Capitola staff outlines three mall‑block housing code options; council to seek developer commitment

Planning staff updated the Capitola Planning Commission on Sept. 4 about next steps for implementing housing‑element objectives on the city’s mall block and described three code pathways the city is considering to enable redevelopment and meet state RHNA obligations.

Planning staff said the City Council asked for more detail from the mall owner before deciding how to proceed and set a follow‑up for next week. The council has not made a final decision on which regulatory approach to use.

The staff presentation described three options for the mall block: (1) a targeted update of objective standards using the city’s typical zoning process with stakeholder outreach and a timeline staff estimated at roughly four to six months for a focused update; (2) a streamlined objective‑standards path requested by the mall owner (Malone Geier), with the council asking staff to try to meet the housing‑element schedule; and (3) a form‑based code that would use a regulating plan to control building form, streets and blocks. Staff said the form‑based code approach typically carries a higher consulting price ($150,000–$200,000) and a longer timeline (about one year), although consultants told staff an expedited program could be done in about seven months with a cost near $150,000.

“The third option was form based code, which includes a regulating plan…When I did my research on that, the price tag associated with that is typically a 150,000 to 200,000. It usually takes about a year,” Planning Department staff said during the report to the commission.

Staff also gave a brief explanation of how the mall block figures into the city’s Regional Housing Needs Allocation (RHNA). The city’s RHNA number is 1,336 units; staff said the mall block inventory totals 1,777 potential sites because mixing affordability levels (very low, low, moderate and market) changes the number of units a site must plan for to yield affordable units within a financially feasible development scenario. Staff said a more detailed explanation and supporting materials would be published with the City Council packet the following day.

Planning staff said the council postponed final direction and will seek additional clarity on Malone Geier’s commitment to a development schedule at an upcoming council meeting. Staff also reported briefly on an active appeal of a Park Avenue fence permit involving the Santa Cruz Regional Transportation Commission (RTC); the council set the appeal hearing date for Oct. 9 and staff said the appeal concerns the fence location along the bluff and the coastal findings required for permits.

No commission vote or formal action on the mall regulatory approach occurred during the Sept. 4 meeting; the item was an informational presentation and Council follow‑up was expected. Staff said they will publish clarifying materials on the RHNA calculations and next steps for the zoning update.