106-E. Planning Commission Staff Report of September 28, 2010.pdfOFFICE OF COMMUNITY DEVELOPMENT
CITY HALL
10300 TORRE AVENUE - CUPERTINO, CA 95014-3255
(408) 777-3308 - FAX (408) 777-3333 - plate@cnertino.or
CUPERTINO
Agenda Item No.
Agenda Date: September 28, 2010
Application: M-2010-03, EXC-2010-03, TM-2010-03 (EA-2010-04)
Applicant: Jane Vaughan (Cupertino Housing Partners, LLC)
Location: 19501,19503,19505,19507 Stevens Creek Boulevard (APN 316-49-999)
Application Summary: Modification to a Use Permit (U-2003-04) to allow 60% of
non -retail uses at an existing mixed -use project (Metropolitan at Cupertino) where only
retail uses are allowed; Exception to the Heart of the City Specific Plan to allow non -
retail uses to exceed 25% of the total building frontage along Stevens Creek Boulevard;
and Tentative Map to subdivide an existing ground floor commercial space consisting
of two commercial condominiums into five commercial condominiums.
RECOMMENDATION
Staff recommends that the Planning Commission:
1. Consider and make a recommendation upon the applicant's request to modify the
existing Use Permit relating to the allowable uses in the commercial space;
2. Consider and make a recommendation upon the applicant's request for an
Exception to the Heart of the City Specific Plan related to store frontage
requirements;
3. Recommend denial of the applicant's request to subdivide the 6,400 square foot
commercial space into five commercial condominiums; and
4. Recommend approval of a Negative Declaration
ftM--1.1
Approval History
On December 15, 2003, the City Council approved a Use Permit (U-2003-04) to allow the
construction of a mixed -use development (Metropolitan) consisting of 107 residential
units and 6,400 square feet of retail space in two buildings on a 3.2 acre site located on
the north side of Stevens Creek Boulevard, east of Wolfe Road and west of Finch
Avenue. The approval prescribed that the ground floor commercial space be used for
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retail uses only (See Attachment 2 for the approved conditions) with the intent to allow
uses that would promote pedestrian activities and activate the area.
The original intent of the residential units was to be condominiums; however, the Use
Permit and the Tentative Map approved in 2003 did not specifically approve the
residential units as condominiums. In 2004, the City Council approved a modification
(M-2004-07) request to convert the 107 residential units into condominiums. As a result
of this modification, and by virtue of separating the residential condominium units
from the ground floor retail space, the two separate retail building portions each
became a retail condominium unit. Therefore, the City recognizes that there are a total
of two existing retail condominium units on the project site (one each in Building A and
Building B as shown below).
Building A Building B
In 2009, the City Council approved another modification (M-2009-06) to the project to
allow the removal of two internal courtyard public pedestrian easements affecting only
the residential portion of the project. The existing public easements that run along the
frontage of the retail commercial spaces and the -perimeter of the mixed -use project site
still remain.
Existing Tenants
The retail building (Building A) west of the driveway is approximately 2,550 square feet
and is occupied by a martial arts academy (Shaolin Martial Arts) and a hair salon
(VJones Salon). The larger retail building (Building B) located east of the driveway is
approximately 3,850 square feet and consists of three tenant space (approximately
1,280 square feet each). Only one of the tenant spaces in Building B is occupied by
Visique Eye Care, a retail eyewear business/optometry practice.
Although most of the existing uses in the buildings are not traditional "retail" uses, they
have been allowed since they are active uses that either contain a strong retail
component or facilitate pedestrian activities that promote commercial synergy
consistent with the intent of the original approval. It should be noted that the martial
arts academy was permitted as a specialized studio prior to the updated Heart of the
City Specific plan (April 2010) that allowed up to 50% of such uses in shopping centers
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provided that parking and noise requirements are met. The Visique Eye Care was
permitted as a retail business given that a substantial portion of its floor plan is
dedicated to retail eyewear, with complementary optometry support.
The owner, Menlo Equities, Inc., has indicated that even though difficult economic
circumstances have required them to rent to the current uses, their ultimate goal has
been to rent the spaces out to active, retail uses.
