09-03-19 Searchable packetCITY OF CUPERTINO
CITY COUNCIL
AGENDA
10350 Torre Avenue, Council Chamber
Tuesday, September 3, 2019
5:30 PM
Televised Special Meeting Study Session (5:30) and Regular Meeting (6:45)
NOTICE AND CALL FOR A SPECIAL MEETING OF THE CUPERTINO CITY COUNCIL
NOTICE IS HEREBY GIVEN that a special meeting of the Cupertino City Council is hereby
called for Tuesday, September 03, 2019, commencing at 5:30 p.m. in Community Hall
Council Chamber, 10350 Torre Avenue, Cupertino, California 95014. Said special meeting
shall be for the purpose of conducting business on the subject matters listed below under
the heading, “Special Meeting." The regular meeting items will be heard at 6:45 p.m. in
Community Hall Council Chamber, 10350 Torre Avenue, Cupertino, California.
SPECIAL MEETING
ROLL CALL - 5:30 PM
STUDY SESSION
1.Subject: Study Session regarding Below Market Rate (BMR) Residential Housing
Mitigation and Commercial Linkage Fees for the Cupertino BMR Housing Program.
Application No(s).: CP-2019-01; Applicant(s): City of Cupertino; Location: Citywide
Recommended Action: Receive update and provide any input to Staff
Staff Report
A – July 2019 Economic Feasibility Analysis prepared by Strategic Economics
B – LeSar Development Consultants Peer Review
C – Redline Draft Economic Feasibility Analysis prepared by Strategic Economics
D –Strategic Economics Memorandum Regarding Peer Review
ADJOURNMENT
REGULAR MEETING
PLEDGE OF ALLEGIANCE - 6:45 PM
ROLL CALL
CEREMONIAL MATTERS AND PRESENTATIONS
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City Council Agenda September 3, 2019
1.Subject: Present award to Vishnu Athrey from Saint Andrews Episcopal School for
winning the Qalaxia Build_your_ BOT contest.
Recommended Action: Present award to Vishnu Athrey from Saint Andrews Episcopal
School for winning the Qalaxia Build_your_ BOT contest.
2.Subject: Proclamation for September as National Preparedness Month
Recommended Action: Present Proclamation for September as National Preparedness
Month
POSTPONEMENTS
ORAL COMMUNICATIONS
This portion of the meeting is reserved for persons wishing to address the Council on any matter not on
the agenda. The total time for Oral Communications will ordinarily be limited to one hour. Individual
speakers are limited to three (3) minutes. As necessary, the Chair may further limit the time allowed to
individual speakers, or reschedule remaining comments to the end of the meeting on a first come first
heard basis, with priority given to students. In most cases, State law will prohibit the Council from
discussing or making any decisions with respect to a matter not listed on the agenda.
REPORTS BY COUNCIL AND STAFF (10 minutes)
3.Subject: Report on Committee assignments
Recommended Action: Report on Committee assignments
CONSENT CALENDAR
Unless there are separate discussions and/or actions requested by council, staff or a member of the
public, it is requested that items under the Consent Calendar be acted on simultaneously.
4.Subject: Approve the August 6 City Council minutes
Recommended Action: Approve the August 6 City Council minutes
A - Draft Minutes
5.Subject: Approve the August 20 City Council minutes
Recommended Action: Approve the August 20 City Council minutes
A - Draft Minutes
6.Subject: Resolution adopting the City of Cupertino's State-mandated Green
Stormwater Infrastructure (GSI) Plan
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City Council Agenda September 3, 2019
Recommended Action: Adopt Resolution No. 19-112 adopting the City of Cupertino's
Green Stormwater Infrastructure (GSI) Plan which demonstrates the City's long-term
commitment to implementation of green stormwater infrastructure as required by the
City's Municipal Regional Stormwater Permit for the San Francisco Bay Region
Staff Report
A - GSI Plan
B - GSI Plan Appendices
C - GSI Plan Framework
D - GSI Resolution
7.Subject: Award of contract to G. Bortolotto & Company, Inc. for $270,000 for 2019
Speed Table Installation Project No. 2019-112
Recommended Action: Authorize the City Manager to award a contract to G.
Bortolotto & Company, Inc. in the amount of $246,100 and approve a construction
contingency of $24,000 for a total of $270,000 for 2019 Speed Table Installation Project
No. 2019-112
Staff Report
A - Contract Documents
8.Subject: 2018-2019 Civil Grand Jury of Santa Clara County Report Entitled, "Inquiry
into Governance of the Valley Transportation Authority"
Recommended Action: Approval of response to the 2019-2019 Civil Grand Jury of
Santa Clara County Report Entitled, "Inquiry into Governance of the Valley
Transportation Authority"
Staff Report
A - Civil Grand Jury of Santa Clara County Report
B - Response Letter to Civil Grand Jury of Santa Clara County
9.Subject: Amendment to existing voluntary collection agreement with Airbnb regarding
transient occupancy taxes to allow certain short-term rental hosts to remit taxes directly
to the City
Recommended Action: Authorize the City Manager to enter into Amendment No. 1 to
the voluntary collection agreement with Airbnb and to enter into other minor
amendments to the voluntary collection agreement in the future
Staff Report
A - Draft Amendment to VCA
B - VCA Staff Report 6.19.18
10.Subject: Library Commission Fiscal Year (FY) 2019-20 Work Program
Recommended Action: Approve the Library Commission FY 2019-20 Work Program
Staff Report
A - Draft Library FY 2019-20 Work Program
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City Council Agenda September 3, 2019
SECOND READING OF ORDINANCES
11.Subject: Second reading of Ordinance Nos. 19-2187 and 19-2188 adopting Zoning Text
and Map Amendments related to the Vallco Shopping District Special Area.
(Application No(s).: MCA-2019-02, Z-2019-01 (EA-2013-03); Applicant(s): City of
Cupertino; Location: 10101 to 101333 North Wolfe Road APN#s:316-20-080, 316-20-081,
316-20-103, 316-20-107, 316-20-101, 316-20-105, 316-20-106, 316-20-104, 316-20-088,
316-20-092, 316-20-094, 316-20-099, 316-20-100, 316-20-095)
Recommended Action: Conduct the second reading and enact:
1. Ordinance No. 19-2187 (MCA-2019-01): "An Ordinance of the City Council of the
City of Cupertino eliminating references in the Municipal Code to the Vallco Town
Center Specific Plan and adding language establishing development standards for a
new Mixed Use Planned Development with Multifamily (R3) Residential and General
Commercial zoning designation (P(R3,CG))" and
2. Ordinance No. 19-2188 (Z-2019-01): "An Ordinance of the City Council of the City of
Cupertino amending the zoning map to rezone 13.1 acres within the Vallco Shopping
District Special Area to Mixed Use Planned Development with Multifamily (R3)
Residential zoning P(R3,CG) and General Commercial uses and the remainder of the
Special Area to General Commercial (CG)"
Staff Report
A - Ordinance No. 19-2187 (MCA-2019-01) - Municipal Code Amendments
B - Ordinance No. 19-2188 (Z-2019-01) - Zoning Map Amendments
C - Area to be zoned P(R3, CG)
PUBLIC HEARINGS
ORDINANCES AND ACTION ITEMS
12.Subject: Application and Review Procedures for Projects Proposed Pursuant to Senate
Bill 35 (Application No(s): CP-2019-04; Applicant(s): City of Cupertino; Location:
Citywide)
Recommended Action: That the City Council find adoption of the proposed Resolution
exempt from CEQA, adopt Resolution No. 19-113 for Application and Review
Procedures for Projects proposed pursuant to Senate Bill 35, and review and provide
any input on the Draft Senate Bill 35 Application Package.
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City Council Agenda September 3, 2019
Staff Report
A - Draft Resolution
B - SB 35 Application Package and Forms
C - Staff Report without attachments (SB 35 item)
D - SB 35 Procedures CC Supplemental Staff Report
E - SB 35 Statute as Amended
F - HCD Guidelines (SB 35 Item)
G - Comments from PC and CC (SB 35 item)
H - Draft Resolution with redlines
I - SB35 Application Package with redlines
13.Subject: Options for unofficial transcription of City Council meetings (continued from
July 16)
Recommended Action: Receive options for unofficial transcription of City Council
meetings and provide direction to staff to use the free YouTube auto-captioning feature
for transcription of Council meetings.
Staff Report
ORAL COMMUNICATIONS - CONTINUED (As necessary)
COUNCIL AND STAFF COMMENTS AND FUTURE AGENDA ITEMS
ADJOURNMENT
The City of Cupertino has adopted the provisions of Code of Civil Procedure §1094.6; litigation
challenging a final decision of the City Council must be brought within 90 days after a decision is
announced unless a shorter time is required by State or Federal law.
Prior to seeking judicial review of any adjudicatory (quasi-judicial) decision, interested persons must
file a petition for reconsideration within ten calendar days of the date the City Clerk mails notice of the
City’s decision. Reconsideration petitions must comply with the requirements of Cupertino Municipal
Code §2.08.096. Contact the City Clerk’s office for more information or go to
http://www.cupertino.org/index.aspx?page=125 for a reconsideration petition form.
In compliance with the Americans with Disabilities Act (ADA), anyone who is planning to attend the
next City Council meeting who is visually or hearing impaired or has any disability that needs special
assistance should call the City Clerk's Office at 408-777-3223, 48 hours in advance of the Council
meeting to arrange for assistance. Upon request, in advance, by a person with a disability, City Council
meeting agendas and writings distributed for the meeting that are public records will be made available
in the appropriate alternative format. Also upon request, in advance, an assistive listening device can be
made available for use during the meeting.
Any writings or documents provided to a majority of the Cupertino City Council after publication of
the packet will be made available for public inspection in the City Clerk’s Office located at City Hall,
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City Council Agenda September 3, 2019
10300 Torre Avenue, during normal business hours and in Council packet archives linked from the
agenda/minutes page on the Cupertino web site.
IMPORTANT NOTICE: Please be advised that pursuant to Cupertino Municipal Code 2.08.100
written communications sent to the Cupertino City Council, Commissioners or City staff concerning a
matter on the agenda are included as supplemental material to the agendized item. These written
communications are accessible to the public through the City’s website and kept in packet archives. You
are hereby admonished not to include any personal or private information in written communications to
the City that you do not wish to make public; doing so shall constitute a waiver of any privacy rights
you may have on the information provided to the City.
Members of the public are entitled to address the City Council concerning any item that is described in
the notice or agenda for this meeting, before or during consideration of that item. If you wish to address
the Council on any issue that is on this agenda, please complete a speaker request card located in front
of the Council, and deliver it to the Clerk prior to discussion of the item. When you are called, proceed to
the podium and the Mayor will recognize you. If you wish to address the City Council on any other
item not on the agenda, you may do so by during the public comment portion of the meeting following
the same procedure described above. Please limit your comments to three (3) minutes or less.
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CITY COUNCIL STAFF REPORT
September 3, 2019
Subject
Below Market Rate (BMR) Residential Housing Mitigation and Commercial Linkage
Fees Update for the Cupertino BMR Housing Program
Recommended Action
Receive update and provide input to staff
Discussion
The City’s 2014-2022 Housing Element is a comprehensive eight-year plan to address
housing needs in Cupertino. During the planning process to prepare the Housing
Element, City officials, staff, and the public discussed strategies to increase the supply of
affordable housing in Cupertino. As adopted by the City Council in 2014, the Housing
Element includes a “Residential Housing Mitigation Program” that requires all new
developments to help mitigate project-related impacts on affordable housing needs.
Residential development projects are required to include a percentage of their total units
as below-market rate units that are affordable to moderate-income and lower-income
households. This is commonly called an "inclusionary housing requirement".
The Housing Element's inclusionary housing requirements are implemented through
the Below Market Rate (BMR) Housing Program required by Chapter 19.172 of the
Cupertino Municipal Code (BMR Ordinance) and the BMR Housing Mitigation Program
Procedural Manual (Housing Mitigation Manual). The BMR Housing Program also
includes Housing Mitigation Fees for residential projects of less than seven units and
commercial linkage fees for non-residential development as described in more detail
below.
As part of its current work plan, the City Council is considering modification of the
City's BMR Housing Program. Accordingly, the City worked with Strategic Economics
to prepare an Economic Feasibility Analysis. This analysis will inform the BMR Linkage
Fees update.
The remainder of this staff report discusses the City's current BMR Housing Program,
the legal framework for modifying the BMR Housing Program, the results of the
Economic Feasibility Analysis, and policy topics for further consideration.
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Current BMR Housing Program Requirements
The City's current BMR Housing Program includes an inclusionary housing requirement
of 15% on for-sale and rental residential developments with seven or more units. For
rental developments, the BMR units must be affordable to very-low (up to 50% Area
Median Income “AMI”) or low-income (up to 80% AMI) households. For-sale
developments must provide BMR units affordable to median- (up to 100% AMI) and
moderate-income (up to 120% AMI) households.
Small residential projects of less than seven units can choose to pay the City’s Housing
Mitigation Fees or to provide one BMR unit. The Housing Mitigation Fees are based on
the City’s 2015 Residential Below Market Rate Housing Nexus Analysis and Non-
Residential Jobs-Housing Nexus Analysis (2015 Nexus Study). Housing Mitigation Fees
are currently set at $17.82 per square foot for detached single family, $19.60 per square
foot for small lot single family/townhomes, $23.76 per square foot for attached
multifamily residences (ownership and rental), and $11.88 per square foot for
commercial/retail uses.
The City first adopted linkage fees for office and Research and Development (R&D)
projects in 1992, and expanded the program to include retail and hotel developments in
2004. The City updated the commercial linkage fees in 2015 (based on the 2015 Nexus
Study) to the current levels of $23.76 per square foot for office/R&D uses, and $11.88 per
square foot for hotel and retail uses.
The City’s Housing Mitigation Manual (most recently amended by Resolution 15-037 on
May 5, 2015) includes rules and regulations for implementing the policy direction in the
Housing Element and the Municipal Code. The Housing Mitigation Manual restates the
Housing Element’s general requirements for on-site affordable housing production with
more specific requirements for affordability levels by income. Table 1 provides a
summary of the affordability requirements included in the Housing Mitigation Manual.
Table 1: Affordability of BMR Units (15% of development total)
Ownership BMR Units Rental BMR Units
Median-Income
Units
Moderate-Income
Units
Very-Low
Income Units Low-Income Units
8% of
ownership units
7% of
ownership units
9% of
rental units
6% of
rental units
For the BMR Housing Program, the City uses household income limits established by
the California Department of Housing and Community Development (HCD) that are
based on adjustments to the median income in Santa Clara County. Table 2 summarizes
the income levels associated with the various affordability requirements.
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Table 2: 2019 Household Income Limits
Income Category Approximate Percent
of Area Median
Income*
Income Limit for 4-Person
Household
Very Low Up to 50% $73,150
Low Up to 80% $103,900
Median Up to 100% $131,400
Moderate Up to 120% $157,700
*HCD makes adjustments to very-low and low-income limits, which do not precisely equal 50% and 80% of
the median.
In addition to on-site BMR requirements, the Housing Mitigation Manual gives
developers the option of requesting that the Council approve an alternative means of
compliance (provided that the alternative gives the City affordable housing equivalent
to the applicable BMR requirement). Applicants may request to: provide on-site rental
BMR housing instead of for-sale BMR units; purchase off-site units to be dedicated
and/or rehabilitated as BMR units; develop off-site BMR units; or donate land for the
development of BMR units.
As noted above, residential developments with six or fewer units may pay the Housing
Mitigation fee instead of producing one on-site BMR unit. The Housing Mitigation fee is
also applied to commercial development and fractional units (as defined in Section 2.3.2
of the BMR Housing Mitigation Program Procedural Manual) required for residential
developments with seven units or more. Such fees are placed in the City’s BMR
Affordable Housing Fund (AHF). These funds may be used to finance affordable
housing within the City, often in connection with other public financing source s to
provide larger numbers of affordable housing units or deeper affordability than can
feasibly be required in connection with market rate development.
Legal Framework
Affordable housing policies in California take different forms, with varying legal
requirements. For residential projects, cities' and counties' police power provides
authority to require a percentage of new residential projects to be reserved for affordable
housing. For non-residential projects, cities and counties can collect impact fees to
mitigate new development's impact on the demand for affordable housing. Both
approaches are subject to limitations, as discussed below.
Residential Projects
In its 2015 decision California Building Industry Ass'n v. City of San José (CBIA), the
California Supreme Court determined that inclusionary requirements for residential
projects are land use provisions, similar to rent and price controls. Because land use and
price control authority comes from a city's general police power, residential inclusionary
requirements designed to improve the public health, safety, and welfare can be adopted
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without justification by a nexus study as long as the requirements do not prevent a
property owner from having the opportunity to earn a fair return on its property. To
date, efforts to overturn the CBIA case at the United States Supreme Court have failed.
Therefore, a nexus study is not currently required for residential inclusionary
requirements. However, an economic feasibility study can be used to demonstrate that
residential inclusionary requirements provide property owners with an opportunity to
earn a fair and reasonable return.
The Palmer/Sixth Street Properties L.P. v. City of Los Angeles (Palmer) case was decided in
2009, and for a time, Palmer precluded California cities from requiring long-term rent
restrictions or inclusionary requirements on rental units. On September 29, 2017,
Governor Brown signed AB 1505 to restore cities' and counties' ability to require on-site
affordable units within rental projects. The law became effective on January 1, 2018.
Under AB 1505, cities can impose inclusionary requirements on rental residential
developments provided: (1) the requirements are included in the zoning ordinance and
(2) alternatives to on-site compliance are allowed. If more than 15 percent of rental units
are required to be affordable to low-income households, HCD may require that the
requirement be justified by an economic feasibility study under certain circumstances
discussed below.
Non-Residential Projects
For non-residential projects, cities and counties are permitted to collect fees from new
development to mitigate that development's impact on affordable housing, provided
that the impact fees are reasonable and there is a sufficient nexus between the amount of
the impact fee and the impact that the proposed development will have on the need for
affordable housing. A nexus study is used to determine the upper limit for impact fees
that may legally be imposed on new non-residential development and is required to
justify affordable housing requirements for non-residential projects. Nexus study
results are often combined with economic feasibility studies to ensure that impact fees
do not preclude development.
Legal Requirements for Modifications
If the City desires to modify its BMR Housing Program, it has several options. Changes
to the Housing Mitigation Manual may be adopted by Resolution, and the City Council
can modify its BMR Ordinance. Unless the City also amends the Housing Element,
which would require HCD approval, changes to the BMR Ordinance or the Housing
Mitigation Manual would need to be consistent with the policies included in the
Housing Element. For example, the Housing Element does not specify an income range
requirement for for-sale residential development. Therefore, the City could amend the
Housing Mitigation Manual to adjust the percentages of median- and moderate- income
housing required and still be consistent with the Housing Element. Similarly, the City
could require rental residential housing to be reserved for extremely-low income
households, provided that the requirement is economically feasible, as such housing
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would also be affordable to very-low and low-income households as required by the
Housing Element.
In addition, if the City decided to amend its BMR Housing Program to require more
than 15% of rental units be reserved for low-income households, HCD could require the
City to prepare an economic feasibility study if the City fails to meet at least 75% of its
share of the regional housing need for the above-moderate income category for five
years or more or if it does not submit its annual housing element report for at least two
consecutive years. The feasibility study would need to demonstrate that the City’s
requirements do not make market rate residential development infeasible.
Even if HCD does not require an economic feasibility study, such a study can be useful
to inform the City’s policy-making efforts and to ensure that its requirements are not
overly burdensome. To meet the applicable legal standard for inclusionary policies, the
City’s requirements must not make market-rate housing development economically
infeasible. To update the BMR Housing Program's requirements related to commercial
projects, the 2015 Nexus Study establishes a theoretical legal maximum for impact fees,
but as with residential projects, any increases should be considered in the context of
economic feasibility.
Economic Feasibility Analysis Results
The City retained Strategic Economics to evaluate potential changes to the BMR
Housing Program in an Economic Feasibility Analysis. The Economic Feasibility
Analysis examined the following issues: (1) increasing on-site affordability requirements
in residential projects; (2) requiring units for extremely-low income households or
individuals with disabilities; (3) requiring units for median- and moderate-income
households in rental residential projects; and (4) increasing commercial linkage fees on
non-residential development projects. The Economic Feasibility Analysis also
summarizes inclusionary housing programs and commercial linkage fees in other cities
in Santa Clara County.
