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Director's Report CITY OF CUPERTINO 10300 TORRE AVENUE, CUPERTINO, CALIFORNIA 95014 DEPARTMENT OF COMMUNITY DEVELOPMENT Subject: Report of the Community Development Direct~ Planning Commission Agenda Date: Tuesday, October 28, 2008 The City Council met on October 21, 2008, and discussed the following items of interest to the Planning Commission: 1. Heart of the City Specific Plan Amendment: Council gave staff direction to bring this item back on December 2 with citywide noticing. Staff will provide a blue-line Heart of the City Specific Plan based on the previous document, with General Plan tie-ins and talking points from the community and Planning Commission. Staff will also bring back a slimmed down version of the Heart of the City Specific Plan showing the essential topics, with an appendix that includes applicable policies from the General Plan. 2. Municipal Code Amendment to the Single Family R1 Ordinance: The Council directed staff to bring this item back and provide another citywide notification. The Council requested a comparison chart of the R1 process flow, and general options/ outcomes, on the following ordinance amendment options: (1) Council Member Santoro's proposal to remove 19.28.060, section 2 and replace 19.28.060 (G)(3) with the following language, "walls exceeding 12 feet in height, and 20 feet in length will incorporate staff's design principles and visual relief techniques." (2) Staff's proposal to require additional architectural review of any two-story residence exceeding 45% second floor area ratio to first floor. Council also directed staff to provide additional insights on potential R1 Amendments, and to include recommended design guidelines created by the City Architectural Consultant. 3. Ouestion of increasing office allocation as part of a General Plan amendment: Council directed staff to include the topic of increasing office allocation as part of the Housing Element and General Plan Amendment process provided that the additional office allocation within the housing allocation in the existing General Plan; to explore additional office square footage alternatives on a parallel track to the Housing Element process; to study traffic and other environmental impacts; and to bring the data back to City Council. 4. Retroactive Application of the new Photovoltaic Permit Fees for Quasi-Public Buildings: Council approved the retroactive application of the new photovoltaic permit fee ($1123 for quasi-public buildings) to Bethel Lutheran Church and St. Jude's Episcopal Church. Report of the Community Development Director Tuesday, May 27, 2008 Page 2 Miscellaneous Items 1. Community Meeting - Lehigh Permanente Quarry (formerly Hanson): The County of Santa Clara scheduled a community meeting for Wednesday, October 22,2008. Representatives from the county answered questions regarding the reclamation plan. Representatives of the Bay Area Air Quality Management District (BAAQMD) were also on-hand to answer recent concerns about mercury emissions from the Lehigh Permanente cement kiln. Quarry representatives were also present to answer questions. Mayor Dolly Sandoval, Council member Orrin Mahoney, and Council member Mark Santoro attended the meeting. Also in attendance was a representative from Santa Clara County, Board of Supervisor Ms. Liz Kniss' office. Approximately 50 persons attended the meeting. 2. Housing Element Focus Group: At the October 24, 2008 Housing Element Task Force Meeting, Tom Ford with DC&E Planning made a presentation on design, density and smart urban infill. The Power Point and webcast are available for review on the city website, www.cupertino.org/housingelement. Enclosures: Staff Reports Newspaper articles G: \ Planning \ SteveP\ Director's Report \ 2008 \ pdlO-28-08.doc City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 (408) 777-3251 FAX (408) 777-3333 CITY OF CUPEI(fINO Community Development Department SUMMARY Agenda Item No. _ Application: SPA-2008-0l Applicant: City of Cupertino Application Summary: Update the Heart of the City Specific Plan to reflect the changes adopted in the 2005 General Plan. Agenda Date: October 21, 2008 RECOMMENDATION: The Planning Commission recommends approval of the draft Heart of the City Specific Plan. BACKGROUND: The City Council directed that the Heart of the City Specific Plan be modified, as part of its 2008/2009 work program, to incorporate technical revisions reflecting the changes made to the 2005 General Plan. The Council directed the Planning Commission to review and forward its recommendations to the Council. The Planning Commission reviewed the draft Heart of the City Specific Plan at its regular meetings on June 10th, August 26th and at a study session on September 23rd. The Planning Commission conducted a study session to receive additional input from the Redevelopment/Economic Development Manager and the public. On October 14, 2008, the Planning Commission voted 4-0 (Comm. Kaneda absent) to recommend approval of the draft Specific Plan with changes. DISCUSSION: FUNDAMENT ALS OF THE HEART OF THE CITY SPECIFIC PLAN The Heart of the City Specific Plan was adopted in 1995 to guide future development and redevelopment of the Stevens Creek Corridor generally between Highway 85 and the eastern City limits near Lawrence Expressway. The purpose and overall goal of the plan for this area is to create a greater sense of place and community identity and to develop this area as a pedestrian-inclusive gathering place. The general policy framework for the Heart of the City area involves creating a link generally between the Oaks Shopping Area at the western boundary of the plan area to the Crossroads area, which encompasses the span of Stevens Creek Boulevard between Stelling Rd to the City Center at N. De Anza Boulevard, and further east to the Cupertino Square Mall vicinity. SPA-2008-01 Heart of the City Specific Plan Update Page 2 October 21, 2008 The Specific Plan involves cultivating a link between these centers by providing a unified set of development standards and design guidelines to promote land uses and development that focus and support the growth of these centers which include a mix of commercial, office and residential uses along Stevens Creek Boulevard. The plan also prescribes connecting these centers by promoting the streetscape concept of a continuous tree-lined landscaped parkway with a separated sidewalk along Stevens Creek Boulevard. The role of the Stevens Creek Boulevard Corridor is determined by the activity centers, as mentioned above, and the supporting uses and developments that are within the mid-blocks of these centers. Currently, there exists a diverse mix of uses and building forms along Stevens Creek Boulevard. These vary, not only, from the specific plan, but also from each other due to incremental development along Stevens Creek Boulevard and such development does not adequately support the activity centers. CHANGES PROPOSED INTHE DRAFT SPECIFIC PLAN BY STAFF: The draft Specific Plan (Exhibit B) allows any variety of general commercial, office