Director's Report
CITY OF CUPERTINO
10300 TORRE AVENUE, CUPERTINO, CALIFORNIA 95014
DEPARTMENT OF COMMUNITY DEVELOPMENT
Subject: Report of the Community Development Director ~
Planning Commission Agenda Date: Tuesdav. May 9. 2006
The City Council met on Mav 2, 2006. and discussed the following items of interest to
the Planning Commission:
1. Consider an appeal bv John McMorrow of the Citv Manager's Determination
regarding site access for the Silverstone project on De Anza Blvd.: The City
Council approved a signalized southbound left turn into the south driveway,
subject to review and approval by the Public Works Director after review of
plans (Wang voted no)
Enclosures:
Newspaper Articles
G: \Planning\ SteveP\Director's Report \2006 \pd05-09-06.doc
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TUESDAY
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Business
BUSINESS EXTRA I PACE 7C
, EBAY UNVEILS
EXPRESS SHOP
MARKETPOwt&OAD I PAGE 8C
STOCKS SLIP DESPrn
OIL PRICE RETREAT
www.mercurynews.com/business
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How
A LARGE CAMPUS
HAS ADVANTAGES
OVER A BUNCH
OF SMALL ONES
ØJ--
. _N<œ<
Steve Jobs said last week
that Apple Computer had
to beat long odds to find the
site of its second campus in
Cupertino - and the com-
panis chief executive
wasn~ kidding. Apple also
pajd big buclœ.
Jobs was most likely
speaking pIajnly when he
told the Cupertino City
Council that Apple ended
soendhu< me than it
:wahave-= .
theland.'llie~
ue of the SO acres APPle is
~tops $160 Dúllion,
acco" to property re-
cords. Ie would not
comment on the purchase
~purchase . is
just the beginning. ~ the
Œne Apple Battens the
site's o1d-styIe stru.ctures
and ho.úlds new oftices for
as IIUIIIJ' as 8,500 employ-
ees - a process the compa-
D¥ experts to take about
!our ¡oears - APPle could
easilyhavespenf$SOOmiI-
lion. _ rear estate experts
predict. That would make
the company's second cam-
found
50 acres
-
pmmd
and why
they paid
?~.c. -t
lor 1 _
Su APPLE, Backl'a&<
In
SWeet~~1O
""""'.....
Much of Apple ~s hmgerfor.... office space comes because
of the success of the II'Od music player. now the CI>f1"I"II1Y's biggest
mnneyrnaIœr.Some _ ",the pIamed ~
. The assessed value of the land - the runber used for tax po.rpnses
- h.... _ $160 million. Local real estate experts say Apple
pn¡babIy paid .......
. _ of the land was owned by _-Packa1i The site is cfll1!Ctly
across _ 280 from VaDco fashion Pari<
. Apple r>par1ed nearly $9 biII1", In casI1 and shorHem imestments .
and no debt at the end of 2OO5,JeavIng it some flexIbillt¡o 10 pay for real
..-
Scuœ: SIIIbI~CalldrAmssar.MIJaaoyNlwsr-.dl
Hewlett-
Packard sold
this building
and two
others to
Apple so the
¡Pod maker
will have 50
acres for its
new campus.
KARENtBOROtERS
-..............
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lOC MERCURYNEWS.COM
SAN JOSE MERCURY NEWS TUESI·
APPLE I How it found 50 acres
Cor1J;imt.edfrom Pag.lC
pus one of the costliest Silicon Valley
commercial ventures in recent mem-
ory.
Business space in Apple's h0me-
town is among the most 8ought-after
in the Bay Area. Just 7.7 percent of
Cupertino'. of6œs are vacant, mak-
ing it one of the toughest pJaces in
the region for busines... to expand,
according to NAJBT Cormzuircial,
which tracks vacancy rates. The
average office vacancy rate in Silicon
Valley as a whoJe is 12.6 percent,
NAJBT found.
The maker of iPod music pJayers
and Macintosh computers probably
could have pun:based Iower-prieed
land elsewbere in the &Iy Area. Cu-
pertino is an . ,address, be it
for comm~-ëal prop-
erties. But the city where Apple bas
deep roots held more allure.
No easy task
''Fifty-acre parœls are generaDy
not that avaDåble in Silicon Valley;
said Matthew Anderson, partner
with Foresight AnaIyëcs. a i-eaI es-
tate marlœI:ing anaJysis and fo.....
casting oomp:my in Oakland. "You
ean't buy 50 acres, you have to piece
it togethe& So if yon're AppJe and
you're going to go through tne trou-
ble of putting it together, you might
as welT pick an area you want to stay
in, as Oþposed to one further _
where you mi2bt save money but it
will~· as difficult to assemble."
