Yardi Systems to Acquire Paseo Nuevo Mall, Bring 600 Workers Downtown and Add Housing

In a dramatic turnaround for Santa Barbara’s Paseo Nuevo mall, Goleta-based Yardi Systems is set to acquire the former Macy’s building, the in-line shopping center, Parking Lot 1, and the land underneath, currently owned by the city of Santa Barbara. The deal, negotiated among Santa Barbara, Yardi Systems, and Alliance Bernstein, would effectively rescue the struggling mall and bring 600 workers downtown, revitalizing State Street.

“I’m so excited about the proposals that are coming before us,” said Meagan Harmon, city council member for District 6. “I think it’s a generational opportunity for the city to revitalize downtown.” The Santa Barbara City Council will discuss the new plan at its Tuesday meeting.

Yardi entered the discussion after the council last year voted against transferring the land underneath the mall, valued between $32 million and $39 million. At the time, housing advocates and some council members pushed for more affordable housing at the building.

The new plan appears to unite disparate interests: Yardi will donate $5 million to Santa Barbara’s Local Housing Trust Fund and $700,000 to the city’s Downtown Plaza and Parking Program.

Separately, Dune, Shopoff Realty Investments, and Praelium, owners of the former Nordstrom building, plan to erect 80 to 112 apartments, including affordable units. DSP would contribute $1 million to improve downtown and $700,000 to the Local Housing Trust Fund.

“By almost every metric, I feel that this project is an improvement,” Harmon said. “It’s an adaptive reuse project.

We’re going to be bringing people downtown who can make use of the downtown amenities every day.” She noted that housing remains part of downtown’s future, and the two proposals balance each other: Yardi for corporate offices and DSP for housing.

Santa Barbara Mayor Randy Rowse said the plans benefit the downtown community and bring more foot traffic to State Street. “We’re trying to facilitate it, but me, personally, I’m excited,” Rowse said.

Since the COVID-19 pandemic, the 500 to 1200 block of State Street has been closed to vehicles, and many storefronts have gone empty.

The city is still in negotiations with Yardi Systems and DSP. The June 2 meeting allows community feedback and presentations. If passed, Yardi and DSP will return with final documents for a vote on the purchase.