HomeMy WebLinkAboutSand Hill Property Company Files SB 35 Application - Press Release - 03.27.2018
FOR IMMEDIATE RELEASE CONTACT: Brian Babcock, PIO
March 27, 2018 TELEPHONE: (408) 777-3262
Sand Hill Property Company Files SB 35 Application
CUPERTINO, CA - Sand Hill Property Company filed an application with the City of
Cupertino today entitled “Vallco Town Center Project Application pursuant to SB 35.” The
California Legislature passed new housing legislation, known as SB 35 and signed by
Governor Brown on September 29, 2017, that changes some aspects of local review. The law
authorizes a property owner to submit an application for a housing development that is not
subject to a conditional-use permit and is permitted a streamlined ministerial approval
process, so long as the development satisfies specified planning objective standards.
Sand Hill Property Company’s proposal includes approximately 1.8 million square feet of
office space, 400,000 square feet of retail, and 2,402 units of housing. Fifty percent of the
housing units are proposed to be affordable. A new AMC theatre, bowling alley, and ice rink
are also included in the plan. The City of Cupertino is committed to a review that is
compliant with state housing law.
While this application is under review, the owners of the Vallco property have requested that
the Specific Plan process continue. The process is a path in which community members can
refine the project options and define preferences. Additionally, the Specific Plan creates an
ongoing opportunity for negotiation of a development agreement and community benefits.
Community members are encouraged to continue to stay engaged in the design and
planning process of the Vallco Special Area.
For more information on the process, visit www.cupertino.org/vallco and
www.envisionvallco.org.
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Mr. David Brandt
City Manager
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014
RE: Vallco Town Center Project Application pursuant to SB 35
Dear Mr. Brandt:
On behalf of Vallco Property Owner, LLC (the “Applicant”), please find attached our
development application for the Vallco Town Center project (also, the “Application” or the
“Project”) that we submit pursuant to California Senate Bill 35 (“SB 35”). This submittal is in
direct response to California’s acute housing shortage and the State Legislature’s recent
declaration that access to housing, and in particular affordable housing, is a matter of statewide
concern. To facilitate and expedite the approval and construction of housing it has provided a
variety of reforms and incentives. SB 35 is one such reform. It provides that, in jurisdictions
failing to meet their state housing obligations like Cupertino, the construction of qualifying
mixed-use residential projects, such as this one, shall be expedited by a streamlined,
ministerial, and objective approval process.
The Vallco Town Center advances SB 35’s goal of delivering affordable housing while retaining
the major design aspects, innovative features, and community benefits of the previous “Hills at
Vallco” application. This includes a 30-acre rooftop park, two town center plazas, and an
exciting retail and entertainment district to be anchored by a new, state-of-the-art AMC
Theatres, bowling alley and ice facility. In terms of quality, this will be a world-class
development.
The Application also makes significant changes to the original Hills plan to assure compliance
with the specific requirements of SB 35 and to address past critiques. Specifically, the Vallco
Town Center project has reduced total office area (including unoccupied or ancillary spaces)
from approximately 2.4 million to 1.8 million square feet, while allowing more diversified uses
such as research and development, medical office and allied labs. The retail area has been right-
sized, adjusting from 640,000 square feet to 400,000 square feet to better reflect market
conditions. At the same time, we have increased housing from 800 units to 2,402, of which an
unprecedented 50%, or 1,201 units, will be affordable to low and very low-income households
at rents expected to be a fraction of market rates. We anticipate this new land use plan will
have other benefits as well, including:
• a 25% reduction in traffic impacts compared to the former Hills plan, in addition to the
greenhouse gas (GHG) benefits resulting from reducing now long commute distances for
area workers who will be residents
• a healthy fiscal impact and necessary infrastructure for the City’s sustainable economic
growth, not to mention thousands of construction jobs over a period of 5-8 years filled
by skilled craftspeople and at the prevailing wage
• millions of dollars in one-time and new annual recurring revenue to Cupertino’s
excellent but severely under-resourced schools
The Project Description sets forth the visionary plan in great detail and includes comprehensive
checklists demonstrating compliance with SB 35. As required by SB 35, the application is in full
consistency with all applicable objective planning standards currently imposed by the City,
including Vallco’s decade-old designation for residential use. We make sure that the Application
not only meets the mixed-use residential and affordability criteria mandated by this recent
legislation, but that we exceed them.