As discussed above, the 2015 Nexus Study establishes the legal maximum for impact
fees that may be imposed on commercial projects. It also analyzed the "affordability
gap" that creates increased demand for affordable housing when market rate housing is
developed. The Economic Feasibility Analysis provides a current analysis of what
increased affordability requirements and impact fees may be feasible in connection with
future development in Cupertino by analyzing the economic effects of various
affordability requirements on future projects. By analyzing the costs of development
(such as land acquisition, soft costs, construction costs, and City requirements) in
comparison to projected revenues, the Economic Feasibility Analysis evaluates whether
the expected returns would be enough to support development in the City if
affordability requirements were increased.
Although the Economic Feasibility Analysis is a helpful tool to aid the City in its
policymaking decisions, all studies of this kind have limitations. For example, the
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Economic Feasibility Analysis provides an overview-level assessment of development
economics in Cupertino generally, because it is based on project prototypes rather than
specific projects. Any individual future project will have unique characteristics that
affect market returns and developer profit requirements. Based on individual project
economics, individual projects may look more or less feasible to developers than the
Economic Feasibility Analysis shows. In addition, the Economic Feasibility Analysis
focuses on market conditions in 2019, making its conclusions most applicable to projects
that have site control (e.g. own the property or have an agreement to acquire or develop
it) and are in the pre-development stage.
As construction costs, rents, and sales prices continue to change, project feasibility will
change as well. Similarly, the Economic Feasibility Analysis results are sensitive to land
price assumptions, which are a major cost of development and impact a project's ability
to support other costs. It is generally assumed that developers will only purchase land
at a price allowing for financially feasible projects and that development costs, including
affordability requirements, are reflected in land sale prices.
However, it is possible that if the City increases affordability requirements, the increase
would depress land values to accommodate what developers can afford to pay while
meeting the City's requirements. Accordingly, over time, the market may adjust to this
cost pressure in the form of reduced land costs, potentially making certain projects more
feasible than they appear today.
The final Economic Feasibility Analysis, which includes a full discussion of its
methodology and conclusions, is attached to this Staff Report as Attachment A. The
Analysis's key findings are summarized below.
Increasing On-Site Affordability Requirements in Residential Projects
Five different prototypes of residential development that are most likely to be developed
in future projects within the City were studied: detached single family; small lot single
family/townhome units; condominiums; lower-density rental apartments; and higher-
density rental apartments.
For each prototype of ownership housing, the Economic Feasibility Analysis studied
project feasibility under five different scenarios of affordability requirements: basic
feasibility (no affordability requirements); 15% inclusionary (existing City policy of 8%
to median income households and 7% to moderate income households); 20%
inclusionary (10% to median income households and 10% to moderate income
households); 25% inclusionary (13% to median income households and 12% to moderate
income households); and in-lieu fees only.
Similarly, for each prototype of rental housing, the Economic Feasibility Analysis
studied project feasibility under five different scenarios of affordability requirements:
basic feasibility (no affordability requirements); 15% inclusionary (existing City policy of
9% to very low income households and 6% to low income households); 20% inclusionary
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(10% to very low income households and 10% to low income households); 25%
inclusionary (5% to very-low income households, 10% to very-low income households,
and 10% to low income households); and in-lieu fees only.
The Economic Feasibility Analysis concludes that increasing the on-site affordability
requirement from 15% to 20% of units is feasible for ownership housing prototypes
(single-family detached, small lot single-family/townhouse, and condominium
developments). However, neither lower-density nor higher-density rental apartments
would be economically feasible if the requirement was increased above 15%. Using the
assumptions regarding current market rents, construction costs, and land costs, any
production requirement could be challenging for the studied prototypes. Moreover,
none of the residential prototypes would be feasible if the on-site affordability
requirement increased to 25% of units. The Economic Feasibility Study concludes that
in-lieu fees can be increased for all but the lower density rental apartments without
impacting project feasibility. (The City currently charges Housing Mitigation Fees
ranging from $17.82 to $23.76 per square foot.) Table 3 summarizes key findings with
respect to increasing affordability requirements in residential projects.
Table 3: Increased Inclusionary/In Lieu Fee Feasibility Summary
Residential
Prototype
Feasibility of Program Change
20% Inclusionary 25% Inclusionary In-Lieu Fees
Detached Single
Family Feasible Currently Infeasible Increase to $30/sf Feasible
Small Lot SF and
Townhomes Feasible Currently Infeasible Increase to $35/sf Feasible
Condos Feasible Currently Infeasible Increase to $35/sf Feasible
Lower-Density
Rental Apartments Currently Infeasible Currently Infeasible Increase Currently Infeasible
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Residential
Prototype
Feasibility of Program Change
20% Inclusionary 25% Inclusionary In-Lieu Fees
Higher-Density
Rental Apartments Currently Infeasible Currently Infeasible Increase to $30/sf Feasible
Increasing Impact Fee Requirements in Non-Residential Projects
The Economic Feasibility Analysis also studied the feasibility of increasing its
commercial linkage fees on three non-residential development prototypes: office/R&D,
hotel, and retail. The building characteristics of each development prototype, including
size, density (floor-area-ratio), and parking assumptions are based on a review of
projects that were recently built, and in planning stages in Cupertino, as well as recently
built and pipeline projects in surrounding areas.
For each non-residential prototype studied, the Economic Feasibility Analysis tested
various fee levels to determine if increases would be feasible. Office and R&D uses are
currently subject to a linkage fee of $23.76/sf, which can feasibly be increased to $25/sf,
with an increase to $30/sf remaining marginally feasible. Hotel uses are currently
subject to a linkage fee of $11.88/sf that is feasible, with an increase to $15/sf remaining
marginally feasible; however, increases to $20/sf are projected to be currently infeasible.
Based on the prototype assumptions, stand-alone retail uses are barely feasible without
any linkage fee, so no increase is projected to be supported. However, the Economic
Feasibility Analysis concludes that retail uses may be feasible when developed in
conjunction with office or residential uses in a mixed-use environment, but it does not
identify linkage fee levels for this development style.
Peer Review
As discussed above, the Economic Feasibility Study's conclusions are sensitive to
assumptions regarding land cost, construction costs, market potential, and developer
profits. Therefore, to further test the methodology and conclusions presented in the
Economic Feasibility Study, the City commissioned LeSar Development Consultants to
conduct a peer review of the Economic Feasibility Study while it was in draft form. The
peer review raised a number of questions and requested additional information related
to the Economic Feasibility Study's methodology and data sources that may have
influenced the Economic Feasibility Study's conclusions. The peer review is included as
Attachment B.
In response, the Economic Feasibility Study was revised to include additional discussion
of its approach to analysis and to provide additional analysis in support of the
assumptions related to housing demand) which drives potential developer revenues and
feasibility). The revised Economic Feasibility Study also expanded upon information
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presented in the pro forma analysis for each prototype. A “track changes” version of the
Economic Feasibility Study showing changes in response to the peer review is included
as Attachment C, and a supplemental memo from Strategic Economics directly
answering questions from the peer review is included as Attachment D.
The revisions result in a clearer, and more comprehensive document. It is important to
note that none of the revisions changed the Economic Feasibility Study's conclusions
regarding feasibility of BMR program changes.
Housing Commission and Planning Commission Review and Feedback
On July 25, 2019, the Housing Commission held a special meeting to receive an update
on the efforts described above. The Housing Commission supported the following
recommendations to the Planning Commission and City Council:
Define different on-site BMR production requirements for each studied
residential prototype based on that development type's feasibility.
Recommended production requirements of:
o 20 % for single family units;
o Between 20-25 % for townhomes and condos; and
o 15% (no change) for rental housing.
Consider setting affordability requirements between the current five percent
increments to maximize the feasible BMR production requirement.
Prohibit in-lieu fees for any residential development project with seven or more
units in order to promote BMR unit production.
Expand alternative compliance options to satisfy BMR requirements through an
equivalent number of off-site BMR units, land donation, or acquisition and
rehabilitation of off-site market rate units that can be converted to BMR units.
Consider pending applications when deciding when modified requirements will
become effective.
Explore parking reductions or other incentives to reduce construction cost if cost
savings could be used to increase affordable housing production.
Allow some residential projects to be only housing without ground floor retail if
single-use development is more feasible and could yield greater affordability
requirements.
Recommended commercial linkage fees of:
o $25 - $30 per square foot for office;
o $15 per square foot for hotel; and
o $11.88 per square foot (no change) for retail.
On August 13, 2019, the Planning Commission held a regular meeting to receive the
Housing Commission's recommendations and provide additional feedback. Planning
Commissioners expressed general support for the Housing Commission's
recommendations. The strongest support was for increasing impact fees on new office
development, and there was discussion about how high such impacts fees should be set
without final agreement. Planning Commissioners were generally supportive of
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increasing inclusionary requirements on ownership housing, but they expressed concern
with changing requirements for rental housing. However, there was continued support
for strategies that would create more opportunities to provide housing for households
with extremely low incomes. Finally, there was discussion between the Commissioners
about potentially studying other affordability mixes, for example extremely low income
and moderate instead of low- and very-low income housing, depending on the
feasibility of those options.
Conclusions and Next Steps
Based on its assumptions and analysis, the Economic Feasibility Study shows the
potential to increase inclusionary requirements for for-sale residential development to
20% from 15% and to increase in-lieu fees.
With respect to rental residential development, higher-density rental apartments appear
to be able to support an increased in-lieu fee. Most developments that include
affordable units for extremely-low income households or for people with disabilities
require public subsidies to operate. Therefore, the City could choose to prioritize fee
collection over on-site inclusionary requirements, which could increase the amount of
public funds the City would have available to contribute to projects. As discussed
above, rental residential projects are not good candidates for: (1) increasing on-site
production requirements; (2) deepening affordability levels to include extremely-low
income households; or (3) from increasing requirements above 15% to require units
affordable to median- or moderate-income households in addition to existing
requirements.
In addition, it may be possible to increase linkage fees for office/R&D uses and hotels to
increase resources available in the City's BMR AHF. Even with additional funding at its
disposal, the City would have a challenge meeting the need for these housing types. Site
acquisition and construction costs can require subsidies of several hundred thousand
dollars per unit, even while leveraging other available funding sources.
Therefore, the City Council should provide direction on recommended modifications, if
any, to the City's BMR Program, or what further feasibility analysis may be helpful to
inform final policy directions.
Sustainability Impact
No sustainability impact.
Fiscal Impact
No fiscal impact.
_____________________________________
Prepared by: Kerri Heusler, Housing Manager
Reviewed by: Richard Taylor, Assistant City Attorney
Approved for Submission by: Deborah Feng, City Manager
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Attachments:
A – July 2019 Economic Feasibility Analysis prepared by Strategic Economics
B – LeSar Development Consultants Peer Review
C – Redline Draft Economic Feasibility Analysis prepared by Strategic Economics
D –Strategic Economics Memorandum Regarding Peer Review
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ECONOMIC FEASIBILITY ANALYSIS
CUPERTINO BELOW MARKET RATE (BMR)
HOUSING PROGRAM
Prepared for:
City of Cupertino
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TABLE OF CONTENTS
Introduction ............................................................................................................................. 1
BMR Requirements for Residential Development ............................................................... 3
Approach................................................................................................................................................... 3
Financial Feasibility Methodology ........................................................................................................ 10
Key Results ............................................................................................................................................ 19
Peer Cities ............................................................................................................................................. 32
Non-Residential Linkage Fee ........................................................................................... 34
Approach................................................................................................................................................ 34
Peer Cities ............................................................................................................................................. 45
Key Takeaways .................................................................................................................. 47
Appendix ....................................................................................................................................... 49
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TABLE OF FIGURES
Figure 1: Description of Prototypes ............................................................................................................ 6
Figure 2: City of Cupertino BMR Income Limits and Income Target for Pricing BMR Units .................... 7
Figure 3: Inclusionary Housing Scenarios Tested for Ownership Prototypes (Detached Single-Family
Prototype 1, Small Lot/Townhouse Prototype 2, and Condominium Prototype 3) .................................. 8
Figure 4: Inclusionary Housing Scenarios Tested for Rental Prototypes (Lower Density Rental Prototype
4 and Higher Density Rental Prototype 5) .................................................................................................. 9
Figure 5: Minimum Return Thresholds by Prototype .............................................................................. 11
Figure 6: Market Rate Residential Sale Prices and Monthly Rents, By Prototype ................................ 13
Figure 7. Market Rate Residential Value Calculation, by Prototype ...................................................... 14
Figure 8. Below Market Rate Residential Values, by Prototype and AMI Level .................................... 15
Figure 9. Retail Revenue Assumptions and Capitalized Value .............................................................. 16
Figure 10: Development Cost Assumptions ............................................................................................ 18
Figure 11: Return On Cost for Ownership Prototypes by Inclusionary Housing Scenario .................... 21
Figure 12: Yield on Cost under Different Inclusionary Housing Scenarios for Multi-Family Rental
Prototypes 4 and 5.................................................................................................................................... 21
Figure 13: Yield on Cost Under Different Revenue Assumptions for Lower Density Multi-Family Rental
(Prototype 4) with 15% BMR Requirement ............................................................................................. 22
Figure 14: Feasibility of Lower Density Multi-Family Rental Prototype (Prototype 4) with 15%
Inclusionary BMR Requirement and Increased Revenues ..................................................................... 22
Figure 15: Yield on Cost Under Different Cost Assumptions for Lower Density Multi-Family Rental
(Prototype 4) with 15% BMR Requirement ............................................................................................. 23
Figure 16: Feasibility Results of Lower Density Multi-Family Rental Prototype (Prototype 4) with 15%
Inclusionary BMR Requirement and Lower Costs ................................................................................... 23
Figure 17: Yield on Cost Under Different Revenue Assumptions for Higher Density Multi-Family Rental
(Prototype 5) with 15% BMR Requirement ............................................................................................. 24
Figure 18: Feasibility Results of Higher Density Multi-Family Rental Prototype (Prototype 5) with 15%
Inclusionary BMR Requirement and Higher Revenues .......................................................................... 24
Figure 19: Yield on Cost Under Different Cost Assumptions for Higher Density Multi-Family Rental
(Prototype 5) with 15% BMR Requirement ............................................................................................. 25
Figure 20: Feasibility Results of Higher Density Multi-Family Rental Prototype (Prototype 5) with 15%
Inclusionary BMR Requirement and Lower Costs ................................................................................... 25
Figure 21. Detailed calculation of the City of Cupertino’s permits and fees for each prototype (Per Unit)
................................................................................................................................................................... 26
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Figure 22: Financial Feasibility Results for Single-Family Detached Prototype 1 ................................. 27
Figure 23: Financial Feasibility Results for Small Lot Single-Family/Townhouse Prototype 2 ............ 28
Figure 24: Financial Feasibility Results for Condominium Prototype 3 ................................................. 29
Figure 25: Financial Feasibility Results for Lower Density Rental Apartments Prototype 4 ................ 30
Figure 26: Financial Feasibility Results for Higher Density Rental Apartments Prototype 5 ............... 31
Figure 27: Inclusionary Housing Requirements and Housing Mitigation Fees in Peer Cities ............. 33
Figure 28. Description of Development Prototypes ................................................................................ 35
Figure 29. Hard Costs Assumptions by Prototype ................................................................................... 36
Figure 30. Land Comparables for Office and Hotel ................................................................................ 37
Figure 31. Soft Cost Assumptions by Prototype ...................................................................................... 37
Figure 32. Revenue Assumptions by Prototype ...................................................................................... 39
Figure 33. Office Comparables ................................................................................................................ 39
Figure 34: Retail Comparables in Cupertino ........................................................................................... 39
Figure 35: Yield on Cost Thresholds by Prototype .................................................................................. 40
Figure 36. Summary of Financial Feasibility of Office/R&D Prototype .................................................. 40
Figure 37. Summary of Financial Feasibility of Hotel Prototype ............................................................ 41
Figure 38. Summary of Financial Feasibility of Retail Prototype ........................................................... 41
Figure 39. Office/R&D Pro Forma Results .............................................................................................. 42
Figure 40. Hotel Pro Forma Results ......................................................................................................... 43
Figure 41. Retail Pro Forma Results ........................................................................................................ 44
Figure 42. Non-Residential Linkage Fees (per Gross S. Ft. of Net New Space) in Nearby Cities ........ 46
Figure 43: Current and Maximum Housing Mitigation Fees Based On Nexus for Ownership Prototypes
................................................................................................................................................................... 47
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INTRODUCTION
Strategic Economics was retained by the City of Cupertino (the “City) to evaluate potential changes to
the Below Market Rate (BMR) Housing Program. The BMR program requirements are currently as
follows:
• The City currently has a BMR Housing Program that imposes an inclusionary requirement of
15% on for-sale and rental residential developments with seven or more units. For rental
developments, the BMR units must be affordable to very-low (up to 50% Area Median Income
“AMI”) or low-income (up to 80% AMI) households 1. For-sale developments must provide BMR
units affordable to median- (up to 100% AMI) and moderate-income (up to 120% AMI)
households.2
• Small residential projects of less than seven units can pay the City’s Housing Mitigation In-Lieu
Fees 3 (the “Housing Mitigation Fees”) or provide one BMR unit. The Housing Mitigation Fees
are based on the City’s 2015 Residential Below Market Rate Housing Nexus Analysis and Non-
Residential Jobs-Housing Nexus Analysis (the “2015 Nexus Study”). Housing Mitigation Fees
are currently set at $17.82 per square feet for detached single family, $19.60 per square feet
for small lot single family/townhomes, $23.76 for attached multifamily residences (ownership
and rental), and $11.88 per square foot for commercial/retail uses.
• The City first adopted linkage fees for office and Research and Development (“R&D”) projects
in 1992 and expanded the program to apply to retail and hotel developments in 2004. The
City updated the non-residential linkage fees in 2015 (based on the 2015 Nexus Study) to the
current levels of $23.76 per square foot for office/R&D uses, and $11.88 per square foot for
hotel and retail uses.4
The City Council is considering modifying the BMR Housing Program, providing direction to examine
the following issues:
• Study the potential to increase the inclusionary requirements to 20% or 25%
• Explore inclusionary housing policy to include units for extremely-low income/disabled persons
• Include median- and moderate-income units in rental projects
• Study inclusionary housing programs in other cities as a comparison
• Study the economic feasibility of increasing non-residential linkage fees on new office/R&D,
hotel, and retail developments
This report provides technical findings on the economic feasibility of increasing the City’s BMR
requirements for residential developments and non-residential developments. It also provides findings
regarding the potential for including extremely-low income housing units and/or median-and
moderate-income units in rental projects. The report also summarizes inclusionary housing programs
and non-residential linkage fees in other cities in Santa Clara County.
The report is divided into three sections.
1 Rental BMR policy states that 40% of affordable units must be set aside for low income, and 60% for very low income units.
2 For-Sale BMR policy states that half of affordable units must be set aside for median income households, and half for moderate income
households.
3 Housing Mitigation In-Lieu Fees: A fee assessed in accordance with the City's General Plan Housing Element, Municipal Code (CMC 19.172)
and the City's BMR Housing Mitigation Program Procedural Manual.
4 Keyser Marston Associates, “City of Cupertino: Non-residential Jobs-Housing Nexus Analysis,” City of Cupertino, April 2015.
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• Section II: The first section focuses on the BMR requirements on housing development.
• Section III: The second section is focused on the non-residential linkage fees on new
office/R&D, hotel, and retail developments.
• Section IV: The third section provides key takeaways and conclusions.
The appendix to the report provides additional background data on housing trends.
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BMR REQUIREMENTS FOR RESIDENTIAL
DEVELOPMENT
Approach
The following summarizes the methodology of the financial feasibility analysis.
Step 1. Develop Prototypes
The first step in the financial feasibility analysis is to review the types of residential and mixed-use
(residential and retail) projects that would be subject to the BMR policy. In close coordination with City
staff, Strategic Economics updated the residential and nonresidential prototypes used in the 2015
Nexus Study, ensuring that they represent the ownership and rental residential development types
that are likely to occur in city in the short term. The prototypes varied based on assumptions regarding
building type, density, unit size, etc.
