Last Friday, CRP staff, anticipating a lack of city council support, asked the city planners to remove the request from the agenda, Herlihy and CRP developers said. But hours later, they asked for it to be added back. Without the letter, the developers will miss the deadline for a state grant, said developer Marcus Bazan in an interview. 

In a Nov. 12 letter to the city council, developers also warned that without support for the grant-funded project, they will need to pursue a larger, six-story proposal with 88 units. 

Tuesday, developers submitted a pre-application for the larger project. They have until May 10, 2026 to submit a complete proposal. 

At the Thursday meeting, Councilmember Melinda Orbach said the city should support the grant application to prevent the larger proposed development. But some other council members said they didn’t have enough information about the project to decide whether to issue a letter, and criticized what they saw as a threat from CRP to pursue the larger building.

“Someone coming in and saying, ‘if you don’t do what we want, then we’re going to do something worse to you’ — I find that to be a very uncomfortable sort of bullying technique,” said Councilmember Susan Westman. 

In an email, Bazan wrote that the developer’s “intention is not to force or pressure anyone, but to follow the procedures set by the state and continue being a constructive partner in expanding affordable housing opportunities for the people who already live and work in this community.”

City staff haven’t decided what the process would be for approval of the larger project, Herlihy said in an interview. State laws limit local governments’ ability to change or block some affordable housing projects.

The site at Capitola Road and Bulb Avenue was previously considered for an assisted living facility in 2024. (Jesse Kathan — Santa Cruz Local file)

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