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Draft Minutes 3-24-09CITY OF CUPERTINO 10300 Torre Avenue Cupertino, CA 95014 CITY OF CUPERTINO PLANNING COMMISSION DRAFT MINUTES 6:45 P.M. March 24, 2009 TUESDAY CUPERTINO COMMUNITY HALL The regular Planning Commission meeting of March 24, 2009, was called to order at 6:45 p.m. in Room 100, Old Council Chambers, 10350 Torre Avenue, Cupertino, California, by Chairperson Lisa Giefer. SALUTE TO THE FLAG ROLL CALL Commissioners present: Chairperson: Lisa Giefer Vice Chairperson; Paul Brophy ` Commissioner: Winnie Lee Commissioner: Marty Miller Commissioner: David Kaneda (not present at roll call; arrived during Oral Communications discussion) Staff present: Community Development Director: Steve Piasecki City Planner: Gary Chao Senior Planner: Colin Jung APPROVAL OF MINUTES: Minutes of tlae March 10, 2009 Planning Commission meeting: • Correction to Page 3, bottom of page, Com. Miller: (second Pane) "adding the cell tower is making it worse" should read "adding tlae cell tower is not making it worse" • Page 7: Sims Property correct spelling is "Simms". Motion: Motion by Com. Miller, second by Com. Brophy, to approve the March 10, 2009 Planning Commission meeting minutes as amended. (Vote: 3-0-1; Chair Giefer abstained, Com. Kaneda absent) WRITTEN COMMUNICATIONS: None POSTPONEMENTS/REMOVAL FROM CALENDAR: None RETIREMENT OF COMMUNITY DEVELOPMENT DIRECTOR STEVE PIASECKI: Chair Giefer announced the retirement of Steve Piasecki, Community Development Director effective March 27, 2009. On behalf of the Planning Commission, she thanked Mr. Piasecki for his contribution to the City of Cupertino and recognized his accomplishments with the City. Mr. Piasecki thanked the Planning Commission and expressed his appreciation to the staff. Com. Miller also acknowledged Mr. Piasecki, and noted he had worked with him for the past 24 years. Cupertino Planning Commission 2 March 24, 2009 ORAL COMMUNICATIONS: Michael Gottwald, Cupertino resident, thanked Mr. Piasecki for his many years of service to the City of Cupertino and wished him well in his retirement. Com. Kaneda arrived at the meeting. CONSENT CALENDAR: None PUBLIC HEARING: 1. M-2009-O1 Modification to a Use Permit (U-2002-06) to amend the conditions of Tenny Tsai approval to allow specialized tutorial or studio uses and determine the (Civic Park, LLC) amount of office/retail uses along DeAnza Boulevard. Includes a possible 20050 Town reassessment of the shared parking arrangement within the parking Center Lane structure. Tentative City Council date: April 7, 2009 Colin Jung, Senior Planner, presented the staff report: • Reviewed the application for a use permit modification to change the general commercial regulations for the Villagio mixed use development. The original proposal had two components to it; one to allow specialized tutorial or studio uses in a complex where it was previously prohibited and to delete the ratio of office to retail uses for So. DeAnza Boulevard. The second part of the use permit modification related to assessing of shared parking arrangements within the parking structure between Villagio and an office building which shares a portion of the commercial parking. The reason for the withdrawal is they could not come up with a written shared parking agreement between the property owners by the time of the hearing. The background of the application is outlined in the staff report. • Staff supports deletion of Condition d with the proviso that the three anchor spaces be retained either as retail or restaurant locations. • Staff does not recommend a change in Conditions b or c as it relates to keeping certain retail or restaurant presence on DeAnza Boulevard. They feel it is an important part of the complex and they are the main businesses that drive the traffic to'the center. • He answered Commissioners' questions related to the application. Eric Wong, representing the applicant: • Said they could live with recommendations on Conditions a and d; and addressed Conditions b and c and explained the reasons they were asking that they be removed. Their goal is to have flexibility in leasing the space; they have tenants interested in leasing space, but the applicant is at a disadvantage if they cannot make on-the-spot decisions and have to inform the interested tenants they may have to go to a public hearing for certain uses. They may lose the interested tenant who will go elsewhere because of anticipated delays. • They are requesting a change also because at this time it would cost an additional $4,000 to apply for a change to the permit. Chair Giefer opened the public hearing; as there was no one present who wished to speak, the public hearing was closed. Colin Jung: • Explained the reason for the clause about not having schools, studios, gyms, etc. in the anchor locations. Most of the schools in town are primarily for students and they normally would not Cupertino Planning Commission March 24, 2009 be active except for limited times of the day and on weekends. They are seeking something with a more regular activity schedule, such as 9 to 5 or later, which does not include the learning centers or dance studios as they are primarily an after school and weekend type activity. A gym would not be appropriate because there is not an abundance of parking to accommodate their clientele. The anchor spaces were important to the Economic Development Manager, who felt those were the prime retail locations from a visibility and traffic standpoint and she wanted to reserve that for places she knew were going to be more active during the day into the week. Gary Chao: • Said that when the building was originally proposed and designed, the corner anchoring buildings with the outdoor seating areas, were meant to cater to restaurants and retail space; they are the primary retail spaces, and through this process staff wants to be certain they are preserved for that purpose. The businesses located mid-block or around the corner are less important in terms of retail, relative to the visibility and pedestrian activation. He said he felt that regardless of the