A six-story hotel is proposed at Laurel and Front streets in Downtown Santa Cruz. (BCV Architecture + Interiors)

SANTA CRUZ >> The Santa Cruz City Council on Tuesday approved changes to the Downtown Plan that allow six stories for a proposed hotel at Laurel and Front streets.

The Downtown Plan had stated that buildings on the east side of Front Street between Soquel Avenue and Laurel could be up to 70 feet if the development aligned with city objectives, which included a “concentration of new housing.” The city council on Tuesday voted to remove the housing requirement in that area for offices, hotels or other buildings.

The rule that required housing was “overly limiting” and inconsistent with city policies that promote tourism, Santa Cruz Senior Planner Ryan Bane said at Tuesday’s meeting. Transient occupancy taxes collected from hotel visitors also are a key source of city revenue, leaders have said. 

The council’s decision did not approve the hotel plans, but it helped pave the way for a six-story, 69-foot hotel that has been proposed on the site since 2021. In February, SCFS Venture LLC submitted revised plans for a 228-room Cruz Hotel at the site at 324 Front St. SCFS Venture is a New York-based company affiliated with New York-based hotel real estate investor Eagle Point Hotel Partners and Santa Cruz-based developer Owen Lawlor of Lawlor Land Use. 

A rooftop pool, bar and views of Monterey Bay are part of a proposed six-story hotel at 324 Front St. in Santa Cruz. (BCV Architecture + Interiors)

The council also voted to change the Downtown Plan to allow 15 feet of additional height for rooftop features like pools, bars and gardens. Renderings in revised hotel plans show a rooftop pool and bar up to 75 feet tall.

The site includes two city-owned lots that the city council agreed to potentially sell to the developer in May 2021.

Following a suggestion by Santa Cruz City Councilmember Scott Newsome, the council voted Tuesday to require that projects without housing in Downtown Plan Zone B pay $5 per square foot for floors above 50 feet. The zone includes the proposed hotel site. The money would go to the city’s affordable housing trust fund.

Projects on the east side of Front Street between Soquel Avenue and Laurel Street (in green) will be required to pay a $5-per-square-foot fee for floors taller than 50 feet if the building does not have housing. Along Pacific Avenue (in purple) the fee will apply to floors taller than 55 feet in buildings without housing. (City of Santa Cruz)

Several residents at Tuesday’s meeting raised concerns that the changes essentially advance plans for the proposed hotel.

“We need more housing, not hotels,” said Alison Buchter.

Councilmember Sandy Brown said she “reluctantly” would vote for the changes. “We are making a change here that will result in potentially less housing in the Downtown,” she said. The fee for additional height without housing will have some benefit for affordable housing, Brown said.

A rendering shows a proposed six-story hotel at 324 Front St. at Laurel Street in Downtown Santa Cruz. (BCV Architecture + Interiors)

A six-story hotel is proposed on two city lots and a credit union building near Laurel and Front streets in Downtown Santa Cruz. Across Front Street, the six-story Pacific Front Laurel housing project is expected to finish in 2024. (Stephen Baxter — Santa Cruz Local)

Councilmembers Renee Golder and Shebreh Kalantari-Johnson said the city has approved affordable housing Downtown, including on the mixed-use library project. Two affordable housing projects – Pacific Station North and Pacific Station South – also are in the works near the Santa Cruz Metro bus depot.

A proposed hotel on Front Street would align with the city’s goals, Golder said. “Hotels, where you can get transient occupancy tax, contribute to our General Fund, which enables us to pay our staff a living wage, so it’s all connected,” she said. “If we just only built housing, then I think we’re not doing our job.”

The council voted 6-0 to approve the changes. Councilmember Sonja Brunner recused herself from the discussion and vote due to her position as the director of operations for the Downtown Association of Santa Cruz.

Other changes to the Downtown Plan approved Tuesday include:

• Streamlining approval processes for multi-family housing, daycare and supportive and transitional housing.
• Requiring approval from the Santa Cruz Planning Commission to the city council to make exceptions to proposed building heights. Previously, exceptions to height rules required a recommendation from the city’s planning director to the city council.

