A proposal to transform Paseo Nuevo into a mixed-use development featuring housing, office space and community investments is moving forward, drawing support from some downtown Santa Barbara business owners who say revitalization is urgently needed.
City staff is expected to present a negotiated framework to the Santa Barbara City Council on Tuesday that would redevelop portions of the downtown shopping center through adaptive reuse rather than demolition.
Under the proposal, the former Nordstrom building at the corner of State and Carrillo streets would be converted into apartments, while the former Macy's building along State Street could become corporate office space for Yardi Systems.
Guille Prieto, co-owner of Zitzilin Imports, said the redevelopment could help address economic challenges facing downtown merchants.
"The redevelopment of downtown is urgent," Prieto said.
City officials say the project could bring hundreds of residents and employees into the downtown core, increasing foot traffic for restaurants, retail stores and entertainment venues.
"To bring people, more flow of money, because downtown is dying," Prieto said.
The draft plan calls for between 80 and 112 apartments within the former Nordstrom building, with 10% of the units designated as affordable housing. Yardi Systems would contribute $5 million to the city's Local Housing Trust Fund as part of the proposal.
Prieto said many businesses have struggled in recent years as customer traffic has declined.
"Every year, sales are lower and lower. Right now, we are just surviving," he said.
Other business owners said the redevelopment could help highlight existing businesses while attracting more visitors to the area.
"It's actually still a hidden gem. Many of the local businesses are still here. I believe with more contribution we would have more attraction here and that would really help," said Eva Luz, owner of Eva Luz Design.
According to city staff, the redevelopment would increase downtown activity by adding housing, office workers and visitors while preserving existing structures through adaptive reuse. Officials say the approach would allow the project to move forward more quickly and with less construction disruption than a complete demolition and rebuild.
The proposed framework will be presented to the Santa Barbara City Council for public discussion and direction at its June 2 meeting. Negotiations between the city, Yardi Systems and development partners remain ongoing.
