CAPITOLA >> The bulk of this week’s Capitola City Council meeting will revolve around the untapped potential of the Capitola Mall and how local officials can help revitalize the major commercial and economic asset after years of underuse.

After more than a year of planning, Kosmont Companies, contracted by the city last September to explore strategies for how it can support redevelopment of the major city hub, has completed the Capitola Mall Redevelopment Land Use Study and will present its findings to the City Council at its meeting 6 p.m. Thursday at 420 Capitola Ave.

According to the city staff report, the study focused on land use and zoning strategies that could help incentivize heretofore elusive redevelopment including fee waivers, bonus residential floor area/height limits, a local tax sharing agreement, special district funds, infrastructure cost support through bonds or grants and public parking structures.

The majority owner of the mall, Merlone Geier Partners, submitted a redevelopment plan in 2019 that included a mix of residential and commercial uses that was reviewed by the city at the time. However, after the onset of the COVID-19 pandemic only a few months later upended the economic outlook, the plan was withdrawn and any potential transformation of the 339,131-square-foot commercial space went back to square one.

Still, it wasn’t long before the mall was brought back into frame. Under pressure to submit plans to state housing authorities that allow for creation of 1,336 new housing units within the city from 2023-2031, the mall was identified as a cornerstone of such an effort and conversations for how the city can support redevelopment began to burn bright once again.

According to the council-approved housing element, the mall site has a realistic capacity of 1,777 units. Among the recommendations for how the mall, spread across several parcels, could hit close to this figure in a redevelopment effort is amending city code only at this location to expand the maximum allowable height from 40 feet to 75 feet as well as increased floor area ratio that allows for larger developments and cuts out parking garages from the calculation.

Like many of its peers across the country, the mall fell on hard times in recent years amid a decline in large-format retail stores. Despite city officials discussing various development concepts with mall owners since 2011, nothing significant has materialized.

The city set aside $25,000 to establish the Mall Redevelopment Committee in this year’s budget and most of that funding went to completing the redevelopment study.

41st Avenue Corridor Plan

The mall issue will also be looked at from a wider angle Thursday, as it serves as an integral component of a plan that guides development of the busy commercial and transportation corridor running beside it.

The city released the 41st Avenue Corridor Economic Development/Mixed Use Revitalization Study in 2009 which was used as a launchpad for the 41st Avenue/Capitola Mall Revisioning Plan in 2011. The pair of studies resulted in a series of recommendations to rejuvenate the corridor, many of which have already been implemented in local code and policy.

However, according to the staff report, financial and staffing resources have prevented implementation of other changes such as relocation of the Santa Cruz Metro Transit Center, development of a “complete streets” plan and improved infrastructure to attract desired retailers, among other things.

Rather than soliciting proposal for specific projects, city staff has recommended that the council approve issuing a Request for Qualification which, in practice, could lay the groundwork for future investments by gathering expert input and broad participation, vetting qualified firms and maintaining flexibility for who the city chooses to work with.

In the long run, city officials argue in the staff report, this approach will set the stage for multifaceted future improvements such as multimodal streets for public transit, bicycles, pedestrians and cars, greenspace development, placemaking and branding through public art, roadway safety enhancements and planning for future housing.

This year’s city budget earmarked $75,000 for the qualification request process with a deadline for submittals set for February of next year.