The changes went into effect immediately for areas outside of the California Coastal Commission’s Coastal Zone in Santa Cruz. The updated plan will go to the Coastal Commission for approval of areas in the Coastal Zone.

Downtown traffic changes near the bus depot

The Santa Cruz City Council on Tuesday also approved temporary changes to streets around the site of a planned affordable housing development at Pacific Station North. 

A seven-story building is planned where the Santa Cruz Metro bus depot building stands at 920 Pacific Ave. Plans include 128 affordable homes, as well as offices, stores and a Santa Cruz Metro office with bus ticket windows.

Demolition of the Downtown Santa Cruz Metro bus depot is expected to start in February to make way for an affordable housing project at Pacific Station North. The bus lanes are expected to be reconfigured. (For the Future Housing)

A public walkway is planned between affordable housing projects at Pacific Station North and Pacific Station South. (For the Future Housing)

Demolition of the bus depot structures is anticipated in February 2024.

Some temporary traffic changes are expected on Soquel Avenue, Front and River streets and River Street South. River Street South runs along the San Lorenzo River from Wells Fargo to CVS.

Plans include:

• Converting River Street South to a one-way street for vehicles. The street is set to include bike lanes in both directions.
• Removing a traffic island at the corner of River Street South and Front Street.
• Creating a temporary storefront at 603-605 Front St. for bus ticket sales and a call center.
• Creating a lane for buses and bicycles on Front Street and River Street.
• Shifting all bus routes to temporary bus stops on Front Street and River Street South. 

The changes are expected to last about two years while Pacific Station North is built. After construction ends, the streets are expected to return to their current configuration.

The temporary plan eliminates some street parking and creates some new parking – reducing the overall parking spots. A previous draft of the plan eliminated fewer parking spaces, according to a city staff report. 

Some of the additional spaces were removed in response to feedback from the Transportation and Public Works Commission during a Sept. 18 meeting. The commission voted to request more room for buses and bicycles.

The commission considered “how many folks are using bus lanes versus how many people are using parking spots,” said Santa Cruz Transportation Commissioner Zennon Ulyate-Crow. “Maybe 30 people [are] using those 11 parking spots in the course of an hour,” Ulyate-Crow said, compared with hundreds using the bus lanes.

Downtown Commissioner and former City of Santa Cruz Mayor Cynthia Mathews approved of the changes, but said some Downtown store owners were worried about the reduced parking spaces hurting their businesses. “That concern for loss of parking affects the businesses, Downtown workers, the visitors and the residents,” she said.

The city council voted 6-0 to:

• Approve the temporary plan.
• Discuss the plan’s possible effect on parking revenue with the Downtown Commission, the Downtown Association and the Downtown Management Corp.
• Spend $500,000 of money budgeted for Pacific Station North on carrying out the plan.

Councilmember Sonja Brunner recused herself due to her position as the director of operations for the Downtown Association of Santa Cruz.

Other Santa Cruz City Council actions

During Tuesday’s meeting, the city council also:

• Ordered an impact report for the Housing for People Initiative that is expected to appear on the March 5 ballot. The proposed law would require housing proposals with more than 30 units to dedicate 25% of the units to be affordable. It would also require a vote to approve building proposals that are taller than existing limits. The report is expected by Feb. 13, 2024.
• Commissioned a study of city fees. MGT Consulting Group is set to study fees set by seven city departments, including public works and parks and recreation. The study is expected to examine whether fees fully cover the cost of city services, and may include recommendations for updated fees. 
• Approved an application for federal grant money for a program that would help the Beach Flats neighborhood reduce problems related to climate change and try to slow displacement from gentrification. The program would aim to bury utility lines, improve biking and walking conditions and try to protect residents of affordable housing against displacement. 

Read more

• Hotel plan could include city land in Downtown Santa Cruz — May 25, 2021
• Santa Cruz credit union board to discuss building sale for hotel — July 9, 2021
• Santa Cruz Local Housing and construction page on proposed hotel at 324 Front St.
• Santa Cruz Local Housing and Construction page on Pacific Station North and South

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