Step 2. Develop Assumptions about BMR Units
Strategic Economics worked closely with City staff to develop assumptions about the percentage of
inclusionary units that should be tested, the income targets, and the affordable sales prices and rents.
Maximum sales prices and rents were calculated using the method and parameters established by
City policy, in coordination with Hello Housing, the BMR Program administrator.
Step 3. Collect Key Inputs and Build Pro Forma
The financial feasibility of each prototype is measured using a static pro forma model that solves for
the profit to the developer. A pro forma model is a tool that is commonly used to estimate whether a
project is likely to be profitable. The key inputs into the financial feasibility analysis are the revenues
(rents/ sales prices), development costs, and land costs. Strategic Economics collected and
summarized data on land prices, residential values, and construction costs using the following data
sources:
• Costar, a commercial real estate database that tracks rental multifamily properties and
property transactions
• Interviews with local developers and brokers
• Redfin, a real estate brokerage firm that collects data on residential sales prices
• Review of pro formas from other projects and clients
Step 4. Calculate Financial Feasibility
The pro forma model tallies all development costs, including land costs, hard costs (construction
costs), soft costs, and financing costs. The pro forma also tallies the project’s total value. The project’s
total value is the sum of (1) the estimated value of the condominiums or townhomes (i.e. the average
per unit sale price multiplied by the number of units), and (2) if applicable, the capitalized value of
retail. The project’s ROC is then calculated by dividing the project’s net revenue (i.e. total value minus
total development costs), by total development costs. To understand the potential impact of
inclusionary requirements on financial feasibility, the ROC results for each prototype and inclusionary
housing scenario are compared to developers’ typical expectation of return, or the threshold for
feasibility. If the ROC for a project is above the threshold for feasibility, it is considered financially
feasible. If the ROC is below the threshold, it is not financially feasible.
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More details on each step of the analysis is provided in the section below.
DEVELOPMENT PROTOTYPES
The analysis estimates the feasibility of different inclusionary requirements for five residential
prototypes, as described in Figure 1. The building characteristics of each development prototype,
including size, density (floor-area-ratio), and parking assumptions are based on prototypes analyzed
as part of the City’s 2015 Nexus Study 5. These development prototypes represent the range of typical
residential development expected to come online in Cupertino in the short term. These prototypes are
mostly based on recently completed projects or development proposals in the pipeline in Cupertino. It
is also assumed that future development will likely be located along Stevens Creek Boulevard, and in
existing residential neighborhoods, given that these locations have been identified in the City’s General
Plan and Heart of the City Specific Plan as key areas for new residential and mixed-use development.
The prototypes vary based on the following characteristics:
• Ownership and Rental. Three of the prototypes include only for-sale units (Prototypes 1, 2, and
3) and two are rental developments (Prototypes 4 and 5).
• Mixed-Use and Residential Only. Two of the prototypes (Prototypes 1 and 2) are 100%
residential while the attached multifamily prototypes have a ground-floor retail component
(Prototypes 3, 4, and 5).
• Project Density and Size
o The single-family detached prototype 1 represents detached single-family custom-built
homes with an average density of 4.5 dwelling units per acre. Because this prototype
has fewer than eight units, it would be allowed to pay the in-lieu fee or provide one
BMR unit under the current BMR policy. The small number of units in this prototype
reflects the fact that there are few potential single-family detached sites in Cupertino
that can accommodate more than 7 units.
o Prototype 2 represents two-story small lot single-family and townhome developments
with a density of 15 dwelling units per acre.
o Prototype 3 is a three-story multi-family condominium building with a density of 35
units per acre. Parking is accommodated in an above-ground podium.
o Prototype 4 is a three-story multifamily rental building with a density of 40 units per
acre. Parking is accommodated in an above-ground podium.
o Prototype 5 is a higher-density six-story project with a density of 76 units per acre. This
prototype is based on a Housing Element site that allows six to eight story heights.
Parking is accommodated in an above-ground podium.
• Parking Ratios. The City requires 2 parking spaces per unit. However, for the multi-family
prototypes there are opportunities to achieve parking reductions under certain conditions. The
assumptions in the pro forma are as follows.
o For Prototype 1 and Prototype 2, the assumption is that the development would
provide all of the required parking.
5 Keyser Marston Associates (2015). Residential Below Market Rate Housing Nexus Analysis.
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o For the condominium prototype 3, developers can lower parking by 10%, assuming
that the reduction is justified by a parking study.
o For multi-family rental housing prototypes 4 and 5, developers can receive parking
reductions on residential units in the scenarios where 5% of the housing units are for
very low-income households, in accordance with Gov’t Code Sec. 65915(p).
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FIGURE 1: DESCRIPTION OF PROTOTYPES
Prototype 1 Prototype 2 Prototype 3 Prototype 4 Prototype 5
Detached Single
Family
Small Lot Single
Family/Townhome
Condominium Lower Density
Rental
Apartments
Higher Density
Rental Apartments
Tenure For-Sale For-Sale For-Sale Rental Rental
Unit Mix 5 bedrooms 3 bedrooms 2 and 3 bedrooms Studios, 1, 2, and
3 bedrooms
Studios, 1, 2, and 3
bedrooms
Format Low-rise, large sites Low-rise, small
sites
Mid-rise, small
sites
Mid-rise, small
sites
Higher density,
small sites
Number of Units 7 50 100 100 100
Parcel Size (Acres) 1.6 3.3 2.9 2.9 1.3
Residential Program
Studios - - - 10 10
1-BD - - - 45 45
2-BD - - 50 40 40
3-BD - 50 50 5 5
4-BD 0 - - - -
5-BD 7 - - - -
Total 7 50 100 100 100
Dwelling Units Per Acre 4.5 15 35 35 76
Ground Floor Retail (Sq. Ft.) 0 0 10,000 10,000 15,000
Parking 2-Car Garage +
Driveway
2-Car Garage +
Driveway
Podium Podium Podium
Parking Requirement (Per Unit) 4 2.8 2 2 2
Parking Requirement (Commercial) n/a n/a 4 per 1,000 sq. ft. 4 per 1,000 sq. ft. 4 per 1,000 sq. ft.
Required Parking Spaces 28 140 240 240 260
Reduced Parking Spaces (a) 28 140 216 185 205
(a) For the condominium prototype 3, developers can lower parking by 10%, assuming that the reduction is justified by a parking study. For multi-family rental housing prototypes 4 and
5, developers can receive parking reductions on residential units in the scenarios where 5% of the housing units are for very low-income households (50% AMI), in accordance with
Gov’t Code Sec. 65915(p).
Source: Strategic Economics, City of Cupertino.
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BMR HOUSING PROGRAM ASSUMPTIONS
Strategic Economics built a pro forma model that tested the feasibility of various inclusionary housing
scenarios under the existing BMR housing program and alternative scenarios. Below is a summary of
the existing BMR program:
• The City currently has a BMR Housing Program that imposes an inclusionary
requirement of 15% on for-sale and rental residential developments with seven or
more units. For rental developments, the BMR units must be affordable to very low or
low-income households6. For-sale developments must provide BMR units affordable to
median- and moderate-income households.7
• Small residential projects of less than seven units can pay the housing mitigation fee
or provide one BMR unit. The housing mitigation fees are based on the 2015 Nexus
Study, and are currently set at $17.82 per square feet for detached single family,
$19.60 per square feet for small lot single family/townhomes, $23.76 for attached
multifamily residences (ownership and rental), and $11.88 per square foot for
commercial/retail uses.
• The BMR program uses income limits published annually by the California Department
of Housing and Community Development (HCD) for Santa Clara County, per household
size. For some income categories, the income targets for pricing BMR units are slightly
different from household income limits that determine eligibility. Maximum BMR sales
and rent prices are determined by the City and its BMR program administrator, Hello
Housing, based on the maximum affordable housing cost provisions of Section
50052.5 of the California Health and Safety Code, Section 6920 of the California Code
of Regulations, and most recent published HCD income limits. The household income
limits for BMR eligibility as well as the income targets for pricing BMR units are shown
in Figure 2.
FIGURE 2: CITY OF CUPERTINO BMR INCOME LIMITS AND INCOME TARGET FOR PRICING BMR UNITS
Household Income
Limits
Income Target for
Pricing BMR Units
Ownership
Median 100% AMI 90% AMI
Moderate 120% AMI 110% Ami
Rental
Extremely Low 30% AMI 30% AMI
Very Low 50% AMI 50% AMI
Low 80% AMI 60% AMI
Sources City of Cupertino Housing Element; City of Cupertino Housing Mitigation Program Procedural Manual.
The inclusionary housing scenarios tested in this analysis reflect the range of policy options under
consideration by the City for ownership and rental development. They are summarized below and
shown in Figure 3 and Figure 4.
6 Rental BMR policy states that 40% of affordable units must be set aside for low income, and 60% for very low-income units.
7 For-Sale BMR policy states that half of affordable units must be set aside for median income households, and half for moderate income
households.
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OWNERSHIP DEVELOPMENT
Strategic Economics tested the economic feasibility of the development of ownership housing (single-
family, townhouse, and condominium prototypes) under five different inclusionary scenarios:
• Scenario 0 (No Requirements): This scenario assumes that the project is 100% market-
rate, with no affordable units and no in-lieu fees required.
• Scenario 1 (Existing Policy): This scenario mirrors the City’s existing inclusionary
housing requirement. The development projects must provide 15% of the units at
prices affordable to median- (100% AMI) and moderate-income households (120%
AMI).
• Scenario 2 (20% Inclusionary): This scenario requires new ownership projects to
include at least 20% BMR units, targeting median and moderate-income households.
• Scenario 3 (25% Inclusionary): This scenario requires new ownership projects to
include at least 25% BMR units, targeting median and moderate-income households.
• Scenario 4 (In-Lieu Fees): This scenario assumes that the development is required to
pay in-lieu fees instead of providing affordable units on-site.
These scenarios are summarized in Figure 3 below.
FIGURE 3: INCLUSIONARY HOUSING SCENARIOS TESTED FOR OWNERSHIP PROTOTYPES (DETACHED SINGLE-FAMILY
PROTOTYPE 1, SMALL LOT/TOWNHOUSE PROTOTYPE 2, AND CONDOMINIUM PROTOTYPE 3)
Inclusionary Housing
Scenarios
% of Units at BMR
Prices
Income Targets for BMR
Units*
In-Lieu Fee Payment
Scenario 0 (No Requirements) 0% N/A No
Scenario 1 (Existing Policy) 15% 8% of units at 90% AMI
7% of units for 110% AMI
No
Scenario 2 (20% Inclusionary) 20% 10% of units at 90% AMI
10% of units at 110% AMI
No
Scenario 3 (25% Inclusionary) 25% 13% of units at 90% AMI
12% of units at 110% AMI
No
Scenario 4 (In-Lieu Fees) 0 N/A Yes
*Per the City of Cupertino Housing Mitigation Program Procedural Manual, the maximum sales price for median income BMR units is
set at 90% AMI. The maximum sales price for moderate income BMR units is set at 110% AMI.
Sources: City of Cupertino Housing Mitigation Program Procedural Manual, 2018; Strategic Economics, 2018.
RENTAL DEVELOPMENT
Strategic Economics tested the economic feasibility of the development of ownership housing (single-
family, townhouse, and condominium prototypes) under five different inclusionary scenarios:
• Scenario 0 (No Requirements): This scenario assumes that the project is 100% market-
rate, with no affordable units and no in-lieu fees required.
• Scenario 1 (Existing Policy): This scenario mirrors the City’s existing inclusionary
housing requirement. The development projects must provide 15% of the units at
prices affordable to low-income (80% AMI) and very low-income households (50% AMI).
• Scenario 2 (20% Inclusionary): This scenario requires new ownership projects to
include at least 20% BMR units, targeting median and moderate-income households.
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• Scenario 3 (25% Inclusionary): This scenario has a higher inclusionary requirement of
25% and targets lower income groups. The income targets include low-income (80%
AMI), very low-income (50% AMI), and extremely low-income households (30% AMI).
• Scenario 4 (In-Lieu Fees): This scenario assumes that the development is required to
pay in-lieu fees instead of providing affordable units on-site.
These scenarios are summarized in Figure 4 below.
FIGURE 4: INCLUSIONARY HOUSING SCENARIOS TESTED FOR RENTAL PROTOTYPES (LOWER DENSITY RENTAL
PROTOTYPE 4 AND HIGHER DENSITY RENTAL PROTOTYPE 5)
Inclusionary Housing Scenarios % of Units at BMR Rents Income Targets for BMR
Units*
In-Lieu Fee Payment
Scenario 0 (No Requirements) 0% N/A No
Scenario 1 (Existing Policy) 15% 9% of units at 50% AMI
6% of units at 60% AMI
No
Scenario 2 (20% Inclusionary) 20% 10% of units at 50% AMI
10% of units at 60% AMI
No
Scenario 3 (25% Inclusionary) 25% 10% of units at 50% AMI
10% of units at 60% AMI
5% of units at 30% AMI
No
Scenario 4 (In-Lieu Fees) 0 N/A Yes
*Per City policy, pricing for low-income BMR units is set at 60% AMI.
Sources: City of Cupertino Housing Mitigation Program Procedural Manual, 2018; Strategic Economics, 2018.
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Financial Feasibility Methodology
This section describes the method used to measure financial feasibility and the major cost and
revenue assumptions underlying the analysis. Additional information is provided in the Appendix.
MEASURING FINANCIAL FEASIBILITY
The financial feasibility of each prototype is measured using a static pro forma model that solves for
the profit to the developer. A pro forma model is a tool that is commonly used to estimate whether a
project is likely to be profitable. For a policy analysis like this one, we use development prototypes to
represent typical projects. However, it is important to note that individual development projects may
be less or more profitable than these prototypes, depending on the specifics of the development
program, development costs (construction and land), sources of financing, and other factors.
Furthermore, because it is a static model reflecting today’s market conditions, the pro forma analysis
does not factor in changes in prices/rents, construction costs, or financing.
For the purposes of measuring financial feasibility in this analysis, developer profit was measured by
using one of two metrics:
• Return on cost (ROC) for ownership housing. ROC is a common measure of project profitability
for residential ownership development. The pro forma model tallies all development costs,
including land costs, hard costs (construction costs), soft costs, and financing costs. The pro
forma also tallies the project’s total value. The project’s total value is the sum of (1) the
estimated value of the condominiums or townhomes (i.e. the average per unit sale price
multiplied by the number of units), and (2) if applicable, the capitalized value of retail. The
project’s ROC is then calculated by dividing the project’s net revenue (i.e. total value minus
total development costs), by total development costs.
• Yield on cost (YOC) for rental housing. YOC is a common measure of profitability for income-
generating projects, such as residential rental development. The pro forma model tallies all
development costs (land costs, hard costs, soft costs, and financing costs). The pro forma also
estimates total revenues: the project’s net annual operating income is the stabilized income
from the property (i.e. rental income generated from both the residential and retail uses),
minus operating expenses and an allowance for vacancy. The YOC is estimated by dividing the
total annual net operating income by total development costs.
RETURN THRESHOLDS
To understand the potential impact of inclusionary requirements on financial feasibility, the ROC and
YOC results for each prototype and inclusionary housing scenario are compared to developers’ typical
expectation of return. These return thresholds are summarized in Figure 5 and discussed below:
• For the Single-Family Detached Prototype 1, the minimum ROC threshold ranges between 10
to 15%, based on developer interviews for new single-family development in Cupertino.
• For the Small Lot Single-Family/Townhouse Prototype 2 and the Condominium Prototype 3,
the minimum ROC threshold ranges between 18 to 20%, based on a review of pro forma
models for new multifamily ownership projects in Santa Clara County.
• For the Lower Density Apartment Prototype 4 and the Higher Density Apartment Prototype 5,
the minimum YOC threshold ranges between 4.75% and 5.25%. According to the developers
interviewed for this study, and a review of recent development project pro formas in the Silicon
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Valley, the minimum YOC for a new multi-family development project should usually be 1.0 to
1.5 points higher than the published capitalization rate (cap rate). The current cap rate for
multifamily properties in the San José Metropolitan Area is between 3.75 to 4.25%.8 The cap
rate, measured by dividing the net operating income generated by a property by the total
project value, is a commonly used metric to estimate the value of an asset. Cap rates rise and
fall along with interest rates. In a climate of rising interest rates, it is important to set the
expectations of YOC at a conservative level, to allow for a margin between the cap rate and the
rate of return. It is also important to consider that investors consider a wide range of factors
to determine if a development project makes financial sense, and some investors may have
different levels of risk tolerance than others.
FIGURE 5: MINIMUM RETURN THRESHOLDS BY PROTOTYPE
Return on Cost Thresholds
Prototype 1: Detached Single Family 10-15%
Prototype 2: Small Lot/Townhomes 18-20%
Prototype 3: Condominiums 18-20%
Yield on Cost Thresholds
Prototype 4: Lower-Density Rental Apartments 4.75-5.25%
Prototype 5: Higher-Density Rental Apartments 4.75-5.25%
Source: Developer interviews and a review of recent project pro formas, 2018; Strategic Economics, 2018.
REVENUE ASSUMPTIONS
MARKET RATE RESIDENTIAL
There is significant pent-up housing demand in Santa Clara County and the broader Bay Area region,
as housing development has not kept up with employment growth. Between 2009 and 2015, Santa
Clara County added over 170,000 new jobs between 2010 and 2015, but only 29,000 new housing
units.9 Apartment rents accelerated beginning in 2011, as the economy emerged from the Great
Recession, and continued growing at an average annual rate of nearly eight percent until 2015. Since
then rents have continued to grow at a slower pace of about four percent.
Sales prices in Cupertino and Santa Clara County have been escalating at a rapid rate over the last
five years. In Cupertino, the median sales price for a single-family home increased from $1.68 million
in 2014 to $2.37 million in 2018. 10 Similarly, the median sales price for a condominium climbed from
$895,500 in 2014 to $1.4 million in 2018.11
The market-rate sale prices and rents assumed for each prototype are summarized in Figure 6. The
values are calculated as a weighted average to reflect that different types of units have different unit
8 CBRE Investor’s Cap Rate Survey (H1, 2018).
9 SPUR, “Room for More: Housing Agenda for San José,” August 2017.
10 Santa Clara County Association of Realtors, 2014 and 2018.
https://www.sccaor.com/pdf/stats/2014.pdf
https://www.sccaor.com/pdf/stats/2018.pdf.
11 Ibid
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values. For new single-family detached development (Prototype 1), sale prices were based on sales of
newly built single-family homes in Cupertino as reported by Redfin. Sales prices for small lot single-
family/townhomes (Prototype 2) and condominium projects (Prototype 3) were based on recent re-
sales in Cupertino as reported by Redfin. The Appendix to this report (Figures A-1 through A-3) includes
detailed information on the project comparables used to inform these estimates.
Because of the lack of recently built apartment projects in Cupertino, the rental rate estimates for
rental units (Prototypes 4 and 5) were based on developer interviews and a review of recently built,
comparable apartment projects in Cupertino and neighboring cities (Mountain View, Sunnyvale,
Campbell, and Santa Clara), as reported by Costar. Since Cupertino’s apartment buildings command
higher rents than in the other cities, a 5% premium was applied over the market area’s weighted
average. Figure A-4 in the Appendix includes detailed information on the project comparables used to
inform these estimates.
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FIGURE 6: MARKET RATE RESIDENTIAL SALE PRICES AND MONTHLY RENTS, BY PROTOTYPE
Unit Mix
Unit Size (Sq.
Ft.)
Sale Price
Per Sq. Ft.
Sale Price
Per Unit
Prototype 1: Single Family
5-BD 100% 3,700 $946 $3,500,200
Prototype 2: Small Lots/Townhomes
3-BD 100% 1,850 $970 $1,794,500
Prototype 3: Condominiums
2-BD 50% 1,350 $1,100 $1,485,000
3-BD 50% 1,600 $1,000 $1,600,000
Weighted Average Unit Size/Sale Price 1,475 $1,050 $1,542,500
Prototype 4: Lower-Density Rental
Studios 10% 680 $4.94 $3,360
1-BD 45% 800 $4.73 $3,780
2-BD 40% 1,100 $4.30 $4,725
3-BD 5% 1,400 $4.13 $5,775
Weighted Average Unit Size/Monthly Rent 938 $4.54 $4,216
Prototype 5: Higher-Density Rental
Studios 10% 680 $4.94 $3,360
1-BD 45% 800 $4.73 $3,780
2-BD 40% 1,100 $4.30 $4,725
3-BD 5% 1,400 $4.13 $5,775
Weighted Average Unit Size/Monthly Rent $4.54 $4,216
Source: Strategic Economics, 2018.