RegulatoUAetail Condition Background
The original intent of the retail condition was reflective of the City's concerns about the
emphasis placed on residential and the diminished presence of commercial uses along
Stevens Creek Boulevard. According to the General Plan, the development activities
prescribed for the Heart of the City area is outlined as follows:
"Mixed commercial and residential development may be allowed if the residential units provide
an incentive to develop retail use, if the development is well designed, financially beneficial to .
Cupertino, provides community amenities and is pedestrian -oriented."
In other words, the Heart of the City area should be commercial oriented with
residential as a supplemental use. Further, projects should assist in enhancing
pedestrian and commercial activities. Consequently, the City has imposed similar use
restrictions on other projects within the Heart of the City area including:
• Verona (corner of Stevens Creek Boulevard and De Anza Boulevard)
• Villagio (De Anza Boulevard and Civic Park Lane)
• Rosebowl (Vallco Parkway and Wolfe Road)
• Travigne Villas (Stevens Creek Boulevard and Blaney Avenue)
• Adobe Terrace (south side of Stevens Creek Boulevard between Torre and Blaney
Avenues)
The City has consistently supported commercial uses by protecting uses that would
enhance and support quality shopping experiences and healthy retail environments.
Generally, shopping districts should be retail oriented with supporting ancillary office
and/or personal service uses, and maintain a predominant retail frontage without
interruptions to pedestrian connections and shopping experiences.
Recent Council Actions
Due to the current economic conditions, the City has in the recent past lessened retail
use restrictions for mixed -use projects, including:
• Adobe Terrace - On October 6, 2009, Council approved 50 % of the retail building to
be occupied by a State Farm Insurance office for the current property owner;
subsequent owners would have to comply with the retail only requirement.
• Villagio - In 2006, the City Council permitted Villagio to lower their 100%
retail/restaurant restriction to 50%. Subsequently, in 2009, the Council further
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allowed vocational and specialized schools to occupy up to 50% of the Town Center
Lane frontage (excluding building corners).
Applicant's Request
The applicant is requesting the following:
1) Allow 60% non -retail (medical office) and 40% retail uses - Modification to Use
Permit;
2) Allow the non -retail (medical office) uses along 60 % of the frontage, where only 25 %
is allowed per the Heart of the City Specific Plan - Heart of the City Exception; and
3) Subdivide the existing ground floor retail space from two (2) existing commercial
condominiums to five (5) commercial condominiums, two in the mixed -use building
to the west of the main drive and three in the mixed -use building to the east of the
main drive - Tentative Map Application.
The proposed applications will not alter the existing visual character of the site and its
surroundings because no physical changes are proposed to the existing site with these
requests.
DISCUSSION
Applicant's Tustification
The applicant's justification letters (See Justification Letters as Attachment 3) indicate
that they would have preferred to lease all of the spaces to retail tenants, but have been
unable to do so since the mixed -use development was constructed in 2006.
The applicant believes that they have been unable to attract retail tenants due to the lack
of convenient and visible on -street parking, the limited amount of retail space in these
buildings that does not allow it to function as a shopping center, and the lack of
commercial synergy without active and pedestrian -friendly foot traffic to Vallco Mall
and the surrounding properties.
The applicant would like to take advantage of a current offer to put a non -retail
commercial use (dental office) in the two vacant units adjacent to Visique Eye Care in
Building B. The applicant states that the P (Mixed Use Planned Development) zoning
allows for office uses with no limitation on how much space can be occupied by medical
or professional offices. -
Additionally, the applicant believes that the shared parking facilities approved for the
mixed -use development will be sufficient to meet the parking demands for this non -
retail commercial use, if the retail and non -retail commercial spaces are permitted to use
the available additional public and office parking spaces in the condominium garage.
