The Santa Cruz Planning Commission approved the project in May. Resident Eric Grabiel appealed the decision and said that soil contamination on the site, the proximity of Branciforte Creek behind the property, and nearby heritage-sized trees together constituted an “unusual circumstance” that required the city council to override state housing laws and deny the project.

“It would be unlawful, would be an abuse of discretion in fact, for the city council to approve the project” without further environmental review, said Elise Cossart-Daly, Grabiel’s lawyer who presented the appeal.

Other neighbors said the building was shockingly tall and close to neighboring houses. “Most things change, that’s fine,” said Eric Grodberg, who said he lives on May Avenue near the proposed building. “But no one had the expectation that an 80-foot building” with a footprint nearly up to the property line “would be built with a bank of windows that are looking directly down onto your house,” he said. “That’s just not okay.”

City staff and a representative from developer Riaz Capital said the appeal didn’t demonstrate a threat to public health and safety required to deny the project. 

Soil contamination is common throughout commercial areas of the city, and the developer is working with state regulators to address the contamination, said Senior Planner Rina Zhou. 

Developers will seek permission from neighboring property owners before removing one heritage tree and pruning another, said Lisa Vilhaur, vice president of design and entitlement for Riaz Capital.

Limited local control

Many neighbors said they were frustrated that the building flies in the face of the 2014 Ocean Street Area Plan, which calls for a more gentle transition between single-family neighborhoods and larger buildings.

Longtime resident Don Landes said the plan was “tossed in the wastebasket” and warned that the building was “the first domino” for the Central Park neighborhood: several other large housing developments have been approved or proposed nearby, including at 908 Ocean Ave. and 525 Water St. 

Many of the standards from the plan are considered subjective, city staff said. State laws enacted after the Ocean Street plan only allow cities to enforce objective standards, which must be specific and precisely worded. 

Councilmembers faced a familiar conundrum: neighbors demanded changes to the project, but according to state law, local leaders can only request voluntary adjustments.

Following the May planning commission meeting, developers agreed to frost the bottom of windows on the second and third floors and install blinds that pull from the bottom to limit direct views of neighbors’ backyards. A slight redesign pulled the building back 3 feet,  rather than 1 foot, from the property line of adjacent single-family homes behind the building on May Avenue.

Thursday night council members requested more changes, such as pulling the building further from the back property line. Vinhaur rejected most of the requests but did agree to offer $50 annual reimbursements for bus passes for residents and to consider angling windows on upper floors to further limit top-down views.

The council voted 4-2 to deny the appeal to the Planning Commission decision and grant the project the permits needed to continue development.

Councilmember Sonja Brunner said her vote was driven by the need to comply with state law and avoid a lawsuit. 

“All of this is really hard for the neighborhood, the neighbors, for city staff, for all of us council members, for the community,” she said.

At the suggestion of Councilmember Susie O’Hara, the vote also directed city staff to develop new objective standards that the city can mandate to limit views of backyards from new, taller buildings.

Mayor Fred Keeley, Vice Mayor Shebreh Kalantari-Johnson, and Councilmembers O’Hara, Brunner and Renee Golder voted to approve the project. Councilmembers Gabriela Triguero and Scott Newsome voted no.

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