The total value of market-rate units is summarized in Figure 7. For the ownership prototypes
(Prototypes 1, 2, and 3), the total project value is obtained by multiplying the per unit sale price by the
total number of units. For the rental prototypes (Prototypes 4 and 5), an income capitalization
approach is used. This approach first estimates the annual net operating income (NOI) of the
prototype, which is the difference between project income (annual rents) and project expenses
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(operating costs and vacancies). The NOI is then divided by the current cap rate to derive total project
value.12
FIGURE 7. MARKET RATE RESIDENTIAL VALUE CALCULATION, BY PROTOTYPE
Prototype 1 Prototype 2 Prototype 3 Prototype 4 Prototype 5
Detached
Single Family
Small Lot
Single
Family/
Townhome
Condo
Lower
Density
Rental
Apartments
Higher
Density
Rental
Apartments
Weighted Average Monthly
Rent (a) per unit n/a n/a n/a $4,216 $4,216
Annual Rent per unit n/a n/a n/a $50,589 $50,589
Vacancy Allowance n/a n/a n/a 5.00% 5.00%
Operating Expenses % gross
revenue n/a n/a n/a 30.00% 30.00%
Annual Net Operating Income per unit n/a n/a n/a $32,883 $32,883
Capitalization Rate (b) n/a n/a n/a 4.25% 4.25%
Sales Value/Capitalized Value per unit $3,500,200 $1,794,500 $1,542,500 $773,714 $773,714
Total Units 7 50 100 100 100
Total Residential Value (c) total
project $24,501,400 $89,725,000 $154,250,000 $77,371,412 $77,371,412
(a) See Figure 5 for details on how the per unit sale price was derived.
(b) CBRE, H1 2018 Cap Rate Survey. Cap rates for the San José Metropolitan Area were between 3.75% and 4.25% for infill
multifamily Class A.
(c) Assuming all units are market rate. Total residential value is calculated by multiplying the per unit sales value/capitalized value
(which is a weighted average) by the total number of units.
Sources: CBRE, 2018; CoStar, 2018; Strategic Economics, 2018.
BELOW MARKET RATE HOUSING
BMR residential values at different AMI levels are summarized in Figure 8. Maximum sales prices and
rents were provided by Hello Housing, the City’s BMR program administrator. Sales prices and rents
for BMR units were calculated using the method and parameters established in the City’s Policy and
Procedures Manual for Administering Deed Restricted Affordable Housing Units (“BMR Manual”).13
An income capitalization approach is also applied to BMR units to derive total residential value.
12 As mentioned above, the CBRE Investor’s Cap Rate Survey (H1, 2018) estimates the cap rate for infill multifamily Class A in San José
Metro Area to range from 3.75 to 4.25%.
13 Maximum sales price calculations incorporate a 10% down payment, as well as an interest rate based on a 10-year rolling average for 30-
year fixed-rate mortgages, according to data from Freddie Mac. Resale prices for existing BMR units are determined by the City. Annual
housing costs associated with BMR rental units, including rent, utility costs, parking fees, and other costs, may not in sum exceed 30% of
the annual income associated with the income target for which the unit is designated.
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FIGURE 8. BELOW MARKET RATE RESIDENTIAL VALUES, BY PROTOTYPE AND AMI LEVEL
Prototype 1 Prototype 2 Prototype 3 Prototype 4 Prototype 5
Income Target for Pricing
BMR Units
Detached
Single Family
Small Lot
Single Family/
Townhomes
Condominium
Lower Density
Rental
Apartments
Higher Density
Rental
Apartments
30% AMI (Extremely Low) n/a n/a n/a $116,806 $116,806
50% AMI (Very Low) n/a n/a n/a $211,968 $211,968
60% AMI (Low)* n/a n/a n/a $260,224 $260,224
90% AMI (Median)* $483,270 $344,879 $322,981 n/a n/a
110% AMI (Moderate)* $612,662 $462,872 $435,374 n/a n/a
*Per policy, the maximum price for BMR units for low income is set at 60% AMI, median income at 90% AMI, and moderate income
at 110% AMI.
Note: All values are weighted averages, according to each prototype’s unit mix. Affordable sale prices and rents were provided by the
City of Cupertino and Hello Housing, based on 2018 Santa Clara County income and rent limits, published by the California Tax Credit
Allocation Committee, and the 2018 Santa Clara County maximum utility allowance, published by HUD.
RETAIL COMMERCIAL
Retail lease assumptions were developed from Costar listings for comparable ground floor retail
spaces in Cupertino, with capitalization rates reported by CBRE for the San José Metro Area. The
annual net operating income and capitalized value were calculated based on the assumptions shown
in Figure 9.
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FIGURE 9. RETAIL REVENUE ASSUMPTIONS AND CAPITALIZED VALUE
Unit New Retail (NNN)
Assumptions
Monthly Rent, Triple Net (a) Per SF $4.25
Vacancy Percent 10%
Operating Expenses Percent Pass through
Capitalization Rate Percent 7.00%
Capitalized Value
Gross Annual Retail Income Per SF $51.00
Less Retail Vacancy Per SF -$5.10
Less Operating Expenses Per SF $0.00
Annual Net Operating Income Per SF $45.90
Capitalized Value Per SF $655.71
(a) Based on recent lease transactions in Cupertino for recently constructed ground-floor retail. Under a triple net
lease (NNN) the tenant pays operating expenses, including real estate taxes, building insurance, and
maintenance (the three "nets") on the property in addition to the rents.
(b) Based on the CBRE H1 2018 Cap Rate Survey. Cap rates for the San José Metropolitan Area were between
4.5% to 5.5% for (Class A) and 6.25% to 7.25% (Class B) for Neighborhood Retail.
Source: CBRE, 2018; Costar, 2018; Strategic Economics, 2018.
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DEVELOPMENT COSTS
The development costs incorporated into the pro forma analysis include land costs, hard costs
(construction materials and labor), soft costs, and financing costs. Cost assumptions are summarized
in Figure 10 and described below.
LAND COSTS
A critical factor for development feasibility is the cost of land. To determine the market value of sites
zoned for residential use in Cupertino, Strategic Economics interviewed developers and reviewed
recent pro formas for similar development projects in Cupertino and nearby communities. Recognizing
that one of the key factors that drives the value of the site is the permitted density, this analysis
assumes that sites zoned for single family detached homes are valued at $9 million per acre ($207
per square foot), while sites zoned for higher-density housing are valued at $10 million per acre ($230
per square foot).
Note that these values are approximations for the purposes of the feasibility analysis; in reality, the
value of any particular site is likely to vary based on its location, amenities, and property owner
expectations.
HARD COSTS
Hard costs are based on Strategic Economics’ review of pro formas for similar development projects,
as well as interviews with developers active in Cupertino and surrounding cities. The assumptions for
hard costs, shown in Figure 10, include estimates for basic site improvements and construction costs
for residential areas, retail areas, and parking structures.
It should be noted that construction costs have been escalating rapidly in the Bay Area in the last
several years14; project feasibility is highly sensitive to changes in construction cost assumptions.
SOFT COSTS AND FINANCING COSTS
Soft costs include items such as architectural fees, engineering fees, insurance, taxes, legal fees,
accounting fees, marketing costs, developer overhead, and city fees, as shown in Figure 10. City fees
and other development impact fees were calculated for the individual prototypes based on data
provided by City staff. Detailed fee calculations are shown in Figure 21. Other soft costs were estimated
based on standard industry ratios, calculated as a percentage of hard costs.
14 Terner Center for Housing Innovation, UC Berkeley. Understanding the Drivers of Rising Construction Costs in California (Ongoing
Research), https://ternercenter.berkeley.edu/construction-costs.
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FIGURE 10: DEVELOPMENT COST ASSUMPTIONS
Metric Estimate
Land Costs
Land zoned for single-family per site acre $9 million
Land zoned for townhomes/multi-family/mixed-use per site acre $10 million
Hard Costs
Site Costs (demo, infrastructure, etc.) per site sq. ft. $30
Residential Area
Single Family (includes 2-car garage) per gross sq. ft. $95
Townhomes (includes 2-car garage) per gross sq. ft. $150
Stacked condominiums (Type V) per gross sq. ft. $275
Stacked apartments (Type V) per gross sq. ft. $235
Higher density apartments (Type 3 modified) per gross sq. ft. $300
Retail Area (Including T.I) per gross retail sq. ft. $130
Surface parking per space $10,000
Podium parking per space $35,000
Soft Costs
Architectural, Engineering, Consulting % of hard costs 6%
Taxes, Insurance, Legal, Accounting % of hard costs 3%
Other % of hard costs 3%
Contingency % of hard costs 5%
Developer Overhead and Fees % of hard costs 4%
City Permits and Fees (a)
Prototype 1 per unit $153,022
Prototype 2 per unit $83,463
Prototype 3 per unit $67,755
Prototype 4 per unit $65,949
Prototype 5 per unit $67,241
Financing Costs
Financing % of hard and soft costs 6%
(a) Includes City fees and permits, school district fees, and sanitation district fees paid on the residential and retail component of
each prototype for market rate units. Includes housing mitigation fee for the retail component.
Sources: Developer interviews, 2018; City of Cupertino, 2018; Cupertino School District and Fremont High School District, 2018;
Strategic Economics, 2018.
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Key Results
This section summarizes the findings of the financial feasibility analysis under different inclusionary
housing scenarios for each prototype. Figure 11 and Figure 12 demonstrate the return obtained by
each prototype, compared to the minimum threshold for feasibility. Figure 21 shows development
costs by type and detailed City fees. Figure 22 through Figure 26 provide the pro forma results for each
prototype.
Ownership residential development can feasibly support higher inclusionary requirements than rental
development. While growth in apartment rents has reportedly started to plateau in Santa Clara County
in the last year, ownership prices (including condominium prices) continue to increase, making it
generally more feasible to build ownership projects.15
Detached single-family development (Prototype 1) can support an inclusionary requirement of 15%,
20%, or the payment of Housing Mitigation Fees. As shown in Figure 11, the single-family detached
Prototype 1 shows positive project revenues for Scenarios 1, 2, and 4, achieving a return on cost (ROC)
well above the minimum threshold of 10%. Recent sales prices of newly constructed single-family
homes in Cupertino are sufficient to offset development costs as well as support inclusionary
requirements or the payment of Housing Mitigation Fees. However, the single-family detached
prototype cannot support an inclusionary requirement of 25% (Scenario 3), which generates a return
of less than 1%. Figure 22 provides more detailed pro forma results for this prototype.
Small lot/townhome development (Prototype 2) can also support all inclusionary requirement of 15%,
20%, or the payment of Housing Mitigation Fees. As shown in Figure 11, Prototype 2 shows positive
project revenues for Scenarios 1, 2, and 4, achieving a return exceeding the minimum threshold of
15% required for feasibility. Although there has been limited townhome construction in recent years
in Cupertino, recent townhome re-sales suggest that prices for new construction would generate
sufficient revenues to offset development costs as well as support any inclusionary requirement or the
payment of Housing Mitigation Fees. Figure 23 provides more detailed pro forma results for this
prototype.
A mixed-use condominium prototype (Prototype 3) can support inclusionary requirements of 15%,
20%, or the payment of Housing Mitigation Fees. As shown in Figure 11, Prototype 3 shows positive
project revenues for Scenarios 1, 2, and 4, achieving a return well above the minimum threshold of
15%. Despite the lack of recent condominium construction in Cupertino, condominium re-sales
suggest that prices for new construction would support any of the scenarios that impose an
inclusionary requirement or the payment of in-lieu fees. Figure 24 provides more detailed pro forma
results for this prototype.
The lower density mixed-use apartment prototype (Prototype 4) is nearly feasible as a 100% market-
rate project. Without any BMR requirements, the lower density rental prototype achieves a yield on
cost of 4.5%, below the minimum requirement of 4.75%, as shown in Figure 12. The lower density
rental prototype does not generate sufficient revenues to support inclusionary requirements or in-lieu
fees under current rents and costs. Figure 25 provides the pro forma for this prototype.
15 Mercury News, Louis Hansen, May 16, 2018. Bay Area condo market heats up as alternative to pricey homes.
https://www.mercurynews.com/2018/05/16/bay-area-condo-market-heats-up-as-alternative-to-pricier-homes/
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The higher density rental multifamily prototype (Prototype 5) can support Housing Mitigation Fee
payments (Scenario 4) but cannot feasibly provide inclusionary BMR units under current market rents,
construction costs, and land costs. Prototype 5 achieves a higher YOC than Prototype 4, largely due to
the greater efficiencies of a higher density project, and is financially feasible in Scenario 1 and
Scenario 4 (see Figure 12). Figure 26 provides more detailed pro forma results.
The lower density mixed-use apartment prototype (Prototype 4) can feasibly provide up to 15%
inclusionary BMR units if it could command 15% higher revenues or if construction and land costs
were reduced by 15%. If a lower density rental project were able to achieve higher revenues (15%
higher) on the apartment units and on the ground-floor retail space, as shown in Figure 13 and Figure
14, the project could feasibly accommodate an inclusionary requirement of 15% BMR units.
Alternatively, if a development project were able to secure a construction bid and purchase a site that
reduced these costs by 15%, the lower density mixed-use apartment prototype could feasibly provide
15% inclusionary BMR units (see Figure 15 and Figure 16).
The higher density mixed-use apartment prototype (Prototype 5) can feasibly provide inclusionary BMR
units if it can command 10% higher revenues or if construction and land costs were reduced by 5%. If
a higher density rental project can achieve 10% higher rents on the apartments and retail space, the
project can feasibly accommodate an inclusionary requirement of 15% BMR units (see Figure 17 and
Figure 18). In another scenario, if a higher density mixed-use apartment could secure a construction
bid and site that is 5% less expensive, this prototype could also feasibly provide 15% inclusionary BMR
units (see Figure 19 and Figure 20).
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FIGURE 11: RETURN ON COST FOR OWNERSHIP PROTOTYPES BY INCLUSIONARY HOUSING SCENARIO
Inclusionary Housing Scenarios
Prototype 1: Prototype 2: Prototype 3:
Single Family
Detached
Small Lot
SF/Townhouse Condominiums
Minimum Required Return 10-15% 18-20% 18-20%
Scenario 0 (No Requirements) 31% 41% 38%
Scenario 1 (Existing Policy) 15% 26% 23%
Scenario 2 (20% Inclusionary) 14% 21% 19%
Scenario 3 (25% Inclusionary) 1% 16% 14%
Scenario 4 (In-Lieu Fees) 28% 37% 33%
Source: Strategic Economics, 2019.
FIGURE 12: YIELD ON COST UNDER DIFFERENT INCLUSIONARY HOUSING SCENARIOS FOR MULTI-FAMILY RENTAL
PROTOTYPES 4 AND 5
Inclusionary Housing Scenarios
Prototype 4: Prototype 5:
Lower Density Rental Higher Density Rental
Minimum Required Yield on Cost 4.75%-5.25% 4.75%-5.25%
Scenario 0 (No Requirements) 4.52% 4.93%
Scenario 1 (15% Inclusionary) 4.22% 4.63%
Scenario 2 (20% Inclusionary) 4.10% 4.50%
Scenario 3 (25% Inclusionary) 3.94% 4.34%
Scenario 4 (In Lieu Fees) 4.40% 4.76%
Source: Strategic Economics, 2019.
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FIGURE 13: YIELD ON COST UNDER DIFFERENT REVENUE ASSUMPTIONS FOR LOWER DENSITY MULTI-FAMILY RENTAL
(PROTOTYPE 4) WITH 15% BMR REQUIREMENT
Revenue Assumptions
Monthly Market
Rate Apt. Rent
per Unit
Monthly
Retail Rent
per SF
Yield on
Cost
Feasibility
Results
Current Apartment and Retail Rents $4,216 $4.25 4.22% Not Feasible
Increased Rents (15% Higher Revenues) $4,848 $4.89 4.82% Feasible
Source: Strategic Economics, 2019.
FIGURE 14: FEASIBILITY OF LOWER DENSITY MULTI-FAMILY RENTAL PROTOTYPE (PROTOTYPE 4) WITH 15%
INCLUSIONARY BMR REQUIREMENT AND INCREASED REVENUES
Source: Strategic Economics, 2019.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
Current Apartment and Retail Rents Increased Rents (15% Higher
Apartment and Retail Revenues)Profit (Yield on Cost) Minimum Threshold for Feasibility of 4.75%
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FIGURE 15: YIELD ON COST UNDER DIFFERENT COST ASSUMPTIONS FOR LOWER DENSITY MULTI-FAMILY RENTAL
(PROTOTYPE 4) WITH 15% BMR REQUIREMENT
Cost Assumptions
Construction Cost
per Unit
Land Cost
per Unit Yield on Cost
Feasibility
Results
Current Costs $385,958 $250,000 4.22% Not Feasible
Reduced Costs (15% Lower Costs) $328,064 $212,500 4.90% Feasible
Source: Strategic Economics, 2019.
FIGURE 16: FEASIBILITY RESULTS OF LOWER DENSITY MULTI-FAMILY RENTAL PROTOTYPE (PROTOTYPE 4) WITH 15%
INCLUSIONARY BMR REQUIREMENT AND LOWER COSTS
Source: Strategic Economics, 2019.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
Current Costs Reduced Costs (15% Lower Costs)Yield on CostMinimum Threshold for Feasibility of 4.75%
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FIGURE 17: YIELD ON COST UNDER DIFFERENT REVENUE ASSUMPTIONS FOR HIGHER DENSITY MULTI-FAMILY RENTAL
(PROTOTYPE 5) WITH 15% BMR REQUIREMENT
Revenue Assumptions
Monthly
Market Rate
Apt. Rent per
Unit
Monthly Retail
Rent per SF
Yield on
Cost
Feasibility
Results
Current Rents $4,216 $4.25 4.63% Not Feasible
Increased Rents (10% Higher Revenues) $4,637 $4.68 4.91% Feasible
Source: Strategic Economics, 2019.
FIGURE 18: FEASIBILITY RESULTS OF HIGHER DENSITY MULTI-FAMILY RENTAL PROTOTYPE (PROTOTYPE 5) WITH 15%
INCLUSIONARY BMR REQUIREMENT AND HIGHER REVENUES
Source: Strategic Economics, 2019.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
Current Rents Increased Rents (10% Higher
Apartment and Retail Revenues)Yield on Cost Minimum Threshold for Feasibility of 4.75%
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FIGURE 19: YIELD ON COST UNDER DIFFERENT COST ASSUMPTIONS FOR HIGHER DENSITY MULTI-FAMILY RENTAL
(PROTOTYPE 5) WITH 15% BMR REQUIREMENT
Cost Assumptions Construction Cost per Unit Land Cost per Unit Yield on Cost Feasibility Results
Current Costs $460,195 $131,579 4.63% Not Feasible
Reduced Costs (5% Lower Costs) $437,185 $125,000 4.85% Feasible
Source: Strategic Economics, 2019.
FIGURE 20: FEASIBILITY RESULTS OF HIGHER DENSITY MULTI-FAMILY RENTAL PROTOTYPE (PROTOTYPE 5) WITH 15%
INCLUSIONARY BMR REQUIREMENT AND LOWER COSTS
Source: Strategic Economics, 2019.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
Current Costs Reduced Costs (5% Lower)Yield on Cost Minimum Threshold for Feasibility of 4.75%
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FIGURE 21. DETAILED CALCULATION OF THE CITY OF CUPERTINO’S PERMITS AND FEES FOR EACH PROTOTYPE (PER UNIT)
Prototype 1 Prototype 2 Prototype 3 Prototype 4 Prototype 5
Detached Single
Family
Small Lot Single
Family/Townhome Condominium
Lower Density
Rental
Apartments
Higher Density
Rental
Apartments
Planning Fees
Planning Applications $9,210 $1,289 $645 $400 $400
CEQA $3,571 $2,447 $1,223 $1,223 $1,223
Consultant Review $2,111 $296 $148 $148 $148
Housing Mitigation Fee (Non-residential only) $0 $0 $1,188 $1,188 $1,782
Public Works Fees
Transportation Impact Fee $6,177 $3,380 $4,374 $4,374 $4,871
Grading $420 $59 $29 $29 $29
Tract Map $1,350 $189 $94 $94 $94
Plan Check and Inspection $543 $76 $38 $38 $38
Storm Drain Fees $4,902 $501 $367 $354 $312
Parkland Dedication (a) $105,000 $60,000 $54,000 $54,000 $54,000
Building Division Fees
Building Fees $11,428 $10,592 $1,664 $1,133 $1,199
Construction Tax $752 $752 $1,075 $1,075 $1,237
Other Fees
School District Fees (b) $7,012 $3,506 $2,826 $1,808 $1,823
Sanitary Sewer District Connection Permit Fee $350 $350 $70 $70 $70
Stormwater Management Fee $197 $28 $14 $14 $14
Estimated City Fees, Total Per Unit $153,022 $83,463 $67,755 $65,949 $67,241
(a) Parkland dedication fees waived for affordable units.
