Special Investigative Series: “A Building on Garden Street”
By Cheri Rae
It’s a building scheme that began with a plan that the public hears a lot these days: redevelop an old area of town with a brand-new project to provide affordable housing for the needy or for downtown workers, along with office space and parking.
Financing for such projects typically comes from a combination of (mostly governmental) sources, including Redevelopment Agency funds.
And so it was with the 113,000 square-foot, 51-unit publicly funded, mixed-use building at 617 Garden Street in Santa Barbara, designed as a “healthy, healing community” to house individuals with mental illness and downtown workers, as well as to provide offices and parking for city workers. Monies for the project came from several individuals and non-profits plus federal, state and city coffers.
The project’s developer, the Mental Health Association, is itself mostly government funded. According to IRS reports from 2008, some 96.8 percent of the organization’s budget came from public funds.
By 2008, the project had already cost $27.15 million. The City of Santa Barbara’s Redevelopment Agency contributed $6.3 million. It also donated a parking lot (in order to utilize new parking spaces at the new building) and purchased a condominium in the building for $1,164,145.00. (The condo is designated as office space for the Water Division; as yet, it is unoccupied and construction work continues to this day.)
A source close to City Hall revealed that substantial development fees were waived for the developer.
“With all those waterproofing repairs, including the ones still on-going, the cost to taxpayers of that building must be well north of $30 million,” calculated one Santa Barbara real estate expert familiar with the financing of the City’s subsidized housing developments.

By way of comparison, the purchase price of the huge St. Francis Hospital, complete with a large parking lot and 7 acres on Santa Barbara’s Riviera, was only $18 million, the local expert pointed out.
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