When members of the Santa Barbara City Council return to work from Thanksgiving festivities, they will immediately confront perhaps the single scariest vote of their political lives.
On Tuesday, December 2, the council will consider a proposal to give away -- outright -- two square blocks of land now owned by the city. The property, located in the very heart of downtown Santa Barbara, is the Paseo Nuevo mall.
The proposal is to give this land to AllianceBernstein, a private investment company based in Nashville, Tennessee, with assets of $800 billion. The hope here is that AllianceBernstein and its development partners will build 233 units of housing where Macy's now sits useless and empty.
The Independent has always emphatically supported building housing at Paseo Nuevo. But, just as emphatically, we now urge that on December 2, the council will tell AllianceBernstein, "Just hold on." Emphatically.
We are asking the councilmembers to be brave. Do not be bullied into moving so quickly. Refuse to vote on this profound decision -- at this time. A land giveaway of this magnitude -- in what is, functionally, our community's urban living room -- is utterly unprecedented. And once done, it cannot be reversed.
What are the expressions? "Measure twice and cut once"? "Trust but verify"? The council and the community at large need time to deliberate over the ever-changing details of AllianceBernstein's proposals -- which have been ever changing. Most of these changes have not been for the better, especially where affordable housing is concerned.
Just last week, AllianceBernstein representatives met privately with councilmembers. Their bully-boy message was that if they didn't get a "yes" vote on December 2, they'd walk away from the bargaining table. Not just walk away, but put all square above-ground blocks of Paseo Nuevo in the company's freezer file, where the property would sit untouched for 14 years. Fourteen years.
That's a serious threat and should be taken seriously.
But AllianceBernstein is hardly the first developer to threaten City Hall that it's taking its ball and going home. That happens all the time. But they might be the first to threaten to puncture the ball first.
In weighing the risk and benefits of their threat, we have a lot more questions than answers about what AllianceBernstein is actually proposing. The proposal keeps shifting in significant ways.
When first proposed, it was a 500-unit rental housing development. Then we were told no, they couldn't build housing on top of underground parking garages. This spring, we learned it was 233 housing units. But another 80 units of rental housing would be built at City Parking Lot 2, right across Canon Perdido Street from the Canary Hotel. And we were assured these affordable units would be built at the same time as those market-rate units in the old Macy's area and both would be open for renting at the same time.
Some community and Planning Commission members objected to this as "undignified economic segregation." We see their point, but 80 new units of affordable housing in downtown, it seems to us, should be a great boost to invigorate the life of the city.
But last week, we have learned, AllianceBernstein is now proposing as few as 24 affordable units, maybe none. And whatever the number, that will be AllianceBernstein's decision, exclusively. And it has five years to decide whether to build affordable housing or not.
How is this a good deal?
Certainly, we need to know what's happening with the 17,000 square feet of retail space the mall will still provide. Early on, it was reported that there would be a major gym and health club. And an embarrassingly high-end supermarket, infamous for its $14 strawberries. Then we were told it wasn't that market. And, oh, by the way, the gym idea was scrapped. City Administrator Kelly McAdoo has assured us that our downtown will not morph into the second coming of Rodeo Drive. Glad to hear it.
In response to major concerns about the proposed development plan, McAdoo removed language that was intensely objected to by representatives of the Shopoff Group, the company now owning the former Nordstrom site. Shopoff had just proposed building 112 housing units there, but the company was startled to learn that the city administration was recommending to the council that the ground under its property be deeded to AllianceBernstein. This would require Shopoff to negotiate with AllianceBernstein for development rights. The additional costs would render their housing proposal financially infeasible, Shopoff argued. How would this help bring housing downtown?
Late Sunday afternoon, November 23, city negotiators withdrew this language from the proposal. So, it seems, changes can be made to the present proposal if the council is given time to consider the proposal seriously.
We absolutely agree that Paseo Nuevo is in desperate need of a major makeover. We absolutely agree that new housing is the answer. We also understand AllianceBernstein has big problems elsewhere (a couple of expensive Los Angeles office buildings and a major San Diego shopping mall having gone belly-up).
But it is ridiculous to ask our elected city officials to vote on a proposed development they have not had time to consider.
We are not suggesting a full-fledged environmental impact report. We recognize state law has changed dramatically to reduce such reviews in hopes of expediting the development of new housing. And we realize that in the face of AllianceBernstein's threats, councilmembers will need to summon exceptional courage.
But when looking at AllianceBernstein's home page, the very first promise made -- in big, bold-faced capital letters -- reads, "Partnering Together -- Pursuing Better Outcomes." We would like to believe the company actually meant those words.
We don't know for certain how much money AllianceBernstein actually lost when the prior mall owners defaulted on a loan AllianceBernstein made to them -- which, by the way, is how it "inherited" its ownership of the mall. Whatever the right number is, it's real money. But presumably, the company would also want to recoup its losses here. So, we question the extent to which AllianceBernstein is really willing to cut off its nose to spite our face.
The City Council has the duty to protect and invigorate our downtown. We all need to know what's actually going to get built. AllianceBernstein has underwhelmed us with a halfhearted community outreach.
Whatever happens this coming Tuesday, it's clear City Hall needs a credible Plan B. It's quite possible that whatever we do -- or don't do -- will not be enough to appease or satisfy AllianceBernstein.
The big problem is, if the council decides to vote for more time in deciding on the proposal this Tuesday, it might discourage other mall operators -- or prospective buyers. We have been repeatedly told that any credible operator needs a 99-year ground lease to amortize costs over a long period. Right now, the city's charter limits the length of time city-owned land can be leased to 40 years. To allow 99-year leases would require an amendment to the city's charter. And that would require a vote of the people. We are confident such an amendment would pass.
Realistically, the soonest such a vote could take place is next year. That, we are told, is a deal-killer for AllianceBernstein. But if AllianceBernstein chooses to walk, we will need to proceed with such a vote anyway.
In other words, we would have more options despite AllianceBernstein's vow to let Paseo Nuevo languish as a festering black hole for the next 14 years.
Right now, the situation is in flux. Anything can happen by Tuesday. But whatever happens, the council needs to allow the whole community to weigh in. It's our city, after all.