Financing and costs appeared to have been factors with the project’s recent setback.

Adam Voelker, market leader and principal for Trammell Crow’s San Francisco office, declined to comment on whether his firm was in contract with Sridhar Equities. Voelker said his firm was still “actively engaged” with the project.

Conflicting reports

After Santa Cruz Local published a July 24 story about High Street Residential backing out of the project, for which High Street Residential did not return requests for comment, Voelker denied that his firm had walked away from the project in a July 31 interview with Lookout Santa Cruz. 

Voelker told Santa Cruz Local this week that High Street Residential wanted to reduce the number of apartment units to 300. The Ocean Street building design would remain basically the same, he said, but the May Avenue buildings would shrink.

“It’s a tough capital markets environment out there,” he said. “So we’re looking to scale the project so that the total investment size is a little more reasonable.”

High Street Residential has continued talks with city planners and the owner.

“We for sure have not walked away,” said Voelker. “But development is always tricky. It’s always a three-dimensional game. We’re in the middle of trying to set the project up for success.”

Ryan Bane, City of Santa Cruz senior planner, said Wednesday that High Street Residential was “continuing to work on the project as if they are in contract.” 

“We have two different parties sort of saying different things,” Bane said. “That’s all we know at this point,” he said, adding that the city wants to see the site developed. “We’re here to help whoever comes forward with developing the project.”

In response to comments from High Street Residential that they are still working on the project, Sridhar, the owner, said “wanting to do something and doing something are different.” 

“I can tell you generally that we are not in agreement at this time,” Sridhar said. “It would be great to have an agreement, but we’re not there.”

Lots on Ocean Street, including a former Togo’s sandwich shop, were slated for redevelopment. (Nik Altenberg — Santa Cruz Local file)

He said that in typical real estate contract negotiations, “the overarching considerations are price and time to close and passing through nonrefundable money.”

Sridhar said that he remained in communication with High Street Residential, as well as with other parties. He also said he was considering developing the site himself. “I certainly have the ability to do this,” Sridhar said. “It’s not something I prefer to do.”

The proposed apartments, which would span Hubbard Street next to Marianne’s Ice Cream to a former Togo’s sandwich shop on Ocean Street, received approval in February from the Santa Cruz Planning Commission. 

Unlike with some other projects in Santa Cruz, many neighbors spoke in favor of the development. Several said they hoped the new buildings would bring in more foot traffic and activity to the area and quell drug use and other illicit activities. 

First proposed in 2018, the 908 Ocean St. project has been modified several times. High Street Residential came in over two years ago, with a representative saying at a 2023 community meeting that the company planned to eventually buy the property and develop the 389 units. 

Questions or comments? Email [email protected]. Santa Cruz Local is supported by members, major donors, sponsors and grants for the general support of our newsroom. Our news judgments are made independently and not on the basis of donor support. Learn more about Santa Cruz Local and how we are funded.