New Developments

Three months after declaring bankruptcy on his plans to develop
Ritz-Carlton condos on lower State Street, Bill
Levy invited investors to a February 13 meeting in which
he asked them to sign an agreement not to sue him for unpaid
monies. In exchange, Levy promised to include these investors in
yet another investment scheme – designed, he said,
to secure them a toehold in future Ritz-Carlton developments in
Santa Barbara. At this point, Levy’s creditor, Mountain Funding,
owns the project. Levy hopes to parlay his control of two
properties potentially useful to Ritz into a re-entry in the
development plans he pushed for the past decade. Levy’s
critics – some of whom were barred from the meeting – have
suggested he aims to shelter himself from an avalanche of
lawsuits.

The Santa Barbara City Council tentatively approved a $500,000
loan to the Trust for Historic Preservation to buy the former
Jimmy’s Oriental Gardens restaurant and turn it
into a state museum extolling Santa
Barbara’s Chinese heritage and the Chinatown that once
flourished nearby. Despite the unanimous vote, some councilmembers
expressed concern about getting repaid. Trust officials stressed
they would repay the city with interest after three years, once the
state parks department purchased the property from the Trust. But
Trust officials conceded no such agreement with the state existed
as yet. The Trust has been securing property near Jimmy’s for
nearly 40 years in hopes of making an urban park out of the
original Presidio of Santa Barbara’s Spanish colonial
forebears.

Santa Barbara’s Architectural Board of Review on February 12
discussed a proposal to construct a Whole Foods
grocery store in the 3700 block of State Street, where a Circuit
City, Taco Bell, and other businesses now stand. Despite concerns
from residents in attendance about the traffic impact of the 15
condos included in the proposal, boardmembers spoke in favor of the
project, which had been amended following a 2005 proposal that did
not include the construction of residential units. A public hearing
will be held in the next six weeks on the pending environmental
review.

With only one discouraging word, the Santa Barbara City Council
unanimously approved loaning $400,000 to Habitat for
Humanity to purchase a vacant Westside lot near the
intersection of Cota and San Pascual streets. The loan was extended
to help Habitat build up to five units of affordable
housing on the 6,600-square-foot site. The deal with
Habitat – and the Housing Trust Fund, which will contribute
$200,000 – happened after the price tumbled from $895,000 to
$495,000. Although Councilmember Brian Barnwell voted for the loan,
he argued the 45-year affordability restriction was too short,
noting he would have preferred City Hall be allowed to buy the
property once the affordability requirement expires.

Ron Cortez, deputy county CEO, strongly recommended at the
February 13 county supervisors’ meeting that the board
ditch the county’s affordable homeownership
program. Cortez, who has most recently been managing the
much-abused program, said that the program was not worth fixing.
Supervisors estimated that it would take 30-40 people to administer
the program successfully – compared to the staff of 12 it now
employs – and calculated that it had produced only 15.7 affordable
houses per year since its inception in 1979. When the board
revisits the issue in May, supervisors will examine other options,
including the imposition of in-lieu fees on developers to subsidize
rental housing managed by an outside agency.