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Director's Report CITY OF CUPERTINO 10300 TORRE AVENUE, CUPERTINO, CALIFORNIA 95014 DEP ARTMENT OF COMMUNITY DEVELOPMENT Subject: Report of the Community Deve~opment Directo~ Planning Commission Agenda Date: Tuesday, August 26, 2008 The City Council met on August 5th & 19th, 2008, and discussed the following items of interest to the Planning Commission 1. Scott Mommer (Pu.blic Storage), 20565 Valley Green Dr: a. Approve a request for a one-year extension to July 18, 2009, of the Use Permit for a Public Storage facility project b. Approve a request for a one-year extension of the Architectural and Site Approval to September 21, 2009, for a Public Storage facility project City Council approved requests. 2. Adopt a resolution accepting the deed to the Nathan Hall Tank House property and authorizing the City Manager to execute the Certificate of Acceptance of the property on behalf of the City of Cupertino, Resolution No. 08-112. City Council adopted the resolution. 3. Karen Ngo (The Oaks Shopping Center), 21265 Stevens Creek Blvd., APN 326-27-035 (a-e). Continued from June 17. Continued to September 2. 4. Consider a new public park design reviewed and recommended by the City of Cupertino Parks and Recreation Commission, Villa Serra Apartments, Jonathan Moss, 20800 Homestead Rd.. (Continued from Aug. 5). Continue to a tentative date of Sept. 16 at request of applicant. 5. Consider a Municipal Code Amendment of Chapter 17 allowing temporary outdoor signs or displays, City of Cupertino, Citywide. (Continued from Aug. 5). Continue to Sept. 2 at request of staff. 6. Consider a City-initiated Master Plan for the South Vallco Area, City of Cupertino, Citywide. (Continued from Aug. 5). City Council discussed the plan and then continued it to Sept. 16 for further refinements. 7. Consider an appeal of a Design Review Committee denial of a Director's Minor Modification to add a 200-square foot sunroom to the south side of an existing single- family residence in a Planned Development area, Jay Swartz (Luo residence), 11535 Murano Ct.. City Council upheld appeal and approved application to install sunroom. 8. Consider Heart of the City Specific Plan update, City of Cupertino, Citywide. (Continued from June 17). Remove from calendar. It will be re-agendized following the completion of the Planning Commission review. [)k' - , Report of the Community Development Director Tuesday, May 27, 2008 Page 2 Miscellaneous Items 1. Apple Fire - Tuesday night, August 12 a fire caused damage at 20705 Valley Green which is occupied by Apple. Greg Casteel, Building Official, did a walkthrough Wednesday morning to assess the damage and see what he could do to be of assistance. The building is basically two building joined by an enclosed atrium. The fire was contained on the West side, in the ceiling. The East side has water and smoke damage, but Apple anticipates that employees will return on next Monday. Fortunately no one was injured. Greg was informed by an Apple representative that the fire/life safety items installed in the building worked very well and that the fire department was extremely efficient. Presently, Apple is working on relocating employees, and Greg offered his assistance with any sites they may need to use. He also provided a plan of attack for repairing the damage to help expedite the process. 2. Mervyns - Mervyns believes the real estate decline has caused sales to drop. The stores will remain open through the Chapter 11 process. If Mervyns pulls out of Cupertino, we may be able to get a more productive store in its place. (news article enclosed) Enclosures: Staff Reports Newspaper articles G: \ Planning \ SteveP\ Director's Report \ 2008 \pd8-26-08.doc Dr2-~ COMMUNITY DEVELOPMENT DEPARTMENT CUPERTINO CITY HALL 10300 TORRE AVENUE. CUPERTINO, CA 95014-3255 (408) 777-3308 . FAX (408) 777-3333 Summary Agenda Item No. _ Agenda Date: August 5, 2008 Application: DIR-2008-17, DIR-2008-18 Applicant:. Scott Mommer Owner: Public Storage, Inc. Location: 20565 Valley Green Drive Application Summary: DIR-2008-17: Request for a one-year extension for the Use Permit (file no. U-2006-03) for an approved Public Storage facility project to July 18, 2009. DIR-2008-18: Request for a one-year extension for an Architectural and Site Approval (file no. ASA-2006-05) for an approved Public Storage facility project to September 21, 2009. RECOMMENDATION: Staff recommends approval of the one-year time extensions for the use permit and architectural & site approval. BACKGROUND: In 2006, the City Council approved the redevelopment of this property to allow a larger, 3 & 4-story, 155,250 square-foot Public Storage facility in three buildings. The departure of the project manager and Public Storage's interest in some redesign of the facilities to make it more cost feasible have made it impossible for the company to start construction within the two-year expiration of the planning permits. Company representatives have been actively working with staff for the past five+ months to move its project plans forward. DISSCUSSION: City ordinance (CMC sections 19.124.100 & 19.134.100) allow the approving body to extend the time for the use of a use permit and architectural and site approval for a maximum of one year, without public hearing (Exhibit A). The requests for time extension were filed before the expiration dates, so the use permit has been DiZ ,-3 fJ CITY OF CUPEI\TINO City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 (408) 777-3308 Fax: (408) 777-3333 Community Development Department SUMMARY AGENDA NO. AGENDA DATE: August 5, 2008 Application Summary: Accept the deed to the Nathan Hall Tank House property by resolution and authorize the City Manager to execute the Certificate of Acceptance of the property on behalf of the City of Cupertino. Recommendation: Staff recommends the City Council accept the deed to the Nathan Hall Tank House property by adopting the attached resolution and to authorize the City Manager to execute the Certificate of Acceptance of the property on behalf of the City of Cupertino. BACKGROUND: On September 19, 2006, City Council directed the City Manager to sign the agreement to dedicate land and restore the Nathan Hall Tank house, and for staff to complete the survey map exhibits for the agreement and develop a detailed plan to ensure its renovation. Staff has completed the survey map exl1..ibits, and is coordinating a community effort to restore the tank house to its original condition. Phase One renovation that began in Summer 2007 to repair the siding, install a new roof and paint the structure has been completed. In addition, the partial reconveyances from the property O'wners and their lenders have also been completed. DISCUSSION: The three property mvners have signed the paperwork to convey the property to the City of Cupertino; hmvever, prior to recordation of the deed, the Santa Clara Comity Recorders office requires that the City Council accept the deed by resolution under California Government Code GOV Section 27281. Following the acceptance of the property, the title company will record the transfer and the property will officially be under the City's mvnership. ENCLOSURE Exhibit A: Certification Letter by the California Government Code GOV Section 27281 Exhibit B: Lot Line Adjustment Exhibit Dt2 ,-5 CITY OF II City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 (408) 777-3308 Fax: (408) 777-3333 CUPERTINO Community Development Department Summary Agenda Item No. _ Agenda Date: August 5, 2008 Application: U-2007-04, ASA-2007-06, TM-2007-09, EXC-2008-07, TR-2008-02, EA-2007-06 Applicant: Karen Ngo, Sand Hill Properties Owner: Modena Investment LP & Sunnyvale Holding LLC Property Location: 21265 Stevens Creek Boulevard (Oaks Shopping Center) APPLICATION SUMMARY: USE PERMIT and ARCHITECTURAL AND SITE APPROVAL (file nos. U-2007-04 and ASA-2007-06) to demolish a theater and 2,430 square feet of commercial space and construct a 4-story, 122-room hotel; a 3-story, ~56,200 square-foot mixed use retail! office/ conference center building over an underground parking podium and site improvements in two development phases at an existing shopping center. EXCEPTION (file no. EXC-2008-07) to the Heart of the City Specific Plan to reduce