Jim Knell’s Big Move: Santa Barbara Real Estate Mogul Launches Drive to Get Cars Back on State Street

One of Santa Barbara's most powerful commercial landlords is going to war with City Hall over the future of State Street — and he's planning to take the fight directly to voters.

Jim Knell, founder of Sima Corp and the largest commercial property owner downtown with roughly 300 business tenants, has launched a paid signature-gathering campaign to place a referendum on the ballot that would reopen State Street to cars, potentially undoing the centerpiece of the city's years-long downtown revitalization effort. Petitioners were stationed outside the Ralphs supermarket in downtown Santa Barbara this week seeking signatures, according to the Santa Barbara Independent, which first reported the story.

The drive comes less than a month after the City Council ratified the State Street Master Plan by an unusually lopsided 6-1 vote on September 1, capping what the Independent described as five years of contentious public process. Implementation of the plan — an ambitious, expensive effort to reanimate downtown around housing rather than retail — was just poised to begin.

"This is my last hurrah!" Knell told the Independent. "This is not something I wanted to do. But I feel I have no other recourse."

What the Referendum Would Do

Technically, the referendum asks voters whether to repeal an ordinance known as Title 31, which began as a COVID-era emergency measure banning cars from State Street and was later made permanent. Repealing Title 31 would allow vehicles back onto the street, though only at certain times and on certain blocks — details that have not yet been worked out.

Knell argues the car ban, adopted in 2019 as a pandemic stopgap, was converted into permanent policy across a nine-block stretch of downtown "without ever asking the people who live here." To qualify the measure, his Committee to Re-Open State Street must collect about 5,400 signatures from registered city voters.

"If the people want this, then fine, I'll acquiesce," Knell said. "But I think someone other than the City Council should be voting on this."

A Tale of Two Downtowns

Knell's case rests on sales tax numbers. Since cars were banned, he says, downtown sales tax revenue has risen just 1 percent — while Coast Village Road climbed 42 percent, the Funk Zone 15 percent, and Milpas Street 14 percent over the same period. The difference, he contends, is cars, which let visitors cruise the main drag and decide where to stop.

He paints a grim picture of the corridor he knows best: commercial space that once rented for $4 a square foot now goes for about $1, downtown office vacancy sits at an all-time high of 40 percent, and pop-up businesses are displacing long-term tenants. Many merchants, he notes, have decamped for other neighborhoods. "Half the businesses on Coast Village Road started out on State Street," he said, adding they're now paying $9 a square foot in Montecito's commercial strip versus $2.25 downtown.

He also puts the master plan's price tag at $100 million and says one of the city's own consultants gave it no better than a 10 percent chance of success.

City officials see it differently. Tess Harris, the city administrator shepherding the master plan, told the Independent that State Street's decline began in 2017 — well before the pandemic closure — and that the downtown sales tax picture has been mostly flat, with the 500, 700, and 900 blocks performing significantly better while the 1000 and 1200 blocks have struggled.

Harris pointed to a wave of institutional investment as evidence of confidence: nearly 20 new businesses have signed leases or opened in the past six months. UCSB has leased space on the 400 block, the Music Academy of the West is set to break ground on the 900 block for a major performance and rehearsal facility, the Santa Barbara International Film Festival's Film Center is operating nearby, City College is relocating its cosmetology program downtown, and Westmont has a presence on the street.

"These are tenants who could pretty much move anywhere they wanted," Harris said. "They're choosing to move downtown. That says something."

A Legal Threat Looms, Too

Knell isn't stopping at the ballot box. He contends City Hall improperly exempted the master plan from state environmental review requirements, and he has put the city on notice that he intends to sue on those grounds. City Attorney John Doimas issued a statement acknowledging his office is investigating Knell's claim, the Independent reported.

The dual-track strategy — referendum plus litigation — mirrors the playbook of well-funded referendum campaigns elsewhere in California, and Knell's deep pockets and commercial stake give him staying power that grassroots downtown critics have often lacked.

What Happens Next

If Knell's committee gathers the required signatures — which observers consider likely, given the paid operation — the City Council would face a choice: adopt the changes Knell seeks voluntarily, or put the question to voters. The earliest a special election could be scheduled is next March, and holding one would cost the city an estimated $300,000.

For Santa Barbara residents, the stakes extend beyond traffic patterns. The referendum sets up the most direct test yet of public sentiment on a question the city has debated since the pandemic: whether a car-free State Street is a bold reinvention of downtown or a mistake that has starved merchants of customers. The master plan's backers argue the corridor's future lies in housing, institutions, and foot traffic; Knell and his allies say the evidence — in the form of tax receipts and empty storefronts — points the other way.

Either way, the five years of planning that produced the master plan now face their first genuine electoral test. The question of who decides downtown's future — seven council members or the city's voters — may be answered at the ballot box next spring.