outcome of the condition, they would eventually have a predominant retail commercial frontage along DeAnza Boulevard. Eric Wong: • Commented that if it was specified that corners could only be used for retail and restaurants, and not financial institutions or office space, the restrictions would make things worse than they currently are in terms of difficulty in finding tenants. Gary Chao: • Clarified that presently a minimum of 50% of the entire ground floor has to be retail; regarding the DeAnza frontage, at least 40% of the frontage has to be retail, hence two layers of conditions. Eric Wong: • Said he was not aware that staff's recommendation on Condition d excluded banks from the corner location; and he just became aware that the three corners were being restricted. Gary Chao: • Said staff's recommendation in the staff report is not to prohibit other uses in the corner spots, but states that the studio, dance, or karate uses cannot be in the anchoring corners. It offered an alternative to what the applicant was requesting regarding b and c. He said the other alternative is that they are focused on the corners and felt that relative to architectural design, the corners are meant to provide for the prime retail spaces; they are comfortable with losing the percentages as long as those areas are being reserved for retail .and restaurant. It is another option, but not what staff is recommending. The applicant said they were not agreeable to that because it makes it worse for them. Eric Wong: • Commented on the language in the model resolution, stating that they could live with a, but asked that b and c be removed. He said that changing the percentage from 61% would make it -- more flexible. Com. Brophy: • Said he would argue against the restrictiveness of the proposed resolution and would prefer to strike all of the conditions and make it available for general commercial use; although as a compromise, eliminating Conditions b, c and d would make the life of the project owners Cupertino Planning Commission 4 March 24, 2009 better without creating problems for the city. He pointed out that based on his observation of the project compared to other similar mixed use projects with commercial on the ground floor and residential on the top floor, they have done the best job of any of the projects in the city to make an effort to lease out under the constraints of the city. He said the existing problem is the fact that even though the project was first approved in 2003 with a revised permit in 2006, the issue is the attempt to force mixed use projects in a suburban area of this sort which are doomed to be a failure; these kinds of projects are rarely successful in suburban arrangements. He said he hoped they would not approve any more of them; and the question remained about what to do with the existing projects, all of which have substantial amounts of vacant space. Said in his opinion, with his experience in the retail shopping center business, the 19,000 square feet is not enough mass to be called a shopping center, but is merely individual spaces that can be leased. He felt it was in the city's best interest to have the center filled up as quickly as possible as vacant spaces in our mixed use projects are a detriment to the city and I would try to look at a solution to fill them up. He referred to the language on Page 1-3 describing the area as "having active pedestrian oriented commercial uses", and said that So. DeAnza Boulevard was not a pedestrian street. In no way is this really a shopping center, nor is it a pedestrian oriented district. He said his preference would be that they all agree to eliminate any limitations other than the clause of general commercial use but should they not do that, he strongly urged the elimination of Conditions b and c, as well as the additional paragraph about the anchor tenant spaces; although as Mr. Wong stated the kind of uses that are listed are the ones that are least likely to afford the best spots anyway. They are the tenants they would get by eliminating Condition d, who will do their best to help existing restaurant uses, such as mothers and children going to restaurants or Red Mango; and would be a benefit to the center, not a detriment. Coin. Kaneda: • Said he agreed that these are trying times and the owner is having difficulty in filling the space; and in general he was inclined to want to help them. He also concurred about having clauses about specialized schools, studios and health clubs; it is not in the anchor stages and he was supportive of striking Conditions b and c, and try to give the owner some flexibility in case the Curry House does move out. Winnie Lee: • Said she supported keeping Condition a; the goal has been to have retail and restaurant if possible, and sales tax revenue is generated for the city. Staff is supportive of removing Condition d, which pleases the applicant because they have an application from a martial arts studio forthcoming. They want it to be a successful shopping area, and at 45% vacancy is not the definition of successful. Striking Conditions b and c will give the applicant more flexibility in renting the spaces. Coin. Miller: • Said he supported deleting Conditions b, c and d, and agreed with comments that the applicant has been unsuccessful in their attempts to fill vacant spaces. He said he also wanted to give the applicant as much flexibility as possible because of the state of the economy, but acknowledged that even when times are not that difficult, they still had trouble renting the space. He added that he was not in favor of insisting on certain percentages as they have been fortunate to be able to rent it to the people they have. • Said he supported Com. Brophy's point of view to give the applicant the most flexibility; and suggested they state the entire center needs to meet the requirements of general commercial. Cupertino Planning Commission March 24, 2009 Chair Giefer: • Said she felt it was important to give flexibility to applicant and she was comfortable removing Conditions "c" and "d"; however she was concerned about their needs as residents