and residential uses as well as mixed-use developments along the street frontage of Central and East Stevens Creek Boulevard subareas in the mid-block areas. However, parcels at the corner or very close to street intersections should have a neighborhood commercial component as prescribed in the 2005 General Plan. In the West Stevens Creek Boulevard subarea and Crossroads area, the emphasis is to retain the commercial activity in the area and therefore, residential projects are not allowed. Planning staff prepared the draft Heart of the City Specific Plan by incorporating the 2005 General Plan language with regard to the Heart of the City area. Attempts were also made to simplify the document by deleting repetitiveness and consolidating the development regulations and guidelines. Language has also been incorporated to allow for flexibility in developing narrow or odd shaped lots by eliminating prescriptive side yard setbacks without compromising the fundamental goals of the plan. PLANNING COMMISSION RECOMMENDATION: At the October 14, 2008 Planning Commission meeting, the Commission recommended approval of the draft Specific Plan as prepared by staff with additionally proposed amendments. A comprehensive list of changes proposed by staff with Planning Commission recommendations categorized by the reason for the change is attached as Exhibit A. The Commission additionally recommended that some elements of the draft Specific Plan, specifically related to The Crossroads area be studied further. The Commission also recommended some general clean up and clarification amendments to the draft Specific Plan. Crossroads Area The Commission discussed the role of the Crossroads area as a significant activity node in the Heart of the City area, particularly as a central retail commercial center along SPA - 2008-01 Heart of the City Specific Plan Update Page 3 October 21, 2008 Stevens Creek Boulevard. The Commission stated that they would like the opportunity to review the Crossroads plan and consider techniques to enhance the retail commercial viability of the area. One of the techniques proposed includes the concept of narrowing Stevens Creek Boulevard to allow for on-street parking and to reduce the traffic speed along Stevens Creek Boulevard that would provide greater visibility of retail uses along the street rather than having Stevens Creek Boulevard function as a pass-through boulevard. The Commission would like to request the City Council to consider testing this technique by implementing "test" lane closure for a limited period to see what the traffic impact might be. During the past years, construction activity has closed a lane at various segments pf Stevens Creek Blvd. With seemingly little impact on the traffic levels of service. Other clean up items/clarifications The Commission also recommended the following additional amendments to the draft Specific Plan as clean up and clarification items: o Use native and water-wise plantings with drip irrigation systems for on-site landscape areas in developments. o Retain the list of streetscape trees as recommended in the draft Specific Plan o Allow for flexible side yard setbacks as recommended in the draft Specific Plan. o Include application requirements and specify the approval authority for developments o Include criteria for placement and frequency of street furniture o Prohibit barbed wire and razor wire fencing, in addition to chain link fencing o Require screening of heating/ air conditioning units from public street view. Prepared by: Piu Ghosh, Associate Planner Aki Honda Snelling, Senior Planner Submitted by: Approved by: Steve Piasecki Director of Community Development David W. Knapp City Manager Attachments Exhibit A: Table of changes proposed by staff and Planning Commission Exhibit B: Model Ordinance with attached Draft Heart of the City Specific Plan Exhibit C: Planning Commission Resolution No. 6533 Exhibit D: Planning Commission report on the Heart of the City Specific Plan Update dated October 14, 2008. Exhibit E: Commissioner Brophy's recommended changes to the Heart of the City. Exhibit F: Email from a citizen, Dan Marshall. Exhibit G: Minutes of the regular Planning Commission meetings from: June 10, 2008 & August 26,2008 & Study session minutes from study session September 23, 2008. S PA-2008-01 Heart of the City Specific Plan Update Page 4 October 2l, 2008 2005 GENERAL PLAN CONSISTENCY Draft S ecific Plan Lan ua a Plannin Commission Recommendation Staff Comment Ma s p A. Land Use Ma and Streetsca e Conce t Plan P P p u dated to reflect the new boundaries. p Folic Framework Section Y Land UselEconomic A. U dated to Illcor orate the 2005 General Plan P P [aluninate subareas -since in General Plan - Unnecessar here Y Goals and Policies references for activit centers includin the Y - ~ Crossroads area subareas of Stevens Creek Boulevard east west and central and other ro ernes north and south of Stevens Creek P p Boulevard within the Heart of the Cit area. This Y re daces the revious re erences to activit centers ~ ~ y iderlli ied as the Oaks De Anza Colic e area the ~~ Crossroads Citl -Civic Center and Valleo Fashion Park J aild UlC1Yl1t1 . B. Develo a Heart of the Cit that rovides a p Y P (~ l c~difv - "Develo a Heart of the Cit that rovides a variet P Y P Y variet of land use o ortunities of mixed use Y PP of land use o ortunities of well lanned and desi rued pP p develo ment' enhanced activit nodes and safe and p y ~,rn~lmer~ ial r~ffi«~ ~lnd residential develo ~~nent enhanced } , efficient circulation and access for all modes of activit nodes and safe and efficient circulation and access Y - trans ortation between activit centers that hel P Y P for all modes of trans ortation between activit centers that P Y focus and su ort activit in the centers. PP Y 11e1 focus and su ort activit in the centers." P pP Y Develo ers will eel orced to incor orate retails . t. in p p 9 their ro'ects to obtaitT a roz~al b the Cit even i the p 1 pp y y~ y ~vil1 not be econor~iicall viable s aces in their ro'eet. y p pl • Develo fT~ent aloe Stevens Creek Boulevard should be p ~~ ~~iarket driven. • Unnecessar to reiterate these olicies since thel are y p ~ ahead included in the General Plan. C. Land Use Economic Goals and Policies a dated P I :l i ~» in~~ kr to incor orate the uses allowed b the 2005 General P Y Plan within each of the subareas. This re ~~laces rc erenccs tv ~reviousli allvzved uses. D. Office and commercial develo ment allocation p I;Ilnun~lte -These numbers chap e as develo ment occurs g p numbers u dated to reflect the 2005 General Plan. therefore unnecessar to include in the S ecific Plan. ~ .5Z ....., ru '\j ~ Q) E E 00 0 0 u 0 Q) 01 ~ ~ 01 .5Z ;.... V) C) V) ..D .s 0 u 0 E 0 u ~ . ..-4 ~ ~ ru s::: B C'j U 0.. ~ a 0:: ~ '0 C) 0.. r./) C U 0 .5 00 0 0 0 01 .... 