Capitola Mall Redevelopment Update

By Erin Kelly-Allshouse

For more than forty years, Capitola Mall has served the community with family-oriented shopping and dining. But recent plans to renovate and transform the Capitola Mall into a vibrant destination, which began over summer, are gaining momentum.

Capitola Town Square concept is designed with a thoughtfully curated collection of retail, residential, entertainment and dining destinations serving the Capitola community and Santa Cruz County. The proposed mix of uses provides existing and new residents the opportunity to live, work, dine, shop and play all within a walkable neighborhood setting that aligns with Capitola’s unique character and personality.

Mall owner and property investment firm Merlone Geier Partners, (MGP), who became the mall’s majority owner in 2018, submitted a conceptual review application in the fall. Conceptual reviews provide applicant’s the opportunity to receive feedback on their proposed concept, prior to submitting a full application with more detail.

Because 96 percent of shoppers today shop online, new owners of the mall are interested in reinventing the landmark to bring in more customers and more business.  Vice president of development Stephen Logan and architect David Geiser are trying to pinpoint what would attract more people to the county’s only mall.

The application received guidance from the Planning Commission and City Council on the overall conceptual design and layout, building scale and massing, connectivity to adjacent uses, proposed land uses, and its economic impact.

At November meetings of the Planning Commission and City Council, Merlone Geier presented plans for the “Capitola Town Square” which included the proposed open-air concept. He said most of the existing mall would be demolished with Target, Macy’s, and Kohl’s remaining in their place. Included in the proposed renovation: nearly 340,000 square feet of new commercial space, a theater, a mall scattered parks, 637 residential units and a pedestrian-friendly main street grid that connects 41st Avenue, Clares Street and 38th Avenue.

Merlone Geier is currently updating their plans to incorporate the guidance and will then submit an official application, which the city expects in January 2020, said Capitola Community Development Director Katie Herlihy.

However, some concerns came to light among residents at the Capitola City Council’s Nov. 14 meeting concerning the planned redevelopment. Herlihy said there were a lot of people who attended and many from the cyclist community who voiced their views.

The housing addition was the biggest concern for some residents attending and the council at November meetings she said. Reports stated that multi-family units would be confined to two buildings situated above the retail businesses –one seven stories and the other five.

The name “Capitola Town Square” drew slight criticism from the community and council, as did the look of the project. Some called it “cookie-cutter” and said it didn’t line up with the unique feel of Capitola and others compared it to shopping centers in San Jose Herlihy said.

“Overall it was very positive meeting about creating an open air mall and making it a great place for the reinvestment, shopping and entertainment,” she said. “The big thing with a redevelopment is that it has to support itself financially, and this is why there is support for a hotel on the sight for a positive economic output.”

Several council members agreed with the Kosmont Company’s suggestion of incorporating a hotel into the final application to help increase the city’s revenue stream from the mall.

A public hearing for the project will go to review and is not expected until late summer of 2020, said Herlihy. The costs are estimated at $277,000 for the Environmental report; $200,000 for an economic consultant, $63,000 for JHS consultant planner; and $206,500 for RRM design 3rd party review of the design and layout.

MGP said a fiscal impact report from Kosmont found that the estimated yearly revenue of the project could be from $850,000 to $1.2 million, but the increased city expenditures could come as a result of the large population increase.

Traffic, already a well-known issue for the city, was also raised by attending residents. An expanded public transportation hub was proposed as the solution. MGP is currently working with Santa Cruz METRO to move the current bus stop to the back of the mall near Macy’s and Kohl’s.

If approved, construction could start the summer of 2021 and be completed sometime in 2024, MGP Vice President of Development Stephen Logan said. Council members, a third-party design group and residents all picked apart MGP’s preliminary plans, which proposed a teardown and rebuild of the mall’s 46 acres.

“Our mall is dying and we need changes,” said Herlihy. “People want an experience and we must accommodate that.”

•••

Visit www.merlonegeier.com/current-development-projects for more information.