The sales sign is still out at La Casa de la Raza, the historic Latino community center near downtown Santa Barbara. And it has languished on the market even with a deep price cut.
The historic building that was offered for sale last year at an asking price of $4.3 million has been marked down to $3.2 million.
While a price reduction could eventually lure a buyer, it’s not good news to the original nonprofit that operated the center, La Casa de la Raza Inc. The group is looking to proceeds from the sale to resume services it suspended around the time of its most recent bankruptcy proceedings in 2021. A lower sales price would mean a smaller pot that can be put to the restart of operations.
Whatever the outcome, the group plans to forge ahead.
“We’re not going away no matter what happens with the sale,” vows Lisa Valencia Sherratt, president of La Casa de la Raza Inc.
An unaffiliated group, meanwhile, moved into the building in 2020, helping to fill the gap in services left by the departure of the original La Casa de la Raza operators. The Restorative Justice Education Center, as it’s known, has been offering help to migrants and others with food assistance, legal aid, medical and mental wellness and other resources.
La Casa de la Raza, the building, is a cultural and architectural icon at 601 E. Montecito St. Its unmistakable fortress-like tower has been a beacon for those in need of aid or community since 1971, whether it was for donated food, education, recreation, concerts or more. The Santa Barbara City Council bestowed Historic Landmark status on the building six year ago.
La Casa de la Raza endured for decades until it was overtaken by financial trouble. It resulted in a Chapter 11 reorganization filing in U.S. Bankruptcy Court in 2017, which was dismissed a year later on a technicality. Then came the Chapter 7 liquidation filing in 2021.
La Casa de la Raza Inc. was heavily in debt and mired in allegations of apparent mismanagement. The nonprofit had not filed taxes in three years. It owed $332,000 to the Internal Revenue Service for payroll taxes dating back to 2013 and $43,547 to state Employment Development Department, U.S. Bankruptcy Court filings alleged.
For nearly four years, the case dragged on. But in July, 2025, an agreement was approved. The building would be offered for sale at $4.3 million. When it sold, creditors who own the building, La Casa Founders Holding Co., would pay $1.5 million of the proceeds to a former lender, MLG Leasing. Sherratt, who joined the La Casa board in 2020, said her group would get the remainder after the trustee and other court-related costs are covered.
The real estate agent appointed by the court to handle the sale, Gene Deering at Radius Commercial Real Estate, declined comment on reasons behind the price cut or any other aspect of the property. He said he could not give details without permission from the court-appointed trustee, who never gave it.
A flashy sales brochure promotes the property as a “unique multi-purpose building” that was built in two phases, 1917 and 1931.
The price cut, however, follows a decision by the city last May to red-tag the property for severe safety deficiencies. Inspectors found blocked exits and unsafe and unpermitted electrical wiring and natural gas piping among other hazards. The city said the violations posed “a significant risk to life in the event of a fire.”
On its web site, the Restorative Justice Education Center noted that it’s had to deal with the building’s deterioration ever since it arrived at La Casa de la Raza. Those problems included collapsed roof sections, rotting floorboards, mold, and other issues.
The first of three phases of required repairs have already taken place, required to lift the red-tag and allow the building to be reoccupied. But there’s still two more phases required, said Restorative Justice’s Jacqueline Karlsen. “There’s still a lot of work that needs to happen within the space,” she said, estimating the costs at a minimum of about $500,000.
A co-founder of the La Casa de la Raza, former Santa Barbara City Councilmember Leo Martinez, said he’s hoping that center can pull off a comeback.
“I would like to see that place do what it was supposed to do,” said Martinez, 83. He remains distressed that La Caza de la Raza’s finances fell into disarray long after he was involved it getting it started.
Martinez, who served on the council from 1973 to 1977, now lives in New Mexico.
Martinez’s involvement began during the tumult of the late1960s when he was a union business agent. Student protests against the draft and Vietnam War spread to UC Santa Barbara. In a scene that captured nationwide attention, protestors torched the Bank of America branch in Isla Vista.
Against the backdrop of the Brown Berets and more strident Latino groups, Martinez had became involved in a less controversial organization, the Chicano Positive Movement.
At the time, the building on Montecito Street housed a building supply store. The contractor who ran the place offered to let Martinez use it for meetings and the owner offered to sell it to the group. Sensing his time was right to approach Bank of America, Martinez said he reached out to the bank’s president in San Francisco for a loan to buy the building. “I told him what was going on and I knew they were looking for a way to get back into the community” after the fire.
Next thing he knew, an entourage of B of A executives arrived.
“Five or six cars drive up to La Casa. We walked around . It was just awesome,” Martinez said. Bank of America made an offer: If the organization could raise $20,000, the bank would lend $150,000.
With the funds, La Casa de la Raza started offering services, from English reading lessons to how to apply for a job. The center raised additional money by hosting monthly dances. In 1987, it hosted a dinner and fundraiser to mark the appearance of United Farm Workers President Cesar Chavez. The center also changed with the times, later becoming a venue for punk-concerts.
Martinez laments that long after he was gone that the center was undone by spending and debt. He blames a lack of checks and balances to have kept it on a sound footing.
Sherratt, however, said once the sale goes through La Casa de la Raza will emerge healthy and ready to serve again.
“We are going to return with a strong business plan, transparency, integrity. The support is growing,” she said.
Sheratt added that her organization will do what it takes to bring success.
“La Casa de la Raza is open to working with community partners who are aligned and share the same values…with a high value on transparency and accountability and mutual support.,” she said.
And she certainly hopes to return to the building that was the group’s longtime home.
“It’s still about the building. We’re not giving up on that,” said Sherratt.
