The Santa Cruz City Council recently approved economic development incentives targeting activation of vacant storefronts and reducing the time and cost to open a business in Santa Cruz.

The proposals presented and approved by City Council at the April and June meetings provide a variety of tools to stimulate new business activity citywide. These incentives include:

• Expansion of the Downtown Pops! Vacant Storefront Activation Program: increased rental rates and flexibility for the types of activations supported to provide greater incentive for property owner participation.
• Adoption of the Vibrancy Ordinance: establishes vacant storefront maintenance standards and requires property owners to register empty storefronts that have been vacant for 2 years or more and pay an annual fee unless participating in Downtown Pops! or undergoing tenant improvements or lease negotiations for a tenant to occupy the space.
• Pre-Application Review Meetings for Building Permits: provides free consultations prior to building permit submittal for business owners and their designers to address questions before formal application and reduce the time to receive building permit approvals.
• Removal of some Planning and Building Fees for First 20 Qualified Businesses: Planning and Building Plan Check and Permit fees relevant to commercial occupancy permits shall not be assessed or imposed for the first twenty (20) qualifying businesses applying to occupy vacant ground-floor commercial or mixed-use storefronts citywide, up to a maximum amount of fourteen thousand dollars ($14,000) per qualifying business. Any fee amount exceeding $14,000 will still be assessed. This applies to ground floor commercial vacant spaces only, not industrial commercial uses.
• Extension of use permits: The amendment regarding the extension of commercial use permits has been officially adopted and is codified in Municipal Code 24.04.160. The updated code automatically extends the life of certain commercial use permits to streamline the process for local businesses. All commercial use permits that were valid at any time between January 1, 2019, and December 31, 2026, are automatically extended until January 1, 2030. This saves businesses time and money by allowing them to take over a previously approved use with a simple Zoning Clearance, resulting in a cost savings of approximately $4,000 and three months of processing time. This change is effective outside the Coastal Zone and is awaiting Coastal Commission approval before taking effect citywide.
• Permit Streamlining: City staff is reviewing potential amendments to the Downtown Plan and the Zoning Code to lower the permitting thresholds and remove use permit requirements for common and desired ground floor uses to streamline the permit process and reduce permit costs for new businesses citywide. Staff will also review entertainment policies, alcohol sales requirements, and sidewalk dining permits to clarify policies and simplify approval processes where appropriate. These changes will require approval by Planning Commission, City Council, and Coastal Commission before taking effect.

The City’s Business Services team is available to assist businesses of all stages and serves as a liaison to our City departments and an advocate for businesses at City Hall. Businesses can contact the Business Services team to request help connecting to technical assistance services, financing resources, finding the right space, guidance through the permitting process, connections to workforce development resources, and assistance in coordinating ribbon cuttings for grand opening celebrations. The Business Services team is available to help businesses identify the steps they need to take from idea to reality.

Have a questions? Fill out the form below and our team will be available to help!