CARLSBAD – The Carlsbad City Council on Tuesday approved a plan to convert a 98-unit former Inns of America hotel into apartments, adding two conditions to address late-raised concerns about potentially displacing long-term residents.
Marcela Escobar, president and CEO of the Atlantis Group, which represents applicant Alliance Development Services, told the council her team was “completely unaware” of long-term tenant concerns until Friday.
Escobar said the applicant differs from the current hotel owner and operator, but her team “immediately started working with the city staff and city attorney” to craft conditions that would allow the project to move forward despite the uncertainty.
Mike Strong, the city’s assistant community developer, said staff have not yet confirmed whether long-term tenants are living at the property. The conditions require a third party to evaluate whether long-term residency exists and determine the next steps under state law.
The council voted unanimously to approve the conversion of the hotel into an apartment complex, The Flats at Terramar, subject to those conditions being in place.
The 3.12-acre site, located at 5010 Avenida Encinas on the southeast corner of Cannon Road and Avenida Encinas and west of an Interstate 5 southbound onramp, is currently operating as Studio 6, a Motel 6 brand that offers extended-stay accommodations. The approved plan converts the 98 units into studio and one-bedroom apartments.
City documents show that 83 of the units at The Flats at Terramar will be market-rate, while seven will be deed-restricted for very low-income residents, five for low-income residents, and three for moderate-income households. Senior Planner Lauren Yzaguire said the mix meets both state density bonus requirements and Carlsbad’s inclusionary housing rules.
The existing 123 parking spaces will remain, comprising 98 for residents, 25 for visitors, and areas for loading and mail delivery. Plans call for exterior upgrades, landscape improvements, and the maintenance of the pool and spa. Developers also plan to add a dog run and pickleball courts.
The Flats at Terramar received waivers under the state density bonus law. To preserve the existing layout, the apartment complex will not provide lower-income units with three or more bedrooms. The development also received a height waiver because existing building elements exceed city standards by between 6 and 21 inches, Yzaguire said.
Councilmember Teresa Acosta said she supported the project to help meet housing needs, particularly for workers.
“For the Carlsbad workforce, we desperately need more housing supply in our community,” she said.
Councilmember Kevin Shin, a pickleball player, raised concern that a 6-foot fence may not contain stray balls that could strike passing cars on Cannon Road.
Councilmember Melanie Burkholder said netting would be preferable to a taller wall. Acosta agreed.
“Nobody wants to be driving between very tall walls,” Acosta said.
Mayor Keith Blackburn called the conversion “a great idea,” noting it avoids common objections to new residential construction.
“I would argue that residents are going to be a much better neighbor than the transient hotel people,” Blackburn said. “Plus, it’s not going to be a new building, it’s not going to be interrupting any residential areas and it’s really close to transportation.”
Some residents questioned the size and livability of the planned apartments. In an email to the city, Carlsbad resident Kurt Wickham, a representative of the Cannon Court Owners Association and West Real Estate, owners of the West Village shopping center along Avenida Encinas, expressed surprise and concern about unit square footage and amenities.
“Wow! If I’m reading this right, the larger units are (less than) 700 square feet and the smaller units are about 315 square feet with no kitchen appliances. If that’s right, that seems totally ridiculous to me,” Wickham wrote.
City associate planner Lauren Yzaguirre responded that all units will be required to meet residential building codes, including kitchens with cooking facilities.
“It doesn’t change my overall comment,” Wickham replied. “This is an atrocity.”
Others, such as Dawn Sheals, a Carlsbad resident who grew up in the city and returned as an adult, welcomed the project but urged the city to prioritize locals and consider adding more affordable units.
“We definitely need more housing options at different price points,” Sheals wrote, adding that she hoped “the low-income housing be allocated to people who already work in our community.”
Sheals suggested prioritizing opportunities for junior teachers, first responders, and librarians, some of whom have an annual starting salary of $29,000.
