When the Old Haunts Get Bulldozed for Much-Needed Housing

For more than 60 years, the Carlsbad Village Plaza has been a cornerstone in the community. The shopping center has about a dozen small businesses and has become a hub for locals and a resource that many count on every day, especially seniors.  

The plaza is walkable for many people. Some start their day with a treat at the Carlsbad French Pastry Café, opened in 1998 by a French immigrant. They stop at the family-owned DeNault’s Ace Hardware store for a new gardening tool or some lightbulbs, followed by a trip to the Carlsbad Village Pharmacy, which has served residents in the area for the past decade. Seniors and families who are on a budget pick up groceries from Smart and Final. It’s also the only grocery store for miles. 

The plaza also includes a laundromat, a local dive bar called the Golden Tee, an antique store, a Mexican eatery, a nonprofit thrift shop and more. Most of the businesses are owned and operated by locals.  

But residents are now facing a harsh reality, one they’ve been trying to fight off for the past few years. There’s a plan in place to redevelop the entire plaza into market-rate housing, affordable housing and retail space. 

Residents want to preserve the beloved space as is, but city leaders say their hands are tied. State housing laws require cities to approve affordable housing projects to address California’s housing crisis, especially its shortage of affordable housing. 

It’s the latest example of an ongoing tension in North County: the need for new housing versus the desire to maintain longstanding community landmarks. 

Just South of Carlsbad, along N. Coast Hwy 101 in the Leucadia neighborhood of Encinitas, a towering round wooden sign shows a sailor with a blue parrot on his shoulder, greeting drivers with a salute. Underneath him, red letters spell “Cap’n Keno’s.” 

For 54 years, Encinitas residents have looked up at that sign inviting locals into a rustic, nautical-themed bar. Its owner Gerry Sova, now 84, opened the bar in 1970 with winnings from a Las Vegas keno game. 

Stepping into Keno’s was like stepping into a time capsule. The large wooden, wrap-around bar seemed to beckon customers for a shot and a beer – cash only, but extremely cheap. Its walls were lined with fishing nets, anchors and other maritime-themed decor that gave the feeling this place might have been washed ashore during a storm. 

The large, deep-red leather booths lining Keno’s dining area were one of the most striking features, framing a long dining table in the center of the room surrounded by about a dozen chairs. From above, dim, yellow lighting from vintage-looking ceiling lamps cast a comfortable glow. The room’s message was clear: come, eat, drink and be merry. 

There, customers could enjoy a burger, fries and a beer for less than $10, or biscuits & gravy with two eggs and bacon for only $5.49, or perhaps a prime rib for $12, or even a full rack of baby back ribs for just $15. 

But the charmingly affordable Leucadia landmark officially closed its doors in September. In its place will be an upscale, mixed-use development with 45 condominiums, office spaces, a restaurant and retail shops. 

Developer Adam Robinson of RAF Pacifica Group purchased the land home to Keno’s, along with several other businesses in 2021 in a deal reportedly worth $10.5 million. He also purchased the liquor license and rights to Captain Keno’s. He says he plans to incorporate it into the new development. 

Sova spoke about his decision to sell the bar in a video to the Encinitas Planning Commission. 

“I would like it to stay the way it is, but, of course, that’s impossible,” Sova said in the video. “We have to face the facts of life …. [My] family will have the money, instead of the problems.” 

In San Marcos, residents had a similar soft spot for the Old Restaurant Row. The area, which opened in 1978, was filled with adored restaurants, cafes, shops, a movie theater and more before it was sold by its owner in 2020. 

In 2022, the property’s new owner, Elizabeth Papera, teamed up with developer Lennar Homes and unveiled plans to build a mixed-use development on the site. Those plans include 202 housing units, 10,400 square feet of commercial space and a 1.5-acre park that will include a skate park and pickleball courts. City leaders approved the plans in late 2023. 

A few of the businesses have relocated to new locations. Others, like 55 Yard Line, an iconic sports bar that operated at the location for 18 years, have closed for good. 55 Yard Line’s owners said they couldn’t find another location they could afford. 

It’s a similar story in Carlsbad. The Carlsbad Village Plaza property was purchased by Tooley Interests, LLC in 2021 in a deal worth $23.5 million. The company plans to replace the village with a five-story, mixed-use development with 218 apartments and ground-floor retail. Twenty-seven of the apartments will be set aside for low-income residents. 

Many residents have been resisting the project since word first got out about what the plaza could become, signing petitions, holding community meetings and speaking out at city meetings.  

“Doing away with the only supermarket in the village and the only hardware and pharmacy will certainly be a hardship to the city’s voters; seniors, those without transportation, tourists visiting the beach and hotels, and the homeless,” wrote Sue and Peter Ladouceur in a letter they submitted to the city’s Planning Commission in July. 

“The Denault’s Ace Hardware has been a staple in the community, employing experienced seniors and creating a small town feel that you do not get at Lowe’s or Home Depot,” wrote Paul Miller in another letter to the commission. “I cannot count how many birthday cakes we’ve ordered from the French bakery. I have to add the Golden Tee, a classic watering hole that many of us have spent evenings at. These stores will not return.” 

Hundreds of other public comments over multiple city meetings echo these same sentiments. Still, the council approved the project with a 4-1 vote on Sept. 24, citing state housing laws that require them to approve affordable housing projects that meet state standards. 

Councilmember Melanie Burkholder, who represents the district that includes the plaza, was the only “no” vote.  

It was official. The plaza that residents have known and loved for decades will be gone. And its business owners will be displaced, forced to either relocate or shut down for good. 

“The state is bullying us,” Carlsbad Mayor Keith Blackburn said at the council meeting. “But if we stand up to the bully, the consequences are completely unreasonable and could cost us a ton of money in the long run.”