(b) Based on the average of Cupertino School District and Fremont Union High School District school fees.
Sources: City of Cupertino, 2018; Fremont Union School District; Cupertino School District; Cupertino Sanitary Sewer District, 2018.
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FIGURE 22: FINANCIAL FEASIBILITY RESULTS FOR SINGLE-FAMILY DETACHED PROTOTYPE 1
Scenario 0
(No BMR Req.)
Scenario 1
(15% On-Site)
Scenario 2
(20% On-Site)
Scenario 3
(25% On-Site)
Scenario 4
(In-Lieu Fees)
Total Units 7 7 7 7 7
Market Rate Units 7 6 6 5 7
Affordable Units 0 1 1 2 0
Fractional Units 0 0.05 0.4 0 0
Revenues
Residential Capitalized Value $24,501,400 $21,484,470 $21,484,470 $18,596,932 $24,501,400
Per Unit $3,500,200 $3,069,210 $3,069,210 $2,656,705 $3,500,200
Development Costs
Land Costs
Land Costs $14,000,000 $14,000,000 $14,000,000 $14,000,000 $14,000,000
Per Unit $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
Direct Costs
Gross Residential Area (a) $2,775,564 $2,775,564 $2,775,564 $2,775,564 $2,775,564
Subtotal Direct Costs $2,775,564 $2,775,564 $2,775,564 $2,775,564 $2,775,564
Per Unit $396,509 $396,509 $396,509 $396,509 $396,509
Per Gross Sq. Ft. $95 $95 $95 $95 $95
Indirect Costs
City Fees (b) $1,071,155 $991,537 $1,169,211 $861,155 $1,532,693
Other Soft Costs (c) $582,868 $582,868 $582,868 $582,868 $582,868
Per Unit $83,266.92 $83,266.92 $83,266.92 $83,266.92 $83,266.92
Subtotal Indirect Costs $1,654,023 $1,574,405 $1,752,079 $1,444,023 $2,115,561
Per Unit $236,289 $224,915 $250,297 $206,289 $302,223
Financing $265,775 $260,998 $271,659 $253,175 $293,468
Per Unit $37,968 $37,285 $38,808 $36,168 $41,924
Total Development Costs $18,695,363 $18,610,968 $18,799,302 $18,472,763 $19,184,593
Per Unit $2,670,766 $2,658,710 $2,685,615 $2,638,966 $2,740,656
Per Gross Sq. Ft. $640 $637 $643 $632 $657
Feasibility
Net Revenue (d) $5,806,037 $2,873,502 $2,685,168 $124,169 $5,316,807
Return on Cost (e) 31% 15% 14% 1% 28%
(a) Includes costs for site prep and 2-car parking garage
(b) Figure 14 shows detailed City fees. Includes fractional in-lieu housing mitigation fee for scenario 1 and 2. Parkland dedication fees waived for affordable units.
(c) Includes architectural fees, engineering fees, insurance, taxes, legal fees, accounting fees, marketing costs, and developer overhead
(d) Net revenue is the project total revenue minus total development costs. (d) Return on cost is the net revenue, divided by total development costs.
(e) Return on cost is the net revenue, divided by total development costs.
Source: Strategic Economics, 2018.
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FIGURE 23: FINANCIAL FEASIBILITY RESULTS FOR SMALL LOT SINGLE-FAMILY/TOWNHOUSE PROTOTYPE 2
Scenario 0
(No BMR Req.)
Scenario 1
(15% On-Site)
Scenario 2
(20% On-Site)
Scenario 3
(25% On-Site)
Scenario 4
(In-Lieu Fees)
Total Units 50 50 50 50 50
Market Rate Units 50 42 40 37 50
Affordable Units 0 8 10 13 0
Revenues
Residential Capitalized Value $89,725,000 $79,265,818 $75,818,755 $72,312,696 $89,725,000
Retail Capitalized Value $0 $0 $0 $0 $0
Total Capitalized Value $89,725,000 $79,265,818 $75,818,755 $72,312,696 $89,725,000
Per Unit $1,794,500 $1,585,316 $1,516,375 $1,446,254 $1,794,500
Development Costs
Land Costs
Land Costs $33,333,333 $33,333,333 $33,333,333 $33,333,333 $33,333,333
Per Unit $666,667 $666,667 $666,667 $666,667 $666,667
Direct Costs
Site Prep/Demo $4,356,000 $4,356,000 $4,356,000 $4,356,000 $4,356,000
Gross Residential Area (a) $15,651,677 $15,651,677 $15,651,677 $15,651,677 $15,651,677
Subtotal Direct Costs $20,007,677 $20,007,677 $20,007,677 $20,007,677 $20,007,677
Per Unit $400,154 $400,154 $400,154 $400,154 $400,154
Per Gross Sq. Ft. $192 $192 $192 $192 $192
Indirect Costs
City Fees (b) $4,173,154 $3,693,154 $3,573,154 $3,393,154 $5,986,154
Other Soft Costs (c) $4,201,612 $4,201,612 $4,201,612 $4,201,612 $4,201,612
Per Unit $84,032 $84,032 $84,032 $84,032 $84,032
Subtotal Indirect Costs $8,374,767 $7,894,767 $7,774,767 $7,594,767 $10,187,767
Per Unit $167,495 $157,895 $155,495 $151,895 $203,755
Financing $1,702,947 $1,674,147 $1,666,947 $1,656,147 $1,811,727
Per Unit $34,059 $33,483 $33,339 $33,123 $36,235
Total Development Costs $63,418,723 $62,909,923 $62,782,723 $62,591,923 $65,340,503
Per Unit $1,268,374 $1,258,198 $1,255,654 $1,251,838 $1,306,810
Per Gross Sq. Ft. $608 $603 $602 $600 $626
Feasibility
Net Revenue (d) $26,306,277 $16,355,895 $13,036,032 $9,720,772 $24,384,497
Return on Cost (e) 41% 26% 21% 16% 37%
(a) Includes 2-car parking garage
(b) Figure 14 shows applicable city fees. Only Scenario 4 pays in-lieu housing mitigation fees. Parkland dedication fees waived for affordable units.
(c) Includes architectural fees, engineering fees, insurance, taxes, legal fees, accounting fees, marketing costs, and developer overhead
(d) Net revenue is the project total revenue minus total development costs. (d) Return on cost is the net revenue, divided by total development costs.
(e) Return on cost is the net revenue, divided by total development costs.
Source: Strategic Economics, 2018.
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FIGURE 24: FINANCIAL FEASIBILITY RESULTS FOR CONDOMINIUM PROTOTYPE 3
Scenario 0
(No BMR Req.)
Scenario 1
(15% On-Site)
Scenario 2
(20% On-Site)
Scenario 3
(25% On-Site)
Scenario 4
(In-Lieu Fees)
Total Units 100 100 100 100 100
Market Rate Units 100 85 80 75 100
Affordable Units 0 15 20 25 0
Revenues
Residential Capitalized Value $154,250,000 $136,743,959 $130,983,540 $125,110,729 $154,250,000
Retail Capitalized Value $6,557,143 $6,557,143 $6,557,143 $6,557,143 $6,557,143
Total Capitalized Value $160,807,143 $143,301,101 $137,540,683 $131,667,871 $160,807,143
Per Unit $1,608,071 $1,433,011 $1,375,407 $1,316,679 $1,608,071
Development Costs
Land Costs
Land Costs $28,571,429 $28,571,429 $28,571,429 $28,571,429 $28,571,429
Per Unit $285,714 $285,714 $285,714 $285,714 $285,714
Direct Costs
Site Prep/Demo $3,733,714 $3,733,714 $3,733,714 $3,733,714 $3,733,714
Gross Residential Area $50,703,125 $50,703,125 $50,703,125 $50,703,125 $50,703,125
Gross Retail Area $1,300,000 $1,300,000 $1,300,000 $1,300,000 $1,300,000
Parking $7,560,000 $7,560,000 $7,560,000 $7,560,000 $7,560,000
Subtotal Direct Costs $63,296,839 $63,296,839 $63,296,839 $63,296,839 $63,296,839
Per Unit $632,968 $632,968 $632,968 $632,968 $632,968
Per Gross Sq. Ft. $343 $343 $343 $343 $343
Indirect Costs
City Fees (a) $6,775,479 $5,965,479 $5,695,479 $5,425,479 $10,398,879
Other Soft Costs (b) $13,292,336 $13,292,336 $13,292,336 $13,292,336 $13,292,336
Per Unit $132,923 $132,923 $132,923 $132,923 $132,923
Subtotal Indirect Costs $20,067,815 $19,257,815 $18,987,815 $18,717,815 $23,572,415
Per Unit $200,678 $192,578 $189,878 $187,178 $235,724
Financing $5,001,879 $4,953,279 $4,937,079 $4,920,879 $5,212,155
Per Unit $50,019 $49,533 $49,371 $49,209 $52,122
Total Development Costs $116,937,963 $116,079,363 $115,793,163 $115,506,963 $120,652,839
Per Unit $1,169,380 $1,160,794 $1,157,932 $1,155,070 $1,206,528
Per Gross Sq. Ft. $634 $630 $628 $626 $654
Feasibility
Net Revenue (c) $43,869,180 $27,221,739 $21,747,520 $16,160,909 $40,154,304
Return on Cost (d) 38% 23% 19% 14% 33%
(a) Figure 14 shows detailed city fees. In-lieu housing mitigation fees apply to non-residential sq. ft. and Scenario 4. Parkland dedication fees waived for affordable units.
(b) Includes architectural fees, engineering fees, insurance, taxes, legal fees, accounting fees, marketing costs, and developer overhead.
(c) Net revenue is the project total revenue minus total development costs.
(d) Return on cost is the net revenue, divided by total development costs.
Source: Strategic Economics, 2018.
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FIGURE 25: FINANCIAL FEASIBILITY RESULTS FOR LOWER DENSITY RENTAL APARTMENTS PROTOTYPE 4
Scenario 0
(No BMR Req.)
Scenario 1
(15% On-Site)
Scenario 2
(20% On-Site)
Scenario 3
(25% On-Site)
Scenario 4
(In-Lieu Fees)
Total Units 100 100 100 100 100
Market Rate Units 100 85 80 75 100
Affordable Units 0 15 20 25 0
Revenues
Residential Net Operating Income $3,288,285 $2,942,477 $2,831,310 $2,691,717 $3,288,285
Retail Net Operating Income $459,000 $459,000 $459,000 $459,000 $459,000
Total Net Operating Income $3,747,285 $3,401,477 $3,290,310 $3,150,717 $3,747,285
Total Capitalized Value $83,928,555 $75,791,903 $73,176,197 $69,891,657 $83,928,555
Per Unit $839,286 $757,919 $731,762 $698,917 $839,286
Development Costs
Land Costs
Land Costs $25,000,000 $25,000,000 $25,000,000 $25,000,000 $25,000,000
Per Unit $250,000 $250,000 $250,000 $250,000 $250,000
Direct Costs
Site Prep/Demo $3,267,000 $3,267,000 $3,267,000 $3,267,000 $3,267,000
Gross Residential Area $27,553,750 $27,553,750 $27,553,750 $27,553,750 $27,553,750
Gross Retail Area $1,300,000 $1,300,000 $1,300,000 $1,300,000 $1,300,000
Parking $7,560,000 $6,475,000 $6,475,000 $6,475,000 $7,560,000
Subtotal Direct Costs $39,680,750 $38,595,750 $38,595,750 $38,595,750 $39,680,750
Per Unit $396,808 $385,958 $385,958 $385,958 $396,808
Per Gross Sq. Ft. $338 $329 $329 $329 $338
Indirect Costs
City Fees (a) $6,594,875 $5,784,875 $5,514,875 $5,244,875 $8,942,363
Other Soft Costs (b) $8,332,958 $8,105,108 $8,105,108 $8,105,108 $8,332,958
Per Unit $83,329.58 $81,051.08 $81,051.08 $81,051.08 $83,329.58
Subtotal Indirect Costs $14,927,832 $13,889,982 $13,619,982 $13,349,982 $17,156,520
Per Unit $149,278 $138,900 $136,200 $133,500 $171,565
Financing $3,276,515 $3,149,144 $3,132,944 $3,116,744 $3,410,236
Per Unit $32,765 $31,491 $31,329 $31,167 $34,102
Total Development Costs $82,885,097 $80,634,876 $80,348,676 $80,062,476 $85,247,506
Per Unit $828,851 $806,349 $803,487 $800,625 $852,475
Per Gross Sq. Ft. $707 $688 $685 $683 $727
Feasibility
Net Revenue (c) $1,043,457 ($4,842,973) ($7,172,479) ($10,170,819) ($1,318,952)
Yield on Cost (d) 4.5% 4.2% 4.1% 3.9% 4.4%
(a) Appendix shows detailed city fees. Excludes affordable housing mitigation in-lieu fee, except in Scenario 4. Parkland dedication fees waived for affordable units.
(b) Includes architectural fees, engineering fees, insurance, taxes, legal fees, accounting fees, marketing costs, and developer overhead.
(c) Net revenue is the project total revenue minus total development costs.
(d) Yield on cost is the total project net operating income divided by total development costs.
Source: Strategic Economics, 2018.
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FIGURE 26: FINANCIAL FEASIBILITY RESULTS FOR HIGHER DENSITY RENTAL APARTMENTS PROTOTYPE 5
Scenario 0
(No BMR Req.)
Scenario 1
(15% On-Site)
Scenario 2
(20% On-Site)
Scenario 3
(25% On-Site)
Scenario 4
(In-Lieu Fees)
Total Units 100 100 100 100 100
Market Rate Units 100 85 80 75 100
Affordable Units 0 15 20 25 0
Revenues
Residential Net Operating Income $3,288,285 $2,942,477 $2,831,310 $2,691,717 $3,288,285
Retail Net Operating Income $688,500 $688,500 $688,500 $688,500 $688,500
Total Net Operating Income $3,976,785 $3,630,977 $3,519,810 $3,380,217 $3,976,785
Total Capitalized Value $87,207,126 $79,070,475 $76,454,769 $73,170,229 $87,207,126
Per Unit $872,071 $790,705 $764,548 $731,702 $872,071
Development Costs
Land Costs
Land Costs $13,157,895 $13,157,895 $13,157,895 $13,157,895 $13,157,895
Per Unit $131,579 $131,579 $131,579 $131,579 $131,579
Direct Costs
Site Prep/Demo $1,719,474 $1,719,474 $1,719,474 $1,719,474 $1,719,474
Gross Residential Area $35,175,000 $35,175,000 $35,175,000 $35,175,000 $35,175,000
Gross Retail Area $1,950,000 $1,950,000 $1,950,000 $1,950,000 $1,950,000
Parking $8,190,000 $7,175,000 $7,175,000 $7,175,000 $8,190,000
Subtotal Direct Costs $47,034,474 $46,019,474 $46,019,474 $46,019,474 $47,034,474
Per Unit $470,345 $460,195 $460,195 $460,195 $470,345
Per Gross Sq. Ft. $401 $392 $392 $392 $401
Indirect Costs
City Fees (a) $6,724,069 $5,914,069 $5,644,069 $5,374,069 $9,688,129
Other Soft Costs (b) $9,877,239 $9,664,089 $9,664,089 $9,664,089 $9,877,239
Per Unit $98,772 $96,641 $96,641 $96,641 $98,772
Subtotal Indirect Costs $16,601,308 $15,578,158 $15,308,158 $15,038,158 $19,387,168
Per Unit $166,013 $155,782 $153,082 $150,382 $193,872
Financing $3,818,147 $3,695,858 $3,679,658 $3,663,458 $3,985,299
Per Unit $38,181 $36,959 $36,797 $36,635 $39,853
Total Development Costs $80,611,823 $78,451,384 $78,165,184 $77,878,984 $83,564,835
Per Unit $806,118 $784,514 $781,652 $778,790 $835,648
Per Gross Sq. Ft. $688 $669 $667 $664 $713
Feasibility
Net Revenue (c) $6,595,303 $619,090 ($1,710,416) ($4,708,755) $3,642,291
Yield on Cost (d) 4.9% 4.6% 4.5% 4.3% 4.8%
(a) Appendix shows detailed city fees. Excludes affordable housing mitigation in-lieu fee, except in Scenario 4. Parkland dedication fees waived for affordable units.
(b) Includes architectural fees, engineering fees, insurance, taxes, legal fees, accounting fees, marketing costs, and developer overhead.
(c) Net revenue is the project total revenue minus total development costs.
(d) Yield on cost is the total project net operating income divided by total development costs.
Source: Strategic Economics, 2018.
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Peer Cities
Strategic Economics researched BMR housing programs in peer cities, including: San Jose, Santa
Clara, Campbell, Mountain View, Sunnyvale, and Palo Alto. The key findings from the research are
explained below and summarized in Figure 27.
INCLUSIONARY REQUIREMENTS
As shown in Figure 27, all of the cities have inclusionary requirements for ownership housing. They are
typically set at 15%, with the exception of Mountain View and Sunnyvale, which have requirements of
10% and 12.5%, respectively. For rental housing, Palo Alto and Sunnyvale have a housing mitigation
fee, but no inclusionary requirements. However, both cities are considering revising their policies on
rental housing.
TARGET INCOME
For inclusionary requirements on ownership housing, all of the peer cities have targeted moderate-
income households, roughly defined as between 80 and 120% of AMI. For rental housing, the income
target is typically low-income (up to 80% AMI), although San Jose also targets very low-income
households (up to 50% AMI). Santa Clara has targeted moderate-income households for both
ownership and rental housing requirements.
Cities that charge housing mitigation fees on rental or ownership housing have set their fees based on
nexus studies that measure the affordable housing needs of very-low, low-, and moderate-income
households.
None of the peer cities have targeted extremely-low income households for their inclusionary
requirements. However, city staff from Sunnyvale and San Jose have indicated that they are providing
funding to develop housing for extremely-low income households through the revenues they have
collected from housing mitigation fees, in-lieu fees, and other housing funds. Local revenues are often
combined with Santa Clara County Measure A funds – which are specifically targeted to extremely-low
income households – as well as 9% and 4% Low Income Housing Tax Credits (LIHTC) and Section 8
vouchers from the Santa Clara County Housing Authority.
ALTERNATIVE MEANS OF COMPLIANCE
All of the cities prefer that units are built onsite, but they allow alternative means of complying with
inclusionary requirements. Developers can typically satisfy the requirement by providing units off-site,
paying in-lieu fees, or dedicating land for affordable housing. However, in some cases, the developer
must first demonstrate that the inclusionary requirement is not feasible. For example, the City of Palo
Alto requires that the applicant present “substantial evidence to support a finding of infeasibility” and
of “feasibility of any proposed alternative.” In other cities, like Mountain View, Sunnyvale, and Santa
Clara, developers must receive approval from the City Council for the alternative. In Sunnyvale and
San Jose, developers that pursue an alternative to the onsite inclusionary requirement must provide
a higher number of affordable units.