Staff Anal
Planned Development Zoning/Retail Use and Frontage Requirements
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Staff disagrees with the applicant's argument that since the underlying planned
development zone for this property allows commercial, office and residential, office
uses should be allowed without any restriction. It is customary for the General Plan
and Specific Plans to provide overarching land use directions. However, the City has
the ability to provide more discretionary conditions through the Use Permit for each
property in order to ensure that each project carries out the General Plan intent and
objective. Further, it is common for more restrictive conditions to be imposed during a
project's discretionary review to ensure that there is an equal balance between private
benefits reaped (revenues generated by the residential units constructed) and the
community benefits being presented (City revenue generated from the commercial uses
and other measures that activate the street frontage and/or enhance the commercial
district).
Staff generally supports the modification to the Use Permit and the Exception to the
Heart of the City Specific Plan to provide more tenant flexibility by allowing non -retail
uses permitted in the Heart of the City Specific Plan provided that the availability of
surface parking for the retail tenants are not undermined (see later for discussion on
parking). Further, precedents have been set by the City to lessen retail use restrictions
on mixed -use projects.
If the Planning Commission finds merit in the Use Permit and Exception requests, staff
recommends that the retail uses remain the majority use in the space and the amount of
non -retail use is the least amount of modification needed to accomplish reasonable use
of the development. The Heart of the City Specific Plan allows for exceptions if the
following findings can be met:
1. The proposed development is otherwise consistent with the City's General Plan and with the
goals of this specific plan and meets one or more of the criteria described below.
2. The proposed development will not be injurious to property or improvements in the area nor
be detrimental to the public health and safety.
3. The proposed development will not create a hazardous condition for pedestrian vehicular
traffic.
4. The proposed development has legal access to public streets and public services are available
to serve the development.
5. The proposed development requires an exception, which involves the least modification of, or
deviation from, the development regulations prescribed in this 6lt7pter necessary to
accomplish a reasonable use of the parcel.
Therefore, the Planning Commission could consider allowing a modification and
exception to allow for 40 % of the combined store frontage (2 of the 5 retail tenant
spaces) to be occupied by non -retail uses, and the remaining 60% of the store frontage (3
of the 5 spaces) to be occupied by retail uses. Staff understands that development of a
commercial district will take time, given Metropolitans location, but is still optimistic
that when the adjacent Main Street project is developed, and Vallco shopping mall is
revitalized, this will create the necessary synergy between these three properties.
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Staff would also like to point out that the applicant was directly involved in designing
the original project and had opportunities at that time to make adjustments to ensure its
success, including proposing less residential units and larger retail tenant spaces with
potential for more visible retail parking to the public. The Planning Commission can
additionally comment on the applicant's suggested measures such as, on -street parking
to transform Stevens Creek Boulevard into a more commercial -friendly street.
Parking
The original Metropolitan approval allowed for shared parking facilities based upon a
parking analysis prepared by Fehr and Peers that concluded the maximum number of
parking spaces necessary to meet the parking demand for the project was 521 spaces.
The approval also stipulated that 24 surface parking spaces (also based upon the
parking analysis) on either side of the entry driveway of Stevens Creek Boulevard be
made available for customers of the retail space only during the hours of 9a.m. to 9p.m.
Although the project was actually developed with 525 parking spaces, exceeding the
minimum parking requirements of the parking analysis, only 23 surface parking spaces
were made available along the driveway and striped specifically for retail use only. It
appears that one of the parking spaces along the driveway is striped for visitor parking
for the office and residential uses, rather than for retail use, which accounts for the
deficit of one parking space per the requirement for retail surface parking.
Based upon the following table that indicates the additional parking needs if the dental
office were permitted to occupy the remaining two retail spaces (Visique Eye Care is
counted as a commercial business due to its strong retail component), there would be a
deficit of 7 parking spaces given the more intense parking requirements for
medical/ dental office:
19501 & 19505 Stevens Creek Blvd
Square
% of
Retail Only
Proposed
Footage
Total SF
Parking
Retail/Medical
Parkin
19501 Stevens Creek Blvd
Unit 101
1,289
20%
4.8
7.4
Unit 102
1,278
20%
4.8
7.3
Unit 103 (Visique)
1,289
20%
4.8
4.8
19505 Stevens Creek Blvd
Unit 101
1,272
20%
4.8
4.8
Unit 102
1,272
20%
4.8
4.8
Total Required
24 spaces
30 spaces
(rounded up from
29.1
Total Available
23spaces
23spaces
Deficit
1 space
7 spaces
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Staff is concerned about the deficit in parking because the available surface parking to
serve the retail uses may be undermined if non -retail commercial uses, such as the
dental office, utilize a greater share of these surface parking spaces than other retail
tenants.
