Associated Transportation Engineers. An EPD Solutions reviewer who examined the studies told the hearing their review "did not identify a significant increase in traffic that would cause queuing issues at the rail crossing." Both parties urged conditions and mitigation where appropriate.

Members of the public spoke for and against aspects of the project. Stephanie Diaz, an East Beach resident, welcomed retention of Tri County Produce but said the four‑story massing felt large for the neighborhood gateway and asked for design language that better reflects a "beachy" character. "We're so pleased that Tri County Produce is remaining," Diaz said, but she asked that findings reflect neighborhood concerns about scale, circulation and parking. Other commenters urged timely approvals to address housing shortages and supported staff's recommendations.

The applicant team — Jared Goran of Vanguard Planning and architect Brian Cornell — emphasized that the revised proposal reduced commercial square footage from prior plans, improved the market's storage and service areas, and that easement area on the parcel counts toward net lot area for density calculations. "The fact that there's an easement that restricts what we can build in a certain area of our lot doesn't change the area of the lot itself and then how you would calculate density," the applicant said in response to concern over whether the railroad easement reduces lot area.

Harris placed several conditions on approval during the hearing: sidewalk widening and lighting improvements along Calle Puerto Vallarta, signage reserving certain parking for market use during market hours, limits on noisy construction work before 8 a.m. (staging allowed earlier), coordination with the railroad for any work within the easement, demonstration of compliance with regional board permitting (including dewatering if required), and completion or phased demonstration of corrective action plan measures as required by regulatory agencies prior to permit issuance and occupancy.

Staff noted some numeric clarifications during the hearing: staff and consultants reported that the project proposes 45 automobile spaces for the commercial component and 50 for the residential component and provides additional bicycle parking; an earlier read of the project description into the record briefly stated a 54‑space garage figure, but the project plans and staff parking demand analysis described the 45/50 configuration used in staff findings.

The decision may be suspended by a Planning Commission member or appealed within 10 calendar days of the written decision. If approvals stand, the project will return to the Architectural Board of Review for design approvals and the community development director for state density bonus findings as required.

The staff hearing officer closed the April 15 meeting after announcing the approval and reminding the public of appeal procedures.