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FIGURE 27: INCLUSIONARY HOUSING REQUIREMENTS AND HOUSING MITIGATION FEES IN PEER CITIES
City
Inclusionary
Requirement Target Income for BMR Policy Housing Mitigation Fee/In Lieu Fees
Alternatives to compliance Ownership Rental Ownership Rental Ownership Rental
Cupertino 15% 15%
1/2 of BMR
units at
Median
(100% AMI)
and 1/2 of
BMR units at
Moderate
(120% AMI)*
60% of BMR
units at Very
Low (50%
AMI) and 40%
of BMR units
at Low (60%
AMI)
-Single family:
$17.82/sf
-Small lot single
family/Townhome:
$19.60/sf
-Multifamily
attached:
$23.76/sf
-Multifamily
Attached (up
to 35 du/ac):
$23.76/sf
-Multifamily
attached (over
35 du/ac):
$29.70/sf
Onsite units are preferred, but alternatives
may be possible with City Council approval.
These include: on-site BMR rental units
where ownership units or a fee is required;
purchase of off-site units to be
dedicated/rehabbed as for-sale or rental
BMR units; development of off-site units to
be dedicated as for-sale or rental BMR
units; land for development of affordable
housing. An Affordable Housing Plan is
required.
Mountain View 10% 15%
Moderate
(80 - 120%
AMI)
Low (50-80%
AMI)
In-lieu fee of 3% of
sales price
$34/sf
(applies to
fractional
units only)
Onsite units are preferred, but City Council
can approve other alternatives.
Sunnyvale 12.5% None
Moderate
(Below 120%
AMI)
Low (Below
80% AMI)
In-lieu fee of 7% of
sales price $17/sf
For ownership units, onsite units are
preferred. With Council approval,
developers may provide alternatives if they
result in a higher number of BMR units.
San Jose 15% 15%
Moderate
(Below 120%
AMI)
9% Mod (80%
AMI)
6% VLI (30-
50% AMI)
In-lieu fee of
$153,000 per unit.
$17.41/sf for
projects of 3
to 19 units in
size
Developers have the option of providing
units off-site or paying in-lieu fees, but the
affordable housing requirement is 20%,
and the target income is lower.
Santa Clara 15% 15%
Moderate
(Below 100%
AMI)
Moderate
(Below 100%
AMI)
$20-$30/sf,
depending on
housing type
Alternatives include dedication of land for
affordable housing, development of
affordable units at an off-site location, or
some combination thereof, with approval
from City Council through a Development
Agreement.
Campbell 15% 15%
Moderate
(Below 110%
AMI)
Low (Below
70% AMI)
$34.50/sf for
projects of 6 units
or less None
Developers can dedicate land or pay in lieu
fees.
Palo Alto 15% None
2/3 BMR
units at 80-
100% AMI
and 1/3 BMR
units at 100-
120% AMI
Mod (80-
120% AMI)
Low (50-80%
AMI)
VLI (30-50%
AMI)
$50-$75/sf
depending on
housing type $20/sf
Developers can dedicate land, pay in lieu
fees, provide rental units within the
ownership project, convert or rehabilitate
affordable housing units. They must first
demonstrate that the inclusionary
requirement is not feasible.
*Sales prices set at 110% for BMR moderate income unit and 90% for a BMR median income unit.
Source: Interviews with City staff, BMR housing ordinances, Strategic Economics,
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NON-RESIDENTIAL LINKAGE FEE
The City is considering updating non-residential fees, otherwise known as commercial linkage fees, on
new workplace buildings (office, R&D, hotel, and retail development projects). Linkage fees are used
to mitigate the impacts of an increase in affordable housing demand associated with a net increase
in worker households. as employees at new non-residential developments seek housing nearby. The
funds raised by the linkage fees are deposited into a housing fund specifically reserved for use by a
local jurisdiction to increase the supply of affordable housing for the workforce. Linkage fees are one
of several funding sources that jurisdictions can use to help meet affordable housing needs of new
workers.
The City first adopted linkage fees for office and R&D projects in 1992, and expanded the program to
apply to retail and hotel developments in 2004. Following a 2015 nexus study update completed by
Keyser Marston Associates, the City amended the fees for all three uses to their current levels--$23.76
for office/R&D uses, and $11.88 for hotel and retail uses.16 This memo report provides updated policy
analysis, including a financial feasibility analysis, and a review of current non-residential linkage fees
in neighboring cities to establish a recommendation on updated linkage fees in Cupertino.
Approach
METHODOLOGY
The financial feasibility of establishing updated non-residential linkage fees in Cupertino was tested
using a pro forma model that measures profit for the developer or investor. Yield on cost (YOC) is a
commonly used metric indicating the profitability of a non-residential project. The pro forma model
tallies all development costs, including land, direct construction costs, indirect costs (including
financing), and developer fees. Revenues from lease rates or hotel room rates are the basis for
calculating annual income from the new non-residential development. The total operating costs are
subtracted from the total revenues to calculate the annual net operating income. The YOC is then
estimated by dividing the annual net operating income by the total development costs. The fee levels
were then added as an additional development cost to measure the resulting change in the YOC.
DEVELOPMENT PROTOTYPES
The analysis estimates the feasibility of potential linkage fees for three non-residential prototypes:
office/R&D, hotel, and retail. The building characteristics of each development prototype, including
size, density (floor-area-ratio), and parking assumptions are based on a review of projects that were
recently built, and in planning stages in Cupertino, as well as recently built and pipeline projects in
surrounding areas.
Based on the development activity in Cupertino, the following is assumed regarding each prototype:
• Office/R&D: Based on a review of market activity in the City, recent and proposed
developments in neighboring cities, it is assumed that the office/R&D development project
would be a speculative building serving the tech industry.
16 Keyser Marston Associates, “City of Cupertino: Non-residential Jobs-Housing Nexus Analysis,” City of Cupertino, April 2015.
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• Hotel: Newer hotel development projects in Cupertino and surrounding areas are typically
upscale, select-service chains that serve business travelers.
• Retail: The retail development prototype is assumed to be a small low-density retail center.
The details regarding the size, density (floor-area ratio), parking, and other key assumptions for each
prototype are summarized in Figure 28 below.
FIGURE 28. DESCRIPTION OF DEVELOPMENT PROTOTYPES
Prototype Description Office/R&D Hotel Retail
Project Type
Class A Office
Speculative Building
Select-Service Upscale
Business Hotel
Neighborhood Retail
Shopping Center
Parcel Size (Sq. Ft.)
174,240
87,120
21,780
Parcel Size (Acres) 4 2 0.5
Total Stories 4 5 1
Floor-Area Ratio (without parking) (a) 1.50 1.20 0.35
Gross Building Area (GSF)
261,360
104,544
7,623
Efficiency Ratio (b) 90% n/a 90%
Net area (NSF)
235,224 n/a
6,861
Number of rooms n/a 140 n/a
Total Parking Spaces 825 155 30
Surface 93 70 30
Structured Garage 732 0 0
Underground 0 85 0
Parking Ratio (per room) n/a 1.1 n/a
Parking Ratio (per 1,000 SF) 3.2 1.5 4.0
Notes:
(a) The Floor-Area Ratio (FAR) is often used as a measure of density. In this analysis, it is calculated as the gross building area, not
including parking, divided by the parcel size.
(b) The Efficiency Ratio refers to the ratio of gross building area to ne leasable area. An efficiency ratio of 90% means that 90% of the
gross building area is leasable space. In hotels, revenue is informed by room count, rather than square footage, and therefore the net area
is omitted.
DEVELOPMENT COSTS
The development costs incorporated into the pro forma analysis include hard costs, (construction
materials and labor) land costs, soft costs (indirect costs), and financing costs.
HARD COSTS
Hard costs are based on Strategic Economics’ review of pro formas for similar development projects,
industry publications, and interviews with developers with projects in Cupertino and nearby
jurisdictions. The assumptions for hard costs by prototype are described in Figure 29. They include
estimates for basic site improvements, construction costs for the building, and costs for parking by
type. In addition, the cost of construction includes a tenant improvement allowance for office/R&D
and retail uses, as well as a Furniture, Fixtures, and Equipment (FF&E) allotment for hotel uses, which
are both typical for this market.
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FIGURE 29. HARD COSTS ASSUMPTIONS BY PROTOTYPE
Cost Category Metric Office/R&D Hotel Retail
Site Prep Per Site Sq. Ft. $3 $3 $3
Construction Costs Per Gross Building Sq. Ft. $300 $250 $165
Per Room $342,472
Parking Costs Cost per Space
Surface $7,000
Structured Garage $30,000
Underground $60,000
Land Costs
Entitled Land Per Site St. Ft. $137.74 $137.74 $75.00
Per Acre $6,000,000 $6,000,000 $3,267,000
Tenant Improvement
Allowance Per Building Net Sq. Ft. $75 n/a $35
Furniture, Fixtures,
Equipment Per Room n/a $35,000 n/a
Source: Costar, 2019; HVS Consulting, 2017; review of pro formas for comparable development projects in Santa Clara
County; interviews with developers in Cupertino and Santa Clara County, 2019; Strategic Economics, 2019.
LAND COSTS
One of the critical cost factors for a non-residential development project is land cost. To determine the
land value of sites zoned for commercial uses, Strategic Economics analyzed recent sales transactions
and estimates for properties in Santa Clara County and interviewed developers.
Land values are similar for both hotel and office development in the Cupertino area, based on a review
of recent transactions. Comparable values for office and hotel sites are showed in Figure 22 below. As
shown, the land values typically range from $120 to $185 per square foot. One exception in the
Cinnabar Street land sale for over $200 per square foot, which is in the Diridon Station Area, and
planned for higher intensity development projects than the prototypes for this study. For the purposes
of this analysis, it is assumed that sites zoned for office/R&D or hotel would have a land value of $138
per square foot ($6 million per acre).
There are fewer land sales transactions for sites that are entitled for low-density retail development.
However, a review of smaller retail property transactions shows that typically the land values are
usually under $100 per square foot. For the purposes of this analysis, it is assumed that a low-density
retail site in Cupertino would have a land value of $75 per square foot (about $3.2 million per acre).
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FIGURE 30. LAND COMPARABLES FOR OFFICE AND HOTEL
Property Jurisdiction Year Sold Acres
Estimated Value
Per Sq. Ft. Land
Proposed
Land Use
4995 Patrick Henry Dr. Santa Clara 2016 48.6 $118
Office
357-387 Cinnabar St. (a) San Jose 2017 5.6 $210
Office
767 Mathilda Ave. Sunnyvale 2017 3.28 $146
Hotel
10801 N. Wolfe Rd. (b) Cupertino 2018 1.72 $185
Hotel
Notes:
(a) 357-387 Cinnabar St. is in the Diridon Station area, and part of Google's transit village, which will have a significantly
higher FAR than the office prototype.
(b) Estimated value for 10801 N. Wolfe Rd. is based on valuation from CBRE in 2018 rather than a sales transaction.
Sources: Costar, 2019; CBRE, 2018;
SOFT COSTS
Soft costs (often referred to as indirect costs) include items such as architectural fees, engineering
fees, insurance, taxes, legal fees, accounting fees, city fees, and marketing costs. Cupertino’s Traffic
Impact Fee was calculated based on the City’s fee schedule. Other permits and fees were calculated
for each prototypes based on estimates generated for new development projects as part of the
feasibility analysis for the Vallco Specific Plan. Soft costs were estimated based on standard industry
ratios, calculated as a percentage of hard costs. These assumptions are shown in Figure 31.
FIGURE 31. SOFT COST ASSUMPTIONS BY PROTOTYPE
Soft Cost Metric Office/R&D Hotel Retail
City Permits and Fees
Traffic Impact Fee
Office Per Gross Building Sq. Ft. $17.40 $4.70 $9.94
Hotel Per Room $3,387
Other Permits and Fees Per Gross Building Sq. Ft. $48.01 $38.34 $57.16
Subtotal City Permits and Fees Per Gross Building Sq. Ft. $65.41 $43.04 $67.10
Other Soft Costs
Arch, Eng., & Consulting % of Hard Costs 5% 5% 5%
Taxes, Insurance, Legal, Acct % of Hard Costs 3% 3% 3%
Developer Overhead % of Hard Costs 4% 4% 4%
Subtotal Other Soft Costs (Excluding
Fees)
% of Hard Costs 12% 12% 12%
Construction Financing % of Hard + Soft Costs 6% 6% 6%
Source: Review of pro formas for comparable development projects in Cupertino, 2019; Individual developer interviews, 2019;
Vallco Specific Plan Feasibility Analysis, 2018; Strategic Economics, 2019.
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REVENUES
Revenue assumptions for each prototype are informed by a range of resources, including commercial
broker reports, hospitality industry reports, and Costar, as well as from interviews with developers and
brokers active in Cupertino and Santa Clara County. They are summarized in Figure 32.
Office: For office rents, Strategic Economics reviewed Cupertino’s office market and the greater Santa
Clara County office market. The largest office development in Cupertino has been the Apple Park
project, which is a build-to-suit development specifically intended for Apple. There has been minimal
recent speculative office development in Cupertino targeting other users. (Main Street was the only
such project completed in the last five years, and most of the space has also been leased to Apple.)
Buildings that are leased by Apple typically achieve rents of $4 per square foot per month (NNN),
compared to lease rates of $4.50-$5.00 per square foot for tech office buildings in neighboring West
San Jose and Sunnyvale (see Figure 33). This is due to the fact that landlords are willing to accept a
lower rent for a long-term lease with Apple, due to the low risk associated with a major corporation.
According to brokers and developers, there is potential to achieve higher rents for buildings that attract
other smaller tech office tenants. For the purposes of this analysis, the rental rate assumption is $4.50
per square foot per month (NNN). While this rental rate is higher than the current average office rent
in Cupertino, it is a reasonable estimate for a new, multi-tenant tech office building in the Silicon Valley.
Hotel: The assumptions of hotel revenues are based on a combination of data sources, including
interviews with hotel developers in Cupertino, and data from STR, a hotel research firm that tracks
hotel room rates, vacancy rates, and revenues per available room for properties in Cupertino (see
Figure 32).
Retail: Strategic Economics reviewed leases from 2018 and 2019 for retail spaces in Cupertino, as
summarized in Figure 34. Average lease rates (asking NNN) were between 4.25 to 5.42. All of these
recent leases were for restaurant spaces on Stevens Creek Boulevard. For the purposes of this
analysis, it is assumed that the retail space would lease for about $4 per square foot per month (NNN).
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FIGURE 32. REVENUE ASSUMPTIONS BY PROTOTYPE
Prototypes Metric Assumption
Retail
Annual Rent (NNN) Per Net Sq. Ft. $48.00
Vacancy Rate 5%
Operating Expenses % of Gross Revenue 10%
Annual Net Operating Income Per Net Sq. Ft. $40.80
Office/R&D
Annual Rent (NNN) Per Net Sq. Ft. $54.00
Vacancy Rate 5%
Operating Expenses % of Gross Revenue 7%
Annual Net Operating Income Per Net Sq. Ft. $47.52
Hotel
Gross annual Room Income RevPAR (a) $79,154
Gross Annual Other Revenue (b) Per Room $27,704
Gross Revenue Per Room $106,858
Vacancy Rate (c) n/a
Operating Expenses 70% of Gross Revenue ($74,800)
Annual Net Operating Income $32,057
Source: Costar, 2019; STR Trends Report, 2019; Individual developer interviews, 2019; Strategic Economics,
2019.
Notes:
(a) RevPAR is a measure of revenue per room, calculated as occupancy percentage times average daily rate.
(b) Other Revenue for hotels based on data from STR Consulting, and from hotel developer interviews.
(c) Vacancy is already reflected in RevPAR estimate.
FIGURE 33. OFFICE COMPARABLES
Project Name Address City Year Built
Mo. Rent/
Sq. Ft.
Lease
Type Source
Lot 11 @ Santana Row 500 Santana Row San Jose 2017 $4.45 NNN Costar
Santana Row 700 Santana Row San Jose 2019 $4.45 NNN Costar
Bldg. 5 Pathline Park
(a) 700 Mary Ave Sunnyvale 2019 $4.95 NNN Costar
Main Street 19319 Stevens Ck. Cupertino 2016 $3.75-$4.00 NNN Interviews
FIGURE 34: RETAIL COMPARABLES IN CUPERTINO
Project Name Address Year Built
Mo. Rent/
Sq. Ft. Lease Type Source
The Biltmore 20030-80 Stevens Creek Blvd 2015 $4.50 NNN (asking) Costar
Main Street 19369 Stevens Creek Blvd 2016 $5.42 full service Costar
Saich Way Station 20803 Stevens Creek Blvd 2015 $4.25 NNN (asking) Costar
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YIELD ON COST THRESHOLDS
In order to understand how the introduction of non-residential linkage fees impacts financial feasibility,
the yield on cost (YOC) results can be compared to an investor’s expectations of return for each type
of development. The YOC thresholds for this analysis were established relative to capitalization rates
(cap rates) for each product type in the Bay Area. The cap rate, which is measured by dividing net
income generated by a property by the total project value, is a commonly used metric to estimate
potential returns.
To ensure that the financial analysis is conservative and does not reflect peak market conditions, the
thresholds selected for determining project feasibility are slightly higher than the published cap rates.
Office/R&D projects with a YOC of above 6.0% and hotel projects with a YOC above 7.5% were
considered feasible in this analysis. Retail projects were considered feasible with a YOC higher than
7.0%. These thresholds are summarized in the Figure 35 below.
FIGURE 35: YIELD ON COST THRESHOLDS BY PROTOTYPE
Prototype
Yield on Cost
Threshold
Published
Cap Rate
Office/R&D (Class AA) 6.0% 4.50%-5.25%
Hotel (Select Service) 7.5% 7.0%-8.0%
Retail 7.0% 6.25-7.25%
Source: CBRE Cap Rate Survey, H2 2018; HVS, 2019; Developer interviews.
RESULTS
Using the YOC thresholds defined above, the following summarizes the results of the financial
feasibility of different linkage fee scenarios for each prototype. The pro formas for each prototype is
shown in Figure 39, Figure 40, and Figure 41.
OFFICE/ R&D
As shown in Figure 36 and Figure 39, the prototypical office/R&D project can support the existing
linkage fee of $23.76 per square foot, which generates a YOC of 6.04%. A linkage fee of $25 (Scenario
2) would also be feasible. However, the prototype cannot feasibly support a fee higher than $30 per
square foot. At this fee level, the prototype is only marginally feasible, with a yield on cost of 5.99%.
FIGURE 36. SUMMARY OF FINANCIAL FEASIBILITY OF OFFICE/R&D PROTOTYPE
Fee Scenario Fee Level Per Sq. Ft. Yield on Cost Office Feasibility
Current Linkage Fee $23.76 6.04% Feasible
Scenario 1 (No Fee) $0 6.25% Feasible
Scenario 2 $25 6.03% Feasible
Scenario 3 $30 5.99% Marginally Feasible
Note: Office/R&D projects must have a minimum yield on cost of 6.0% to be considered feasible
Source: Strategic Economics, 2019.
HOTEL
As summarized in Figure 37 for hotel projects, the existing linkage fee of $11.88 is financially feasible,
with a yield of cost of 7.65%. A fee of $15 per square foot (Scenario 2) is marginally feasible, resulting
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in a YOC of 7.46%. A higher linkage fee of $20 per square foot (Scenario 3) is not feasible (see Figure
40).
FIGURE 37. SUMMARY OF FINANCIAL FEASIBILITY OF HOTEL PROTOTYPE
Fee Scenario Fee Level Per Sq. Ft. Yield on Cost Hotel Feasibility
Current Linkage Fee $11.88 7.50% Feasible
Scenario 1 (No Fee) $0 7.65% Feasible
Scenario 2 $15 7.46% Marginally Feasible
Scenario 3 $20 7.39% Not Feasible
Note: Hotel projects must have a minimum yield on cost of 7.5% to be considered feasible
Source: Strategic Economics, 2019.
RETAIL
The financial feasibility analysis shows that retail developments are not financially feasible under
current market conditions. Even without a linkage fee (Scenario 1), the retail project achieves a yield
on cost that is lower than the threshold of 7.0 % (see Figure 38 and Figure 41). There may be cases
in which a retail project could support the current Housing Mitigation Fee if it were combined with other
land uses (residential or office) in a mixed-use project.
FIGURE 38. SUMMARY OF FINANCIAL FEASIBILITY OF RETAIL PROTOTYPE
Fee Scenario Fee Level Per Sq. Ft. Yield on Cost Retail Feasibility
Current Linkage Fee $11.88 6.35% Not Feasible
Scenario 1 (No Fee) $0 6.48% Not Feasible
Scenario 2 $15 6.32% Not Feasible
Scenario 3 $20 6.26% Not Feasible
Note: Retail projects must have a minimum yield on cost of 7.0% to be considered feasible.
