CAPITOLA — Redevelopment plans for the aging Capitola Mall begin to ramp up this week, as the city Planning Commission hears preliminary design plans from property owners.

Merlone Geier Partners, a majority owner of the mall, will give details for its planned redesign of more than two-thirds of the mall, featuring an open-air layout, a main commercial street, nearly 340,000 square feet of new commercial space that will include a theater and 637 residential units. The presentation for the new “Capitola Town Square” project comes ahead of a formal application to the city Planning Department, and is designed to draw early public input.

Population Increase

Two buildings, one seven stories and one five stories, would host the hundreds of planned multifamily residential units. The housing would be buffered by parking garages and have the retail business “wrapped around” the outside. To accommodate new construction, existing 38th Avenue would be extended across Capitola Drive and through the middle of the mall and out to Clares Street, forming an active main street with angled parking, wide sidewalks and outdoor dining spaces, informal seating, signage and landscaping.

The Town Square project is estimated to increase Capitola’s population of 10,080 by about 12%, necessitating city service increases costing an estimated $875,000 to $1 million per year. The city is expected to see a parallel influx of about $850,000 to $1.2 million a year in new tax revenues.

Because the development plan differs from existing city codes, the developer will need to provide evidence that the mall redevelopment provides the city with substantial public benefit. If the developer opts to carve out space on-site for units at “affordable” rates — rather than paying the city an in-lieu fee — 15% percent or about 95 units would need to be set at affordable rates. Development agreements, however, allow the city and applicant to negotiate the total amount of affordable units offered or fees paid.

Expansion

The Capitola Mall, first built in 1977, comprises more than 46 acres of land bordered by 41st Avenue, Clares Street and Capitola Avenue. The latest design proposal would bring total developed space up to 1.1 million square feet of land, with structures ranging from a single story in height up to 85 feet. The mall’s existing large anchor stores range in height from 30 to 40 feet tall. The main mall building, which was expanded in 1989, is approximately 35 feet tall and houses 68 retail tenants. Related Articles Peter Boutell, Lending a Hand | An FHA loan may be best solution

Coast Line | Second round of Cares grants available

California passes first-in-nation plastics recycling law

Santa Cruz downtown project financial details sought prior to contractor hiring

Harry Domash, Online Investing | Have you considered preferred stocks?

To achieve its plans, the developer plans to demolish the former Sears building, plus about 125,000 square feet of the existing mall’s “spine” and the standalone former Takara restaurant. The developer also is planning exterior improvements to existing anchor stores, including larger anchor retail stores Target, Kohl’s and Macy’s.

One early critique of the preliminary plans coming from city staff took aim at the project’s perceived benefits versus the project’s proposal.

“(The) name of project is Capitola Town Square,” the city report to the Planning Commission reads. “The project lacks a true town square or common open space of adequate size to evoke a town square concept/experience.”

Editor’s note: This article has been updated to correct an error in a street name.

IF YOU GO

What: Capitola Planning Commission

When: 7 p.m., Thursday.

Where: Capitola City Hall, 420 Capitola Ave.

At issue: Conceptual review for future redevelopment of the Capitola Mall.