City Council — June 2, 2026

Meeting Summary

Present: 5-Friedman, 1-Santamaria, 3-Gutierrez, Tempestin, 6-Harmon, 2-Jordan, Rowse

This summary was AI-generated to save you time. It may miss or misstate details — verify against the official recording and the transcript.

Yardi Systems and DSP will adapt vacant Macy’s and Nordstrom buildings for corporate headquarters and residential units.
The project involves $100 million in investment and includes a fee title transfer to private partners.
Council members discussed housing benefits and property tax revenue while prioritizing architectural character.
The Council passed a motion to direct staff to return with final Disposition and Development Agreements.

The Santa Barbara City Council unanimously voted to move forward with a major redevelopment proposal for the vacant Macy’s and Nordstrom buildings at Paseo Nuevo. The plan involves a partnership between local software company Yardi Systems and developer DSP, utilizing adaptive reuse to revitalize the downtown core.

Yardi Systems: Will renovate the former Macy’s building for its corporate headquarters, bringing approximately 600 employees to downtown State Street daily.
Housing: DSP will develop 80 to 112 residential units in the former Nordstrom building, including 10% moderate-income units.
Investment: The project entails approximately $100 million in private investment.
Public Benefits: Includes a one-time contribution to the Local Housing Trust Fund (estimated between $5.7 million to $7.7 million) and will generate ongoing property tax revenue for the City, which was previously uncollected under a lease agreement.
Structure: The deal involves transferring fee title of the land to the private partners rather than extending a lease.

Public speakers were overwhelmingly supportive, citing Yardi Systems' long history of philanthropy and local investment in Santa Barbara. Housing advocates expressed strong backing but urged the Council to negotiate stronger contributions to the Housing Trust Fund and establish long-term funding sources. Some speakers requested performance guardrails ("clawbacks") if milestones are missed and suggested dedicating space for Chumash cultural heritage and prioritizing local businesses in leasing.

Council members described the project as a "generational opportunity" that avoids the demolition and construction disruptions of previous proposals. Councilmember Harmon noted the shift from a failed proposal in December, highlighting that this new plan is more viable and honors the city's architectural character. Councilmember Sneddon raised questions regarding the fee transfer and property tax calculations, while Councilmember Jordan emphasized the need to ensure the housing benefits are realized and the project is not stalled by bureaucratic processes. Several members requested the developers consider ongoing partnerships regarding housing funding and cultural representation.

The Council passed a motion to direct staff to return with the final Disposition and Development Agreements for approval at a future date. The meeting concluded with unanimous support for advancing the project.