Proposed Changes to Capitola Mall Redevelopment
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Developer Merlone Geier has requested an 85-foot height limit, exceeding the 75-foot cap recommended by city staff.
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The proposal includes at least 1,777 new apartments, with 15% (266 units) priced for low-income renters and 5% for moderate-income or market-rate studios.
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The developer also seeks:
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Streamlined approval for hotels and restaurants
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Reduced parking requirements: 1 space per studio/1-bedroom, 1.25 for larger units (current rules require 2 spaces per larger unit)
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Potential elimination of retail spaces, which could impact city sales tax revenue.
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Affordable Housing & City Goals
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Capitola is required to permit 1,336 new housing units by 2031, with more than half designated for very-low and low-income residents.
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The mall redevelopment is expected to deliver 266 of the 282 required low-income units, making it central to the city’s Housing Element plan.
What’s Next
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The Capitola Planning Commission will discuss the proposed zoning changes on Thursday, Oct. 30, with potential approvals in November and final City Council decisions in December.
This redevelopment could reshape Capitola’s skyline and housing landscape—though trade-offs like reduced retail and parking are sparking debate.
-Santa Cruz Local, Jesse Kathan, October 30, 2025