one side yard setback to 15 feet for a proposed 4-story, 122-room hotel and a 3-story, 56,200 square-foot mixed use retail/ office/ conference center building at an existing shopping center. TENTATIVE MAP (TM-2007-09) to subdivide an 8.1 net acre parcel into two parcels of 3.0 acres and 5.1 acres in size, with one parcel to be further subdivided into four commercial condominium units and a common area lot. TREE REMOVAL (TR-2008-02) request to remove and replace approximately 47 trees that are part of an approved landscape plan for an existing shopping center. RECOMMENDATIONS: On a unanimous vote the Planning Commission recommended: · approval of a negative declaration for the project; and · approval of the project per Resolutions Nos. 6516,6517,6518,6519,6520 /)12 /'1 Applications: U-2007-04, ASA-2007-06, TM-2007-09, EXC-2008-07, TR-2008-02, EA-2007-06 21265 Stevens Creek Boulevard Page 2 August 5,2008 Staff believes the applicant's plan is a workable concept that can be approved with several modifications that the applicant continues to oppose. On balance these seem like reasonable compromises that allow the applicant to proceed while protecting the longer term public interests relating to preserving the redevelopment potential and future viability of the Oaks Shopping center and aesthetics of the new buildings. Staff recommended conditions address project phasing, Mary Avenue setback and landscaping and the street improvements along Stevens Creek Boulevard. These conditions are outlined in the "Staff Comments" section of this report. BACKGROUND: The Planning Commission reviewed the project on May 27, 2008 and June 10, 2008 and took public testimony at both hearings (Exhibit A-3). A l/z mile radius was noticed for the hearings. Over 1,500 notices were mailed to property owners and given to Oaks Shopping Center tenants. The City Council reviewed the project on June 17, 2008 (Exhibit A-3) and continued it to its August 5, 2008 hearing. DISCUSSION City Council Member Comments and Directions · Evaluate whether an all office and conference center mixed use project will enable you to develop this project as one phase. · The project needs additional noticing; more public input. · Minimal (less than 10 spaces) to no parking loss on Mary Avenue is desired. · The hotel needs better architectural detailing, particularly on the westerly side of the building. ' · Install Heart of the City landscaping improvements along the whole Stevens Creek Boulevard frontage (westerly driveway to Mary Avenue). · Do not require a contribution toward highway bridge improvement. Shift funds to street landscaping improvements. · Remove and replace dead trees, including field-grown oaks for previously removed large oaks. · Clarify office building and conference center proposal. · If the underground garage is limited to hotel guests and mixed-use building tenants, explain how you would force them to use it, instead of the more convenient surface parking lots. · Contact the Marriott Corp. and find out their policies on sustainability for their hotel operations. · Provide computer visual simulations of the hotel and mixed-use building in their site contexts. · Calculate floor area ratios for the proposed development and the remaining shopping center. DrZ~ Applications: U-2007-04, ASA-2007-06, TM-2007-09, EXC-2008-07, TR-2008-02, EA-2007-06 21265 Stevens Creek Boulevard Page 3 August 5,2008 Public comments There were numerous comments relating to aesthetics, landscaping, traffic, breaking up of the ownership and building design that are detailed on the attached exhibit B-3. Applicant Comments At the June 17th hearing, the applicant stated that his plan was to lease back three acres from the property owner in order to build the hotel and mixed use building. The Marriott Residence Inn is an extended-stay type of hotel that should not compete with surrounding hotels because of the type of customer it attracts (those staying 5 days or longer), which are currently going elsewhere in the area. Transient occupancy tax is estimated to be $600,000 annually and traffic is less because of the infrequency of guest turnover. The project must be phased because there will be different lenders - one for each building. Staff asked for a greater than 20 feet Mary Avenue setback because it felt the building height needed to be mitigated by landscaping in the public right-of-way. Just pushing the building forward does not help as it would eliminate 16 hotel rooms. Proposed Mary Avenue setback of 20 feet is adequate. Doing all of the Heart of the City landscape improvements on Stevens Creek Boulevard does not make sense at this time because future redevelopment of the main shopping center buildings will cause the removal of the landscape improvements between the driveways. The applicant will work with staff to improve hotel design, particularly the visible upper floors on the west side of the building. The applicant does not wish to return to the Planning Commission for design review. Both buildings are needed to make the project feasible. A smaller hotel and a smaller mixed-use building would make the project infeasible. The subdivision and condominium plan are also necessary to make the project move forward. In response to the City Council member comments and directions, the applicant provided the following written replies in an email to staff. Applicant responses (full text) are in bold-face capital letters in Exhibit C-3: . "One development phase does not work for us and neither does a phased condo plan. We must have approval for the condo division for the hotel and mixed use building at time of project approval. This is a lender driven requirement." Dr<4 Applications: U-2007-04, ASA-2007-06, TM-2007-09, EXC-2008-07, TR-2008-02, EA-2007-06 21265 Stevens Creek Boulevard Page 4 August 5, 2008 · "We have set up an informational meeting for the Oaks Tenants for July 28th. We have also met with the owner of Glenbrook Apartments, Avery Ventures, and they have expressed support for our project." · "Revised site plan attached, putting in finger islands for trees along section of Mary (Avenue) in front of hotel. Loss of parking spaces on Mary Avenue limited to 4.... We are revising the elevation facing the freeway to add more detail to floors 3 and 4..." · "We agree to improve the section (of Stevens Creek Boulevard) directly in front of the Shane (Company) to and including the main (east) driveway." · "We expect quasi-office tenants, such as, medical, dental, insurance uses (to occupy the mixed-use building.)." · "We can ask the hotel to inform guests upon check-in that they need to park in the garage and we can also post signs stating hotel parking is in the garage." · ". .. (Marriott Corporation) referred us to the USGBC's LEED Guide. They do not have their own program (for sustainability)." City Staff Comments · Noticing: Per City Council direction, the City Council 'hearing was advertised using display ads in the Cupertino Courier for two weeks prior to the hearing, · Previous Oak Tree Removal: Staff did some additional research and found three specimen oak trees had been removed from the shopping center within the past few years. Two were removed with a tree removal permit and replaced. Another was approved for removal by staff under emergency conditions and was not replaced. Any condition of approval should be modified to require one field grown native oak tree as a replacement. · Floor Area Ratios (FAR): Parcel No.1 (Hotel & Mixed Use) No.2 (Shopping Center Remainder) Proposed FAR 90% 24% · Development Phasing/Property Subdivision: Staff has opposed development phasing for this project. Staff prefers that both buildings be completed at the same time. Under the applicant's proposal, staff feels the second phase may not be built and it would be a constraint to potential, future comprehensive redevelopment of the shopping center. The land where the mixed use building is located is potentially an integral part of future redevelopment of the shopping center and should not be put at risk by potentially locking it up in a different ownership from the rest of the shopping center. That portion of the property should be retained by the shopping center ownership unsubdivided until such time when the City has a bonafide, ready-to- DI'2-/O