.The Future Of Downtown Santa Cruz

In the shadow of a new six-story housing development on Laurel Street, Mia Thorn is sweeping the outdoor patio of her eatery, Cruz Kitchen & Taps, getting ready to open for dinner. Thorn has watched the project across the street rise from the rubble of what used to be a Taco Bell. 

“It’s like a weed! It just shot up,” Thorn says.

Looking up at the new building’s steel blue facade from Thorn’s establishment, which previously housed the iconic Saturn Cafe, the juxtaposition between Santa Cruz’s past and future is stark. 

As building projects in the downtown area continue to gain footing over the remnants of previous long-time businesses and structures, the change is giving some residents whiplash. 

Santa Cruz is experiencing a seismic shift as it moves into a new era of urban development. As the national housing crisis deepens, it’s the city’s responsibility to alleviate it at the local level. What that looks like—and who will be uprooted in the process—is a major debate.

Making Plans

The Downtown Plan Expansion has been a contentious issue within the Santa Cruz community since it was brought to the public in April 2022. 

The project, which began to take shape in 2021 with the help of a state grant, envisions an overhaul of roughly 29 acres south of Laurel Street that stretch towards Main Beach. The city of Santa Cruz says that a core objective is building much-needed affordable housing in the project area. The initial plan called for 1,800 units of new housing, of which 20% would be required to be affordable to people with moderate, low and very low incomes.  

The plan would also build out 60,000 square feet of commercial retail space, as well as a new 3,200-seat arena for the Santa Cruz Warriors basketball team to call their permanent home.

The Warriors play a key role in funding the expansion. The organization has pledged to seek private money for the project—including the market-rate and affordable housing—in exchange for permission to build adjacent commercial developments that will bring a return on investment. 

In order to fit the 1,800 units of new housing, developers would need to build up to 17 stories according to the initial proposal and the potential change to the skyline downtown was a concern for residents.

The pushback against the project came to a head during a September 2022 informational meeting. City staff informed attendees that the meeting was not meant to discuss any of the pros and cons of the project as a whole. However, this did not dissuade detractors of the plan from speaking out: they voiced concerns over traffic congestion and the town “losing its character” to towering skyscrapers.

As a result the city planning department, with direction from a new city council, in January 2023 amended the Downtown Plan Expansion. The maximum height was cut to 12 stories and the number of units slashed from 1,800 to 1,600, including any density bonuses developers might use. The affordable housing rate was left at 20%.

For months after, as city planners took time to tweak the plan, the conversation surrounding it died down. But in July, a new group calling themselves Housing For People revived the issue and raised the stakes.

Ballot Battle

Housing For People made a splash over the summer. 

Under their proposed initiative, certain aspects of developments like the Downtown Plan Expansion would be decided by voters. The initiative, which the group seeks to put on a ballot for next year, would require development projects in Santa Cruz over a certain height to be taken to a vote. 

Height limits on buildings in the area south of Laurel Street where the plan is projected are currently set at a maximum of eight stories—the expansion plan area would be rezoned to increase that height limit. The initiative also wants the affordable housing allocation to be increased to 25% for the entire city of Santa Cruz.

Frank Barron, a retired land use planner who previously worked for the city of Santa Cruz, is using his knowledge to help steer the demands of the group.

“Under our ordinance, if it passes, it would be subject to a vote of the people so you have to put it on the ballot, and decide if we want that 29-acre area to be up-zoned, or any other areas throughout the city,” Barron says. 

“Along the corridors and throughout the rest of downtown, there’s some pretty tall buildings that could be allowed under existing zoning. So we’re saying ‘okay, we accept that, but we will want a vote of the people if they want to go above that.’”

The group needs around 3,800 signatures for their initiative to make the ballot. Barron says that they have significant support from city residents. 

City officials tasked with moving the Downtown Plan Expansion forward—including recently-elected Mayor Fred Keeley—question the initiative’s intention.

Keeley says that Housing For People’s initiative is misguided, failed to get any public input and was “cooked in someone’s living room.”