Source: Strategic Economics, 2019.
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FIGURE 39. OFFICE/R&D PRO FORMA RESULTS
Office/R&D
Site and Building Characteristics
Parcel Size (Sq. Ft.) 174,240
Parcel Size (acres) 4.00
Total Stories 4 - 5 stories
Building Type Steel
FAR (without parking) 1.50
Revenues
Income $12,702,096
Net Operating Income $11,177,844
Project Costs
Land Costs $24,000,000
Direct Costs
Site Prep $522,720
Gross Building Area $78,408,000
Tenant Improvement Allowance $17,641,800
Parking $22,611,000
Subtotal Direct Costs $119,183,520
per net Sq. Ft. $507
per gross Sq. Ft. $456
Indirect Costs
Soft Costs $14,302,022
City Permits and Fees (excl. non-residential linkage) $12,548,925
Subtotal Indirect Costs $26,850,948
Financing Costs $8,762,068
Total Development Cost Including Land (TDC) $178,796,536
per net Sq. Ft. $760
Fee as % of Total Development Cost
Scenario 1: No Linkage Fee 0%
Scenario 2: Linkage Fee of $25/Sq. Ft. 2.84%
Scenario 3: Linkage Fee of $30/Sq. Ft. 3.53%
Current Linkage Fee ($23.76/Sq. Ft.) 3.36%
Yield on Cost (NOI/TDC)
Scenario 1: No Linkage Fee 6.25%
Scenario 2: Linkage Fee of $25/Sq. Ft. 6.03%
Scenario 3: Linkage Fee of $30/Sq. Ft. 5.99%
Current Linkage Fee ($23.76/Sq. Ft.) 6.04%
Source: Strategic Economics, 2019.
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FIGURE 40. HOTEL PRO FORMA RESULTS
Hotel
Site and Building Characteristics
Parcel Size (Sq. Ft.) 87,120
Parcel Size (acres) 2.00
Total Stories 5 stories
Building Type Concrete
FAR (without parking) 1.20
Revenues
Income $15,494,376
Net Operating Income $4,648,313
Project Costs
Land Costs $12,000,000
Direct Costs
Site Prep $261,360
Gross Building Area $26,136,000
FF&E $5,075,000
Parking $5,590,000
Subtotal Direct Costs $37,062,360
per gross Sq. Ft. $355
Indirect Costs
Soft Costs $4,447,483
City Permits and Fees (excl. non-residential linkage) $4,499,679
Subtotal Indirect Costs $8,947,162
Financing Costs $2,760,571
Total Development Cost Including Land (TDC) $60,770,093
per room $419,104
Fee as % of Total Development Cost
Scenario 1: No Linkage Fee 0%
Scenario 2: Linkage Fee of $15/Sq. Ft. 1.69%
Scenario 3: Linkage Fee of $20/Sq. Ft. 2.52%
Current Linkage Fee ($11.88/Sq. Ft.) 2.00%
Yield on Cost (NOI/TDC)
Scenario 1: No Linkage Fee 7.65%
Scenario 2: Linkage Fee of $15/Sq. Ft. 7.46%
Scenario 3: Linkage Fee of $20/Sq. Ft. 7.39%
Current Linkage Fee ($11.88/Sq. Ft.) 7.50%
Source: Strategic Economics, 2019.
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FIGURE 41. RETAIL PRO FORMA RESULTS
Retail
Site and Building Characteristics
Parcel Size (Sq. Ft.) 21,780
Parcel Size (acres) 0.50
Total Stories 1 story
Building Type Concrete
FAR (without parking) 0.35
Revenues
Income $329,314
Net Operating Income $279,917
Project Costs
Land Costs $1,633,500
Direct Costs
Site Prep $65,340
Gross Building Area $1,257,795
Tenant Improvement Allowance $266,805
Parking $213,444
Subtotal Direct Costs $1,803,384
per net Sq. Ft. $263
per gross Sq. Ft. $237
Indirect Costs
Soft Costs $216,406
City Permits and Fees (excl. non-residential linkage) $511,470
Subtotal Indirect Costs $727,876
Financing Costs $151,876
Total Development Cost Including Land (TDC) $4,316,636
per net Sq. Ft. $629
Fee as % of Total Development Cost
Scenario 1: No Linkage Fee 0%
Scenario 2: Linkage Fee of $15/Sq. Ft. 1.74%
Scenario 3: Linkage Fee of $20/Sq. Ft. 2.58%
Current Linkage Fee ($11.88/Sq. Ft.) 2.05%
Yield on Cost (NOI/TDC)
Scenario 1: No Linkage Fee 6.48%
Scenario 2: Linkage Fee of $15/Sq. Ft. 6.32%
Scenario 3: Linkage Fee of $20/Sq. Ft. 6.26%
Current Linkage Fee ($11.88/Sq. Ft.) 6.35%
Source: Strategic Economics, 2019.
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Peer Cities
A large share of municipalities in San Mateo and Santa Clara counties, particularly cities that are
desirable locations for tech and biotech companies, have adopted non-residential linkage fees. Figure
42 summarizes non-residential linkage fees in these jurisdictions.
For office/R&D uses, most cities have set linkage fees between $15 and $25 per square foot. The
majority of cities have lower fee levels for retail uses, typically in the range of $5 to $10 per square
foot. The non-residential linkage fees for hotel uses are usually between $5 and $15 per square foot.
The cities of Palo Alto and San Francisco have higher linkage fees than the rest of the local
jurisdictions. These cities also have higher average retail and office rents, and hotel room rates than
other Bay Area locations.
Many municipalities provide exemptions or fee reductions for the following types of projects:
• Smaller non-residential projects. For example, non-residential linkage fees do not apply to
projects adding less than 5,000 gross square feet in Redwood City, San Carlos, San Mateo
City, Colma, or Burlingame. Projects adding less than 3,500 gross square feet in
unincorporated land in San Mateo County, and less than 10,000 gross square feet in Menlo
Park or East Palo Alto are also exempt. Some cities also tie their fee to building size on a sliding
scale. Mountain View offers a 50% fee reduction for office projects under 10,000 square feet,
and hotel or retail projects under 25,000 square feet. Sunnyvale also offers a 50% fee discount
for the first 25,000 square feet of any project.
• Prevailing wage. Multiple jurisdictions, including Redwood City, San Carlos, San Mateo City,
and San Mateo County, provide 25% fee reductions for projects that pay prevailing wage.
• Community-serving facilities. Most cities exempt projects such as hospitals/clinics, child care,
public, educational, religious, and/or non-profit uses. Additionally, projects that are replacing
property damaged from natural disasters are also often exempted.
It is common for jurisdictions to allow alternative means of complying with non-residential linkage fee
requirements. Developers can typically satisfy the requirement by providing affordable housing either
on or off-site, or by dedicating land for affordable housing. East Palo Alto and Palo Alto allow for the
requirement to be met by either converting market-rate units to affordable units, or by rehabilitating
existing affordable units. In most cases, the applicant must first prove that an alternative is necessary.
For example, Palo Alto requires that the applicant present “substantial evidence to support a finding
of infeasibility” of paying the fee, and of “feasibility of any proposed alternative.”
Many cities have either enacted or updated their fees in the last four years, and fees are typically
adjusted annually, based on either ENR’s Construction Cost Index for the San Francisco Bay area, or
on the national Consumer Price Index.
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FIGURE 42. NON-RESIDENTIAL LINKAGE FEES (PER GROSS S. FT. OF NET NEW SPACE) IN NEARBY CITIES
Jurisdiction Office/ R&D/ Medical
Office Hotel Retail/ Restaurant/
Services
Date Fee Was
Adopted
Burlingame (a) $18 - $25 $12 $7 2017
Colma $5 $5 $5 2006
Cupertino $23.76 $11.88 $11.88 2015
East Palo Alto $10.72 none none 2016
Foster City $27.50 $12.50 $6.25 2016
Los Altos $25 $15 $15 2018
Menlo Park $17.79 $9.66 $9.66 2018
Mountain View (a) $13.14 - $26.27 $1.41 - $2.81 $1.41 - $2.81 2014
Palo Alto $36.22 $21.08 $21.08 2017
Redwood City $20 $5 $5 2015
San Bruno $12.50 $12.50 $6.25 2015
San Carlos $20 $10 $5 2017
San Francisco (b) $19.04 - $28.57 $21.39 $26.66 1996
San Mateo City $25 $10 $7.50 2016
San Mateo County $25 $10 $5 2016
Santa Clara City (a) $10 - $20 $5 $5 2017
South San Francisco $15 $5 $2.50 2018
Sunnyvale (a) $8.25 - $16.50 $8.25 $8.25 2015
Source: City Ordinances and Fee Schedules; 21 Elements, 2019; Silicon Valley at Home, 2019; Strategic Economics, 2019
Notes:
(a) Fees vary based on project size in four cities: Burlingame, Mountain View, Santa Clara, and Sunnyvale. Hotel and retail projects
under 25,000 sq. ft, and office projects under 10,000 sq. ft. in Mountain View are charged the lower fee; In Burlingame, Santa Clara
and Sunnyvale, office projects under 50,000 sq. ft., 20,000 sq. ft. and 25,000 sq. ft. respectively pay the lower fee.
(b) San Francisco's fees for R&D are $19.04 per sq. ft., while its fees for office are $28.57 per sq ft. Small Enterprise Workspace
and Production/Distribution/Repair fees are $22.46 per sq. ft.
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KEY TAKEAWAYS
Based on the economic feasibility analysis, Strategic Economics offers the following conclusions
regarding the City Council’s direction on the BMR Housing Program.
Is it financially feasible to increase the inclusionary requirements to 20% or 25%?
• For ownership housing prototypes, it would be financially feasible to raise the inclusionary
requirement from 15% to 20%. The analysis indicates that the existing requirement of 15%
and a higher requirement of 20% are economically feasible for single-family detached, small
lot single-family/townhouse, and condominium developments.
• Ownership housing prototypes can support a higher Housing Mitigation Fee per square foot.
The analysis shows that single-family detached, small lot single-family/townhouse, and
condominium developments could support paying the maximum housing mitigation fee (in-lieu
fee). The maximum nexus-based fees are $30.10-$30.60 per square foot for single-family
detached; $35.60 per square foot for small lot single-family/townhouse development; and
$35.10 per square foot for condominiums. The City’s Housing Mitigation Fees cannot exceed
the maximum housing impact fees justified by the 2015 Nexus Study (see Figure 43 below).
Exceeding the amounts shown below would require conducting a new nexus study.
FIGURE 43: CURRENT AND MAXIMUM HOUSING MITIGATION FEES BASED ON NEXUS FOR OWNERSHIP PROTOTYPES
Prototype
Current Housing
Mitigation Fee
Maximum Nexus-
Based Fee
Return on Cost
At Maximum Fee
Is Maximum
Fee Feasible?
Single-Family Detached $17.82 $30.10-$30.60 25.5% Yes
Small Lot SF/ Townhouse $19.60 $35.60 34.2% Yes
Condominium $23.76 $35.10 31.4% Yes
Source: Keyser Marston Associates (2015). Residential Below Market Rate Housing Nexus Analysis
• The rental apartment prototypes cannot feasibly support an inclusionary requirement under
current rents and construction/land costs. The higher density rental housing prototype can
support payment of Housing Mitigation Fees of nearly $30 per square foot, but cannot feasibly
provide inclusionary BMR units under today’s rents, construction costs and land costs.
However, with increases in rental revenues or decreases in construction costs and land costs,
rental housing development could potentially support the current inclusionary requirement of
15%.
Can the inclusionary housing policy be amended to include units for extremely low income/ disabled
persons?
The results from the feasibility analysis show that rental development in Cupertino cannot feasibly
provide BMR units on-site under current market conditions. An increase in revenues or a decrease in
construction and land costs could make it possible for lower density and higher density rental
prototypes to provide 15% inclusionary BMR units for very low income and low income households.
Under current market conditions, it is not financially feasible for the inclusionary housing policy to
include units for extremely low-income households.
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However, there are strategies that could allow the City to generate funding for the development of
extremely low-income units, and for disabled persons. City staff from Sunnyvale and San Jose have
indicated that they are providing funding to develop housing for extremely low-income households
through the revenues they have collected from housing mitigation fees, in-lieu fees, and other housing
funds. These local revenues are often combined with Santa Clara County Measure A funds – which
are specifically targeted to extremely-low income households – as well as 9% and 4% Low Income
Housing Tax Credits (LIHTC) and Section 8 vouchers from the Santa Clara County Housing Authority.
Can the inclusionary housing policy be amended to include median-income and moderate-income
units in rental projects?
The results from the feasibility analysis show that rental housing development in Cupertino is not
feasible with an inclusionary requirement of 15% under current conditions (see Figure 25 and Figure
26). However, a 15% increase in project revenues or a decrease in construction and land costs of 15%
could make the low density rental prototype feasible with a 15% BMR requirement. The higher-density
rental prototype can feasibly provide Housing Mitigation Fees at the current level. An increase in
revenues of 10% or a decrease in construction and land costs of 5% can make the higher density
rental prototype feasible with a 15% BMR requirement.
Adding a requirement for median-income and moderate-income units in addition to the existing
inclusionary requirement of 15% would not be economically feasible for the rental prototypes. For this
reason, it is not financially feasible for the inclusionary housing policy to be amended to also require
units for median-income and moderate-income households.
Can the BMR requirements for non-residential development (linkage fees) be increased for
office/R&D, hotel, and retail developments?
• For office and R&D development, it would be possible to raise the Housing Mitigation Fees to
a level between $25 to $30 per square foot. As shown in Figure 39, the office/R&D prototype
is feasible with a non-residential linkage fee of $25 per square foot. At $30 per square foot,
the prototype achieves a yield on cost that is slightly under the threshold required for feasibility.
• For hotel development, it may be possible to increase the Housing Mitigation Fees to between
$12 and $15 per square foot. At the current fee level of $11.88, a hotel project is feasible
(Figure 37). With a fee of $15 per square foot, the project achieves a yield on cost that is
slightly lower than the threshold for feasibility.
• The financial feasibility analysis shows that retail developments are not financially feasible
under current market conditions. Even without a Housing Mitigation Fees, the retail project
achieves a yield on cost that is lower than the threshold of 7.0% (see Figure 38). There may be
cases in which a retail project could support the current Housing Mitigation Fee if it were
combined with other land uses (residential or office) in a mixed-use project.
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APPENDIX
The appendix includes additional information on:
• Recent single-family sales for new construction in Cupertino (Figure A-1)
• Recent townhome re-sales in Cupertino (Figure A-2)
• Recent condominium re-sales in Cupertino (Figure A-3)
• Recent rental project comparables in Cupertino and surrounding cities (Figure A-4)
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FIGURE A-1: RECENTLY BUILT SINGLE FAMILY COMPARABLES
Address City Lot Size Beds Baths Price Square Feet Price/Sq. Ft. Year Built
21825 Lomita
Ave Cupertino 9,671 5 4.5 $3,380,000 3,891 $869 2016
21800
Almaden Ave Cupertino 11,098 5 3.5 $3,220,000 3,555 $906 2017
10240
Lebanon Dr Cupertino 9,048 5 4.5 $4,100,000 3,623 $1,132 2018
10257 Glencoe
Dr Cupertino 9,375 5 4.5 $3,593,800 3,727 $964 2016
7425
Heatherwood
Dr Cupertino 9,396 5 4 $3,650,000 3,763 $970 2017
805 Rose
Blossom Dr Cupertino 8,660 5 4.5 $2,980,000 3,339 $892 2017
10308 N
Stelling Rd Cupertino 9,612 5 4.5 $3,350,000 3,769 $889 2017
10381 Bret Ave Cupertino 9,374 5 4.5 $3,270,000 3,727 $877 2016
20861 Dunbar
Dr Cupertino 9,750 5 3.5 $3,998,000 3,949 $1,012 2016
Weighted
Average $3,512,995 3,705 $946
Sources: Redfin, 2018; Strategic
Economics, 2018.
Sources: Redfin, 2018; Strategic Economics, 2018.
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FIGURE A-2: RECENTLY BUILT TOWNHOME COMPARABLES
Address City Lot Size Beds Baths Price Square Feet Price/Sq. Ft. Year Built
10280 Park Green Ln #836 Cupertino 2,176 3 2.5 $1,760,000 1,670 $1,054 2006
10281 Torre Ave #817 Cupertino 2,176 3 2.5 $1,800,000 1,670 $1,078 2006
10700 Stevens Canyon Rd Cupertino 1,570 3 2.5 $1,852,000 2,239 $827 2007
20652 Gardenside Cir Cupertino 1,480 3 2.5 $1,680,000 1,704 $986 1990
20679 Gardenside Cir Cupertino 1,440 3 2 $1,665,000 1,640 $1,015 1990
23020 Stonebridge St Cupertino 3,348 3 2 $1,830,000 2,202 $831 1980
23030 Stonebridge Cupertino 3,348 3 2 $1,698,000 2,202 $771 1980
22981 Stonebridge Cupertino 3,348 3 2 $1,710,000 2,202 $777 1980
10910 Lucky Oak St Cupertino 1,312 3 3.5 $1,780,000 2,082 $855 1980
10826 Northridge Sq Cupertino 1,487 3 2 $1,455,000 1,389 $1,048 1978
10107 Lamplighter Sq Cupertino 1,753 3 2.5 $1,740,000 1,727 $1,008 1975
10174 Potters Hatch Cmn Cupertino 1,575 3 2.5 $1,816,000 1,785 $1,017 1974
10020 Mossy Oak Ct Cupertino 1,662 3 2.5 $1,680,000 1,645 $1,021 1972
10142 Amador Oak Ct Cupertino 1,854 3 2.5 $1,600,000 1,614 $991 1970
Weighted Averages:
All years $1,728,250 1,841 $934
Since 2000 $1,808,896 1,860 $970
Sources: Redfin, 2018; Strategic Economics, 2018.
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FIGURE A-2: RECENT RE-SALES OF TOWNHOME COMPARABLES
Address City Beds Baths Price Square Feet Price/Sq. Ft. Year Built
20488 Stevens Creek Blvd #2207 Cupertino 2 2 $1,338,000 1,171 $1,143 2003
20488 Stevens Creek Blvd #2309 Cupertino 2 2 $1,430,000 1,171 $1,221 2003
19999 Stevens Creek Blvd #209 Cupertino 2 2 $1,266,000 1,039 $1,218 2003
19999 Stevens Creek Blvd #101 Cupertino 2 2 $1,265,000 1,192 $1,061 2003
19503 Stevens Creek Blvd #317 Cupertino 2 2 $1,400,000 1,158 $1,209 2006
19503 Stevens Creek Blvd #251 Cupertino 2 2 $1,200,000 1,087 $1,104 2006
19503 Stevens Creek Blvd #139 Cupertino 2 2 $1,468,000 1,130 $1,299 2006
19503 Stevens Creek Blvd #261 Cupertino 2 2 $1,530,000 1,359 $1,126 2006
19503 Stevens Creek Blvd #331 Cupertino 3 2 $1,728,000 1,502 $1,150 2006
20488 Stevens Creek Blvd #1813 Cupertino 3 3 $1,930,000 1,766 $1,093 2003
20488 Stevens Creek Blvd #1401 Cupertino 3 2 $1,480,000 1,578 $938 2003
Weighted Averages:
2-Bd $1,367,604 1163 $1,171
3-Bd $1,720,858 1615 $1,060
Sources: Redfin, 2018; Strategic Economics, 2018.
