Swenson starts building downtown Santa Cruz housing at key Pacific Avenue location

By Jondi Gumz, Santa Cruz Sentinel
http://www.santacruzsentinel.com/article/NE/20171220/NEWS/171229959

December 20, 2017, SANTA CRUZ >> Builder Swenson celebrated Wednesday afternoon, toasting the start of the $35 million Park Pacific development that in two years will offer 79 rental units, a ground-floor restaurant and fill a key downtown property vacant since the 1989 earthquake.

“Cheers,” said Case Swenson, president of San Jose-based Swenson and son of founder Barry Swenson, raising a glass of

Case Swenson, president of Swenson, opens Wednesday’s groundbreaking ceremony for Park Pacific, a 79-unit apartment complex on the Pacific Avenue site of the former Bookshop Santa Cruz building that was destroyed in the 1989 Loma Prieta earthquake. (Dan Coyro — Santa Cruz Sentinel)

red wine. “It’s been a good year,” said Jesse Nickell III, Swenson senior vice president, raising a glass of white wine. The housing is “very welcomed in our city,” Mayor David Terrazas told 60 people at Wednesday’s groundbreaking. “Barry Swenson is really committed to investing in our town.” Crews last month began moving earth at the building site, which is in downtown Santa Cruz next to Lulu Carpenter’s and Bank of the West, and the project is expected to create up to 300 construction jobs.

Case Swenson briefly mentioned the challenges of the project at 1547 Pacific Ave., once owned by Ron Lau, whose building was demolished after the Loma Prieta earthquake. While the rest of Pacific Garden Mall was rebuilt after the quake, financing woes hampered rebuilding efforts at this location.

Lau was unable to reach agreement on a project, and city officials considered the site an eyesore. In 2005, the city Redevelopment Agency filed suit against Lau to take the property under eminent domain so Bolton Hill could build condos there. Lau got a settlement of $1.7 million and rights to two condos but the seven-story development the council approved in 2006 was not built before the economy crashed, and Santa Cruz County Bank, which had financed the project, foreclosed. The Rodoni family and Clarum Homes were involved before Swenson stepped in. “It’s so hard to get these buildings off the ground,” said Swenson. “It’s a flat-out miracle.” Barry Swenson bought the property in 2015 for $6.25 million, reviving a project that had faced one snag after another.

Case Swenson got emotional as he thanked his father, who had a stroke last year and was unable to attend. “My dad worked on this 15 years ago,” he said. “I wish he could be here.” Case Swenson also thanked Wells Fargo, which is providing financing for Park Pacific, and others who helped the project along the way. Case said the Park Pacific represents the company’s 12th groundbreaking of the year, a sign of how the construction industry is booming over the hill, where much of the development is taking place.

Nickell, who’s been with Swenson for 31 years, said the company has invested $144 million in downtown Santa Cruz, starting with building the St. George Hotel in 1991. Among them, he said, are: Bookshop Santa Cruz, Chocolat, Pacific Wave, Saturn Cafe, Lali’s, Walgreens, Eco Goods, University Town Center, Five Guys, Shogun Sushi, Del Mar Theatre restoration, Sockshop & Shoe Co., Cruzio, Ecology Action, Walnut Commons Cohousing, the NIAC Building and Coast Commercial Bank’s headquarters at 75 River St.

About 60 people attended, including Santa Cruz City Councilwoman Richelle Noroyan, former Santa Cruz Mayor Don Lane and many of the Swenson employees working on Five55 Pacific Ave., a 94-unit rental complex due for completion in January, and Aptos Village, 69 residential units with retail and office space, parts of which are to be ready by the end of 2018.

The City Council in September approved Swenson’s request to build 79 units at 1547 Pacific Ave. instead of 63, which helped the company obtain financing. The project will have fewer larger units and more smaller ones: 16 studios, 43 one-bedroom units and 20 two-bedroom units. Studios will have 450 square feet, one-bedroom units 700 square feet and two-bedroom units 1,000 square feet. Parking will be underground.

Construction is expected to take up to 24 months. The complex is to be rented at first, then sold as individual condominiums, with 12 dedicated as affordable.

In September, Swenson project manager Scott Connelly estimated studios could rent for $2,000 a month, one bedrooms for $2,500 to $3,000 a month, and two bedrooms at $3,700 a month, with some higher-end units.