“It went through no public process. They had no public meetings, they sought nobody’s broad input on it,” Keeley says. “It’s the idea of a few people sitting in their living room thinking about what the city should be doing and not doing from a planning perspective.” 

When Keeley ran for mayor in 2022, part of what he campaigned on was addressing residents’ concerns over the Downtown Plan Expansion. Once elected, Keeley led the efforts to amend the plan in January 2023. He says that although the city has tried to address the unease groups like Housing For People voiced, ultimately their demands are arbitrary.

“I think that picking a number out of a hat with no basis for indicating whether that’s going to be possible or not points to another major—and probably fatal—flaw in the initiative. Again, was the number ‘25%’ the result of community meetings?” Keeley says, in reference to the 25% affordable housing demand from the group.

Ultimately, Keeley says, the initiative’s purpose is to “kill development of housing in Santa Cruz.”

While city officials tout the importance of public engagement, some residents most affected by the debate don’t feel like they have been properly informed or included.

Left Behind

Mia Thorn signed a seven year lease for her restaurant’s Laurel Street location in 2021. 

The building she’s in will be redeveloped as part of the Downtown Plan Expansion and will likely be razed sometime before her lease is up. She says that the fate of the area has already been decided and that those affected by the plan don’t have a say. 

“It’s already done. I don’t know if anybody is really gonna sit in protest and actually have their voices heard with it,” Thorn says. “The powers that be […] they’ve made moves five years down the road, seven years down the road, that we little guys are barely hearing about now.”

The impact on the handful of businesses that will be bulldozed is only one of the pending effects of the expansion. Roughly 150 city residents living in the project area will be displaced when the time comes. 

Thorn says that despite feeling powerless over her business’s fate, she is a supporter of the revitalization the plan expansion will bring. Having grown up in Santa Cruz, she knows how rough the area can be.

“South of Laurel is up and coming and I believe in it,” Thorn says. “I’m excited to see growth and I’m excited to see this not be so scary and funky.”

She also expresses support for the Housing For People initiative.

“I think it’s smart. I think we as locals, knowing how expensive it is, should have a say in how people find affordable housing, and what does that look like,” Thorn says. 

The waves made by this local group have a lot of people talking. But one burning question is: where do the Warriors stand at the moment?

Will They Stay Or Will They Go?

Santa Cruz Warriors President Chris Murphy says there are currently no plans for the team to leave town.

“We love Santa Cruz. We have no intention of leaving Santa Cruz and we’re working with the city on what the next few years look like with the lease renewal,” Murphy says.

The team is currently in negotiations with the city to renew the lease on their present arena, which is only their temporary home. There were always plans to build a more modern, permanent home for them after their initial 15-year contract was up. That time is fast approaching.

“We continue to work diligently with the city and the private sector towards finding the best possible solution for not only a new venue, but for creating a lot of homes downtown and finding the best solution for the entire community,” Murphy says.

When asked about the demands of the Housing For People initiative and how it may affect the Warriors’ future plans, Murphy simply says that “everyone is entitled to their opinion” and that they will continue to work with the city towards their common goals.

A Change Is Coming

As the city moves forward with multiple housing developments in its urban core, the promise of affordable housing in the future might not calm the fears for residents who find it hard to afford a place now.

“I don’t think that’s an irrational concern. I think that that is an absolutely legitimate question,” says Mayor Fred Keeley.

Keeley understands the apprehension surrounding the Downtown Plan Expansion. Big changes like this don’t come often to a town like Santa Cruz, but he says that it’s been here before.

“We’re on the third of three big inflection points of change in our city’s history,” Keeley says.

Keeley considers the arrival of UCSC in the 1960’s and the city’s rebuild after the 1989 Loma Prieta earthquake as the two previous inflection points. Now, the time has come to embrace the third, according to Keeley, and that has to be done as a reflection of the entire city, not just one faction of it.

“I view it as my responsibility, together with my colleagues, to help lead us through this moment of change in a way that we can see our Santa Cruz values and hopes and dreams reflected in that change that comes about,” Keely says.