Although the applicant has suggested that there are currently unused and available
parking spaces in the underground garage that can be used by these commercial
tenants, staff would like to point out that these garage spaces were intended to provide
flexibility for a variety of office uses in the adjacent office building. While the current
office uses may not need all of the spaces, it preserves the ability to rent the office space
to a variety of tenants with slightly more intensive parking needs.
Additionally, based on past experience, staff does not believe that the customers of the
retail spaces will use the underground garage parking spaces, but will park in spaces
with easier access to the commercial spaces. Staff believes that allowing more parking
intensive uses will result in customers parking in the surface parking area dedicated to
the office building, which would impact the office uses. Therefore, staff does not
support use of the underground garage for the commercial uses.
Staff believes that the only flexibility that can be provided in this case is if employees
are allowed to park in the garage space to preserve the retail surface parking for the
commercial building. As an option, the Planning Commission may recommend. that
the additional parking originally intended for office complex use be utilized by
employees of the commercial spaces who are planning to move in. It is estimated that
there will be an average of one employee in each commercial space, and possibly two in
some cases; therefore, we estimate that each commercial space will have an average
parking need of 1.5 spaces for employees whose shifts will be long enough to be
included to use the underground garage parking. Consequently, staff feels it is
reasonable to assume that about 7 employee spaces could be accommodated in the
underground parking garage, which is the number of additional parking spaces that
would be required if two of the retail units (40%) were converted to non -retail
commercial (dental office) use.
Staff additionally recommends that the applicant restripe the "visitor parking' space
along the left side of the driveway as "retail customer" parking to bring the surface
parking spaces to 24 spaces, as required by the original approval.
Commercial Condominium Request
The tentative map (See Tentative Map as Attachment 7) proposes to subdivide the two
commercial buildings into five commercial condominium units. Essentially, each of the
five tenant spaces would become a condominium unit that could be sold individually.
The applicant's justification letter for condominium units (See Justification Letter in
Attachment 3) indicates that each of the commercial condos would be approximately
1,280 square feet, similar in square footage to the average residential unit so that the
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homeowner association (HOA) costs could be evenly assessed per unit. All 112 units
(107 residential, 5 retail) would be members of the Metropolitan HOA and would be
subject to the CC&Rs (See CC&R as Attachment 4). All buildings and common areas
are maintained by the HOA. However, the commercial condo owners would each be
responsible for maintaining their interior units and their exclusive common areas in the
plaza fronting their spaces along Stevens Creek Boulevard (See Retail Plaza Standards
as Attachment 5).
Although the City recognizes that each of the two separate commercial buildings is an
existing condominium unit by virtue of separating the residential condominium units
from the retail space, planning staff is not supportive of further subdividing these
buildings into additional condominium units. Planning staff is concerned about further
subdividing the retail space for the following reasons:
1. Enforcement Issues
With multiple owners, staff believes that there is less ability to ensure that each
owner will adhere to and comply with the conditions of approval, particularly each
time the ownership of a unit changes hands. Additionally, this places additional
burden on city staff to enforce conditions of approval and act as property managers
when there is no cohesive property management or owner to do so.
2. Maintenance Issues
Multiple ownerships also tend to have greater maintenance issues due to the fact
that there are more members that need to agree upon maintenance work before the
work can be accomplished. The applicant's justification letter states that each owner
will be responsible to maintain their own exclusive common areas fronting along
Stevens Creek. With such multiple ownerships, this could lead to inconsistencies
within the maintenance of the public plaza in front of these units, particularly
because of their visibility along Stevens Creek Boulevard. Over time, one owner's
plaza may be maintained better or worse than an adjacent owner's. Additionally,
although there are provisions in the Metropolitans standards to encourage
uniformity of plaza furniture, there is not a requirement that they be uniform, and
there is no requirement to receive approval by the City.
