SANTA CRUZ >> Tuesday, the Santa Cruz City Council is expected to decide whether to demolish the 61-year-old Circle Church to make way for 12 homes. A group of neighbors that wants to stop the project has pivoted to a new tactic ー trying to buy the land. 

Two proposals are on the table for the circular lot at 111 Errett Circle:

• 12 single-family homes with possible accessory dwelling units and a common building in the center
• 10 single-family homes, six condos and four accessory dwelling units, with a common building in the center.

The city’s planning staff has pushed for the second option because they said it would use the land more efficiently and allow lower-priced housing options.

But the developer, a group of seven investors called Circle of Friends LLC, wants the first option. Member Brett Packer, a general contractor, said at the April 16 Santa Cruz Planning Commission meeting that the group does not have the “financial wherewithal” to build the six condos. They bought the property in 2017 for $3.3 million to build homes for themselves.

“We were OK going forward with both plans until COVID hit,” Packer said. “And with the COVID crisis and the ensuing economic meltdown that’s happening around us right now … our chances of getting financing to build the condo complex are pretty much nil. 

“And same with the possibility of possibly selling that part of the development to a developer. Probably not likely in the next few years, which, if this were approved, it would leave us stuck in a place where we couldn’t move forward with the project until the market changes.”

The planning commission voted unanimously April 16 to recommend the first option. It would subdivide the lot into 12 single-family parcels. The city council gets the final say. 

The second option is still on the table for the city council, despite Circle of Friends’ recent withdrawal of that option.

The Circle Church lot is in a single-family home zone. The second option and its six condos would require the city council to permit slightly more density than the zoning allows.

The planning commission also recommended an affordable housing condition ー that an in-lieu fee only be allowed if the group proved that it would build a co-housing community. Co-housing, which means owners have communal areas, management and meals, has been the group’s plan from the start.

An in-lieu fee is a price that developers can pay to the city’s Affordable Housing Trust Fund instead of building the required number of affordable units. This project would call for two affordable parcels.

Possible sale of land

In recent weeks, in response to COVID-related economic hardship, the Circle of Friends has offered to sell 2 1/2 of its 10 shares of the property, said Mark Thomas, a Circle of Friends member, real estate agent and school teacher.

Asking price is $460,000 for a share.

The group has received several inquiries. Leaders have said they plan to wait until after the city council meeting to move forward.

Gospel Community Church, a group that rents the church space at 111 Errett Circle from Circle of Friends, has made an offer to buy the property outright. Thomas, of Circle of Friends, would not disclose the offer price. He said, “it’s on the table” and the group would consider it.

A new tactic

A group of neighbors that opposes the church demolition and housing proposal has shifted to a new approach. Renamed “Save the Heart of the Circles,” the group is trying to get nonprofit status to fundraise and make an offer on the entire property from Circle of Friends.

The group circulated a “Save the Circle Church” online petition last year that collected more than 2,300 signatures. Group leaders also tried to get the city’s Historic Preservation Commission and the city council to list the church as a historic site to complicate development plans. The commission and the city council voted against it.

Jess Reeves, a group leader, said the group awaits potential affiliation with a local nonprofit so that contributions would be tax deductible. Matching funds from businesses also would be possible. 

Reeves said the group wants the public to continue to benefit from the space. The church should be open for services and the gym for school groups, she said. Ideas include a breakfast cafe and a church food program that serves the homeless, she said.

Reeves said the group does not know yet how much they can offer Circle of Friends. She wants it to be a “win-win” and for the owners to “come out whole.”

“We want people to know that we’re on the precipice of this,” Reeves said. “We want to buy the property back. This isn’t over.”

Save the Heart of the Circles recently bought a half-page advertisement in the Santa Cruz Sentinel that announced the group’s intent to buy the property. Thomas, the Circle of Friends member, said the group did not contact Circle of Friends before the advertisement ran. 

“We’re private people that own a private piece of property. They have no right to tell us what to do with our property,” Thomas said.

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