Capitola has been awarded $250,000 in federal funding aimed at enhancing safety and traffic flow along Bay Avenue. This financial support was secured by Representative Jimmy Panetta as part of a larger allocation of over $15 million for various projects within California’s 19th Congressional District. The funding will specifically facilitate the construction of a roundabout at the intersection of Bay Avenue and Hill Street, addressing long-standing safety concerns in the area.
The federal funds are part of a broader initiative that includes $3.15 million earmarked for improvements at the Santa Cruz Wharf, alongside investments in Boulder Creek, Scotts Valley, and Monterey. Capitola’s Mayor, Margaux Morgan, expressed gratitude for the funding, stating, “The Bay Avenue corridor has certainly had its safety issues and concerns over the years. Moving forward, we want to prioritize pedestrian and bicycle safety along with ease and traffic flow for drivers.”
For several years, Capitola has focused on enhancing safety for pedestrians and cyclists on Bay Avenue. Intersections along this corridor, particularly at Hill Street and Capitola Avenue, have seen numerous attempts for improvement since 2024. Following a tragic incident in which a resident of the Bay Avenue Senior Apartments was killed in a hit-and-run, the city had previously implemented changes, including the addition of bike lanes. However, these modifications were reversed in September 2025 due to increased traffic congestion.
After conducting a series of traffic studies, city officials proposed a tentative plan to install roundabouts at the Hill Street and Capitola Avenue intersections. A report presented to the City Council on February 27, 2025, indicated that roundabouts would alleviate congestion and enhance safety for cyclists and pedestrians compared to alternatives like stoplights. Despite their advantages, roundabouts are projected to be costlier to construct than other solutions.
The city sought public input regarding its Bay Avenue plans via a community survey after the reversal of the temporary changes at Hill Street. The project will soon be presented to the Capitola City Council for further discussion and to outline the next steps. An updated version of the public survey is expected to reopen shortly.
Capitola Mall Zoning Discussion Scheduled
In addition to the Bay Avenue improvements, Capitola will hold a special meeting to discuss draft zoning ordinances for the Capitola Mall site on Monday at 17:30. City staff will provide an overview of the state’s housing element requirements, the development process, and the Planning Commission’s recommendations. The draft ordinances are publicly accessible on the city’s official website.
Since September 2025, Capitola has collaborated with Merlone Geier Partners, the primary owner of the mall property, to create new zoning codes that accommodate mixed-use development. This initiative aims to incorporate housing, retail, and green spaces into the area. The city faces a significant challenge, having to permit the construction of over 1,300 new housing units by 2031, with the Capitola Mall site identified as a potential location for such development.
The process of developing these zoning codes has been met with delays and frustrations from both city officials and residents. Tensions arose recently when Melinda Orbach, a City Council member, faced scrutiny for her husband’s request for technical assistance from the state’s Department of Housing and Community Development. Matt Orbach, who serves as the assistant community development director for the city of Watsonville, argued that the city’s draft ordinances did not align with the plans necessary for mall development.
Despite these challenges, the Planning Commission has recommended the draft ordinances to the City Council, which will consider the first reading at the upcoming meeting. Two readings at different City Council meetings are mandated before the ordinances can be enacted.
The special meeting will take place at Capitola City Hall, located at 420 Capitola Avenue. Community members are encouraged to attend as the city navigates these critical developments in urban planning.
