The New Old State Street

The purpose of commercial streets is to facilitate commerce. That is why commercial streets are lined with commercial buildings rented to commercial enterprises. State Street is a commercial street with commercial buildings. Now it is viewed as a playground, an open space that everyone can use for recreation. That is a commerce killer.

I have been following and writing about State Street since 2013. Back then the issues were rising store vacancies, the homeless, the death of Paseo Nuevo, and the planning and development bureaucracy. It got worse after the Thomas Fire (Dec. 2017). It felt like a pall had been cast over Santa Barbara. Then COVID hit in 2020 and the city closed State Street to automobile traffic declaring it to be a temporary playground (“promenade”) for pedestrians and cyclists. State Street almost died. By Q4 2020 there were 48 storefronts for rent (Radius CRE). 

The problems discussed then are still around, some better (homeless), some worse. The bureaucracy is still slow and obstructive. As of Q1 2026 there were still 30 storefronts for rent. 

Back then the City’s politicians and planners were unable to decide on what to do with State Street, so they did what politicians always do: hire a consultant and get cover for whatever they eventually want to happen. 

In July 2017 the City hired the Kosmont urban consulting firm for $84,000. To set the scene, I wrote two articles in March and April 2017 (“State Street Glut” and then “From Glut to Prosperity”) in which I analyzed State Street’s problems and then offered solutions. The Kosmont report came out two years later and came to some basic conclusions that were about the same as mine. What did the City do in response to Kosmont’s suggestions? If not nothing, not much. 

When State Street was closed there was strong support for the promenade by City Council. They appointed a State Street Advisory Committee to come up with recommendations. In 2022 they entered a contract for $780,000 with another consultant, MIG, to draft a master plan for State Street. After three years of no progress the City fired MIG and in October 2025 hired another consultant, Moule & Polyzoides (M&P), for $343,250 (they had paid MIG $510,00 up to that date). The total cost for the master plan report: $853,250.

On April 16, 2026, M&P presented the City with a two-part 324-page report outlining their recommendations for a State Street Master Plan. I did read it. It’s what you would expect from consultants: beautiful graphics and typography, lots of colorful architectural renderings, images, charts, lots of white space. Lots of consultant-speak. They started out by praising the Chumash. 

Much of the report echoed the State Street Advisory Committee’s recommendations to keep the promenade, which is why they were able to get the report out quickly. It is a how-to-do-it rather than a what-to-do. That committee is chaired by former City planning director, Dave Davis and consists of 15 members including three City Council members, four land use planners, two architects, two downtown orgs, a nonprofit rep, and one State Street commercial property owner.

The basic plan for State Street is to keep it as a community park and playground rather than a commercial street. About the same as we have now. The report just fleshes out the details of how to do that. Lots of data and recommendations which is probably why it required 324 pages. They pretty much paid attention to the desires of the various interest groups who contributed to the years-long public planning process. Everybody got something. Except the property owners and businesses on State Street.

It isn’t going to work. 

First, the whole closed-street-as-mall concept has failed nationwide. From about 200 back in the day to maybe six today are left that are economically viable. Like I said, it kills commerce. The report praises the few that are left but they don’t mention the 194 or so that failed.

The cost of this thing is huge, up to $90 million or more. They say the funding can be obtained through bond issuances, federal and state grants, and private investment. It’s obvious that it won’t be so easy to fund. The City says it’s broke. So is the State. The federal government’s deficit is starting to drag the economy down. The report is not realistic and their data is stale. This is why consultants consult rather than govern or build or own property. It’s easy to write it, not so easy to do it.

The question not asked in the Draft Plan is: Why are the Funk Zone and Coast Village Road (it is in the City’s boundaries) the most successful commercial areas in the City? They didn’t have consultants or a master plan to guide them, but they thrive. There are no vacancies on CVR and very few in the Funk Zone. 

The answer to that question is, they thrive because their success was organic. The City just let them be. No master plans from years of meetings. Entrepreneurs saw opportunity, took the initiative, and transformed them to what they are today. The lesson for the City: Get out of the way. But that’s not what our City Council wants.

After all the commentary on the report settles down, the result will be that things are pretty much going to remain as they are now. Nothing really new here. The purpose of the Report was to justify what the majority of City Council members wanted to happen. The result of all that money and planning effort is that the report is a very expensive fantasy wish list to placate people who like to plan things and serve their personal interests. Too bad for the property owners and businesses whose taxes fund the City.