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The revised Ordinance will consider adjusting the allowed ratio to facilitate greater architectural diversity, but will not consider increasing or decreasing the total allowed building area on an Rllot or changing the required second story setbacks. The Ordinance amendment 'i.vill also include minor language clarifications relating to gardening activities and miscellaneous wording changes to improve the readability of the document, Application No. MCA-2008-03, City of Cupertino, Citywide. RECOMMENDA TION The Planning Commission recommends that the City Council deny: . MCA-2008-03, citing the need for a more comprehensive design revie'iv process for two story homes. The City Council may consider the following alternatives: 1. Adopt the Plam1ing Commission recommendation and initiate a review of the Rl Ordinance including but not limited to topics on the ratio of 2nd floor area to 1st floor area, the total 45(/0 floor area ratio and the overall Rl design revie'iv standards/process; or MeA-2008-03 - Rl Ordinance October 21, 2008 Page 2 2. Adopt the staff recommended ordinance framework and direct staff to work with the City Architectural Consultant and return in a month to present final ordinance details for consideration. BACKGROUND: On May 6, 2008, the City Council amended the Planning Commission work program to include a limited review of the R-l Ordinance regarding the allowed ratio of the second floor building area compared to the first floor building area. The intent is to allow greater design flexibility to property owners. The Council directed the Planning Commission to present recommendations on ordinance options to the City Councilby October 2008. On July 8, 2008, the Planning Commission reviewed the proposed Rl Ordinance amendment. The Commission directed staff to provide a focused ordinance framework with specific list of principles and guidelines that will address Cupertino's residential development needs. On September 9, 2008, the Planning Commission reviewed the proposed design review framework, and recommended denial to the City Cow1cil, citing the need for a more comprehensive design review process for two story homes to address overall massing, design and review process. DISCUSSION: The currently 45% second story floor area ratio has resulted in a "wedding cake" style of architecture that is slowing becoming the predominate style of new two-story homes or additions in many neighborhoods. By creating a process that allows homeowners to increase the second floor ratio, new architectural opportunities become available. . Staff believes that achieving architectural diversity does not require increasing or decreasing the total allowed building area on an Rl lot or changing the minimum setback requirements. Through appropriate design review and specific enhanced design principles, homes may be allowed to exceed the 45% second floor area limit in exchange for higher design quality and broader range of architecture. In addition, the proposed process is voluntary, only applicable to those 'wishing to increase their second floor area above 45%. Homes that are designed to meet the existing Rl Ordinance would only be subject to the current Rl Ordinance standards. Please refer to the attached August 26, 2008 Planning Commission staff report for the detailed staff proposal. MCA-2008-03 - R1 Ordinance October 21, 2008 Page 3 Planning Commission Recommendation Planning Commission voted 4-1 (Miller voting no) to not recommend the proposed approach to deal with the 2nd floor to 1st floor ratio. The Commission believes that the concern for design diversity and functionality are better addressed by evaluating a more comprehensive design review process for two story homes including consideration of the allowable overall floor are ratio and the 2nd floor to 1st floor ratio. Primary concerns of the Planning Commission are as follows: . Massive and visually intrusive homes will result from increasing the 2nd floor ratio to potentially 100% of the 1st floor (especially on small lots). . Not enough process or detail specified to achieve the desired architectural quality and diversity. . Evaluation should also include the total floor area ratio and a more comprehensive design review process. . Clear expectation of the design requirements and review time should be provided. Please refer to the attached September 9, 2008 and July 8, 2008, Plmming Commission meeting minutes for the detailed discussion. Staff Comments / Recommenda tion Massive and visually intrusive homes: In most cases, having 100% 2nd floor area to 1st floor area ratio is impractical and mathematically challenging due to the physical constraints resulting from typical lot sizes, minimum setbacks, and functional living space requirements on the 1st floor. Those lots that can accommodate between 75-100% 2nd floor to 1st floor ratio v,TOuld have to substantially reduce their building footprints to not exceed the total floor area of 45% (see illustration # below). Consequently, residences vvould be oriented further avvay from adjacent properties, creating more outdoor space/buffer and lessen visual intrusions. The illustrations below are example building footprints and setbacks on two typical Cupertino lot sizes (5,000 and 7,000 square feet) intended to compare building massing and relationship to adjoining properties between a typical 45% 2nd floor to a 100% 2nd floor. MCA-2008-03 - Rl Ordinance October 21,2008 Page 4 i 1- :to ~ ~ L~' ~ f.:E.AA.. ~ l- :"1 :, ~nl:l-': ; ! I I I - ;- - -., - ~1;L ~{rt , . Wi- ~-f"ff -- h, : ~:1 V" ~I ~~ 1. '" ~ ~ l ...... ~ rl --, .:.Ill i -.-.--- I ! ! I , I I - I --,- - ',- 1- --. _ _ __ I I _"' F..~- i I...... ! _.n ~!_ _, /. I -I I , : I l-~ C-f:'- I I I I :.-1, I I ; I I II I :' I II ~ E I ~ II I I' ;,. -....... I I I I I I i I _ _'_' _ _ l~ ' -.- f- - f. - :-- ~ -. I - -. '.. -, I I I I I I I I I I I i I T I I _ _-~ ~e!- Ai-rn-: -f i . 1 I.l.: I ~ I I I I , : f : ,- - / /' ... ",' II I 0.: I ~ I j J " '''" ; -.- ',' ._ t. ~ ! 400! I ./ .".-' ._ :~ t= ~!,"7 -,--' - - .- - - .. { _.- ~ - .'- - I I f.....,.. i I I : J ! I r:.'+A j I ! ~ I I , I Lfi$EJtJb . ,""",-1'r;,i:~ J.)JJp -..-.... :!11JJ.) !L1[1,,L1 :fJT.~ - P" ~~ ~....c. ~"'; ..;r," '~5~; ~~rtX'i .... ~r.M:J.J1.} --- m'F!;1'.:1" CJ J.tPi ~.....-'Kl'I.l'l'fu,L( sr;rT~ ----- l".fo>;: 8..A Ig~.I>f.: - t 1':J02"':E.'*' c. o~:-<t ~L" ;:~....~ f~'\ ~""'."""-""""""""""""J ~JL~ E:~ 'J I · ~ U- ~'~f--~~---'--"~L J~~ Lot Size: 5,000 Square Fe,et Lot Din1ellBio11S: 50 feet X 100 feet T\1CA-2008-03 - Rl Ordinance October 21, 2008 Page 5 r-. ~ lot.;. ~ :tl~, 1., i ~I - I...... I 1- 't-- ll.l.) l!:: ~ ... ~ '~ ~; CJI -I " ~t.:A2., ] r :; . i . I \ : i - . - Of .- --- 0- - - - -. - - -- I . ._~.- -'i ~- . r'~ - -. - - . - --. h 0 - '0-- :: ~ /~ , I '- I I ! I _.1. l~J':>J i :- ..., ..~ 41 ~ v, ~ ;1 '-. J _ !: / _ ~ " j~~ fEr' -.rCl__.&- ~.____ _......___:::::r."'::""':____ _ ., r'___ ..__ ~. . , . -' - -I - -.-,.-- - --.... . -..,. --' - - - - - -.- - -1, _ _ -i ?-:' t t t, I ;- ,~ T t..~6f.JJ() ~ ~~~"f 'r. P..N'f,I .... .... _ !'1W f.Plc.u.~ ~(Mr.~ _ ~~,lI.t ~ C;H W ~'f:iLE ~t_iJ' (. tl-a~ ~=-T ~~ r-AR........ ----~ l~ '-}- J:5i i L2_~~ 1- 0- -'<. '. "-u ~. ioiI. ~.~ ~ ~ ~ ~ ~~. ~~ ~l d _I _ _ _ + _ i. _ _ _ _ __ _ _ _ _ _ _.. _ __ ~ .. _ __ I;.