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101-September 21, 2010 Staff Report.pdf COMMUNITY DEVELOPMENT DEPARTMENT CITY HALL 1010300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3308www.cupertino.org CITY COUNCIL STAFF REPORT Meeting: September 21, 2010 Subject Review opportunities for future development on the Hewlett Packard campus located in the North Vallco Master Plan area. Recommended Action Staff requests Council direction on future development on the Hewlett Packard campus and recommends that the Council consider authorizinganalysis of additional retail allocation in the General Plan. Background On August 17, 2010, the Council asked staff to agendize a discussion on the future development potential of the Hewlett Packard campus in light of the recent news that Hewlett Packard is moving out of Cupertino. The Hewlett Packard campus is located in the North Vallco area(see Attachment A), as defined by the General Plan, and is one of the City’s major employment centers. It is roughly bounded by Homestead Road, Wolfe Road, I-280, and Tantau Avenue. The 240-acre area includes the 95- acre Hewlett Packard campus, the approximately 60-acre Apple campus, as well as Cupertino Village retail center, a hotel, two apartment complexes and additional office and residential properties. In 2006, the City Council authorized the preparation of the first phase of a Master Plan for the North Vallco area. The study was initiated to proactively address development opportunities in the area ahead of development proposals. The urban design firm of Freedman Tung and Bottomley, represented by Michael Freeman, was retained to help prepare the plan and facilitate three Community Workshops. The Council also appointed a 20-person Study Committee and consultant, Bruce Liedstrand, as advisors for the Master Plan effort. The North Vallco Master Plan report was receivedby the Council in November 2007. Discussion The final North Vallco Master plan outlined 10 general principles consistent with the General Plan policies for the area, which reflect community input received from residents and corporate tenants(see Attachment B). They include: Partner with the community and corporate citizens Preserve the area as a workplace core (office, office/research & development) Incentivize provision of an engaging and vital work environment Promote walkability and connectivity; at the same time recognize company security requirements Work with property owners to create a distinctive identity for the area Promote sustainable designs and practices Ensure responsible and efficient use of land Respect the interests of adjacent residential neighborhoods Minimize traffic impacts Obtain constructive community consensus on the appropriateness of residential development in the area recognizing that the community has differing views General Plan Guidance The Cupertino General Plan (Policy 2-35) prescribes that the North Vallco area consist of mostly office and light industrial activities, along with neighborhood commercial and hotel uses(see Attachment C).Residential uses are allowedin the area, except on the 95-acre Hewlett Packard campus. The Hewlett Packardcampus commits the City to the development policies of the 1993 General Plan through a Development Agreement which was signed in November 1995 and expires in November 2015. The Development Agreement is referenced in the 2005 General Plan. When the Hewlett Packardcampus is sold to another owner, a new Development Agreementwillbe required to lock in parameters for future development. The General Plan provides a clear policy to retain the North Vallco Area as an employment area with predominantly office and light industrial uses. The General Plan also recognizes (Policy 2- 44) that maintaining the cohesiveness of commercial centers and office parks is necessary to have a healthy tax base and retain opportunities for existing businesses to expand in response to changing business trends. This of crucial importance given that only 4% of the City’s area is zoned for industrial land (including the North Vallco Area and the BubbRoad area). Plans for future development in the area must consider impacts to the City’s revenues and the City’s ability to retain/attract major corporate headquarters and campus developments (including facilitating emerging industries) in order to stay competitive with other cities and regions. Retail Commercial Development Allocation In reviewing uses in the North Vallco area that could provide economic benefits to the City, staff recommends looking at allowing larger format stores that historically bring more revenue. The North Vallco Area is in a geographically central location in the Silicon Valley and provides the essential tenant prerequisites, such as, convenient highway access and visibility that are critical to larger format stores. Currently, the remaining City-wide allocation for commercial uses is approximately 80,000, which is not adequate to build a new large format retail development which typically requires around250,000 square feet(see Attachment D). In order to plan for future uses as negotiations onthe site develop, staff recommends: 1.Adding 500,000 square feet to the City-wide commercialallocation; and 2.Amending the General Plan and zoning on the Hewlett Packard siteto allow larger format, regional commercial uses. Policy 2-23, Strategy 5 “Allocation Review”, which states, “Review allocations of the development priorities periodically to ensure that the development priorities meeting City needs and goals,” supports this approach. It is estimated that the process for the General Plan amendment, rezoning and environmental review would take approximately 6-10 months and cost about $90,000 to $120,000 (depending on the level of environmental review). The costs could be recouped later from applicants for retail development. In addition, sales tax revenue from these larger format stores would easily cover these “start-up” costs. Residential Development While the General Plan allows residential uses in the North Vallco area (except onthe Hewlett Packard campus), the City has historically discouraged residential uses in order to maintain the cohesiveness and vitality of the North Vallco employment center and to preserve the significant development potential for corporate campuses. The General Plan advises caution and provides criteria for any conversion of office/industrial uses to residential usesin this area with Policy 2- 43 and Policy 2-44.TheCity’s recently completed Housing Element which extends to 2014 does not anticipate residential development in the North Vallco area. Coordination with Apple and HP Staff has informed Apple and Hewlett Packard regarding the discussion related to the North Vallco Master Plan area. Both companies have expressed the desire to maintain the policies in the 2007 North Vallco Master Plan,noting that considerable effort was spent on community participation and coordination among the property owners in the area. Hewlett Packard has also stated that it is premature to discuss specific options for their campus at this time. _____________________________________ Prepared by: Gary Chao, City Planner Reviewed by: Aarti Shrivastava, Community Development Director Approved for Submission by:David W. Knapp, City Manager Attachments: A.N. Vallco Master Plan Area Map B.N. Vallco Master Plan C.General Plan Policy 2-23, 2-35, 2-43, 2-44 D.Remaining Commercial Development Allocation by Area