Is the large development at 2120 Delaware the city’s salvation or ruin?

Planning commission wants the public to take it up with Santa Cruz City Council

It is, by all accounts, the biggest darn thing the city’s ever seen. Red Tree Properties (RTP) purchased the vacant lot at 2120 Delaware Street in Santa Cruz in 2005 with a dream of turning it into a mixed-use development that would contain residential, commercial, industrial and retail space in one harmonious mini-city on the Westside. The environmental impact report (EIR) was released on Monday, June 23, reaching some concerned citizens’ hands only on Wednesday, a day before it was slated for recommendation by the Santa Cruz Planning Commission on June 26. In a marathon four-hour session for the one item, including a detailed one-hour report from the staff outlining the project, the commission unanimously decided to give the city council its recommendation to approve the EIR, with slight amendments, and only one serious misgiving.

The project proposes to break the property into 45 lots, which could further be broken into condominiums (up to 145 work-live units and 248 purely residential units), and phase in construction over 15 years, with the initial period lasting about three years and concentrating on the Delaware side. Eight streets with mawkish names like Avenue Tea and Easy Street will form a grid for the lots, as well as a pedestrian and bicycle walkway called Fast Lane. Arroyo Seco Creek forms the property’s western boundary.

The development is unusual on several fronts. It is an unprecedented (for Santa Cruz) combination of living and working space in an industrial environment, creating precisely the sort of urban infill that the proposed 2030 General Plan calls for. RTP argues that the unusual nature of the development means some of the old rules, particularly about parking, should be reconsidered.

City staff found that, in a worst-case scenario, the development falls short by about 300 parking spaces, or nearly two acres. While RTP did provide an overlay plan for deleting some buildings to provide those spaces in the EIR, it is asking for the ability to conduct a parking study at 50 percent build-out, to determine the actual parking needs of the site.

Because it’s designed to provide living and working space together, RTP believes its parking needs will be far less than a traditional development. During public comment, Roger Kaspar, founder of a small biotech firm called Transderm currently located on Delaware Street, expressed enthusiasm for the project, stating he needs to double his workforce but can’t find the space to do so. “All but one of our employees lives on the Westside. And we all live within biking distance,” he says. “Parking is not an issue for us. We’re just out of room to grow.” The commission decided to recommend the halfway study, provided it happens when the development is also 70 percent occupied (to avoid skewed numbers from vacant buildings) and conducted by a third party with no financial stake in whether lots become buildings or parking spaces.

The other unusual aspect, and the one that seemed to provoke the most nervousness from both the commission and the public, is that there’s no set timetable for anything to happen. RTP is developing the land with infrastructure in stages, but the timelines are rough, and expected to be market driven. Buildings could be created to suit the needs of tenants, and in an industrial area, that’s a wide range of uses. There’s also no guarantee that construction will be even halfway done before 2015, when the city can no longer guarantee enough water supply for new development. As it is, the development doesn’t expect to finish until 2025.

The nature of this “build it when they come” model also leaves the development open to nonprofit tenants—for instance, UC Santa Cruz—who could occupy much of the office space tax free, undercutting the main direct benefit to the city. Sandy Brown, the city planner who has taken the lead on this project, was forced to admit in the meeting that, legally, there was no way to prevent such a thing from taking place.

As for the water, the approval the development gets from the city would not be a carte blanche for every square foot, only the infrastructure and design plan. Individual buildings would still need to go through a permitting process, and, after 2015, if there’s no water, RTP will be in line with everyone else waiting for building permits.

The commission also agreed with a staff recommendation that a certain percentage of industrial square footage be built at each stage before any residential units are constructed, in order to prevent the development from becoming condos in warehouse clothing. While only two buildings are slated to be primarily residential (on the second, third, and fourth floors), many of the industrial spaces have “flex” areas on the second floor, which can serve as office or living space. The uncertainty about which use will predominate makes approval of the project complicated.

Craig French, managing partner of RTP, acknowledges that the Delaware proposal is like nothing the city has had to deal with before. “I think we are ahead of the curve,” he said, “and it’s not a comfortable feeling in a regulatory environment, except that we’re doing this project concurrently with the expected General Plan. That’s given us the confidence to be ahead of the curve.” He assured the commission that the buildings will not come at the expense of industrial lands. “The residential is literally an overlay, literally above the work space. We believe the strengths of the project are in alignment with the values of this community. We took this big box site and are breaking it down to allow for smaller businesses.”