Applications: U-2007-04, ASA-2007-06, TM-2007-09, EXC-2008-07, TR-2008-02, EA-2007-06 21265 Stevens Creek Boulevard Page 5 August 5, 2008 be-built development proposal. Adopting a phased condominium plan, pursuing a future line lot adjustment for the mixed-use building should address the applicant's needs and reduce future development review time, while addressing the legitimate concerns of the City to keep the parcel whole until such time as there is a solid development application and appropriate sureties that it will be built. · Mary Avenue Landscaping/Street Parking Loss: The idea of converting a limited number of Mary Avenue parking spaces to provide landscape "finger" islands has merit. It should achieve a greater visual setback for the hotel while minimizing on-street parking loss on Mary A venue. The applicant can also achieve greater building setback from Mary A venue by eliminating eight hotel rooms at the end of the hotel building where the setback on Mary Avenue is most constrained. This will reduce the hotel by 6.5% but will provide much needed setback and landscaping that will work with the landscaped finger islands to soften the bulk and mass of the four-story hotel as viewed from Mary Avenue. It has the side benefit of reducing some of the parking demand. · Stevens Creek Boulevard (Heart of the City) Landscaping: The development addition is significant and will increase the shopping center building square footage by 137%. The applicant should install the full Heart of the City landscape improvement from the westerly driveway to Mary Avenue and a modified, and less costly, landscape improvement between the driveways because of the restricted frontage depth. The suggestion at the last Council meeting that this is done in-lieu of a contribution to the Highway 85 bridge enhancement seems like a reasonable compromise. · Hotel Design: Some minor design additions were made to address City Council concerns about the hotel design. Since the June 17th plan set, the applicant has added a number of faux balcony grills to the third floor westerly elevation. The brick base on the same elevation was eliminated at the suggestion of staff because it will not be a visible element. No other changes were made to the elevations. Staff recommends that the west elevation facing Highway 85 needs additional balcony and awning treatment at the second and third stories of the building. Staff has prepared recommended conditions of approval (Exhibit D-3) to address the above issues. Applications: U-2007-04, ASA-2007-06, TM-2007-09, EXC-2008-07, TR-2008-02, EA-2007-06 21265 Stevens Creek Boulevard Page 6 August 5, 2008 ENCLOSURES Exhibit A-3: Staff Reports to City Council dated June 17, 2008 and to the Planning Commission dated May 27, 2008 and June 10, 2008, including initial study, ERC recommenda~on and Negative Declaration Exhibit B-3: Summary of Public Testimony at June 17th Council Meeting and additional emailed public comments Exhibit C-3: Applicant responses to City Council direction and staff notes. Exhibit D-3: Staff recommended conditions of approval Plan Set Prepared by: Colin Jung, Senior Planner Submitted by: Approved by: Steve Piasecki Director, Community Development David W. Knapp City Manager G:\Planning\PDREPORT\ CC\ U-2007-04 ASA-2007-06 TM-2007-09 EXC-2008-07 TR-2008-02 EA-2007-06 CC2 Report.doc Dr< -1/ CUPERTINO PUBLIC WORKS DEPARTMENT Summary AGENDA ITEM IS- AGENDA DATE August 19.2008 SUBJECT AND ISSUE Report on modified street improvements for the Knopp development at 21925 Lindy Lane and recommendation to retain the street improvement conditions required by the Planning Commission. BACKGROUND On July 26, 2005, the Cupertino Planning Commission approved application TM-2005-03, granting the applicant John Knopp a permit to subdivide the property at 21925 Lindy Lane int.o two residential lots. As part of the approval; the Planning Commission required that established existing trees along the street frontage of the property be preserved. In order to preserve the trees, -the standard roadside improvements would have to be modified to allow the roadway to be built at less than the standard width and to delete the requirement for a concrete sidewalk:. The procedure laid out in Section 14.04.040 B of the Cupertino Municipal Code for modifying roadside improvement standards for streets in areas of the City not covered under the hillside development provisions of the Code requires that a semi-rural designation for such streets be approved by Council. A prerequisite for Council consideration of a semi-rural designation is that at least two-thirds of the property owners along the affected street shall have signed a petition to the City requesting a semi-rural designation for their street. A Knopp subdivision representative attempted to circulate such a petition to the residents of the area shown on the attached map, but indicated to City staff that many of the residents who were approached remained sufficiently unclear about the imPlications of the petition that they were unwilling to sign it. - . Recognizing that the trees could not be preserved without modifying the street improvement standards, as well as the existence of significant sentiment in the neighborhood to preserve the trees and the natural quality of the neighborhood, staff held a neighborhood meeting at the site to clarify the options presented by the petition. With plans produced by the applicant's engineer, staff used the site meeting to demonstrate graphically the options for modifying the improvement requirements to preserve the trees and minimize grading of the hillside. The attending residents were polled for a general sense of the modified improvements that would be acceptable on a revised petition, and the following was the result: 15 - 1 o;e - I/) the area of the street affected. The fact that such concurrence was not received would not normally impede the application of these conditions. 2. The applicant could submit construction securities for the most extensive improvements that could be required to allow the applicant to submit the :final map for Council approval, while the time for the petition signatures to be submitted ill support of the semi-rural designation is extended; or 3. Since the petition has not achieved the required two-thirds signup, the Council may overrule the Planning Commission's condition, as was done on Poppy Way, albeit after the fact and at considerable expense to the City. In that case, the standard improvements will be required, and the applicant can proceed with the final map approval. FISCAL IMPACT There is no fiscal impact. STAFF RECOMMENDATION Staff recommends that the Planning Commission conditions requmng modified street improvements for the Knopp development at 21925 Lindy Lane be retained. Submitted by: .~,~ ~ Ralph A. Qualls, Jr. Director of Public Works Approved for submission to the City Council: ~ David W. Knapp City Manager Dr2 -13 15 - 3 ~~ CITY OF CUPEIQ"INO City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 ( 408) 777-3308 Fax: (408) 777-3333 Community Developmellt Departmellt Summary Agenda Item No._ Agenda Date: August 19,2008 Application: CP-2008-02; EA-2008-04 Applicant: City of Cupertino Property Owner: City Wide fI' APPLICATION SUMMARY: City initiated focused Master Plan for tIle South Valleo Area. RECOMMENDATION: Th.e Planning COlumission recommel1ds that tIle City Cowlcil adopt the SoutIl Vall co Master Plan. . BACKGROUND: Ill. March of 2008, the City Council initiated tIle planning process for the South Valleo plaru1.lllg area. TIle approximately 125-acre area is bonnded by 1-280 to the llorth, Stevells Creek Boulevard to tI1.e SoutIl, lllcluding Cupertll1.0 Square SI10pping center (formerly Vallco Fashion Park) alollg the east and west side of Wolfe Road and the office development alollg the east side of Tantau Avenue. ( . -.