of the city of Cupertino, and whether it is in their best interest to remove the requirement of their expectations of the DeAnza Boulevard frontage. She expressed concern that if they did not stipulate what the DeAnza frontage is, that at some point, with a different owner or different economy, they might end up with a dance studio, a nail parlor or dry cleaner along DeAnza Boulevard. She said she was concerned with the DeAnza side, and she was willing to change the percentages, and open them up to provide more flexibility, but wants a predominant restaurant/retail frontage facing DeAnza Boulevard because it is the hook that pulls people in. What is put in place currently would go beyond the present ownership and the tenure of the Planning Commission but it might not outlast the Cupertino residents. For the longevity and what their expectation as residents is for the plaza, there should be some stipulation of what percentage remains forward facing the Cupertino residents. She reiterated that she was comfortable with most of the things mentioned, but not with completely striking Condition b. Com. Kaneda: • Said the owner said that 60% would not quite work and asked Chair Giefer if she would be interested in allowing some flexibility on that, such as 61% or whatever the amount would work out to be. Chair Giefer: • Said she would support moving the scale in the direction up to 65%, such as a 65/35 split, to provide greater flexibility. She did not want the city and the residents to lose control of the DeAnza facing street. The Planning Commission has the responsibility to set a tone and there is an applicant who does not have a problem tenanting it per the old resolution. Eric Wong: • Said that the additional flexibility to combine the two spaces into a larger space, although not ideal, they could live with that. Com. Kaneda; • Said they were struggling on one hand, to keep some control over what that DeAnza frontage is. like. However, they do not want to do something that says the applicant has to return in two years because they haven't been able to lease it out; or have a situation where the applicant has the opportunity to lease the space out, but require a Planning Commission public hearing, which may cause a delay and drive away potential tenants. They would like to find a middle ground that would work for the applicant from a leasing standpoint, but also provide comfort in not having a nail salon or dry cleaners there in the future. Eric Wong: • Said they would prefer to have a restaurant or bakery, having a financial office is not their first choice. If the percentages were changed to 65/35 it would take care of the Curry House space plus the vacant space; and being such a small change they could live with that. He pointed out that Terranomics, a top retail leasing firm, has been working to fill the spaces with tenants since the purchase of the property. Com. Kaneda: • Said he was comfortable with bumping the number up to 65% so they could combine the spaces; Coms. Miller and Brophy are interested in striking it all together. Cupertino Planning Commission March 24, 2009 Com. Miller: • Said that there were already a number of centers struggling within the city, and he did not feel it served the community or business owners any good to putmore restrictions on them when it is already so difficult to rent space. • He said that although the applicant said he can live with it, they cannot conclude that all the situations are taken care of that would prevent him from having to go before the Planning Commission again, since he may lose a tenant because they did not bump it up to 66 instead of 65; and it is just a number. He said he did not see the advantage. • He would prefer to see all the spaces leased, even if not all retail, and the difference in sales dollars is negligible to the city. The importance of not having vacant store fronts is critical. Com. Brophy: • He said that 50% occupancy after two or three years is not considered an investor's success; he would also prefer to see the two restaurants that are there. They also have to look at the history in the city of projects which the Planning Commission, City Council and staff pushed for; mixed use with the idea they would get the pedestrian oriented commercial uses. • The applicant is also faced with the problem of losing arestaurant/retail tenant if he has to wait until he hears from the city if it is permissible; and he is also faced with paying the $4,000 fee. • Relative to the sales tax issue, he said those types of projects when they were approved were a combination of two factors; both made sense, but when combined, wound up leading to the type of developments that are not a contribution to the community. Sales tax revenues are always in the back of the mind of the City Manager, the City Treasurer and the City Council, and the problem with that is that when additional space is added, it results in uses that provide a minimal to zero space and zero to minimal sales tax dollars. There are plenty of shopping centers that have vacant spaces and available land for retaiUrestaurantuws. • The applicant is one of the most competent owners and he has made a serious effort to lease out the spaces; in terms of aesthetic appearance, he said he felt the owner should be given the flexibility to make deals without having to return to the Planning Commission. Motion: Motion by Com. Miller, second by Com. Brophy, to approve Application M-2009-O1 per the model resolution with the following changes: Conditions b, c and d be eliminated; deletion of Condition d in the model resolution. (Vote: 4-0-1; Chair Giefer no.) Chair Giefer said she did not support the application; although she agreed they needed to provide flexibility for the retail owners, she disagreed with not stipulating the retail restaurants frontage along DeAnza, which she felt was a mistake for the city). OLD BUSINESS: None NEW BUSINESS: None REPORT OF THE PLANNING COMMISSION: Environmental Review Committee: No meeting. Housing Commission: Meeting cancelled. Mayor's Monthly Meeting with Commissioners: Report provided at previous meeting.