The development is at a former Good Earth Tea facility between a Safeway shopping center and the railroad tracks. The project is expected to return to the Santa Cruz Planning Commission and will require city council approval. 

The proposal includes: 

• About 300 bedrooms in 144 units. 
• Studios, one-, two-, three- and six-bedroom apartments.
• Six-story buildings on the shopping center side and two-story buildings on the railroad side. 
• 212 residential parking spots, 39 commercial car parking spots and 412 bike parking spaces. 
• More than 13,455 square feet of commercial or industrial ground-floor space would be needed to satisfy city staff recommendations.

The land is zoned for industrial use, and the landowners are seeking a permit that essentially would allow housing and more design leeway. An owners’ representative said the property has been underused and often vacant for years.

Thursday, the planning commission weighed whether to support the project in concept and a  staged permit application. Some staff recommendations included more industrial and commercial square footage, eliminating a wall between the project and the rail trail, and moving an electrical room further from the property. 

The planning commission voted 5-1 in favor, with Planning Commissioner Rachel Dann the sole dissenter and Commissioner Pete Kennedy absent. 

Mark Primack, an architect and former Santa Cruz City Council member, spoke on behalf of the property owners. The housing proposal “will support more jobs than the current buildings ever did, jobs in R&D, food services, tech and retail,” he wrote in a letter to the planning commission. 

“Just as importantly, the next generation of Santa Cruz workers and students will have a vibrant, secure residential community that supports environmental principles of smart growth and livable streets, while activating our rail trail, patronizing local businesses and enjoying smart transportation options,” Primack wrote.

Some residents at Thursday’s meeting brought up concerns about disrupted views, traffic and  increased congestion. 

Kenny Imes, who lives near the project, decried the “private fifth floor rooftop terraces with bay views available only for these primarily student residents.” He said the project would diminish residents’ privacy, views, parking, and job opportunities. The previously submitted planset, though outdated, contains private and public terraces.

“Build student housing on campus,” Imes said.

Resident Marcus Brady called it a “pipe dream thinking that people are going to use public transit and not own a car.” 

Primack said, “This is not housing for UCSC students. This is housing for young people, whether UCSC students, Cabrillo students, or driving over the hill to San Jose State.”

A 144-unit apartment complex is proposed near Almar Avenue and the railroad tracks on Santa Cruz’s Westside. (Stephen Baxter — Santa Cruz Local file)

Approval process

Developers initially submitted a proposal to city planners in March 2024 as a mixed-use project with 120 apartments spread across three residential buildings. One-, two-, and three-bedroom units were planned. 

A separate, approved 38-unit affordable housing development is expected to be built in an vacant triangular lot across the street at 844 and 850 Almar Ave. 

The developers now have made changes to the project, including adding six-bedroom units and reducing the height of the building on the side nearest the rail trail to two stories from four.

Developers had planned to take the usual route to approval, which would have required it to conform to zoning code, would have taken advantage of state density bonuses, and wouldn’t have required council approval. Following this process would have required the developer to seek a zoning change, an arduous process potentially costing hundreds of thousands of dollars, said Santa Cruz Planning and Community Development Director Lee Butler.

“Rather than continue down that contentious and compromising path, we and the planning director agreed that, if the owners were willing to trust a ‘discretionary’ process, trust staff, commissions, council and residents to rise above the current siege mentality and appreciate this project on its own merits and for its own potential, then we might actually create a new model for cooperation and creativity,” Primack said at the meeting.

A planned development permit doesn’t come with the same requirements as a typical permit, but can be approved or denied by the council at their discretion without any mandate from the state forcing their hand. But it requires that “advantages to landowners afforded by the planned development process will be balanced by public benefits,” according to city law.

This type of permit allows variation from objective standards, in this case, on a number of significant obstacles for the developer including the underlying industrial zoning. 

The only type of residential use allowed in industrially zoned areas are live-work units, according to city rules. The proposal now contains no live-work units. Exceptions are supposed to show a “public benefit.”

“We don’t have that public benefit yet with the current design,” said commissioner Dann. “All sorts of things I could see being public amenities in addition to what’s already in the proposed plan. But I don’t know that, and a trust us scenario isn’t something I’m particularly comfortable with,” Dann said.

“At this point in our community, I consider housing to be a public benefit,” Planning Commissioner John McKelvey said.

Speaking to the council in support of recommending the permit, Butler, the planning director, said the city council would have a larger role in guiding the outcome of the project. The planning commission meeting was meant to give “initial feedback to see if [the owners] want to move forward in advance of committing all those resources,” Butler said.

Commissioners added recommendations that the developer look into additional public benefit measures such as traffic calming, street trees and using local union labor for construction. They also wanted updated renderings. 

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