Getting Scrappy

While unanimous commission support, mixed-use development, help for small businesses, and a plan for the only large vacant chunk of land left in the city might seem like a breeze, there was plenty of opposition to the EIR, most of it from a Westside neighbors collective called Santa Cruzans for Responsible Planning (SCRAP—the ‘a’ appears to have developed itself). Speaker after speaker approached the podium to complain about how little time the public was given to digest the 280-page EIR (with some speakers referring to the document being 500 pages, and one arriving at the 600 page figure). Most speakers were also alarmed at the three-minute time period allotted by Planning Commission Chair Bill Schultz.

“You should continue this matter,” said Celia Scott. “Three minutes is not long enough to comment on a project this size. The EIR did an inadequate analysis of greenhouse gas emissions.”

In its section on greenhouse gas emissions, the EIR reads, “Currently there is no requirement in statute, regulation, or case law for quantification of GHG emissions on a project level, and there is no universally accepted method to quantify greenhouse gases from a specific development project. Nor is there any requirement for a quantitative significance threshold.”

While deadlines for such documents, mandated by AB 32 (the California environmental bill that aims to reduce greenhouse gas emissions back to 1990 levels by 2020), are still a few years away, the governor’s Office of Planning and Research released an advisory document on June 19, four days before the EIR’s release, providing an early correction for just the lack the EIR complains about. “Until such time as further state guidance is available on thresholds of significance, public agencies should consider the following general factors when analyzing whether a proposed project has the potential to cause a significant climate change impact on the environment,” the document reads, before detailing 12 factors to consider. The document does not have the force of law, but it should serve as a good voluntary guideline for any developer wanting to get ahead of the curve, as French puts it.

It should be noted that there’s little indication 2120 Delaware is fighting environmental regulation. On the contrary, RTP is going through the process to get it LEED (Leadership in Energy and Environmental Design) certified as a green building project, and has partnered with a solar technology firm to determine the best orientation of the buildings to capture solar energy. (There was grumbling at the meeting from some speakers that the buildings won’t be facing due south, which is the most energy efficient way to collect solar, but west. A representative from the development’s solar contractor spoke up to say the orientation would capture fewer kilowatt hours, but would be capturing energy during peak demand times and saving more money from PG&E, making solar a more economically viable option. There is no requirement in the plan for each building to include solar; the developers have decided to orient the buildings so that it’s an attractive option.)

The most puzzling aspect of the EIR to SCRAP members, however, was its statement that an alternative to the proposed project, called Alternative 3, was deemed to be “the environmentally superior alternative, as it best met project objectives, while also substantially reducing or avoiding significant impacts compared to the other two alternatives analyzed.” Alternative 3 is building out the land under existing zoning requirements with no planned development. Because RTP is asking for increased density in the area due to the project’s unique mixed-use plan, Alternative 3 (strictly following current zoning guidelines) would build 20 percent fewer commercial and industrial spaces, and 30 percent fewer residential units. Even without LEED-certified development, solar energy, and responsible coordinated planning, that much less usage is bound to have a lighter impact on the environment.

As is often the case, the real question revolving around the development is one of growth. RTP’s plan allows for it, and SCRAP’s preferred Alternative 3 does not. One of SCRAP’s biggest worries, as voiced at the meeting, was the estimated 5,129 new daily vehicle trips in the area upon buildout. Susan Martinez of SCRAP stated, “The developer wants a blank check. But much about this project is unknown. This is a residential area with children. Can we add 5,000 car trips to that area?”

Commissioner Mari Tustin replied, in her remarks after public comment, “This project is big, bold, and scary. The traffic will impact all of us, even me. I live over there. But we can’t pull up the ladder, now that here.”

Schultz added—after indicating hesitation about the chosen stormwater filtration device and pondering the possibility of rainwater harvesting—that worries about traffic might be missing the point. “The applicant is incredibly sensitive to the goals of the new General Plan,” he said. “This starts small, goes slow, and can adapt. The slowness is one of the biggest benefits. And being on the rail line is a golden opportunity to create demand and access for a commuter train. This project proposes what green is all about, and the great part is it’s not planned around the car. We’re looking at the opposite of the old paradigm.”

Commissioner Rod Quartararo, who seemed the most hesitant of the voices yet still joined the unanimous approval, left the audience with the following advice: “You’ve got this in front of you now. It would behoove you to be prepared to make your arguments to the city council on July 22.”

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