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.
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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
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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
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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
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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
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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.
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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."
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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-
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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
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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:
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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
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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.
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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.
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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.
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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
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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
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Print Powered By ~; F (',: 'natDY'::'9f!l.ic;,s
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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
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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.