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City pauses awarding Los Osos Phase 1 contract to evaluate vacancies and broader options
Summary
City Manager Lister told council the city is temporarily pausing award of the Phase 1 Los Osos construction contract—citing recent tenant closures and a redesign by the Santa Margarita Water District—to allow additional due diligence and consideration of a more comprehensive plan or public‑private partnership; temporary site improvements and community events will continue.
City Manager Lister updated the council on the Los Osos project and said the city will temporarily pause awarding the Phase 1 construction contract for the North Basso parking lot and related work while owners and site conditions evolve.
“We are temporarily pausing awarding the construction contract for phase 1,” City Manager Lister told council. He said several tenants have closed or announced closures (Michaels, Party City, Big Lots and uncertainty around CVS and Stein Mart), which could present an opportunity for a more comprehensive redevelopment strategy. The pause will allow additional due diligence, outreach to property owners and the exploration of a possible public‑private partnership.
Lister emphasized that the city remains committed to the downtown vision and that the temporary pause means no additional cost is incurred while the Stein Mart property remains on the city's books. In the meantime the city has implemented temporary site improvements — landscape touchups, painting, additional seating — and will continue farmers markets and monthly night markets at the site.
Council received the report and did not take immediate action on a construction award; staff will continue outreach to property owners and return with options once further evaluation is complete.
