Past Due

The city of Monterey has so far received four applications for residential projects on Garden Road, including this property at 2600 Garden Road. They are stalled pending requests to use more water.

As the Covid-19 pandemic stretches on in the U.S., businesses are continuing to adapt, and at least one trend looks like it will become permanent: Many employees will continue working remotely.

That will likely further depress demand for office space locally, which, even before the pandemic, was already in high supply: Unlike housing, vacant office space has long been abundant in nearly every corner of the county.

That’s why, in June 2019, Monterey City Council voted 4-1 to rezone commercial properties along the south side of Garden Road so that they can be converted into multifamily residential units. In so doing, the city would have a better chance of meeting the state-mandated goal of adding 650 housing units by 2023.

But given the chronic water shortage on the Monterey Peninsula, that plan has faced a challenge from the start. Another branch of the state government – the State Water Resources Control Board – has a competing mandate in the form of a cease-and-desist order that forces California American Water, the Peninsula’s water provider, to reduce and limit its usage of water from the Carmel River. Part of that order dictates that, should a change in use at an existing water meter occur, no increase in usage is allowed.

That reality has kept prospective developers of Garden Road residential properties from finalizing their plans in hopes that the State Water Board will allow an exception to that order.

This comes after the Monterey Peninsula Management District, after working on the proposal for over a year in concert with local cities, submitted an application to the State Water Board on March 9, asking that the district be allowed to allocate 75 acre-feet of additional water annually to local projects that include affordable housing.

“This is a real de minimis amount of water that shouldn’t radically affect the order, but it would enable a developer to make that commitment today and remove that uncertainty,” says Dave Stoldt, MPWMD’s general manager. By the time the increased usage would go into effect, he adds, new water projects might already be completed and the order lifted.

But so far, the district has heard nothing back from the state, and Jackie Carpenter, a State Water Board spokesperson, says the agency cannot comment on the matter because it will ultimately be decided on by the board.

Meanwhile, developer Brad Slama, who owns three of the commercial properties on Garden Road with plans to convert them into housing, says unless there are assurances of the extra water for affordable housing, he’ll be reducing the number of housing units he proposes.

One example he cites, a former gym at 2000 Garden Road, will be downsized from a potential 101 housing units to 59, unless there is the promise of more water credits by the end of the year. “Some projects will have to go forward just with the water credits we have onsite, because it’s taking too long,” Slama says. “I’m losing money every month they’re idling, and I can only do that for so long.”

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