A rendering of the proposed Front Street hotel in Downtown Santa Cruz.

The Santa Cruz Planning Commission on Thursday night advanced a plan to build a hotel at Front and Laurel streets with 232 rooms and ground-floor shops, a restaurant, a bar and a cafe.  (BCV Architecture + Interiors)

SANTA CRUZ >> A proposed six-story hotel in Downtown Santa Cruz edged closer to approval Thursday night after it received unanimous support from the Santa Cruz Planning Commission. The city council and the California Coastal Commission are expected to consider the project. 

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Hotel design

Plans submitted by New York-based developer SCFS Venture LLC include:

  • A 232-room hotel at Front and Laurel streets.
  • Three floors of underground parking with 214 spaces and an automated valet system. It does not include parking for about 130 anticipated employees.
  • Shops, a cafe and a restaurant on the ground floor.
  • A publicly accessible rooftop bar with three pools.
  • A banquet hall and conference space.
  • A public outdoor dining area and lawn with a path to the Santa Cruz Riverwalk on the San Lorenzo River levee.

The plans include more rooms than previous designs submitted in 2019 and 2023.

The land includes a former Santa Cruz Community Credit Union building and two city-owned lots that the city council agreed in May 2021 to potentially sell to the developer. Leaders of SCFS Venture plan to develop a third city-owned parcel north of the hotel into a public dining area and path to connect Front Street to the river levee.

The proposed building takes advantage of a change to the Downtown Plan approved by the city council in October. Under previous rules, buildings in some parts of downtown could be up to 70 feet tall if they include housing. The changes allow buildings without housing to qualify for the extra height. The extra height in this case allows for 116 additional hotel rooms, according to planning documents.

Buildings without housing that include the extra height must now pay $5 per square foot to the city’s Affordable Housing Trust Fund. At that rate, the hotel developer would pay about $227,500 to the fund. The city council could raise the required fee, according to a city staff report. 

In the project application, the developer proposed: 

  • Public bike rentals that are free for the first 90 minutes. 
  • A $25,000 donation to the Boys and Girls Clubs of Santa Cruz County and $15,000 to the Santa Cruz Hostel Society.
  • Allowing local nonprofit groups the use of the hotel’s rooftop or conference facilities at a discounted rate for at least three days annually. 

The California Coastal Commission is expected to consider a coastal permit for the project. If the Coastal Commission requires changes to the project, the hotel would not provide the bikes, money and nonprofit perks, according to a city staff report.

The Coastal Commission will likely require some rooms in the hotel to be provided at lower costs, Santa Cruz Senior Planner Ryan Bane said at Thursday’s meeting. The city council is expected to consider the number of low-cost rooms in the hotel, Bane said.

Community concerns

At Thursday’s meeting, four members of the hospitality-worker union Unite Here Local 19 said planning commissioners and the city council should demand a higher fee to the Affordable Housing Trust Fund to address the city’s housing crisis.

Dream Inn employee Maria Elena Gonzales said she drives 45 minutes to work from Pescadero each day because she can’t afford housing closer to her job. “I ask consideration for working families,” Gonzales said in Spanish.

District 3 Santa Cruz City Council candidate Joy Schendledecker suggested that the city keep ownership of the two parcels that would be part of the project and charge the hotel rent on the land. “Once we privatize our community assets, we never benefit from them again,” she said.

Hotel taxes are a key part of the City of Santa Cruz budget. About $12 million of the city’s $121.8 million General Fund revenue came from transient occupancy taxes in Fiscal Year 2023, according to the city documents. The tax on Santa Cruz hotel visitors rose to 12% in 2023.

“The hotel is going to contribute significantly to the finances of the city,” said Owen Lawlor, a representative of SCFS Venture.

Jorian Wilkins, executive director of the Downtown Association of Santa Cruz, said the hotel would help revitalize downtown and help struggling retail businesses. “This is going to bring hundreds of people into our community on a nightly basis,” Wilkins said. “If we don’t have things like this drawing people downtown, we won’t have the beautiful downtown that we have today.”

Developers proposed a public outdoor dining area and a walking and biking path that connects Front Street to the San Lorenzo River levee’s riverwalk. (BCV Architecture + Interiors)

The developer may accept a higher fee towards the Affordable Housing Trust Fund, depending on the number of low-cost hotel rooms requested by the Coastal Commission, said Santa Cruz Planning Director Lee Butler. 

City staff are “looking to maximize what we as a community receive while also making sure that we are not compromising the ability of the project to move forward,” Lee said. “We want them to succeed, and they won’t build their hotel if they’re not going to be making money.” 

Design considerations

Commissioners praised the design of the building and said there are three projects with affordable housing on city land in the works: Pacific Station North, Pacific Station South and the downtown library, housing and parking garage

Planning Commissioner Rachel Dann noted that many housing projects are under construction and have been planned around Santa Cruz

“Every site can’t be housing, this site shouldn’t be housing,” said Planning Commission Chair Julie Conway. The project will support “economic vitality and supporting our dear struggling downtown,” she said.

The planning commission unanimously voted to recommend that the city council approve the project. They also recommended raising the developer’s suggested donations of $25,000 to the hostel group and $15,000 to the Boys and Girls Club to $50,000 each. 

The project is expected to head to city council for a vote. If approved, it would then go to the Coastal Commission. The path to the levee would also require a permit from the U.S. Army Corps of Engineers.

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Reporter / California Local News Fellow | + posts

Jesse Kathan is a staff reporter for Santa Cruz Local through the California Local News Fellowship. Kathan holds a master's degree in science communications from UC Santa Cruz.