A now bas employees working
in SO buiktings strung across
Cupertino, includIDg on BuDb Road
and De Anza Boulevard, Cupertino
city officials said. Consolidating on
one !arge campus will save the com-
pany money and headaches in main-
tenance and security costs, acc0rd-
ing to real estate experts.
Convenience also is a factor.
4'In ~ campus setting, it's more of a
secluded feel, as oppÓsed to a \Dg!>-
rise,J> Anderson sãia. "Plus, there's
room fur other facilities and ameni-
ties, such as more parking or a soc·
œr field. When groups are worlóng
togethe; they don't have to get on a
bus and drive to another building.
they can just waJk."
Anderson added that having an-
other !arge campus is also a security
advantage for tight-!iPP<'? Apple,
which zeaIousIy guards information
about new products and shields its
development efforts from public
KAREMT. BCR:HERS - MERCtRYNEWS PHDTOGRAPHS
Hewlett-Packard sold buildings on Ridgeview Court - street address 10555,
above, and IObOO, below - along with the buildi,,!! at 10435 N. Tantau Ave.,
shown on Page lC, to Apple for its second campus In Cupertino.
vie'R.
"From a security standpoint,' it is
easier to secure their intelJectua\
property and their new ideas in a
campus setting than one where all
their people are spreacj out," Ander-
son said
Assembling 50 acres of land in Sil-
icon ValleY. re<JUire:s more thanjust a
big ~ -:it ta1œs discretion,
too. If sellers find out a mu\tibilJion-
dollar company is hunting for land,
they're likely to boost the asking
price.
So, as with its new products, Ap-
ple was equally secretive about its
plans for its second campus.
Apple worlæd with development
firm !Ðnes Interests to secure land
that will become the technology
firm's new campus. The property is
roughly bounded by Interstate 280,
PruneridRe Avenue, North Wolfe
Road and"'Iantau Avenue.
Last week, !Ðnes purchased an
eigbt-acre slice of land bounded by
Pruneridge Avenue and 1-280 from
Palo Alto real estate developer Sum-
merHillHomes.
SummerHill had just purchased
the property on Pruneridge in Fel>-
ruary for an undisclosed sum from
Sobrato Interests and announced
þlans to construct ISO townhomes
and apartments and a one-acre park
on the site.
The property had been rezoned to
permit housing. That prohably
means ~le ''paid a little more, e&-
pecia1!y with tne entitlements and
housirig being as hot as it is now,"
said Cupertino City Manager David
Knapp.
SummerHill officials were told on-
ly at the closing that !Ðnes was
worldng Qfi:;þeha\f of Apple,' which
would cobblétogether thatJsJ>d with
properties iÏ"'¡iurchased fronfothers
to get the space needed to build its
second campus. The closing 00-
CWTed hours after Apple CEO Jobs
made a surprise appearance before
the Cupertino City Council to inform
officlaJS about his company's expan-
sion plans.
'We ~ are in the business
of building homes, so that is not that
common an occurrence for us. But
n1tim5d-Þ\Y' that is what the seller in-
formed us," said Kaëa Kamangar,
senior development manager with
SummerHill.
'Assemblage'
Most attempts to piece to¡¡ether
contiguous land owned by dŒerent
owners - a practice known as lias-
sembJage" - are conducted ~
often with property owners m the
dark about who the buyer is, said
Philip Mahoney, executive vice pres-
ident and partner with Cornish &
Carey. a Santa Clara commercial
real estate brokerage.
"I've worked on many assen'Iblag-
es, and the only way they happen is if
they are quiet. There's no upside to
those not involved knowing before
they need to," inc\udjn¡¡ city officials,
said Mahoney, who saia his company
was not involved in the Apple trans-
action.
Often companies like Apple "do
not want theU" competitors to know
what they are doing because any-
thing pefœived as j;rowth can be
percêVed as a strength or a weak·
ness and others can react to that.
There is no upside in being overt in a
search such as this," Mahoney said.
When buy;ng Wfferent parcels of
land with separate owners, "the
complexity of the deal grows by the
number of owners involved," Maho-
ney said. There may be numerous
existing tenants with existing leases
to be sorted out, fur example, or dif-
ferent zoning for each property.
Hewlett-PacIiard, which sold three
buildings to Apple, said its part of
the deal is expected to close next
month.
Buying the land is just the first
step for Apple. 'The company is pre,
paring deVelopment plans to present
to city officials for apþroval, and may
have to have the property rezoned.
Mercury News reseon:her Ldgh
Poitinget contnüuted Ie this report.
<kmtadMu:hek Chandler at (~ .,/) _"?
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