~ ~f ;: i I : : l....f - .. i -I' - -l- - - L' - ....... - - - - - - - - . '; - - -. - 0 . - - I I I I I Irt--- ~ J: r I . I ,. l ~ ~ , I i I : I ~ '" - - -ll-~-~"' -.-. - -. -- .- . I i ! I I i , o. I I r .. - t J - - - ~~ ~, ~j r:4f'T .-- ;'- I I I ri..:... "l ~ I I ~(-5-~J.Jb -- 'P~rvlJ~g .. ... ~ .Ml"'r~Cl M ~ _ tl\ ~ 1. ~ ~ [;A& f! .'1..LL '-'C~ 2r.ifr....~ r~ '~........- ~ ~. '-is'~a-.- f. J-...l- , t- 'o-c{", I ~~- .' ~~- Lot Size: 7,000 Square Feet Lot Dilue11sio11S: 70 feet X 100 feet Council Option: If t11e COUI1Cil fU1ds ll1erit i11 tl1e proposed ordi11a11ce frall1e\~Tork, t11e Council n1a)l elect to cap tl1e ll1axilnUln 2nd floor buildi11g area to 1st floor bllilding area ratio at 1000/0 or less. ' Additional process and details needed to achieve architectural diversity: Tl1e i11te11t of t11e l1ew desigl1 revieV\T process for 1101nes exceedu1g 450/0 secol1d floor to first floor bllildi11g area ratio is to provide greater desig11 flexibility. Tl1erefore arty 11e\v design sta11dard must pro\Tid.e adequate flexibility to facilitate a variety of pote11tial desigr1 c011cepts. 111e staff proposed ordi11ance fralnework incllldes specific design MCA-2008-03 - Rl Ordinance October 21,2008 Page 6 principles and visual relief techniques. These principles and techniques are not intended to establish or dictate a specific style or mass but would rather provide assistance to applicants to understand various methods for minimizing visual mass. Please refer to the attached August 26, 2008 Planning Commission staff report for additional details on the proposed design principles and visual relief techniques. Council Option: The Council can direct additional review process or details if necessary. Additional evaluation of the total floor area ratio and a more comprehensive design reVIew process: As mentioned previously, staff believes that achieving architectural diversity does not require changing the maximum 45% total building floor area ratio. By creating a process that allows applicants to increase the second floor ratio, new architectural opportunities become available. Staff believes the proposed design principles and review requirements would offer an alternative and streamlined process for homeowners and design professionals. Council Option: The City Council can initiate a more comprehensive residential design review process/ guidelines similar to Los Gatos and Los Alto, if warranted. Other Related Minor Ordinance Changes Setback surcharge and 50% second floor exposed wall requirement Aside from the proposed design principles and techniques, staff suggests that homes exceeding the 45% second floor to first floor building area ratio would also be exempt from the second floor 10 feet setback surcharge requirement. In addition, the 50% second floor wall exposure requirement would be revised to include the proposed visual relief measures discussed in the previous section of the staff report. Other miscellaneous changes Staff is recommending additional language clarifications be made relating gardening activities allowed in the R1 district and minor wording change to improve readability of the general R1 Ordinance. Please see attached redline ordinance XXX for additional details. MCA-2008-03 - R1 Ordinance October 21. 2008 Page 7 COUNCIL OPTIONS: The City Council may consider the following options: 1. Do not authorize any change to the Rl Ordinance. 2. Adopt the Planning Commission recommendation and initiate a review of the Rl Ordinance including but not limited to topics on the ratio of 2nd floor area to 1 st floor area, the total 45% floor area ratio and the overall Rl design review standards / process. Note: This option will add significant time and cost to the process. The City would have 3. Adopt the staff recommended ordinance framework and direct staff to work with the City Architectural Consultant and return in a month to present final ordinance details for consideration. ./\ Submit;d by:: ) f i ! / / \ / A VJ??+ .7 , ~\ --- //~~ Steve PiaseckI Director, Community Development Approved by: w David W. Knapp City Manager Attachments Exhibit A: Proposed Ordinance Recommendations Exhibit B: Existing Ordinance Exhibit C: Planning Commission Staff Report with attachments, August 26,2008 (postponed September 9, 2008) . Exhibit D: Planning Commission Meeting Draft Min.utes, September 9, 2008 Exhibit E: Planning Commission Meeting Draft Minutes, July 8, 2008 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: October 21, 2008 SUBJECT Consider taking up the question of increasing office space and hotel allocation as part of a General Plan Amendment. RECOMMENDATION Initiate a discussion on how to best proceed with analysis related to a potential increase in office space and hotel room allocation numbers. BACKGROUND Attached are two letters from Apple Inc. and Hewlett Packard, asking the City Council to initiate a discussion related to the cap on office allocation in Cupertino. This issue was brought up by Apple at the September 16th City Council meeting when the South Valko Master Plan was approved. At that time, the Council was not ready to refer this issue to the Housing Element process. General Plan Policy 2-20 establishes development allocation to "Provide sufficient development opportunities for these areas in order to enhance their distinct character and functions, while maintaining the desired transportation levels of service." The Cupertino General Plan, adopted by the City Council on November 15, 2005 lists six strategies to achieve that goal, including #5, "Allocation Reviev,r". It states, "Revie\'\' allocations of the development priorities periodically to ensure that the development priorities meet City needs and goals," Currently, the remaining allocation for office development is 466,627 square feet. This reflects all reductions to date for completed and/ or entitled projects. The number includes the 150,000 square. feet set aside for "corporate headquarters", See attachment D for a breakdown in the amount of square footage by area. Office Allocation Page 2 of 3 ANAL YSIS Any future office projects will further draw down on the total remaining allocation. For projects in areas with no allocation remaining, drawing from other areas is allowed by the general plan, but must be approved by the City Council. This would likely occur as a proportional reduction across all of the areas v. just one area. Currently, there are several potential office projects that could draw down on the existing 466,627 square feet over the next few years. They include: 1. Apple's new campus in the North Valko area 2. BP's potential expansion of their existing campus 3. Sand Hill Property's "Main Street" mixed project which includes 100,000 to 200,000 square feet of new office space. While precise numbers for additional office allocation needs for these and other future projects have yet to be determined, staff believes that the 'number in the range of 800,000 to 1,000,000 square feet. Currently there is approximately 12,000,000 square feet of commercial/ office development. Consequently, this change would equal approximately 6 to 8 percent increase in building area over the