One of the more recognizable corners of Carlsbad Village could soon look very different.

The Carlsbad Planning Commission voted 6-1 to recommend approval of Carlsbad Village Square, a proposed four-story mixed-use development that would replace the shipping container plaza currently occupied by Choice Juicery and Crackheads.

Located at the northwest corner of Carlsbad Village Drive and State Street, the little outdoor plaza has become a distinctive part of the Village. With its shipping containers, outdoor seating and casual atmosphere, it definitely stands out among the more traditional buildings downtown.

And now, its future is up in the air.

What Is Being Proposed?

The latest proposal calls for a four-story building with seven condominiums and ground-floor commercial space.

One of the seven condos would be deed-restricted for a low-income household.

The developer also plans to provide nine residential parking spaces. Eight of those spaces would be located inside four garages using hydraulic lifts that allow one vehicle to be parked above another.

The project would not provide dedicated commercial parking.

Normally, that might be a significant issue in an already busy part of the Village. However, because the property is located within a half-mile of the Carlsbad Village Coaster Station, state law allows the project to waive certain parking requirements.

This Project Has Been Around for a While

Interestingly, this isn't the first time a development has been proposed for this property.

A similar project went before the City Council in 2018. That version included five condominiums with commercial space on the ground floor.

The City Council denied it, citing concerns that the project wasn't compatible with the surrounding one- and two-story commercial buildings.

But a lot has changed since 2018 — particularly California's housing laws.

The developer submitted the revised proposal in March 2025, increasing the number of condominiums from five to seven and including one deed-restricted affordable housing unit.

That affordable unit is particularly important because it allows the project to take advantage of state housing laws that can override or waive some local development requirements.

Why Some Carlsbad Residents Are Opposed

The biggest concern from residents isn't necessarily the number of condos.

It's what continued development like this could mean for the character of Carlsbad Village.

Some residents who spoke against the project said replacing the existing plaza with a four-story building would further change the "quaint" atmosphere that has traditionally made the Village different from other parts of San Diego County.

And it's easy to understand why this particular property gets attention.

This isn't a large development on the outskirts of town. It's right at Carlsbad Village Drive and State Street, just a few blocks from the beach and in the middle of one of the busiest pedestrian areas in downtown Carlsbad.

Does Carlsbad Have Much Choice?

That's where this story gets more complicated.

Planning commissioners indicated that California's current housing laws give the city significantly less discretion than it had when the previous project was denied in 2018.

Because the new proposal includes affordable housing, state law allows the developer to request waivers from certain local development standards.

Planning Commission Chair Roy Meenes acknowledged the frustration surrounding the issue, saying both residents and local officials have concerns about the effect state housing requirements are having on the Village.

Despite those concerns, the Planning Commission voted 6-1 to recommend approval.

Commissioner Kiley Fitzgerald cast the only opposing vote after raising concerns about the lack of designated parking for people with disabilities.

The project will still need to go before the Carlsbad City Council for a final decision.

What About the Property's History as a Gas Station?

Another issue raised during the Planning Commission meeting involved possible soil contamination.

The property was previously used as a gas station and automotive service center from the early 1920s until the mid-1980s.

A resident questioned whether contaminants from gasoline, oil or other automotive products could create a public health or safety concern.

According to Carlsbad's community development director, underground fuel tanks were removed from the property in 1998. Soil samples were also taken, and the remaining contamination reportedly did not reach levels requiring additional remediation.

My Take as a Carlsbad Local Realtor

I've got to admit, I'm a little bummed about this one.

I've always thought the shipping container plaza was one of the cooler and more unique little spots in Carlsbad Village.

It isn't some historic landmark, but that's not really the point. It's quirky. It's casual. It has outdoor seating. And it has that laid-back feel that fits a beach town like Carlsbad.

Those little things contribute to the personality of a downtown area.

At the same time, there's a bigger issue here that cities throughout California are dealing with: How do you add more housing while preserving the character that made people want to live somewhere in the first place?

And in this case, Carlsbad's ability to answer that question locally appears to be increasingly influenced by state housing law.

The end result here would be seven new condominiums, including one deed-restricted affordable unit.

So… there's that.

Whether that's a worthwhile tradeoff for this particular corner of the Village is something Carlsbad residents will probably have plenty of opinions about.

What do you think?

Are you disappointed to potentially see the shipping container plaza go, or do you think adding housing and new commercial space is a good change for Carlsbad Village?

Once again, my name is Bern McGovern, local realtor, and I keep up with San Diego news so you don't have to.