- ~ - ~ f' ~ I r r I Ot21 t South Valko Master Plan August 19, 2008 Page 2 The area also includes office properties owned by Hewett Packard, Apple, Menlo Equities, as well as the Metropolitan residential! commercial development. Adjoining vacant parcels are zoned for uses such as hotel, residential, office and commercial developments. The City Council authorized Sand Hill Property Company, a new major landowner in the area, to take the lead in managing the master plan community outreach and planning process. Sand Hill Property Company purchased the 17.4 acre site bordered by ValIeo Parkway, Tantau Avenue, Stevens Creek Boulevard and the Metropolitan development. Sand Hill Property Company recently submitted their site specific development application and will be going through their formal public review process shortly after the master plan process. Please refer to the attached Planning Commission staff report for the detailed discussions on the public outreach efforts associated with the master plan and the master plan framework summary. DISCUSSION City Council Study Items In March of 2008, the City Council reviewed the master plan process and specified several items to be evaluated during the master plan review process or as part of Sand Hill's site specific development review process. Please refer to the following table summarizing how each item has been addressed: CITY COUNCIL STUDY ITEMS SOUTH VALLCO MASTER PLAN SAND HILL SITE SPECIFIC DEVELOPMENT REVIEW PROCESS 1 Modification of Finch Avenue Policy 5.5 Further studies will be provided (traffic and circulation) during the site specific development review process. 2 Street parking on Valleo Parkway and Stevens Creek Policy 5.3 Further analysis will be provided by the City and the traffic consultant Boulevard during the site specific development review process. 3 Crosswalks on Wolfe Road Policy 5.2 and Chapter 5 Outside of project area. 4 Connection with Rosebowl Policy 5.4 Detailed site plan and addrtional analysis will be provided. 5 Retail on Valleo Parkway Policy 4.4, Policy 55, and Chapter 6 Additional analysis will be provided during the site specific development review process 6 Oak tree on Stevens Creek Blvd and Finch Avenue Policy 4.3 and Figure 1.5 Specific landscaping plan will be presented for review. 7 Ash Trees on Vall co Parkway Policy 4.3 and Figure 1.5 Detailed arborist report will be prepared by the City Arboris!. Specific project landscaping plan will be presented for review. S Sustain ability and Energy Efficiency Policy 6.3 and Chapter 4 and Sandhill will study and incorporate sustainable measures to be presented Chapter 6 at the project specific development review process 9 Connectivity to Calabazas Creek Trail and boxed culvert Policy 5.1 and Chapter 5 Specific pedestrian circulation plan will be provided. D.e-/$ South VaIleo Master Plan August 19,2008 Page 3 Staff comments on items #2 and #9: Street parking on Vallco Parkway and Stevens Creek Boulevard One of the main objectives of the master plan is to revitalize the area by enhancing the pedestrian and retail experience. Based on the public testimony received at the community workshops, and the experience of local retail brokers, the success of street front retail is directly linked to having convenient and visible street front "teaser parking". The prime examples of this principle in practice can be found in downtown Mountain View, Palo Alto, Los Gatos, and Los Altos. A policy has been added in the master plan (see Policy 5.5) encouraging developers within the plan area to enhance existing public streets by creating a pedestrian friendly and retail serving environment. The City has retained Fehr and Peers Transportation Consultants to evaluate the option of having diagonal parking on Valko Parkway and parallel parking on Stevens Creek Boulevard along Sand Hill's property. The final traffic report and the specific street enhancement options will be presented to the Council during Sand Hill's site specific development review process. Underground Culvert Currently there is an underground box culvert that extends from the south side of Stevens Creek Boulevard to the north side of Valko Parkway. The channel's bottom is approximately 20 feet below Finch Road. The concept of reopening up the culvert in order to restore Calabasas Creek to its natural condition and possibility creating a linear park has been considered previously by Toll Brothers and Santa Clara Valley Water District (SCVWD). According SCVWD, opening the culvert would yield a deep channel at least 150 feet wide. In addition, due to the high velocity flow, and soil erosion prevision requirements, the channel would need to be lined with hardened material (i.e., concrete). The channel would not look like a natural stream course, but rather a man made concrete ditch that would take up the entire width of Finch Road. Based on the engineer's estimate in 2002, the cost associated with day-lighting the culvert is upwards of 2.2 million (see exhibit C). Sand Hill has determined that it would be physically and financially impractical to open the underground culvert. However, the easements for the creek area would be respected. Planning Commission The Planning Commission reviewed the draft master plan on July 8, 2008 and recommended that the Council approve the plan with the following added measures: Ot2 -) It, South Vallco Master Plan August 19, 2008 Page 4 1. Individual developments within the master plan area shall address the level of LEED certification that will be attained and incorporate principles including renewable energy on-site with the goal of attaining LEED Silver certification or higher. 2. New developments within the master plan area is expected to connect, contribute and help implement the pedestrian and bike connections along Calabasas Creek trail from ValIeo Parkway going under Hwy. 280 eventually connecting to Tantau A venue. 3. Trash Management and Receptacle (recyclable and non-recyclable trash) Policy. 4. Encourage the use of native vegetation and drought tolerant trees. 5. Delineate and acknowledge the redwood screen trees along the rear of the Macy's parking garage. 6. Require vehicular ingress and egress shared access between existing properties and new properties. All of Planning Commission's recommendations have been incorporated into the master plan document (see exhibit C). Staff comments on item #1: Green Building Policy Since the Council has not formally decided on adopting the LEED certification process exclusively, staff recommends that flexibility should be provided to the developers or property owners to explore other equivalent certification methods. CONCLUSION Staff believes that Sand Hill has addressed all of the Council and Planning Commission concerns in the Master Plan. The Council should adopt the Master Plan with the Planning Commission changes and staff comments. Sand Hill is prepared to make a full presentation at the Council's hearing. Submitted by: Approved by: Steve Piasecki Director, Community Development David W. Knapp City Manager Enclosures Exhibit A: Planning Commission Resolution Exhibit B: Draft South ValIeo Master Plan Exhibit C: City Council and Planning Commission Study Items Matrix Exhibit D: Memo from BKF Regarding Calabasas Creek Exhibit E: Planning Commission Staff Report Dated July 8, 2008 012 /' (1 I CITY OF CUPERJINO City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 (408) 777-3308 Fax: (408) 777-3333 Community Development Department SUMMARY Agenda Item No. _ Agenda Date: August 19, 2008 Application: DIR-2008-13 Applicant: Jay Swartz Owner: Perry Luo Location: 11535 Murano Court APPLICATION SUMMARY Consider an appeal of the Design Review Committee denial of a Director's Minor Modification to add a 200 square foot to the south side of an existing single-family residence in a Planned Development. RECOMMENDATION The Council has the options to either: a) Uphold the Design Review Committee's decision; or b) Uphold the appeal; or c) Uphold the appeal with modifications. BACKGROUND On July 7, 2003, the City Council approved Use Permit (U-2003-02) to construct 55 single-family residences on a 4.03-acre parcel. Comments received during neighborhood outreach meetings prompted site development changes by the developer. One of those changes included increasing the setbacks to 20'-0"and providing privacy protection landscaping for three of the homes abutting the existing residential properties along the southern border. The intent was focused on minimizing visual and privacy impacts from the proposed second floor. Consequently, these three homes have larger useable rear yard area compared to the rest of the homes in the development. The owner of 11535 Murano