remaining twelve year built-out of the current General Plan. Additionally, there is very little hotel allocation remaining (78 rooms) beyond the 600+ rooms earmarked for Cupertino Square through a Development Agreement. Future hotel projects can proceed using a formula that converts commercial/retail space to hotel rooms. This was recently done with the approval of a hotel at The Oaks shopping center. However, it would be useful to anticipate future hotel needs for other parts of the city that don't draw down on the City's retail allocation. Retail allocation overall sits at over 377,521 \,vhich should be adequate until the next General Plan process. Future hotel allocation needs are likely to be in the neighborhood of 600 rooms. There are currently two hotel projects in the planning phase - 10165 N. De Anza at Alves \vith 138 rooms, and as many as 250 rooms at Main Street Cupertino. It is generally true that hotels generate less peak hour trips, and have the additional benefit of generating Transit Occupancv Taxes for the Citv. - ~ Having the discussion about development allocations within the Housing Element process appears to make sense because increased office allocation has an effect on the amount of housing that ultimately needs to be considered. It also consolidates the number of general plan amendments, makes the community process more cohesive, and streamlines environmental re,riew. Office Allocation Page 3 of 3 COUNCIL OPTIONS The City Council may consider the following alternatives: 1. Include this discussion as part of the Housing Element process, already underway. 2. Initiate a separate General Plan amendment to address this issue. 3. Do not authorize review of the office and hotel allocations. Regardless of the alternative chosen, there will be significant costs related to environmental review, including traffic analysis, which should be borne by the three major potential applicants listed above. Costs are estimated to at $200,000 to $300,000. Staff believes that this review can be conducted within the time frame set aside for the Housing Element Update. Enclosures: Exhibit A - Letter from Apple Inc. Exhibit B - Letter from Hewlett Packard Exhibit C -- General Plan page 2-16 Exhibit D -- Remaining Office Development Allocation by Area Prepared by: Gary Chao, City Planner Submitte,d by: )/________ / I ;/ // / , ),. '\\ / ";'./ / /1 / ' / (/L-V --~/' Ste\;'e' Piasecki Director of Community Development Approved by: ~L David \Iv. Knapp City Manager G: \ Planning \ PDREPORT\ CC\200S \ OfficeSpaceAllocation, DOC 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: October 21, 2008 SUBJECT AND ISSUE: Approve the adoption of a resolution to retroactively apply the reduced photovoltaic systems fee for quasi-public buildings to April 1, 2007, Resolution 08- RECOMMENDATION Staff recommends approval of the resolution retroactively applying the photovoltaic fee reduction to quasi-public buildings that have applied for such a permit in the last eighteen months. BACKGROUND On October 7, 2008, Council adopted Resolution No: 08-134, which lowered quasi- public photovoItaic permit fees to $1123. Council further directed staff to bring back before Council the issue of applying the reduced fee retroactively to the two churches that have installed photovoltaic systems within the last eighteen months: Bethel Lutheran Church and St. Jude's Episcopal Church. FISCAL IMPACT The retroactive application of the new photovoltaic systems permit fee will result in an impact to the General Fund in the approximate amount of $8,988.00; $4,494.00 per occurrence. Prepared by: Traci Caton, Ad:n;linistrative Assistant, Community Development Dorothy Steenfott, Administrative Assistant, Administrative Services SUbmi'd by: /) /~~ i / ~v ~."y , 'c,i~/\ ,;~ j -- Steve Piasec'ki Director, Community Development Approved by: (9wI~ David W. Knapp City Manager Enclosure: Resolution approving a retroactive application of the reduced photovoItaic fee for quasi-public buildings EI Paseo de Saratoga selling; Coyote Valley land values fall - Silicon Valley 1 San Jose Business Journal: Page 1 of 2 Welcome, bethe@cupertino.org I AI Silicon Valley I San Jose Business Journal - September 29, 2008 http://sanjose.bizjournals.comlsanjose/stories/2008/09/291newscolumn 1.html SILICON VALLEY I SAN JOSE BusinessJournal Sponsored by brother ;;ot yoo' ~l~ Friday, September 26, 2008 EI Paseo de Saratoga selling; Coyote Valley land values fall Silicon Valley / San Jose Business Journal- by Sharon Simonson EI Paseo de Saratoga, the 340,000-square-foot retail center in San Jose, is selling, says NAI BT Commercial broker Dan Wald. But the veteran investment property salesman won't disclose who is buying it or for how much. According to public record, the center is owned by Sunrise Penguin Saratoga LP, out of Chicago. Sunrise Penguin redeveloped EI Paseo in 1997, according to Retail Traffic magazine, adding a supermarket, The Jungle and REI. "The property is in escrow," Wald says. "All contingencies have been removed, and the buyer has done its due diligence. " The center is part of a large retail cluster totaling more than 1 million square feet on Saratoga A venue past Quito Road. The location, while in San Jose, is on the cusp of the much-tonier city of Saratoga. Besides El Paseo, the cluster includes the 637,000-square-foot Westgate Mall, home to Nordstrom Rack, Target, Old Navy and dozens of other retailers and restaurants. EI Paseo itself has a Lucky grocery store, Petco, AMC Theatre, OfficeMax and various other shops. Side by side, the two centers are in some ways indistinguishable from one another. A casual shopper might think they are one. Westgate was acquired by Federal Realty Investment Trust for nearly $100 million in early 2004. Federal Realty, which owns San Jose's Santana Row as well as shops in downtown Los Gatos. is one potential buyer of EI Paseo. A spokeswoman for the Maryland company declined comment. Affordable apartments built for teachers Developer Bruce Dorfman says his Mill Valley company, Thompson/Dorfman Partners LLC, hasn't made money building affordable apartments for the Santa Clara Unified School District in the past eight years. The apartments are leased to new teachers at below-market rates as part of a retention effort by the district to help teachers save enough money to eventually buy a Silicon Valley home. Still, Dorfman says, the work has been worth it. The teachers who get the apartments are satisfied, and the program's success gives hope that "the system can work. http://www.bizjournals.comlsan jose/stories/2008/09129/newscolumn I.html ?t=printable 10/14/2008 El Paseo de Saratoga selling; Coyote Valley land values fall - Silicon Valley / San Jose Business Journal: Page 2 of 2 "We really kind of get a ham sandwich out of it," Dorfman says, "but on a personal level, the program has been incredibly rewarding." The district held a lottery Sept. 22 to determine which of 78 eligible and desiring teachers would win one of the 30 apartments that Dorfman plans to finish early next summer. The first phase of the $12 million Casa del Maestro development, with 40 apartments, was completed in 2002. The district has financed the construction using tax-exempt debt and cut costs by donating the land, Dorfman says. The teachers' rent will repay the loans, operate the property and build a small reserve. The mystery to Dorfman is why more school districts don't follow Santa Clara's lead. Over the years, his company had talked to dozens of school districts from across the country that face similar recruitment and retention problems. So far, he knows of only two, including Santa Clara, that have gone forward with a program. The second is the San Mateo County Community College District, where Dorfman is now doing his second housing project. 