Can of Worms or Can of Whoop-Ass?

Showdown Looms over 250-Room Hotel Proposal in Santa Barbara’s Funk Zone

A rendering of the proposed Garden Street Hotel at 101 Garden Street in Santa Barbara | Credit: Cearnal Collective

Developer Shaun Gilbert is hoping to build a 250-room hotel on a 4.5-acre chunk of Santa Barbara real estate between the railroad tracks and the freeway, likened by Gilbert’s architect to “a pork chop” or “a lamb chop.” Either way, it’s a prime cut — right at the intersection of Garden and Yanonali streets on the outer flanks of the city’s Funk Zone.

Gilbert’s Newport Beach–based outfit is named Dauntless Development. Last Wednesday, Gilbert needed every ounce of dauntlessness that name suggests. That’s when half the city’s Planning Commission and a handful of public commenters made plain their frustration that Gilbert and his real estate partners — the Wright Family Trust — were proposing a hotel instead of much-needed housing. They didn’t hold back.

“What is the benefit the rest of Santa Barbara will receive because of this project?” demanded Commissioner Devon Wardlow.

“I don’t see it as a community benefit,” declared Commission Chair Roxana Bonderson, as if answering Wardlow’s question. “I see it as a tourist-exclusive benefit. It’s not even open to the locals to step foot on the premises to enjoy a meal.”

When Gilbert explained that a housing proposal for the site — zoned to allow both housing and hotels — didn’t pencil out financially, Commissioner Lucille Boss shot back, “I don’t understand the definition of ‘pencil out.’ Housing projects ‘pencil out’ lots of other places.”

The ace up Gilbert’s sleeve, however, is the Specific Plan approved by the City Council way back in 1983 giving the late, visionary developer Bill Wright the green light to build a 250-room hotel on the site. Numerous times, Gilbert expressed grave concern he’d “be opening a can of worms” if he strayed from the development rights detailed in that Specific Plan. With the financial world teetering on the brink of a banking crisis and construction loans equally uncertain, Gilbert told the commissioners, he couldn’t risk anything that might significantly delay the project. Changing the project description would do just that.

When the Environmental Impact Report for the Specific Plan was approved 40 years ago — before several of the commissioners had been born — the maximum number of housing units envisioned was 56. Under the new laws passed by the state legislature to encourage more and faster housing development in response to California’s housing crisis, it’s not clear just how many units Gilbert and the Wright Family could hope to shoehorn onto the property.

Fifteen years ago, Wright proposed building as many as 91 condominiums on the site. Of those, 20 percent were affordable. That proposal, however, was pulled in 2008 in the wake of the Great Recession. That was also well before Wright partnered with Dauntless Development.

The last time the Planning Commission gave the Wright property the once-over was in August 2019. Back then, some commissioners expressed strong interest in housing instead of hotel rooms. Commissioner Bonderson spoke at that meeting as a member of the public and in her testimony that day stressed the need for housing instead of hotel rooms. Last Wednesday, Bonderson expressed incredulity that the most recent proposal ignored those concerns.

“What compelled you to come back with a project that didn’t check off any of the boxes that were suggested to you that day?” she demanded.

The reality, of course, is more complex. In the early 1990s, for example, developer Bill Wright would donate the 2.5 acres of land needed by the City of Santa Barbara to extend Garden Street from where it previously dead-ended at Yanonali Street to Cabrillo Boulevard. In 1997, this created — for the first time — an entryway for development into what had hitherto been an impenetrable hodgepodge of semi-industrial storage yards and warehouses that first gave rise to the term “the Funk Zone.” Wright took it a step further, voluntarily subjecting his extensive Funk Zone holdings to the rigorous design review rules and regulations that govern El Pueblo Viejo. That Garden Street extension, argued Commissioner Lesley Wiscomb, was quite beautiful and of great benefit to the entire community. The only person not to have benefited from it, she added, was the property owner himself.

Developer Shaun Gilbert (right) and architect Brian Cearnal at last week’s city Planning Commission meeting

Coming to Gilbert’s aid last Wednesday was architect Brian Cearnal, a veteran of land-use battles in front of the city’s design review boards. Getting uncharacteristically hot under the collar, Cearnal castigated some of the commissioners’ demands for more information and data as “just nuts” and suggested that Gilbert push the commission for a project denial and then appeal the matter to the City Council.

Ultimately, Gilbert agreed to add an unspecified number of housing units into the project — which will increase the project’s elevations — to help offset any adverse impact the new hotel might have on the city’s housing supply. He also agreed to donate an equally unspecified amount of money into a new affordable housing trust fund still on the City Council’s drawing boards. He said he’d also reach out to Funk Zone businesses and residents for their input as well as soon-to-be-displaced business tenants who now lease space in Wright’s storage yards.

Gilbert stressed he was “open,” but cautioned against unrealistic expectations. Time was of the essence, he stated. It’s already taken nearly two years, he exclaimed, for City Hall to deem his application “complete.” If City Hall were to tell the developers they had to build housing, he warned, “You won’t get anything built here.” Even so, he repeated, he was open. “Not everyone’s going to get what they want, but we’re open to talking about it.”

The Planning Commission will deliberate over the matter next on May 11.