3. Precluding Possibility of Future Retail Uses
The applicant has indicated that they had been seeking retail uses for these units;
however, due to the economy and market demand at this time, and the fact there is
no current synergy or critical mass of commercial uses at, this time without the
development of the surrounding properties, the only viable interest they have
received for these units are for non -retail commercial uses (dental office).
Staff is concerned that if these units are sold individually, and if medical/dental
offices occupy these spaces, the potential in the future for retail uses in these spaces
as originally intended will not be realized, particularly when the economy improves
and the adjacent and surrounding uses, including the mixed -use Main Street and
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Rosebowl project sites, are developed to create a synergy and critical mass of
commercial in the area. Medical/dental offices typically do not have a high turn-
over, particularly when they are ownership units. Essentially, once a medical/ dental
use occupies a space, there is little likelihood of turnover, and the potential for
market demand in an improved economy with a synergy of commercial uses will no
longer have an effect on the tenancy of units.
4. Setting of Use per Unit
These applications have been submitted as a result of an offer the applicant has
received to purchase the retail Building B space and to occupy a non -retail
commercial use in the two vacant spaces adjacent to Visique Eye Care. Therefore, in
order to meet the 40% non -retail and 60% retail requirement, the retail Building A
space will have to remain as 100% retail, and the retail Building B space will be
allowed 66% non -retail and 33% retail. Staff is concerned that the owners of
commercial units in Building B will not have the flexibility of leasing or selling their
units for non -retail commercial use and that this will create problems in the future.
5. Shared Parking
Staff is concerned that if the units are separated as individual condominium units,
allowing more intensive commercial uses that require garage parking that would
compete with the office and residential uses, would become even more difficult to
manage.
For the reasons stated above, staff recommends that the Planning Commission
recommend denial of the tentative map to create the five commercial condominium
units.
SUMMARY OF PLANNING COMMISSION OPTIONS RELATED TO
RETAIL/NON-RETAIL USES
The Planning Commission has the following options regarding the modification and
exception applications:
a) Recommend modifying the percentage of permissible non -retail commercial uses to
no more than 40 % of the total tenant spaces (Buildings A and B combined) - as
recommended by staff, with the provision that all uses meet the parking
requirement for the site, or are provided an alternative option to meet the parking
requirements. The Commission may consider recommending an 6- tion to allow the
commercial uses to utilize up to 7 spaces in the underground garage parking spaces
for the commercial spaces, and to require employees of the commercial space to
utilize the underground garage and leave surface parking spaces for the commercial
customers;
OR
b) Provide alternative use ratio as deemed appropriate by the Commission;
OR
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c) The Commission may consider placing a restriction similar to the recent Adobe
Terrace example that allows for the non -retail use only for the duration of time that
the prospective non -retail commercial use occupies/ owns the units, and that
subsequent owners would need to comply with the retail only requirement. The
disadvantage of this option is that the unit(s) may never revert back to retail uses if
the use remains long term and certain costly tenant improvements are installed that
make it difficult to revert back to retail uses.
ENVIRONMENTAL DETERMINATION
The Environmental Review Committee (ERC) reviewed this project on September 2,
2010, and recommended approval of a negative declaration on a 5-0 vote for this project
(see Attachment 6).
Prepared by Aki Honda Snelling, AICP, Senior Planner
Reviewed by:
q? n 4 ��- -
G
City Planner
ATTACHMENTS
Approved by:
aKZ,4�
arti Shrivastava
Community Development Director
Attachment 1
Model Resolutions of Approval and Denial
Attachment 2
Conditions of Approval for U-2003-04
Attachment 3
Applicant's Justification Letter
Attachment 4
CC&Rs
Attachment 5
Retail Plaza Standards
Attachment 6
Initial Study/Negative Declaration
Attachment 7
Tentative Map
G: Planning/pdreport/pcMreports/2010Mreports/M-2010-03