22.8 acres sold in Coyote Valley Coyote Range LLC has sold 22.8 acres at 270 Richmond Road in the heart of Coyote Valley. The transaction, said Andre Walewski, a Colliers International broker who represents Coyote Range, is an eye-opener for anyone who wonders what has happened to Coyote property values since the city of San Jose decided to halt land- planning for the 7,000-acre area earlier this year. Walewski would not disclose the sale price. But the same buyer - Crystal Springs Property Investments LLC out of Hillsborough - had the property under contract two times. The first time was before the land-planning stopped; the second time was after. Needless to say, the second price was "significantly lower" than the first, Walewski says. The price is also not in public record. "Everybody's expectation for Coyote Valley was that something was going to happen with the planning to make the land worth a lot more money," W alewski says. That did not happen. The buyer plans to keep the land as a long-term investment for children and grandchildren, he says. The sellers plan to take their sums and to invest them elsewhere. SHARON SIMONSON can be reached at 408.299.1853 or ssimonson@bizjournals.com. All contents of this site @ American City Business Journals Inc. All rights reserved. http://www.bizjournals.com/san j ose/stories/2008/09/29/newscol umn l.html ?t=printable 10/14/2008 Cupertino Square tries new team - Silicon Valley / San Jose Business Journal: Page I of 3 Silicon Valley / San Jose Business Journal- October 6, 2008 hU~1 /sanjose. bizJournalS~~Qlnlsanj9sejstQrie_s/2Qfl8Ll 0/Q6/stQn2~html SILICO,N VALLEY I SAN JOSE BlsilessJournal Friday, October 3, 2008 I Sponsored by brother ~t N;.J' 51:!;' Cupertino Square tries. new team Silicon Valley / San Jose Business Journal - by Sbaron S1m.Qnson fr~ r. ~.'. . y . t , .~ Vicki Thompson Principals John Luk and Andy Le of GD Commercial Real Estate were hired to attract new tenants to the troubled shopping mall. View Laroer . ..~-- It's back to the future at Cupertino Square, the struggling South Bay mall once known as Valleo. Orbit Resources Inc., the mall's new majority owner, has retained Milpitas brokerage GD Commercial Real Estate to help get the mall's vacant conidors filled with shoppers. GD Commercial is best known for its ties to Asia, and Hong Kong native John Luk, executive managing director for the firm, said he plans to capitalize on those connections as the broker works to attract tenants to the shopping center. "I have offices in Shanghai, Bejing, Hong Kong and Guangzhou," he said. "I can tap into some of the tenants that really want to expand into the United States, but there is no bridge for them to come over." The emphasis on bringing international offerings with a focus on the Pacific Rim is not new for V alleo. Indeed, it is much the same strategy employed by the mall's former managing partners Alan Wong and Emily Chen after they bought it in 2003. Yet the 1.4 million-square-foot mall on Wolfe Road adjacent to Interstate 280 has struggled for much of the last two decades. Sandwiched between the highly successful Stanford Shopping Center in Palo Alto and the Santana Row-Westfield Valley Fair juggernaut in San Jose, Cuper1ino Square has failed to establish itself as a third option. While it retains Macy's, JC Penney and Sears as anchors, the mall's roughly 500,000 square feet of interior shop space remains about half vacant. On a recent Tuesday afternoon, almost no shoppers strolled its aisles, and even Luk observed that it lacked "energy." Most recently, Orbit, an international investment company with offices in Europe and Shanghai, as well as Silicon Valley, sought bankruptcy court protection after a bitter fight with its lender over the mall's future. That troubled history stands in stark contrast to the obvious spending potential of Cuper1ino residents. At more than $100,000, Cupertino's average household income is one of the highest in Santa Clara County. http://www.bizjournals.com/san jose/stories/2008/ I 0/06/story2.html ?t=printable 10/14/2008 Cupertino Square tries new team - Silicon Valley / San Jose Business Journal: Page 2 of 3 There is also concern from some community members that the shopping center doesn't sport an all-Asian theme, even though nearly half of Cupertino's residents are Asian, according to the U.S. Census Bureau. "We want a shopping mall for everybody. People don't come to Cupertino to shop in Taiwan. We don't mind an Asian influence, but if there weren't rules, a lot of our restaurants wouldn't even have English signs," said Dennis Whittaker, a community activist and co-founder of Concerned Citizens of Cupertino, a local advocacy group that includes people of various ethnicities. Whittaker noted that Cupertino has no book store, no stationery or office supply stores. "We are tired of sending our sales tax to San Jose and Santa Clara ... it would be nice to have an upper-level department store like Nordstrom as well as an Asian marketplace." The Census Bureau counts East Indians as Asians, he noted, two groups many would consider ethnically disparate. The center's spotty past puts his company under tremendous pressure, Luk said. Eight GD brokers will be focused on getting Cupertino Square filled, and the company plans to open a full leasing office in a key mall location. The goal will be to lease 50,000 square feet at the center by next spring. Like others who have been affiliated with Cupertino Square in the past, Luk is careful to say that the mall welcomes all comers and to emphasize that the mission is to create an "international entertainment and lifestyle center." The Hoffbrau House, a German beer-themed buffet-style eatery, is expected to open at the center early next year; Italian restaurant Vapiano has also signed on. But he acknowledges that to find success, the mall's owners can't ignore the Asian population. "It's part of the fabric of the community," he said. He pointed to his company's success bringing Asian tenants to Fremont's Pacific Commons II and Fremont Times Square, where he said brokers filled nearly 100,000 square feet. The Times Square anchor is Marina Food, an Asian grocer. Marina already has a store in Cupertino. Luk said potential tenants at Cupertino Square include Cashbox Club Karaoke, a plastic-surgery center, a day spa, retailers aimed at child enrichment programs through tutors and