Ct. (one of the three homes with 20'-0" rear yard) is proposing the construction of a 200 square foot single story attached sunroom within their useable rear yard area. The sunroom will match the existing residence in material and color and the existing privacy protection landscaping and 8'-0" privacy fence pre -'16 File No: DIR-2008-13 Page 2 August 19, 2008 would remain. The Murano Homeo,vl1ers Associat~on has reviewed and approved the project. Typically the Director has t11e discretion to approval such request, however it was forwarded to t11e Design Review Committe~ due to expressed concern.s received from the adjacent l1eighbor. On July 17, 2008, the Design Review Committee del1ied the proposed project with a 2-0 vote. Tl1e Design Review Committee's decision is being challenged by owner (Perry Luo). Although the Committee could 110t identify al1Y privacy impacts created by the sunroom, the Committee felt that the project was 110t C011sistent with t11e origu1al u1tent of the Use Permit (U-2003-02). PROJECT LOCATION The project site is located on the west side of Mural10 Court along the southerl1 bOUl1dary of the development. A two-story residence currently exists on the parcel. Single-family . residential parcels surround the subject site. ~~' ~- I '" ,; .,d.. .~. ~.. -- -- ---=- .-- ~ ~ f. ' 1 .. D,Q"-Iq File No: DIR-2008-13 Page 3 August 19, 2008 DISCUSSION: Appellant Tl1e applicant is appealu1g t11e Desigr1 Revie\v Committee's decision based on the following reaS011: 1. The origu1al setbacks \vere established by the developer to Inu1imize visual and privacy impacts from t11e proposed second floor. Because the proposed SUl1room is single-story and does not create l1ew visual or privacy impacts, the previous agreement should be reevaluated based 011 the type, location, and size of the addition. COlnl11unity COl11111ents The neighbor immediately abuttu1g t11e subject property to the sout11 cOl1tacted staff with C011cerns t11at the SlU1fOOm would create privacy, noise aJ1d odor impacts. Ir1 additio11, t11e 11eighbor requested that the existing 20'-0" setback be retained, due to the original agreeme11t by the developer to setback t11e residence 20'-0" to minimize privacy concerns at that time. De/~ File No: DIR-2008-13 Page 4 August 19, 2008 Staff Staff previously supported the proposed sunroom at the Design Review Committee for the following reasons: 1. Significant privacy impacts are not evident because the proposed sunroom is single story, starting at 8'-4" high slop roof, not exceeding 11'-0" at the point of attachment to the residence, privacy landscaping would be preserved, and the adjoining privacy fence is 8'-0" high. The height of the sunroom windows do not offer views into the adjoining property, and the sunroom would be used as gathering space for the homeowners, which would not create any additional' noise or odors other then those typical of residential activities. 2. The original use permit for the development did not have any provisions that prohibit the addition of a sunroom. In addition, the applicant has obtained approval from the Horne Owners Association. 3. The design of the sunroom will be consistent with the main residence in material(s) and color. Enclosures Exhibit A: Appeal Form Exhibit B: DIR-2008-13 Design Review Committee Staff Report, July 17, 2008 Exhibit C: Design Review Committee Minutes, July 17, 2008 Exhibit D: Arborist Report, June II, 2008 Exhibit E: Letter from Murano Homeowners Association, November 6, 2007 Exhibit F: City Council Minutes, July 7, 2003 Exhibit G: Planning Commission Resolution No. 6188 Exhibit H: Planning Commission Minutes, May 27,2003 Exhibit I: Plan Set Prepared by: Leslie Gross, Assistant Planner Submitted by: Approved by: Steve Piasecki Director, Community Development David W. Knapp City Manager DfZ /~I Silicon Valley / San Jose Business Journal - July 28, 2008 . httD: II saniose.biziournals.com I sanjose/stories/20081 07/281 newscolumn2.html lusTiiiiJiirnal Friday, July 25, 2008 Apple leases Sand Hill Property building Valley developer Peter Pau continues to work his magic. Apple Inc. has leased the 6o,ooo-square-foot speculative office building that his Sand Hill Property Co. built facing the Apple headquarters on North De Anza Boulevard in Cupertino, according to Kelly Kline, economic development manager for the city. Kline estimates it will take Apple several months to occupy the structure, which still needs to be finished on the inside. Apple is by far Cupertino's most noteworthy corporate citizen, though Hewlett-Packard Co. is a strong second. Apple controls in excess of 3 million square feet of Cupertino's 8.8 million square feet of offices and research and development space. "We try to track every company's business presence," Kline said. DQ-!1.~ Silicon Valley I San Jose Business Journal - July 28, 2008 httD: II saniose.biziournals.coml saniosel stories 120081 07/281 newscolumn2.html IlsiiiiiJililal Friday, July 25, 2008 Morgan Hill petitions court to remove ballot initiative Silicon Valley f San Jose Business Journal - by Sharon Simonson and Stephen Ellison Morgan Hill city officials have petitioned Santa Clara County Superior Court for an injunction on a ballot initiative that would significantly reduce the amount of affordable housing to be built in the city. City Manager Ed Tewes called the initiative "invalid" and "unconstitutional" because it would make it impossible for the city to abide by regional and state affordable housing laws. He expects a decision from the court within the next two to three weeks. If passed by voters, the initiative -- which was approved for the November ballot following a petition of Morgan Hill residents -- would lower the city's maximum of new housing built as affordable from 30 percent to 20 percent and exempt developers from building below-market-rate homes. Ballot materials for the initiative have been submitted, Tewes said, but because the county's deadline for accepting materials is Aug. 8, and the packets go to print even later, there is still time to remove the initiative. [)12/::13 CD o o C'i ,.: t- en ;:) (!J ;:) <( ~ C.) ..... cz. = I- ~ = ca ..c:I .... .... E o o ai Cii c 5 o 'N' :.a ai en o 'c al '" ?- m ..... cz. ca -= ~ I- = .... rn m - -- .... rn = ~ > ?- m == <6 :;0 C1> <6= -= J:!l ~'" ~:;; =<= ~~ .~ -b= ~ ~C3 !E~ C':I"g ~.~ Eo-,=_ =~ c:-.> 5 LC':)a:lc::l'CO ~Ct: ~2 :g = ~ E c..;> ... 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Guardino to lead BART tax push for VTA - San Jose Mercury News llJeJllercury News MercuryNews.com Guardino to lead BART tax push for VTA AGENCY EXPECTED TO APPROVE PUTTING SALES TAX INCREASE ON NOVEMBER BALLOT By Gary Richards Mercury News Articie Launched: 08/04/2008 01 :32:54 AM PDT The Valley Transportation Authority will vote Thursday to put a new sales tax on the November ballot, and the campaign will be headed by a familiar face - Carl Guardino. The president and chief executive of the Silicon Valley Leadership Group said Friday that he has agreed to lead the effort to approve a one-eighth- cent increase in the sales tax to cover the cost of operating BART, if and when it is extended from . Fremont to San Jose. Guardino, 46, has run nine tax, bond or initiative campaigns in 16 years, and seven have been winners. But this measure is unlike any of the most recent five transportation taxes that have gone to Santa Clara County voters since 1984. Its only purpose is to raise money for the BART project - about $50 million a year for 30 years - and won't be collected unless the Federal Transit Administration approves $750 million in construction funds for the $6 billion project. It's also a smaller tax increase than the previous measures. Four involved half-cent increases, and one was a quarter-cent. The countywide sales tax is currently 8.25 percent. The business lobby polled voters twice this year and has kept survey results private. But Guardino Page ] of 2 said he thinks this tax will pass because it is for BART alone and not a slew of other projects. Without a new tax, the VT A lacks the cash to cover operational and maintenance costs of the 16.1-mile extension from Fremont to Milpitas, San Jose and Santa Clara. The FT A won't consider any aid until it knows that money has been set aside for those costs. "Without this, we