There is a City-administered Specific Plan process in progress, and, though we do not have an
active role in it, we fully support its continuation notwithstanding this Application. While SB 35
stipulates the Application is to be processed and approved pursuant to statutory timelines, the
City’s timely completion of the Specific Plan would still allow Cupertino to fulfill its legal
obligations to the State as well as preserve the possibility of an alternative program.
It is our sincere hope that this City process is successful in yielding a project that is derived from
the community while also being viable. However, absent such an alternative, our Application
offers a viable, housing-focused plan for the dead mall and will allow us to get started on a
feasible project with a reasonable schedule of completion.
This is the essence of why today’s Application is necessary. When the City’s “Specific Plan”
process was authorized in October 2017, our intent was to engage with a City-designed process
to finally revitalize the mall. We offered a range of options that we considered economically
viable and asked that the City focus on increased residential use to help address the Region’s
and Cupertino’s housing shortage and severe and worsening affordability crisis.
However, at this time we are unable to see a successful path to a community-supported,
market-feasible project that would not result in another ballot challenge. While we appreciate
the hard work of City staff and earnest people to engage in the ongoing community process,
the simple fact is that this process is under the relentless attack of the same Political Action
Committee (PAC) that has derailed past planning processes with ballot box planning and is
presently litigating against the City of Cupertino over it.
This PAC has already made it clear they will not accept any viable outcome of the City’s
planning process, but all the while failing to articulate a vision of its own, besides the fallacy of
bringing a dead mall back to life. Instead of allowing the planning process to take place. There
have been significant and ongoing efforts since 2012 to stop revitalization of Vallco and
undermine community planning processes including:
• Past and ongoing litigation against the City of Cupertino over Vallco (2016-Present)
• Ballot initiative (Measure C) against Vallco (2016)
• Threats of ballot box challenges against Vallco (2015 -Present)
• Attempts to rewrite the General Plan, downzoning Vallco to retail only (2017)
• Actions to strip Vallco’s Housing Element designation (2017)
• Fundraising for litigation and ballot box challenges to prevent the revitalization of Vallco
(2015-Present)
• Attempts to unduly influence the City-sponsored community Specific Plan process
(2017-Present)
• Public request to the City to abandon the City-sponsored community Specific Plan
Process (2018)
Given the continued uncertainty and instability in Cupertino and the repeated efforts by a
group of Cupertino residents to stop revitalization of Vallco and worsen the housing crisis in
Cupertino, we submitted the SB 35 Application.
After 4 years of hard work, we find ourselves in a time loop. Relying solely on this process under
these circumstances is untenable. The risks associated with waiting longer to advance the
project cannot be justified. The markets won’t wait for Cupertino; key tenants have left Vallco
and the few that remain are left hanging. Investment capital has become increasingly skeptical
of the City’s ability to pull off a revitalization of the mall. It is time to advance this project or it
may not happen at all.
What is more, this housing and affordability crisis is real and getting worse. It is affecting us on
both business and personal levels and requires action now. Businesses at our neighboring Main
Street Cupertino project are severely short-handed due to the lack of housing available for their
workers.
This is driven by a lack of housing, specifically affordable workforce housing. Cupertino
currently provides only one affordable housing unit for every 14 of its low-income jobs — one
of the most egregious ratios in the Bay Area – and it’s only getting worse: two thirds of
Cupertino’s own “below market rate” rental housing stock, totaling 142 units, will convert to
market rates within the next decade, and the City has yet to permit a single low or very low
income unit from its now 3-year old Regional Housing Needs Allocation.
The intent of SB 35 is to alleviate these housing and affordability problems so the well-being of
the State and its regions can be safeguarded. Vallco can and must be a substantial part of that
solution. It is important to note this Application is informed by years of community engagement
on the future of Vallco. We are confident it will be successful and are proud to bring it forward
for our community.
While we are ready, willing and able to construct the project defined in this Application, we
wish to reiterate that, as the City continues its Specific Plan process, we intend to remain open-
minded in the event that the City advances and environmentally clears an alternative project on
a reasonable timeline. Such a project would need to be economically viable but could seek to
include a different mix of office, retail, and housing types, among other things.
Our doors remain open to you, but in the meantime, it is imperative to secure approval on the
Application submitted, a viable project that both revitalizes Vallco and provides solutions to the
housing and affordability crisis we as a community all face. We look forward to your review and
timely approval of our Vallco Town Center SB 35-compliant project application.
Sincerely,
Reed Moulds
Managing Director
Sand Hill Property Company
Cc: Mayor and City Council Members
Ms. Aarti Shrivastava, Assistant City Manager