people teaching the martial arts. He cites Aberdeen Centre in British Columbia, Canada, as a potential template. Aberdeen bills itself as "North America's first multicultural retail experience," offering retailers a venue that caters to "sophisticated ... affluent ... Asian and Western shoppers," Luk and his colleagues need look no further than the other side of 1-280 to find another prototype for success. The much-smaller Cupertino Village at Homestead and Wolfe roads also struggled until it was redeveloped as an Asian shopping center in the late 1990s by the valley's own Peter Pau. It was sold to Kimco Realty Corp. for $65 million in early 2006, and it is bustling with activity. The center is anchored by 99 Ranch Market, another Asian grocer. The other tenants include East West Bank, Ten Ren Tea, Lee & Associates Dental, Joy Luck and Sheng Kee Bakery. Kimco got the green light from Cupertino to expand the Village by 25,000 square feet and add a parking garage on the 12.5-acre site. Cupertino Village is a "dense, high-income submarket of the San Francisco Peninsula with diverse ethnic demographics and a strong Asian community," Kimco told analysts and shareholders May 1. SHARON SIMONSON call be reached at 408.299.1853 or ssimonson@bizjournals.com. http://www.bizjournals.com/sanj ose/stories/2008/ 1 0/06/story2.html ?t=printable 10/14/2008 Erik's DeliCafe shows big appetite for growth - Silicon Valley / San Jose Business Journal: Page 1 of 2 Welcome, bethe@cupertino.org I Al Silicon Valley / San Jose Business Journal - September 29, 2008 http://sanjose.bizjournals.com/sanjose/stories/2008/09/29/smalib I.html SILICON VALLEY I SAN .JOSE BusiRessJournal Sponsored by brother ~t )'OO,J' ~I:;k> Friday, September 26,2008 I Modified: Thursday, October 2,2008 Erik's DeliCafe shows big appetite for growth Silicon Valley / San Jose Business Journal- by Cathy Weselby t: .: ~;t. ~;:;/ , ~ Vicki Thompson Erik Johnson, founder of Erik's De1iCafe, shows off one of his classic sandwiches at his Santa Cruz eatery. Johnson says his 35-year-old secret to success has been consistency, quality, service and integrity. He has 25 locations with four more on the way. View Larger All Erik Johnson wanted to do 35 years ago when he opened his first Erik's Deli was serve people sandwiches that made them feel good. "If you go into business to make money, you'll go broke," Johnson says. Today, Erik's has 25 locations, with four more on the way, generating $17.5 million in revenue last year and on track to do $20 million this year. The "secret goo" to his success, Johnson says, has been sticking to his values of consistency, quality, service and integrity and instilling those values with the franchise owners. ''I'm a control freak," he says. The growth certainly did not happen overnight. Johnson has been busy setting the wheels in motion for some time so that the formula can be replicated beyond the Bay Area. Over the past five years, he outsourced all the food preparation, worked out specifications on every element of the decor so that it can be easily reproduced at each new site and hired a chief operating officer. Johnson opened the first Erik's Deli in Scotts Valley in 1973 with $429 that he borrowed from his father, Ray Johnson. His father also made all of the soups, and his mother made potato salad in their kitchen, and Johnson would drive back and forth between Monterey and Scotts Valley every day. In 1977, he opened a commissary in Santa Cruz and would deliver to the cafes in Capitol a, Aptos and Santa Cruz, as well as the original Scotts Valley location. Erik's Deli became Erik's DeliCafe when Johnson opened his first location http://www.bizjournals.com/san jose/stories/2008/09/29/smallb 1.html ?t=printable 10/14/2008 Erik's DeliCafe shows big appetite for growth - Silicon Valley 1 San Jose Business Journal: "over the hill" in Los Gatos in 1980. Page 2 of 2 Four years ago, Johnson decided to outsource all of the food production between three companies: Del Monaco Specialty Foods, Good Earth and Will's Fresh Foods. He hired Ledyard Distribution to make the rounds to the 25 locations. Erik's DeliCafes are known for their barn wood paneled walls, potbelly stoves - the cafe's signature - farm tools and antique knickknacks sprinkled throughout the dining room. Johnson decided to update the cafe's decor four years ago and hired a designer from Phoenix to help modernize the design. The new look has warm umber walls and enlarged photos of the sandwiches and salads. Johnson carried forward some of the old photographs and antiques "so as not to lose connection with the past." Now each franchisee has a blueprint for a new cafe that can be fit to the square footage. Johnson recently hired Tony Bendana as chief operating officer to run the day-to-day operations of the company and ensure that the franchisees are in compliance and help grow the company Bendana's first cafe opening will be at the corner of Market and E. Santa Clara streets in downtown San Jose. Franchise owners Manuel Jimenez Jr., Manuel Jimenez Sr. and Richard Natividad anticipate opening the doors in November. Johnson says the San Jose Redevelopment Agency has been helpful with obtaining the permits for outdoor seating and recommending signage. Johnson said he didn't have the same experience with the city of Santa Cruz when he moved his downtown Santa Cruz cafe to Walnut Street and tried to get a permit for a patio. The first two locations outside of the Bay Area will open in Fresno, with franchisees expressing interest in opening up shop in Modesto and Stockton. Only two of the 25 Erik's DeliCafes are company-owned; the rest are franchises. Johnson says that the cafes are an owner-operated type of business. "Y ou've got to stay on top of it," Johnson says. The initial franchise fee is $20,.000 with a total investment of $274,000 and 5 percent royalty fees. Many of Johnson's franchisees are former employees. The menu may have shifted slightly through the years, but the sandwich names have lasted: Marrakech Express, Pilgrim's Progress. R.E.O. Speedwagon, Abbott's Habit, Natural High. An ad agency in the 1970s called them, "sandwiches with character." The cafes go through 52,000 pounds of alfalfa sprouts annually. Johnson says that many of his long-term contracts are soon coming up for renewal, and his suppliers have warned him that costs have increased substantially. Johnson is reviewing the menu and will probably have to raise prices, something he hasn't done in more than two years. He says he would prefer to raise prices rather than sacrifice quality. "After all, it's got my name on it," he says. Cathy Weselby can be reached at 408.299.1821 or cweselby@bizjournals.com. All collfents of this site @ American City Business Journals Inc. All rights reserved. http://www.bizjournals.com/sanjose/stories/2008/09/29/smallb l.html ?t=printable 10/14/2008 ~:r:,;r:f:!;:-'::~j{;;;t~~.t;~;.i~: SO'SlN ESS+TECHNOLOGY For the latest headlines, blogs and podcasts, visit your tech-news hub at www.siliconvalley.com. i~~ __ III Saturday, October 18.2008 ~'!