Heading into Tuesday’s six-hour-long city council hearing on the proposed redevelopment of the Paseo Nuevo shopping mall in downtown Santa Barbara, councilmembers were told by the project’s developers, in no uncertain terms, that if the city did not move forward with the plan as currently proposed, they would walk away and leave the mall undeveloped for the next decade or more. The word they used, according to Councilmember Kristen Sneddon, was “fallow.”
“They looked me in the eye and said: ‘If you don’t pass this deal, we’re going to leave it fallow like we’ve done to two other properties in Los Angeles — and that’s just the reality,’” Sneddon said during Tuesday’s council meeting.
The proposed redevelopment of the struggling Paseo Nuevo mall has been years in the making, ever since global investment firm AllianceBernstein (AB Commercial) acquired the rights to the majority of the mall after the previous owners defaulted on a reported $120 million loan on the property in 2021. AB Commercial, not a housing developer but a financial firm with over $800 billion worth of assets in its portfolio, enlisted a whole team of partners to work on the projects, including the Arcturus Group, The Georgetown Company, and a group of architects with Gensler, Mullen & Henzell, and AB Design Studio.
AB Commercial’s portion of the mail includes all the in-line shops and the former Macy’s building, while the Nordstrom’s building is owned by another company, Shopoff, and the city held onto ownership rights of the land underneath the mall. Due to the complicated ownership of the mall, all three of the ownership parties need to agree to any future housing at the site…