don't have a chance to get the federal money, nor should we get it," VTA General Manager Michael Burns said. "BART will not be built without these funds." The VTA has received $409 million of a promised $649 million from the state for the BART extension. The agency has spent $245 million from a tax passed eight years ago to buy tracks from Union Pacific, perform design work and buy land downtown, where BART would tunnel under Santa Clara Street. The VTA will meet 6 p.m. Thursday after a closed session to consider the tax measure, and there is little doubt that the 12-member board will approve it. Friday is the deadline for putting measures on this fall's ballot. If the tax passes, Burns said, FT A approval could come in three years. That would enable the line to open in maybe a decade. These dates are anything but firm, depending on federal and state aid being available to cover construction costs. Meanwhile, regional officials are moving ahead with plans to extend BART from the Fremont station to Warm Springs, near the Santa Clara County line. In two weeks, the California Transportation Commission will consider giving $20 million to help build overpasses at Kato Road and Warren Avenue, where BART trains would run. This work would cost Advertisement o Print Powered By . (~:.L~ :i':"~I?Yr:<31"!l ic s' DR/;;L5 http://www.mercurynews.comlci _] 009] 291 ?IADID=Search-www.mercurynews.com-www.mercurynews.... 8/4/2008 Guardino to lead BART tax push for VTA - San Jose Mercury News Page 2 of2 ~~t Jtercury News MercuryNews.com more than $90 million. The proposed tax increase comes at a time the national economy is being hammered by high gas prices, rising food costs, a home mortgage crisis and a sagging stock market. And the November ballot will be crowded with three bonds going before voters - $10 billion to begin building a high-speed rail line from Los Angeles to San Francisco, $9.3 billion for water projects and $840 million to run the trauma, burn and pediatric trauma center at Valley Medical Center. "It could be tough," said Supervisor Liz Kniss, VTA chair. "But let's ask the voters if they are willing to support BART." Contact Gary Richards at mrroadshow@mercurynews.com or (408) 920- 5335. Advertisement G ~. Print Powered By ~; F (',: 'natDY'::'9f!l.ic;,s De.... c2lt, http://www.mercurynews.com/ci_1 0091291 ?IADID=Search-www.mercurynews.com-www.mercurynews.... 8/4/2008 Campbell sales-tax hike could be a sign of things to come - Silicon Valley 1 San Jose Business Journal: Page 1 of2 Silicon Valley / San Jose Business Journal - August 4, 2008 http://sanjose.biziournals.com/saniose/stories/2008/08/04/storyS .html SILICON VALLEY I SAN JOSE BusinessJournal Friday, Augu~ 1, 2008 Campbell sales-tax hike could be a sign of things to come Silicon Valley / San Jose Business Journal - by Cathy Weselby At-a-glancc Campbell receives only 1 cent of the 8.25 cents per dollar sales tax. State -- 6.25 cents Campbell -- 1 cent Santa Clara County -- 1/2 cent VT A -- 1/2 cent * Local governments are being confronted with shrinking property-tax and sales-tax revenues, inflation and a state government that's looking to borrow money from cities to balance its budget. The cities' response to these shortfalls will have a ripple effect on business owners and consumers. "There's a structural problem when you see every local government facing these sorts of fiscal problems," Los Gatos Town Manager Greg Larson said. And some cities have to face the infrastructure needs sooner than others. The Campbell City Council approved a ballot measure on July 29 that will let voters decide whether to raise the city's sales tax by a quarter cent to make up for the city's $2 million deficit. Campbell City Manager Dan Rich said the city has already tightened its belt and cut $4 million over the past three years. Rich said that out of every 8.25 cents for sales tax, the state gets 6.25 cents and the city gets a penny. The remaining cent is split between the Santa Clara County Transit District and the Valley Transportation Authority. "A sales tax increase would be a local revenue source that would be protected because the money would stay here for local services," he said. The measure requires majority voter approval, and Rich is confident Campbell voters will pass the increase. "Poll data has told us that 71 percent of Campbell residents are willing to support the sales tax (increase)," he said. Business owners, however, are not as swayed about the tax hike. biZ-;) 1 http://www.bizjournals.com/sanj ose/stories/2008/08/04/story5 .html ?t=printable 8/5/2008 Campbell sales-tax hike could be a sign of things to come - Silicon Valley 1 San Jose Business Journal: Page 2 of2 Trailsloggers owner Neal Collins said he was concerned about how the tax increase would be perceived by residents in neighboring communities. "We don't want to give people a reason to not go to Campbell," Collins said. "Hopefully the same people ,-\Tho are in favor of the tax are the same people who support the local businesses." Rock Bottom Brewery managing partner Bennett Ponder said the increased sales tax would detract from food and beverage sales. "With the current economic struggles, 1 can't see this passing," Ponder said. Los Gatos, like Campbell, has been forced to cut services in the past five years but has not had to draw on its reserves yet. "We know over the next two to three years, we will have to either reduce expenses or raise revenues," Larson said. He had projected a 4 percent increase in revenue this year, but the expenses could grow beyond 4 percent. "I think we're going to be looking at everything and put every option on the table," he said. "The town council and community will decide what works best for Los Gatos." Cupertino Mayor Dolly Sandoval said the city has kept expenditures down, and she doesn't anticipate going to the voters to ask for more revenue. She said. city officials had concerns about the state borrowing money from local government. "If the state takes money this year and next year, or a larger piece of the pie, then we may need to look at something next year," Sandoval said. However, under Proposition lA, passed in 2004, the state cannot just use city funds. Rather, the governor has to declare a fiscal emergency and then borrow the funds, repaying them back with interest. City of Sunnyvale spokesman John Pilger said city leaders are not looking to raise taxes. "We're doing OK as long as the economy keeps improving," Pilger said. He added that Sunnyvale has a 20-ayear budgeting process that is distinct from that of other cities. "We don't take on new products or services unless we can see a funding stream for ongoing operations for 20 years," Pilger said. "We take the long view, and it's proven to be good for the city." If Campbell voters approve the sales tax increase, it will be the first city to do so in Santa Clara County. Cathy Weselby can be reached at 408.299.1821 or cweselby@bizjournals.com. All contents of this site @American City Business Journals Inc. All rights reserved. PR-.:2f!, http://www.bizjoumals.com/sanj ose/stories/2008/08/04/story 5 .html ?t=printable 8/5/2008 Bay Area tops developer's list of apill-rment-leasing markets - Silicon Valley / San Jose Business Journal: Page 1 of 2 Silicon Valley / San Jose Business Journal - August 11, 2008 ::tt;; f f sa -:.:~.;,:z.o..:-;-.c:s.::o:-:-:. f sa -:':'~se fstc:"les 1,:::8/;;8/:..:.. /:" e ws=~ _::-_;-_~.:-t:- SIUCO.. "ALL~ j SAM .:]OSE Business,'! n!' f' i FMday,Augu~8.2008 Pau sells Campbell Hotel proje(Ct Cupertino's Peter Pau and his ~_~.~._!!!!!__r!~p~_!1.Y....~~.