The Paseo Nuevo Redevelopment Project proposes to transform the existing shopping center into a vibrant, mixed-use district that will bring new residents, revitalize retail activity, and strengthen the long-term economic and social vitality of Downtown Santa Barbara.
The project area extends from State Street to Chapala Street and Ortega Street to south of Carrillo Street, encompassing the former Macy’s site, in-line shops, and a portion of City Parking Lot 2.
Public comments are open through November 1, 2025. Feedback will be summarized for City Council review during consideration of the project’s Disposition and Development Agreement by the end of 2025.
We want to hear from you! Submit a Comment Online.
Key Project Elements
- 313 new rental homes, including 233 market-rate units located on the former Macy’s site in a new 4–7 story residential building and 80 affordable units on City Parking Lot 2, adjacent to the existing parking structure
- 125,000+ sq. ft. of Retail Space, including a market at State and W. Ortega Streets
- Over 1,500 Parking Spaces across Lots 1, 2, and 10 (Lot 1 adds 28 spaces; Lot 2 reduced by 186)
- Building Height: Up to 75 feet (via Density Bonus Law)
- Community Uses to Remain: Museum of Contemporary Art; Center Stage Theater
For more information, including frequently asked questions, visit Paseo Nuevo Redevelopment.
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This project is a bad deal for the public.
2) It gifts 30-40 million dollars of public land to private developers/private equity. The land is encumbered now, but it won’t be in the future and we are giving away a prime piece of real estate on State Street that should belong to posterity.
2) It involves demolition of a valuable and perfectly usable public parking structure — millions in construction costs down the drain and a net loss of downtown parking.
3) There is no net gain of affordable housing compared to a non-subsidized project — the developers are “banking” units for future construction projects
4) The City will pay the developer’s property taxes for 20 years.
5) The developers — Alliance Bernstein — have a huge potential financial loss in acquiring the Macy’s lease from a foreclosed loan. The City is bailing them out to turn a loss into a profit, and the taxpayers are financing that financial gain. The developers are saying it’s a 6% return, but that’s a lot better than a 50% loss, and we all know that the developers will turn around and raise prices at the end to get their 10-12%. The City has not released any financial basis for this deal, and there is zero transparency how we got to this point.
7) The affordable housing units involve the destruction of a public parking structure, as I mentioned, and the final result is north-facing sunless units that are jammed into an alley.
Please contact your representatives to tell them to not make this deal. We can do better, and nothing is better than this deal.
I see the downside of this project that ZBHotep outlined, and I just want to ask…how can we stop projects like these from ruining our city. It seems that the State Legislature always wins! The public is always invited to weigh in but nothing ever happens.
This project is purely voluntary on the City’s part and only requires a majority City Council vote to turn over the land and enact the other concessions. The vote on this project is scheduled for early December.
We can stop this. Make your voice heard.