By the time the City Council approved the La Entrada time-share condo development for the bottom of State Street 10 years ago, the development had become a lightning rod for intense community debate and great suspicion. But when major changes to this project were discussed before the Santa Barbara City Planning Commission on this past Thursday, only one speaker rose to speak against them.
Representatives from some of the groups that took the initial development proposal to court – like the League of Women Voters – announced they were “pleased” to support the changes. Even so, the developer, Ray Wicken, who represents Mountain Funding, heard an earful of angry words by people upset at how three blocks of prime Santa Barbara real estate – which essentially form the entrance to the city – had been abandoned to weeds and blight for so long.
“It’s a crime,” declared Planning Commissioner Stella Larson. She decried the lack of attention given the area by Mountain Funding – and his predecessor Bill Levy – as “demolition by neglect.”
Technically the issue before the commissioners was whether the new plans “substantially conformed” to the plans initially approved by the City Council in 2001. If so, Mountain Funding can piggyback its new concept – hotel rooms as opposed to time-share condos – onto the existing building permit. That permit has already been extended twice and can’t be extended again. If not, Mountain Funding has to either build the approved project, which it claims makes no economic sense, or start back at square one, which would amount to submitting brand new plans for the largest private redevelopment project in the past 100 years. That process could take years and the outcome would by no means be certain.
While the issue of substantial conformance got batted around somewhat, it was clear that a majority of commissioners and city staffers were most concerned that construction on something begin as soon as possible. Larson warned the development team led by Ray Wicken and land use attorney Doug Fell that she’d feel “gypped and ripped” if she didn’t hear the roar of construction equipment soon.
In 2001, developer Bill Levy won approval to build 62 very high-end time-share condos – “fractional ownership” being the preferred term – in the Californian Hotel and on the two blocks across the street. But Levy never managed to build what he’d fought so hard to get approved. Sued by a pack of disgruntled investors and business partners, Levy failed to secure the financing necessary to get the project off the ground. In 2004, when asking for yet another extension, he promised that construction was just around the corner. The corner never came.
Levy was forced to seek financing from Mountain Funding, a South Carolina-based bank that specialized in making high-interest loans to developers in distress. By 2006, Levy was way behind in his payments. In 2007, Mountain Funding foreclosed and took over the property. The company’s efforts to find a buyer – as many as 40 prospects checked out the deal and walked away – failed. Mountain Funding reportedly wanted too much, but it didn’t help that the stock and real estate markets crashed and that much of the world was seized by a massive recession. In the intervening time, Mountain Funding has done the absolute bare minimum in terms of construction to keep its permits from expiring, a practice described by Planning Commissioner – and City Council candidate – Bendy White as “Tai Chi construction.”
Earlier this year, Mountain Funding’s agent Ray Wicken announced he was abandoning the time-share concept almost entirely, and was instead seeking permission to build 123 hotel rooms and nine time-shares. To garner community support, Mountain Funding has proposed reducing the height of the structures by about a half-story, and creating an expansive public courtyard on the block abutting the railroad tracks at State and Mason streets that’s far larger than the one initially approved. These changes could be accomplished by putting the parking – all 220 spaces – further underground than Levy proposed. Mindful of the nasty fight over mountain views that initially – and perhaps fatally – slowed the project down, Mountain Funding has proposed strategically massing much of the most intense development right across State Street from the Californian. Pains were taken to reduce impact to the mountain views.
In his presentation, Wicken – who was simultaneously wracked by the flu – appealed to the city’s pocketbook. The redesigned project would provide far more to City Hall in terms of bed taxes and sales taxes than the approved time-share project. That it was not gated off to most city residents – as were parts of the approved project – was a plus. In addition, he pledged that Mountain Funding was willing to build the entire project all at once; the prior project would have been built in phases over a seven-year span.
The first “witness” to testify on Wicken’s behalf was former planning commissioner Barbara Chen Lowenthal, one of two commissioners who voted against the original project. After recounting how she’d wrestled with La Entrada over 36 meetings – debating the appropriateness of time-shares and the impact to views – she deemed the new plans “far for the better.”
The other commissioner to vote against Levy was Bendy White, who objected then as now to granting the developer more than 25,000-square-feet worth of set-back encroachments. While White also has serious reservations about the modified project – he questioned whether it was economically feasible for the developer to place the parking as far underground as he promised – he gave the proposed changes grudging praise. “There’s less of it to dislike than the old project,” he said.
The last witness to testify on Mountain Funding’s behalf was Roy Millender, who along with Levy had begun scheming and dreaming to build something grand at the base of State Street back in 1976. “I believe what you have before you now is a better project,” he decreed.
Opposing the changes and a finding of substantial conformance was Tony Romasanta, who owns a major hotel by State Street and Cabrillo Boulevard. Romasanta reminded the commissioners of how many times they’d been assured construction was imminent, and how many times those promises had been violated. “All the public benefits they’re promising you today, they promised you then,” he said. Romasanta’s quarrels with Levy are now the stuff of urban legend. He also had harsh words for Wicken and Mountain Funding. “He has left it a slum,” he charged, painting a vivid picture of weed patches, broken windows, and unpainted buildings.
When Wicken explained to the commissioners that one of the partners was a Minneapolis-based pension management company with $4 billion in assets, Romasanta muttered sarcastically, “Four billion dollars and they won’t paint the goddamn building,” referring to the Californian. Speaking of Wicken, he added, “He’s done it on the cheap at our expense and I don’t like it. I resent it, and I’m on my hind legs telling you so.”
Romasanta urged the commissioners to pull the plug on the existing development plans, then contract with the land owner to buy space to build a new public parking garage that could serve the train depot for the day when commuter rail becomes a reality and not just a fantasy. While many commissioners shared his frustration over promises not kept, Romasanata got no traction with his plan of attack.
Instead, Planning Commissioner Sheila Lodge said her main concern was seeing to it that construction started and finished when the developer said it would. She dismissed some of the sanctions proposed by City Hall, if construction did not commence, as “a slap on the hand.” Commissioner Charmaine Jacobs expressed similar concerns that City Hall draft language that forced the developers to build, but found some of the sanctions – such as ordering the Californian Hotel demolished – too stiff.
City Attorney Steve Wiley assured the commissioners that he was working on some “fish or cut bait” legal language that would establish clear and detailed timetables by which construction had to progress. Failure to comply, he said, would result in the project being consigned “to white space.”
While Jacobs and White expressed the most detailed reservations about the proposed changes, none of the commissioners argued that the new project did not substantially conform to the project as already approved. The decision, however, rests with City Administrator Jim Armstrong, who did not attend the meeting. Armstrong will have to watch a video of the meeting and come up to speed with the project’s voluminous history – much of which precedes his tenure at City Hall – before rendering a judgment.