~. have sold their 3.5-acre hotel development site at 655 Creekside Way in Campbell to the Huntington Hotel Group for an undisclosed price. Huntington plans to construct a $39 million, 162-room Courtyard by Marriott on the site, said NAI BT Commercial Vice President Scott Griemsmann. Griemsmann represented both seller and buyer in the transaction. Huntington specializes in developing, owning and managing Marriott- and Hilton-branded hotels. The company has developed more than $200 million in real estate in California and Maryland over the past si..x years, according to its Web site. It has five Marriott and Hilton hotels in development, which will bring its portfolio to more than 2,400 rooms. Huntington already owns 14 hotels in California, Texas and Maryland, though none in the Bay Area until now. Bay Area tops developer's list of apartment-leasing markets - Silicon Valley / San Jose Business Journal: Page 2 of 2 The hotel business may be poised for some heartache on the national scene, but conditions look fairly good in Silicon Valley, Griemsmann said. "Hotels are a very different part ofthe commercial real estate industry," Griemsmann says. "With apartments or offices, you bave fixed, relatively long-term leases, and you can project cash flows fairly easily. Hotels have a pretty strong correlation vvith Gross Domestic Product." OfZ~q PG&E, SunPower announce major solar deal- San Jose Mercury News ~be mercury News MercuryNews.com Page 1 of 2 PG&E,SunPowerannounce major solar deal SUNPOWER, OPTISOLAR PLAN NATION'S BIGGEST PLANTS IN SAN LUIS OBISPO COUNTY By Matt Nauman Mercury News Article Launched 08/14/2D08 015811 PM PDT For more than a year, San Jose's Sun Power has been touting a 14-megawatt photo-voltaic solar array at Nellis Air Force Base in Las Vegas as the largest in the nation. That's about to change in a big way. Pacific Gas & Electric announced two deals Thursday that will result in 800 megawatts of power from massive facilities using PV panels - enough to power nearly a quarter-million homes, according to the utility. SunPower, best known for making solar panels used on homes and businesses, will now build a utility- scale-size plant. The 250 megawatt facility, to be constructed in San Luis Obispo County. will start generating power in 2010 and reach full capacity in 2012. It will require approval from local and state regulators. The second deal, announced at a press conference at PG&E's San Francisco headquarters, is even larger. The utility said it will buy 550 megawatts of power from a plant built by OptiSolar, a Hayward company. The plant, to be called the Topaz Solar Farms, uses thin-film solar panels that use sunlight to create electricity. Its technology allows it to deposit a thin ~ layer. or film, of amorphous silicon on solar panels. "It's monumental," said Julia Hamm, executive director of the Solar Electric Power Association in Washington, D.C. "I really think it demonstrates that the time for solar has come. It's not some small niche thing anymore for rooftops." For more than a year, San Jose's SunPower has been touting a 14-megawatt photovoltaic solar array at Nellis Air Force Base in Las Vegas as the largest in the nation. That's about to change in a big way. Pacific Gas & Electric announced two deals Thursday that will result in 800 megawatts of power from massive facilities using photovoltaic panels - enough to power nearly a quarter-million homes, according to the utility. Sun Power. best known for making solar panels used on homes and businesses, will now build a utility- scale-size plant. The 250 megawatt facility, to be constructed in San Luis Obispo County, will start generating power in 2010 and reach full capacity in 2012. It will require approval from local and state regulators. The second deal, announced at a press conference at PG&E's San Francisco headquarters, is even larger. The utility said it will buy 550 megawatts of power from a plant built by OptiSolar, a Hayward company. The plant, to be called the Topaz Solar Farms, will also be built in San Luis Obispo County. It will use thin-film solar panels that use sunlight to create electricity. Its technology allows it to deposit a thin layer, or film, of amorphous silicon on solar panels. "It's monumental," said Julia Hamm, executive director of the Solar Electric Power Association in Washington, D.C. "I really think it demonstrates that the time for solar has come. It's not some small niche thing anymore for rooftops." Dr< /30 PG&E, SunPower announce major solar deal - San Jose Mercury News ~~e .mercury News MercuryNews.com Numbers confirm the scope of the announcement. Hamm's group has tabulated recent announcements amounting to 95.5 megawatts of solar power from central-station photo-voltaic plants. If constructed, the plants announced by PG&E will generate more than eight times as much power. SunPower's biggest installations include the one at the Nellis base and four in Spain between 18 and 23 megawatts. It also has anno~nced a deal with Florida Power & Light for two projects totalling 35 megawatts. liThe size perspective is very important, and quite shocking," said Fang Wan, PG&E's vice president of energy procurement. IIWe believe that PV has come to. the point where it competes effectively with other alternative forms of energy, and it's pretty close to making a good run at gas-fired power." For SunPower, it's a full-circle moment, as founder Richard Swanson envisioned large solar farms in the desert shipping power to cities back in the 1970s. It wasn't economically feasible then, he said, but technological innovations and increased production volumes have mad,e it so now. "As costs have come down, the cost of alternatives have gone up, so we're rapidly reaching a tipping point," said Swanson, SU[1Rower's president and chief technical officer. Companies such as Palo Alto's Ausra and Oakland's BrightSource Energy ~ave signed deals with PG&E to produce energy at solar.thermal plants where arrays of mirrors heat a fluid and turn a turbine. But the SunPow€r deal, where electricity is generated using silicon-based photo-voltaic solar modules, will "probably have people fa'lling off their chairs from Osaka to Madrid," said Julie Blunden, a SunPower, vice president. That's because many still think photo-voltaic systems are only'suitable for homes and businesses, she said. Advertisement o Page 2 of2 For OptiSolar, the news represents a milestone. It announced its intention to build the 550-megawatt plant earlier this year. Now, it has a buyer for the power. That plant will be huge - covering nine square miles. "But it's very visually unobtrusive," said Randy Goldstein, OptiSolar's chief executive officer. "The modules are fixed in place and are three feet off the ground. It almost looks like a lake." OptiSolar has said it will build a 1 million-square- foot plant in Sacramento to make the panels and other hardware needed for this project and subsequent ones. In a statement, Gov. Arnold Schwarzenegger called the solar news "a huge step toward meeting our long-term renewable energy and climate change goals" In all, PG&E says, the two plants will deliver 1.65 billion kilowatt-hours of electricity a year. The utility now says it has 3,600 megawatts of renewable energy contracts. It is required under state law to get 20 percent of its power from renewable sources by 2010. j){l-?Yt Valley Fair plans expansion - San Jose Mercury News ~~e mercury News MercuryNews.com Valley Fair plans expansion By Donna Kato Mercury News Articie Launched: 08/15/200807:13:25 AM PDT California's most lucrative mall and Silicon Valley's premier destination for serious shoppers, Westfield Valley Fair is gearing up for its biggest transformation in almost a decade. Construction is slated to begin in January once the holiday rush is over and expansion will take place in phases that mall managers insist won't disrupt customers. Although unconfirmed, local buzz indicates the new tenants will include two new anchors, Neiman Marcus and Bloomingdale's. With longtime anchors Macy's and Nordstrom, it would mark Valley Fair as one of the few U.S. malls with four top-tier department stores under one roof. "You're going to see a domino effect," said David Burke, Valley Fair's general manager. "As one phase finishes, another will start." The first phase begins with construction of new buildings for Longs and Safeway, now in dated Page 1 of2 structures near the corner of Winchester Boulevard and Stevens Creek. Their new homes will be located behind the current location. Next, the parking areas facing Stevens Creek will be demolished to make room for the new anchors and other tenants. About 3,000 additional parking spaces will be added to the 7,500 current spaces, much of it in the area occupied by Washington Mutual and Bank of America, which moves to the corner of Winchester and Stevens Creek. Once completed, the face-lift will expand the mall's retail space from 1.5 million square feet to more than 2 million square