SCOTTS VALLEY >> Palisades Builders Inc. is the city’s “new dance partner,” as Mayor Jim Reed put it, working over the next two years to see if it’s possible to design the long-planned Scotts Valley Town Center on Mount Hermon Road and get broad community support.
The Scotts Valley City Council voted late Wednesday 4-1 for Palisades, of Campbell, with Stephany Aguilar voting no. She favored the other finalist developer, Braddock & Logan of Danville.
Palisades’ vision: a $180 million development, 288 residential units, 32,000 square feet of restaurant, market hall, and retail, parking garages, a town green, partnering with nonprofit Eden Housing on affordable units.
Braddock & Logan’s vision: A $161 million development, 313 residential units, 27,280 square feet of restaurant, retail and office, a town green, and partnering with nonprofit Habitat of Silicon Valley on affordable units.
The two finalists each scored 4.3 on a 5-point scale on financial qualifications, experience, proposed development plan, project vision and community outreach.
“There’s no plan, just vision,” said Reed, who expects a dozen meetings will take place to talk about the right mix of retail, public amenities and housing. “We’ve tried to figure out how to have our cake and eat it, too.”
One difference: Palisades suggested a food hall with a variety of food services.
“Like Abbott Square?” asked Councilman Jack Dilles.
“Precisely,” said Doug Ross of Palisades.
“If we could get Trader Joe’s or REI in here, then we could get more retail,” Ross added. “The housing needs to be there to support the retail components.”
Still, after hearing from people worried about growth, Dilles wanted “under 200” housing units.
GROWTH
In the past five years, the city has grown by about 550 people to 12,000, and a handful of residents spoke of their concerns that too much development is on the horizon.
The city’s 10-year-old Town Center plan calls for 300 housing units, 310,000 square feet of retail, parking for 1,475 cars and a town green on the 59-acre former Skypark airport site on Mount Hermon Road but the plan also included Bluebonnet Lane property where 48 multifamily homes have already been built.
Several developers interested in the Town Center have danced with the city, but all walked away, most recently in 2017, with Amazon biting into sales at brick-and-mortar stores such as Sports Authority and Toys R Us.
The new vision involves far less retail shopping with some retail experiences.
There’s a balancing act between keeping the small-town character of Scotts Valley and “providing a place for our children to live,” Reed said. “The only way the Town Center gets built is if there is profit for the developer.”
REVISIONS
Palisades’ initial vision included a four-story building.
Reed confirmed the fire district does not have a ladder truck to reach a fourth story or $1 million to buy a new vehicle, but he was confident ladders at the building could provide protection.
Based on feedback, Palisades revised its vision, shifting the four-story building off Mount Hermon Road and shifting parking to ease problems at the bus station lot on Kings Village Road.
“We appreciate your flexibility,” said Councilwoman Donna Lind.
Aguilar said Palisades would have to change a proposed road passing through the Manana Woods well property unless that property was acquired.
“No way would I ever vote for a four-story building,” said Aguilar who preferred Braddock & Logan’s housing styles, town homes, one-story flats for sale and rental apartments.
Braddock & Logan identified arsenic contamination of soil under the runway as an issue for the developer, but did not provide cleanup cost estimates.
The developer also must acquire 8 acres owned by the city of Santa Cruz and 6 acres owned by Scotts Valley.
Councilman Randy Johnson complimented Andy Byde of Braddock & Logan, saying the company was “a close No. 2,” but he went with Palisades for “the look of the town green” and architect John Warden’s creativity.
STARBUCKS
Near midnight, there was another vote on a different piece of the Town Center.
Developer Corbett Wright got a 5-0 council vote for The Hangar at Skypark, a 13,300-square-foot building with a restaurant taproom and a 2,400-square-foot Starbucks Coffee drive-thru at 250 Mount Hermon Road. He plans live music and movies, with a New Year’s Eve celebration until 1 a.m.
Wright, a member of the Braddock & Logan team, said his costs for arsenic cleanup for the Hangar were “easily two and a half times” the $400,000 estimate.
Asked how critical Starbucks was to The Hangar, Wright said, “I don’t think I can do it without that.”
He had envisioned a microbrewery but learned the city’s treatment plant couldn’t handle the higher sugar levels in the wastewater.
“The way we get the brewpub is the Starbucks,” said Reed. “It’s the experiential retail we’re trying to crate.”
After the vote, Wright said, “I don’t know if the Town Center is going to get built, but this will get built.”
PALISADES BUILDERS
Team: Douglas Ross Construction and Chris Foley of Polaris Pacific, Totomic and Ground Matrix; local consultant Owen Lawlor
Town Center vision: 288 residential units, low- and medium-density and affordable units; 32,000 square feet of restaurant, market hall, retail; parking garages; town green.
Estimated cost: $180 million; private investors and bank financing $145 million.
Experience: 30 years in construction, built 15,000 units, commercial, retail, hotels, housing including affordable.
Planned: $90 million Riverfront Apartments, 140 units and 10,000 square feet restaurant space in downtown Santa Cruz slated for 2019.
Completed: Seabright Breakers, 11 rentals, Santa Cruz, $9 million, 2017; Darwin Apartments, 15 units, Santa Cruz, $8 million, 2017; San Mateo, 120 housing units with Mid-Peninsula Housing Coalition, $32 million, 2015.
Past lenders: Goldman Sachs, Wells Fargo, U.S. Bank, McQuarrie Bank, Canyon Partners.
Source: City of Scotts Valley