By Jorge Casuso
September 10, 2025 -- The developer of the 521-unit mixed use housing project at the Gelson's site at Lincoln and Ocean Park boulevards will not be moving ahead with the approved project.
That update on Santa Monica's largest residential project in six decades was provided Monday night by DTSM interim Boardmember Sean Besser who stated at an Ocean Park Association (OPA) meeting that "there is no project that exists."
Besser noted that the developer, Cypress Equity, is not the owner of the property but partnered with the owner," the real estate investment company Balboa Retail Partners, "to have the right to develop it."
Cypress Equity "walked away from the contract," Bessser said. "The owners have been shopping it to somebody else."
Asked if another developer could take over the the project "as it exists" Besser said that "plans have not been submitted to the City.
"They have not been permitted, so there are literally no plans," Besser said, adding that "there are no current or future plans at the moment."
The Lincoln Center development immediately drew widespread and intensive community backlash after it was publicly unveiled during a Zoom community meeting in February 2022 attended by some 500 participants.
For two years, slow-growth advocates could do little to stop a project whose fate was all but sealed under California law, which gave residents no say in the project's fate.
Under SB330, meant to fast track new housing construction, the nearly 900,000-square-foot project -- composed of 12 separate six-story structures on a 4.7-acre site -- only required an administrative approval and a design review.
In February 2024, the City's Architectural Review Board (ARB) voted 5 to 0 to approve the project at its only public hearing, directing the developer to alter the landscaping, lighting, colors, design details and materials.
Besser said the project "fell in large part" because of Measure GS, a property transfer tax hike approved by Santa Monica voters in November 2022.
Under GS, properties that sell for more than $8 million must pay a transfer tax of $53 for every $1,000.
In addition, construction of multi-family developments in Santa Monica has come to a standstill over the past two years also due to high interest rates and an uncertain economy.
That has resulted in building permits issued for only 181 of the more than 4,300 units the City has approved.
Former Mayor Sue Himmelrich, who sponsored Measure GS, cautioned that the development ultimately built on the site could be "worse" than the Lincoln Center project.
"I've never seen a project that voluntarily went away that didn't come back worse," Himmelrich said. "It's the developers job to make the most money."
"It's coming back," she said. "It remains to be seen what happens."