feet. Projected for completion in early 2010, the build-out will mean the number of tenants can increase from the qment 225 to about 275. "We are in an enviable position," said Burke of Valley Fair's apparent health, despite a rocky economy. The mall declines to give sales figures, including the cost of the expansion. But, according to the International Council of Shopping Centers, which collects numbers from the Directory of Major Malls, Valley Fair is one of the country's top selling retail centers, with $809 in sales per square foot, excluding Macy's and Nordstrom, the major anchors. The next highest selling mall in the state is South Coast Plaza in Orange County, with $800 in sales per square foot. The national average is $411. After its expansion, Valley Fair will be one of four California malls with 2 million square feet or more of retail space. They include South Coast Plaza, Del Amo Fashion Center and Lakewood Center, all in Southern California. Silicon Valley's demographics and diversity are the reasons behind the mall's success, said Stacy Df2 ~3~ Valley F~ir plans expansion - San Jose Mercury News ~be .mercury News MercuryNews.com Carroll, Valley Fair's marketing director. The mall estimates it gets about 16 million visitors a year. South Coast, by comparison, draws about 21 million visitors a year, but from a denser population area that includes tourist traffic from the theme parks. "Name brands are very popular with our customers and we see that trend continuing, even with the luxury brands,1I Carroll said of stores such as Tiffany & Co. and Louis Vuitton that were added during the last expansion, completed in 2002. For more than a decade, Silicon Valley's shopper profile has shown a relatively affluent customer base and a high number of Asian consumers who place . value on certain labels and brands, often exclusive and pricey. The upscale feel of the mall and mix of high-end and mainstream retailers have kept those customers coming back. Valley Fair generates more than $7 million annually in tax revenues to San Jose's coffers. The customer profile is also a reason brands such as Stuart Weitzman, Kiehl's, Juicy Couture and Betsey Johnson opted to open stand-alone boutiques even though their products are carried in stores in Valley Fair. IISilicon Valley has a built-in customer base- there's always the woman willing to spend there," said New York-base.d designer Betsey Johnson, who recently opened a fashion carnival of a boutique in the mall. Johnson said she's familiar with San Jose shoppers because she was married to someone from the area and visited often. The new store is one of 10 her company is opening this year. Kiehl's opened a Valley Fair boutique in 2007, making it the third store to come to the Bay Area. "Though we're a New York company, California is our second home - we opened our first free- Advertisement o Page 2 of2 standing store outside of New York in San Francisco in 2001, and since then, 'California continues'to be a vital hub of Kiehl's growth," said Chris Salgardo, president of the company. IIWe first came" to Silicon Valley in 2005 with a store in Palo Alto. " We were very fortunate to be able to open at the Westfield Valley Fair mall last faiL" A Martin -+- Osa store opened earlier this week, one of several that landed this summer. Confirmed to o"pen by the end of the year is a Marc Ecko Cut & Sew shop, and rumored to be coming this fall is Red Mango, the yogurt shop once slated for Santana Row. Valley Fair's parent company, Westfield, is the world's largest listed retail property group. It is based in Australia with a U.S. management office in Los Angeles that oversees its 50-plus American shopping centers. FAST FACTS ON V ALLEY F Am Built in 1956 as an open-air mall with Macy's as its anchor. Bought by Westfield in 1998. Last expansion completed in spring 2002. Cost of last expansion: $165 million Annual sales per square foot: $809 Average annual sales for comparable malls in the U.S.: $411 New stores that opened this summer include Betsey Johnson, Peter Alexander, Stuart Weitzman and Martin + Osa. Source: Mercury News reportinglnfobox1 I) R-. '33 Cupertino CUPERTINO SQUARE IS SCHEDULED TO GO ON THE AUCTION BLOCK Ongoing legal battles continue By CODY KRAATZ AND MATT WILSON Wanna buy a mall? Cupertino Square, formerly know~ as Valleo Fashion Park, will be on the auctIOn block in front of a downtown courthouse on Sept. 10, barring any last-minute com- promise between the mall and lender Gramercy Warehouse Funding I, LLC. Gramercy said in an Aug. 7 notice of sale, or foreclosure, that Cupertino Square owes it and its lending partner, United Com- mercial Bank, an estimated $121 million. That includes principal, advances, fees and interest from a $195 million loan for con- struction at the 32-year-old mall, which has been trying to reinvent itself with a ~ew name, a new look and new tenants SInce 2007. Gramercy could start the bidding as high as the remaining loan balance or lower. If no one else makes a higher bid, then Gramercy would own the mall. This auction process adheres to what was spelled out in the origin~llo3? agre~ment, including a May 5 notIce filed WIth the county that the mall was in default to the tune of $1.6 million. The mall's attorney, James Evans, said in May that the mall is not in default, characterized an auction, as highly unlikely and called the notice of default and threat of auction "total games- manship," according to the Silicon Val- ley/San Jose Business Journal. Evans was unavailable for comment, and another attorney on this case did not return calls. (~I.....+inn ...-.rrrrn 0 .Jumber 21 · August 20, 2008 · Cupertino, CA · Est. 1947 · www.rupertinomurier.com Auction Continued from page 1 Gramercy had to wait three months before it could foreclose on the mall, and can still cancel the a uc- tion,set to be held at the Santa Gara County Superior Courthouse at 190 N. Market St. in San Jose. Meanwhile, the fate of the belea- guered mall remains tied up in a heated legal battle that began in early April when Cupertino Square sued Grarnercy and DCB. The mall alleged that the lender was being inflexible and making unreasonable demands as the mall tried to stay afloat in 2007. Investment holding company Orbit Resources, the owner since September 2007, does not appear to have much direct control because a receiver, appointed at Grarnercy's request, is running the show. Orbit CEO Phil Liao was unavailable for comment. The receiver, listed as Douglas P. Wilson in court records, has been in charge ofthe mall's rents since mid- June. Messages left with Douglas Wilson Companies were not returned before press time. Longtime general manager Mike Rohde said he works closely with the receiver on day-to-day opera- tions.He also said he is skeptical that the auction on the courthouse steps will really happen. "I just don't think it will go that far. I think Orbit and the lender will work out their differences in time," f)r<-3'f he said. Gramercy's attorney, Eric Rowen, declined to comment on whether the looming auction, which will be managed by Chicago Title Company and not his firrn,is a tactic to pressure Cupertino Square into paying up. He said he did not know of any reason why the auction wouldn't happen as planned. As to whether the two sides could reach a compromise that would prevent that,hehadno comment except that "anything is possible." He also said that given the cur- rently tight credit market, a new loan to pay what Grarnercy is demanding may be difficult for Cupertino Square to find. Rohde said the mall is continuing to progress and that the legal dis- pute and the thre'at of auction have not been the main obstacle recent- ly. "It is more of an economic slow- down than anything," he said. Kelly Kline, Cupertino's redevel- opment/economic development. manager and a close Cupertino Square observer, told the Cuperti- no City Council on Aug. 5 that most projects at the mall are "on hold . until the receivership situation changes and the lawsuit with the lender is resolved." This isn't the first time the mall has been on the auction block. In February 2003, the Teachers Insur- ance and Annuity Association,Vall- co's lender and the only bidder, took over the mall for $55 million. WIlson had been serving as receiver since 2002.