~;!J {t5 ;-;:1:: ;8REi\~\ \t Mervyn.. ' . ' s tQ,~l@~e" sell offlnventot)/at all . its remaining stores YET ANOTHER BLOW TO MALLS By Anne D'lnnocenzio ABsociated Press Ailing department store chain Mervyn's, which had, been operating for almost five decades, has become the latest merCh8.l1t headed for extinc- tion. The retailer, which filed for Chapter 11 bankruptcy protec- tion in July, said Friday that if plans to begin liquidation sales .. at its remaining 149 stores arid wLnd down its business. The ,HayWill."d-b~~' chain said liq- uidatiQn., sales..during the holi- day season w:eretile' bestway to maximiZe value for the compa- nY's creditors after exhausting all its options, including the sale of the company. See MERVYN'S, Page 3 LOCATIONS OF SOME SOUTH BAY MERVYNS STORES 950 \IV Hamilton Ave., Campbell 20730 Stevens Creek Bivd.. Cupertino 749 E. Calaveras Blvd.. Milpitas 990Cochrihe Road, .~_~rgan Hill 3'50 Showers Drive, Mountain View 5655 Mowry Ave.. Newark 250 Walnut Street Redwood City . 1375 BIDssom Hill Road, San Jose 375 N. Caprtol Ave.. San Jose 2010 E! Camino Real. Santa Clara SOUi!:e: Me~'Yns , -. - - ~ MERVYN'S I Hard-hit by slumping California economy, stores to close Continuedfrom Page] When the chain filed the Chap- ter 11 petition on July 29, it said that it planned to reorganize its business and keep open all of its 175 stores. Mervyn's now oper- ates mainly in California and has seen its sales drop further as the state is alYlong the hardest hit by the real estate slump. The Contra Costa Times re- ported that Forever 21 has sub- mitted a bid to acquire about 150 Mervyns stores. Officials at Mervyn's did not return phone calls. The allliounce- ment marked the latest liquida- tion for a retailer and represents yet another blow to the nation's malls, which al'e seeing increasing vacancy rates ill a deteriorating economic environment. On Tues- day, specialty retailer Linens 'n Tlpngs, which filed for bmlkruptcy protection in May, annOLmced it will begin liquidation sales at its stores as early as this week after failing to find a buyer that wanted to operate the company. The big problem with Mervyn's, a 59"year-old chain, was that it had been squeezed between high-end department stores and discount- ers like Wal-Mart Stores. Before its bankruptcy filing, Mervyn's had been shuttering stores and leaving states such as Oregon and Washington since 2005, after a consortium of private equity play- ers including Sun Capital Part- ners bought Mervyn's from Tar- get for $1.2 billion. According to the company's Web site, Men-yn's was fOlmded by Mervin Morris who opened the first store in San Lorenzo, targeting young families. MercuryNews.com Sunnyvale: New downtown proceeding on schedule By Denis C. Theriault Mercury News Article Launched: 10/17/200810:07:19 PM PDT Acknowledging recent whispers that Sunnyvale's long-awaited downtown redevelopment project had once again run aground, city officials had a strong retort this week: Don't believe 'em. Councilman Ron Swegles said Friday that primary developer Sand Hill Property has reported that despite the nation's pervasive economic gloom, there are no problems with the $400 million project - a sweeping restoration of Sunnyvale's long- demolished traditional downtown - and that everything remains on schedule. "They've assured us there's not a problem with the project," he said - "at all." Swegles said talk bubbling around town had the project, known as the Sunnyvale Town Center, grinding to a halt, with workers laid off. So city officials put out a news release to the contrary. "That's why we addressed it," Swegles said. When completed, the Santana Row-like Town Center will replace an outmoded 1970s mall along Mathilda Avenue that, in turn, replaced what once was Sunnyvale's old-fashioned downtown corridor. In its place will be big retailers like Target and Macy's, along with office and retail space and a couple of hundred condominiums. Given the checkered past of a project that first took shape in 1999, any action - or lack thereof - usually ends up a hot topic for Sunnyvale residents. The mall went bankrupt under one developer, and another developer - Forum Development Group - missed several deadlines before Sand Hill, joined by developer RREEF, took over the site in April 2007. Wrecking balls got swinging a month later to residents' cheers, and the first phase of the project remains on target to open late next year. Still, a few tweaks have been discussed as home sales have softened and doubts have emerged about the developer's ability to sell all the residential units proposed. The biggest change would be allowing more rental units in the project as well as more commercial space, such as offices and restaurants. Council members discussed amendments to the project this month, city spokesman Adam Levermore-Rich confirmed, but because those discussions were held while . the council was in closed session, he did not know specifically what they involved. Another looming challenge - groundwater tainted by perchloroethylene, a chemical used by three former downtown dry cleaners about 50 years ago - also has yet to slow the project, Levermore-Rich said. As part of its deal with the developers, Sunnyvale agreed to pay the costs of pumping out the chemical plumes. "It's not standing in the way of the construction," Levermore-Rich said. As for that talk about slowing down? "They beat the last milestone by a month or two," Councilman Chris Moylan said. "We believe the relationship we have with this developer is good enough that if there were problems, they would have come to us." LuSJ Iv) -z~{()p PLOTS e3 PLOYS vVhal',td3rewing in the.ReClL~Est(Jle.!'dal'ket -7 by the credit crunch. It also is suffering from a scar- ci ty of property transactions and lising defaults. '. When Gramercy Capital Corp. .releases it~ The company is flirting with breaching eel. third-Cjt~aj:ter earnings,. investors in the com- .' rain'covenants on its unsecured bank lines. FOT mercia] property finance ari.d investment instance, the $175 mlllion line froml<e>'Bank re- camp,tny likely will .focus' on: its ability to qtlires, among other things, that Gramercy's maintain creiUr lines from, its bank lenders. earnings be at least 1.30 times what it has to . A failure to clo so couid pLlt the New York make ill interest payments. L.1St quartel', that ra- , : complmy,'s survival in doubt ancl put a drag tio fell to 1.42. on its largest ;shureholcl.er a~d corporate.. f\ vio~ation ofthat covenant could lead Key- . cotlsili,..,-office' developer and investor SL Bank to.asJ< for immediate repayment. As of June Green Realty Corp. ,;', . 30, Gramercy had tapped $75 million on that facU- '. Gramercy hasn't amiouncect a date for its earn. ity. It reported $55 million in cash on its balance ings release, but it is expected as soon <:15 next sheet.. 1\ spokesman for the company declined to week. Like many of its peers, the real-estate invest-' conunent ahead of its earnings release: Shares in ment.trtlst has seen its access to capital curtailed Gramercy m'e down about 95% this year. . .... Key Credit Liile' I' e ' t . r a' . a h " r " /~ I /