Construction begins on oft-delayed 144-unit housing project in Watsonville

WATSONVILLE—Watsonville’s newest residential development broke ground on Feb. 17, nearly five years after it was originally approved by the city council.

Watsonville Mayor Eduardo Montesino (fourth from right) is joined by Shaz Roth (third from left), CEO of the Pajaro Valley Chamber of Commerce and Agriculture, and other key players in the groundbreaking ceremony Feb. 17 for Hillcrest on Ohlone Parkway in Watsonville. Photo: Tarmo Hannula/The Pajaronian

Hillcrest, located off of Ohlone Parkway, will consist of 144 units when fully built out over several phases, including 76 townhomes, 63 duplexes, and five detached single-family structures on 11 acres that overlook Watsonville Slough.

A total of 29 homes will be sold at below market rate, with details and pricing on those still to be determined, said Andy Ardila, principal of the Ardila Costello Team at Compass, which is overseeing sales and marketing for the Hillcrest project. The market rate homes will start in the $800,000s.

The first batch of homes will go on sale in the summer.

“There’s been a tremendous amount of time spent on this project, but we knew the benefits to the community,” Mayor Eduardo Montesino said. “Twenty-nine affordable units is incredible for our community, especially for the working class.”

The development will also include picnic, turf, play and bird watching areas, and a hiking trail around the wetlands.

Mark Lester, CEO of developer LANDCO, said on completion, Hillcrest will add $130 million in real estate to Watsonville’s tax base, and result in $6 million in impact fees for schools and other uses.

“The Hillcrest project will deliver abundant and vitally important community benefits, including essential affordable housing stock, high-paying construction jobs, significant impact fees for local parks and schools, and recurring property tax revenues for both the City of Watsonville and Santa Cruz County,” Lester said. “We are proud to be leading this much-needed housing development.” 

The developers also announced that for the first 10 homes sold, they will donate $1,000 each to Second Harvest Food Bank.

Originally approved by the Watsonville City Council in August 2018 as Sunshine Vista, Hillcrest has faced a complicated road to this point. The development has seen pushback from neighbors concerned about increased traffic, had troubles with securing funding and multiple times changed project managers. 

The development team returned to the council in 2021 to propose a major change to the soil remediation plan. Instead of excavating, hauling and disposing of the top 2-foot layer of soil that was deemed contaminated from the site’s previous use as an auto wrecking yard for 60 years, the developer proposed removing only the top six inches and burying the remaining 18 inches—roughly 20,000 cubic yards—in a cement-sealed pit on the outskirts of the property. 

The council approved that plan in a 4-3 vote.

A local group filed a complaint to the California Attorney General’s Office against the City of Watsonville and the County of Santa Cruz for advancing a housing project, claiming that the pit would create an environmental hazard for its future residents and a massive liability for the city.

Author: Erik Chalhoub