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FIGURE A-3: RECENT RE-SALES OF CONDOMINIUM COMPARABLES
Address City Beds Baths Price Square Feet Price/Sq. Ft. Year Built
20488 Stevens Creek Blvd #2207 Cupertino 2 2 $1,338,000 1,171 $1,143 2003
20488 Stevens Creek Blvd #2309 Cupertino 2 2 $1,430,000 1,171 $1,221 2003
19999 Stevens Creek Blvd #209 Cupertino 2 2 $1,266,000 1,039 $1,218 2003
19999 Stevens Creek Blvd #101 Cupertino 2 2 $1,265,000 1,192 $1,061 2003
19503 Stevens Creek Blvd #317 Cupertino 2 2 $1,400,000 1,158 $1,209 2006
19503 Stevens Creek Blvd #251 Cupertino 2 2 $1,200,000 1,087 $1,104 2006
19503 Stevens Creek Blvd #139 Cupertino 2 2 $1,468,000 1,130 $1,299 2006
19503 Stevens Creek Blvd #261 Cupertino 2 2 $1,530,000 1,359 $1,126 2006
19503 Stevens Creek Blvd #331 Cupertino 3 2 $1,728,000 1,502 $1,150 2006
20488 Stevens Creek Blvd #1813 Cupertino 3 3 $1,930,000 1,766 $1,093 2003
20488 Stevens Creek Blvd #1401 Cupertino 3 2 $1,480,000 1,578 $938 2003
Weighted Averages:
2-Bd $1,367,604 1163 $1,171
3-Bd $1,720,858 1615 $1,060
Sources: Polaris Pacific, 2018; Redfin, 2018; Strategic Economics, 2018.
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FIGURE A-4: RECENTLY BUILT RENTAL COMPARABLES
Rent Per Unit Unit Size Rent Per Sq. Ft.
Project Name City
Year
Built Stories Studios 1-BD 2-BD 3-BD Studios 1-BD 2-BD 3-BD Studios 1-BD 2-BD 3-BD
Nineteen 800 Cupertino 2014 6 $4,026 $5,477 0 1,339 1,562 $3.01 $3.51
Main Street Lofts Cupertino 2018 4 $3,508 $3,995 916 1,044 $3.83 $3.83
Verve Mountain View 2017 3 $3,860 $5,071 $6,195 737 1,112 1,286 $5.24 $4.56 $4.82
Domus on the
Boulevard Mountain View
2015 4 $3,868 $4,876 788 1,061 $4.91 $4.60
Elan Mountain View Mountain View 2018 4 $3,860 $5,071 $6,195 737 1,112 1,286 $5.24 $4.56 $4.82
Montrose Mountain View 2016 4 $3,816 $5,443 739 1,154 $5.16 $4.72
Madera Apartments Mountain View 2013 4 $4,113 $5,510 849 1,181 $4.84 $4.67
Carmel the Village Mountain View 2013 5 $3,282 $3,623 $5,866 573 797 1,258 $5.73 $4.55 $4.66
6tenEAST Sunnyvale 2017 4 $3,309 $3,515 $4,414 $5,185 701 808 1,136 1,406 $4.72 $4.35 $3.89 $3.69
Naya Sunnyvale 2016 4 $3,250 $4,336 693 1,038 - $4.69 $4.18
481 On Mathilda Sunnyvale 2016 4 $3,098 $3,251 $4,160 701 781 1,174 $4.42 $4.16 $3.54
Encasa Apartments Sunnyvale 2016 3 $2,854 $3,356 $4,235 $5,854 572 856 1,163 1,688 $4.99 $3.92 $3.64 $3.47
Anton 1101 Sunnyvale 2015 4 $3,145 $3,280 $4,490 569 704 1,069 $5.53 $4.66 $4.20
2295-2305
Winchester Blvd Sunnyvale
2014 3 $3,371 $4,248 662 1,005 $5.09 $4.23
Ironworks Sunnyvale 2017 7 $3,520 $4,036 $5,109 . 784 1,174 1,365 $4.49 $3.44 $3.74
Solstice Sunnyvale 2013 6 $2,955 $3,329 $4,099 462 778 1,122 $6.40 $4.28 $3.65
Orchard City Lofts Campbell 2018 3 $2,946 $3,707 $4,817 607 924 1,237 $4.85 $4.01 $3.89
Revere Campbell Campbell 2015 5 $3,662 $3,912 $5,219 1,015 1,198 1,233 $3.61 $3.27 $4.23
Monticello Village Santa Clara 2016 6 $3,356 $3,244 $4,074 920 842 1,251 $3.65 $3.85 $3.26
Weighted
Average $3,225 $3,568 $4,541 $5,516 677 790 1,137 1,383 $4.71 $4.49 $3.98 $3.98
Sources: Costar, 2018; Strategic Economics, 2018.
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1
To: Kerri Heusler, Housing Manager, City of Cupertino
From: Diana Elrod, Principal
Date: June 26, 2019
Re: Peer Review of Draft Economic Feasibility Study for the City of Cupertino’s BMR Program
Thank you for the opportunity to provide comments on the economic feasibility study drafted by
Strategic Economics (SE) for the update of the City’s BMR Program requirements. It is my
understanding that SE conducted this study to discern whether, and to what extent, inclusionary
requirements for residential development and commercial impact fees may be modified from the
baselines established in 2015. That year, Keyser Marston Associates (KMA) completed an extensive
nexus study on both commercial and market‐rate residential development to assess the impacts of
new development on the need for affordable housing.
As the nexus was established in 2015, a further nexus study was not required here. Rather, SE’s
current study is intended to analyze the feasibility of applying different inclusionary percentages
(from the current requirement of 15%), as well as analyze whether the current mitigation fees for
new market rate residential and commercial development can be increased.
I have reviewed SE’s draft in conjunction with a review of KMA’s analyses from 2015 to help
evaluate the report’s conclusions. I have identified a set of questions to assist in further
understanding SE’s work, and more information about SE's methodology is needed before I finalize
my assessment of the report's recommendations.
Residential Analysis
1. It is hard to understand the step‐by‐step process that SE used for its methodology. The
report lacks a clear narrative how it got from point A to point B to point C. It would be
helpful to explain in simple language how the process works and why the particular data
points are used.
2. Most inclusionary feasibility studies we typically see are based on a residual land cost
analysis, rather than on a return on cost (ROC) or yield on cost (YOC). Can SE provide more
background as to why ROC and YOC analysis were used rather than a residual land cost
analysis and if that difference would meaningfully change any of the reported results?
3. The ROC analysis’s sources on page 10 reference “recent project proformas” and developer
interviews. Can further documentation be provided on what recent proformas were analyzed, and
what developers were interviewed?
404 Euclid Avenue, Suite 212
San Diego, CA 92114
(619) 236‐0612
www.LeSarDevelopment.com
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2
4. I am curious about the use of Redfin for data in the analysis. There are a number of
professional data aggregators that one typically sees, such as DataQuick, Costar, etc. which
SE does use for some of the analysis. What was the thought behind using Redfin (which I
personally experienced containing incorrect data in reporting sales)?
5. The report uses comps for townhomes and other housing types in Cupertino that are quite
old. Typically, if the review of comps finds that no development is currently taking place,
then adding an additional requirement would further constrain the development of housing.
Is that the case here, or are there other market factors influencing the types of projects
proposed and approved in Cupertino?
6. Figure A‐3 in the appendix is titled “Recent Re‐Sales of Condominium Comparables” when in
fact the table shows rents. Figure A‐4 repeats this information but calls the table “Recently
Built Rental Comparables.” Can SE update the table to include the dates when these comps
were built?
7. On page 11, the sales prices per unit are in some cases significantly different than what was
shown in the KMA report just four years ago. For example, condominiums in the 2015 report
were on the order of $800,000. What accounts for the more than 100% increase in four
years? Is this the result of construction cost escalation, and can SE say more about the
market's ability to sustain the higher current sale prices while absorbing additional
affordability requirements?
8. In addition, rents shown on that page are also substantially higher than in KMA’s study. Can
SE provide some additional explanation about the market forces that are driving these
increases?
9. On page 13, should the income limits be updated to the 2019 counts? Would showing
increased rents using the 2019 data result in higher affordability requirements being
feasible?
Non‐Residential Analysis
1. KMA provided information on mitigation fees as a percentage of total development cost as
one way to measure a fee’s reasonableness. How does SE’s methodology compare?
2. The pool of comparables used in the analysis is quite small. Would that impact the resulting
outcomes?
Summary
Based on the questions and comments outlined above, additional information is necessary to
assess whether there may be additional potential to feasibly modify the City's affordability
requirements. I am happy to provide additional input and further evaluation once these questions
are fully fleshed out.
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ECONOMIC FEASIBILITY ANALYSIS
CUPERTINO BELOW MARKET RATE (BMR)
HOUSING PROGRAM
Prepared for:
City of Cupertino
7/16/197/16/19
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TABLE OF CONTENTS
Introduction ............................................................................................................................. 1
BMR Requirements for Residential Development ............................................................... 3
Approach................................................................................................................................................... 3
Financial Feasibility Methodology ........................................................................................................ 10
Key Results ............................................................................................................................................ 19
Peer Cities ............................................................................................................................................. 32
Non-Residential Linkage Fee ........................................................................................... 34
Approach................................................................................................................................................ 34
Peer Cities ............................................................................................................................................. 46
Key Takeaways .................................................................................................................. 48
Appendix ....................................................................................................................................... 50
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TABLE OF FIGURES
Figure 1: Description of Prototypes ............................................................................................................ 6
Figure 2: City of Cupertino BMR Income Limits and Income Target for Pricing BMR Units .................... 7
Figure 3: Inclusionary Housing Scenarios Tested for Ownership Prototypes (Detached Single-Family
Prototype 1, Small Lot/Townhouse Prototype 2, and Condominium Prototype 3) .................................. 8
Figure 4: Inclusionary Housing Scenarios Tested for Rental Prototypes (Lower Density Rental Prototype
4 and Higher Density Rental Prototype 5) .................................................................................................. 9
Figure 5: Minimum Return Thresholds by Prototype .............................................................................. 11
Figure 6: Market Rate Residential Sale Prices and Monthly Rents, By Prototype ................................ 13
Figure 7. Market Rate Residential Value Calculation, by Prototype ...................................................... 14
Figure 8. Below Market Rate Residential Values, by Prototype and AMI Level .................................... 15
Figure 9. Retail Revenue Assumptions and Capitalized Value .............................................................. 16
Figure 10: Development Cost Assumptions ............................................................................................ 18
Figure 11: Return On Cost for Ownership Prototypes by Inclusionary Housing Scenario .................... 21
Figure 12: Yield on Cost under Different Inclusionary Housing Scenarios for Multi-Family Rental
Prototypes 4 and 5.................................................................................................................................... 21
Figure 13: Yield on Cost Under Different Revenue Assumptions for Lower Density Multi-Family Rental
(Prototype 4) with 15% BMR Requirement ............................................................................................. 22
Figure 14: Feasibility of Lower Density Multi-Family Rental Prototype (Prototype 4) with 15%
Inclusionary BMR Requirement and Increased Revenues ..................................................................... 22
Figure 15: Yield on Cost Under Different Cost Assumptions for Lower Density Multi-Family Rental
(Prototype 4) with 15% BMR Requirement ............................................................................................. 23
Figure 16: Feasibility Results of Lower Density Multi-Family Rental Prototype (Prototype 4) with 15%
Inclusionary BMR Requirement and Lower Costs ................................................................................... 23
Figure 17: Yield on Cost Under Different Revenue Assumptions for Higher Density Multi-Family Rental
(Prototype 5) with 15% BMR Requirement ............................................................................................. 24
Figure 18: Feasibility Results of Higher Density Multi-Family Rental Prototype (Prototype 5) with 15%
Inclusionary BMR Requirement and Higher Revenues .......................................................................... 24
Figure 19: Yield on Cost Under Different Cost Assumptions for Higher Density Multi-Family Rental
(Prototype 5) with 15% BMR Requirement ............................................................................................. 25
Figure 20: Feasibility Results of Higher Density Multi-Family Rental Prototype (Prototype 5) with 15%
Inclusionary BMR Requirement and Lower Costs ................................................................................... 25
Figure 21. Detailed calculation of the City of Cupertino’s permits and fees for each prototype (Per Unit)
................................................................................................................................................................... 26
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Figure 22: Financial Feasibility Results for Single-Family Detached Prototype 1 ................................. 27
Figure 23: Financial Feasibility Results for Small Lot Single-Family/Townhouse Prototype 2 ............ 28
Figure 24: Financial Feasibility Results for Condominium Prototype 3 ................................................. 29
Figure 25: Financial Feasibility Results for Lower Density Rental Apartments Prototype 4 ................ 30
Figure 26: Financial Feasibility Results for Higher Density Rental Apartments Prototype 5 ............... 31
Figure 27: Inclusionary Housing Requirements and Housing Mitigation Fees in Peer Cities ............. 33
Figure 28. Description of Development Prototypes ................................................................................ 35
Figure 29. Hard Costs Assumptions by Prototype ................................................................................... 36
Figure 30. Land Comparables for Office and Hotel ................................................................................ 37
Figure 31. Soft Cost Assumptions by Prototype ...................................................................................... 37
Figure 32. Revenue Assumptions by Prototype ...................................................................................... 39
Figure 33. Office Comparables ................................................................................................................ 39
Figure 34: Retail Comparables in Cupertino ........................................................................................... 39
Figure 35: Yield on Cost Thresholds by Prototype .................................................................................. 40
Figure 36. Summary of Financial Feasibility of Office/R&D Prototype .................................................. 40
Figure 37. Summary of Financial Feasibility of Hotel Prototype ............................................................ 41
Figure 38. Summary of Financial Feasibility of Retail Prototype ........................................................... 41
Figure 39. Office/R&D Pro Forma Results .............................................................................................. 42
Figure 40. Hotel Pro Forma Results ......................................................................................................... 43
Figure 41. Retail Pro Forma Results ........................................................................................................ 45
Figure 42. Non-Residential Linkage Fees (per Gross S. Ft. of Net New Space) in Nearby Cities ........ 47
Figure 43: Current and Maximum Housing Mitigation Fees Based On Nexus for Ownership Prototypes
................................................................................................................................................................... 48
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INTRODUCTION
Strategic Economics was retained by the City of Cupertino (the “City) to evaluate potential changes to
the Below Market Rate (BMR) Housing Program. The BMR program requirements are currently as
follows:
• The City currently has a BMR Housing Program that imposes an inclusionary requirement of
15% on for-sale and rental residential developments with seven or more units. For rental
developments, the BMR units must be affordable to very-low (up to 50% Area Median Income
“AMI”) or low-income (up to 80% AMI) households1. For-sale developments must provide BMR
units affordable to median- (up to 100% AMI) and moderate-income (up to 120% AMI)
households.2
• Small residential projects of less than seven units can pay the City’s Housing Mitigation In-Lieu
Fees3 (the “Housing Mitigation Fees”) or provide one BMR unit. The Housing Mitigation Fees
are based on the City’s 2015 Residential Below Market Rate Housing Nexus Analysis and Non-
Residential Jobs-Housing Nexus Analysis (the “2015 Nexus Study”). Housing Mitigation Fees
are currently set at $17.82 per square feet for detached single family, $19.60 per square feet
for small lot single family/townhomes, $23.76 for attached multifamily residences (ownership
and rental), and $11.88 per square foot for commercial/retail uses.
• The City first adopted linkage fees for office and Research and Development (“R&D”) projects
in 1992 and expanded the program to apply to retail and hotel developments in 2004. The
City updated the non-residential linkage fees in 2015 (based on the 2015 Nexus Study) to the
current levels of $23.76 per square foot for office/R&D uses, and $11.88 per square foot for
hotel and retail uses.4
The City Council is considering modifying the BMR Housing Program, providing direction to examine
the following issues:
• Study the potential to increase the inclusionary requirements to 20% or 25%
• Explore inclusionary housing policy to include units for extremely-low income/disabled persons
• Include median- and moderate-income units in rental projects
• Study inclusionary housing programs in other cities as a comparison
• Study the economic feasibility of increasing non-residential linkage fees on new office/R&D,
hotel, and retail developments
This report provides technical findings on the economic feasibility of increasing the City’s BMR
requirements for residential developments and non-residential developments. It also provides findings
regarding the potential for including extremely-low income housing units and/or median-and
moderate-income units in rental projects. The report also summarizes inclusionary housing programs
and non-residential linkage fees in other cities in Santa Clara County.
The report is divided into three sections.
1 Rental BMR policy states that 40% of affordable units must be set aside for low income, and 60% for very low income units.
2 For-Sale BMR policy states that half of affordable units must be set aside for median income households, and half for moderate income
households.
3 Housing Mitigation In-Lieu Fees: A fee assessed in accordance with the City's General Plan Housing Element, Municipal Code (CMC 19.172)
and the City's BMR Housing Mitigation Program Procedural Manual.
4 Keyser Marston Associates, “City of Cupertino: Non-residential Jobs-Housing Nexus Analysis,” City of Cupertino, April 2015.
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• Section II: The first section focuses on the BMR requirements on housing development.
• Section III: The second section is focused on the non-residential linkage fees on new
office/R&D, hotel, and retail developments.
• Section IV: The third section provides key takeaways and conclusions.
The appendix to the report provides additional background data on housing trends.
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BMR REQUIREMENTS FOR RESIDENTIAL
DEVELOPMENT
Approach
The following describessummarizes the methodology of steps taken in the financial feasibility analysis.
Step 1. Develop Prototypes for Pro Forma Analysis
The first step in the financial feasibility analysis is to review the types of residential and mixed-use
(residential and retail) projects that would be subject to the BMR policy. In close coordination with City
staff, Strategic Economics updated the residential and nonresidential prototypes used in the 2015
Nexus Study, ensuring that they represent the ownership and rental residential development types
that are likely to occur in city in the short term. The prototypes varied based on assumptions regarding
building type, density, unit size, etc.
Step 2. Develop Assumptions about BMR Units
Strategic Economics worked closely with City staff to develop assumptions about the percentage of
inclusionary units that should be tested, the income targets, and the affordable sales prices and rents.
Maximum sales prices and rents were calculated using the method and parameters established by
City policy, in coordination with Hello Housing, the BMR Program administrator.
Step 3. Collect Key Inputs and Build for Pro Forma
The financial feasibility of each prototype is measured using a static pro forma model that solves for
the profit to the developer. A pro forma model is a tool that is commonly used to estimate whether a
project is likely to be profitable. The key inputs into the financial feasibility analysis are the revenues
(rents/ sales prices), development costs, and land costs. Strategic Economics collected and
summarized data on land prices, residential values, and construction costs using the following data
sources:
• Costar, a commercial real estate database that tracks rental multifamily properties and
property transactions
• Interviews with local developers and brokers
• Redfin, a real estate brokerage firm that collects data on residential sales prices
• Review of pro formas from other projects and clients
Step 43. Calculate Financial Feasibility
The pro forma model tallies all development costs, including land costs, hard costs (construction
costs), soft costs, and financing costs. The pro forma also tallies the project’s total value. The project’s
total value is the sum of (1) the estimated value of the condominiums or townhomes (i.e. the average
per unit sale price multiplied by the number of units), and (2) if applicable, the capitalized value of
retail. The project’s ROC is then calculated by dividing the project’s net revenue (i.e. total value minus
total development costs), by total development costs. To understand the potential impact of
inclusionary requirements on financial feasibility, the ROC results for each prototype and inclusionary
housing scenario are compared to developers’ typical expectation of return, or the threshold for
feasibility. If the ROC for a project is above the threshold for feasibility, it is considered financially
feasible. If the ROC is below the threshold, it is not financially feasible.Approach
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Approach
To examine the potential impact of new BMR requirements on the financial feasibility of new
development, Strategic Economics worked with City staff to make assumptions about development
prototypes, which represent the types of new residential development projects likely to be built in
Cupertino. The five development prototypes include ownership and rental development types. Then,
Strategic Economics built a pro forma model to test the financial feasibility of different inclusionary
requirements or the payment of in lieu fees on each prototype. The pro forma model’s inputs are based
on present-day estimates of revenues and costs.
This section outlines the development prototypes and inclusionary housing scenarios tested in this
analysis.
More details on each step of the analysis is provided in the section below.
DEVELOPMENT PROTOTYPES
The analysis estimates the feasibility of different inclusionary requirements for five residential
prototypes, as described in Figure 1. The building characteristics of each development prototype,
including size, density (floor-area-ratio), and parking assumptions are based on prototypes analyzed
as part of the City’s 2015 Nexus Study 5. These development prototypes represent the range of typical
residential development expected to come online in Cupertino in the short term. These prototypes are
mostly based on recently completed projects or development proposals in the pipeline in Cupertino. It
is also assumed that future development will likely be located along Stevens Creek Boulevard, and in
existing residential neighborhoods, given that these locations have been identified in the City’s General
Plan and Heart of the City Specific Plan as key areas for new residential and mixed-use development.
The prototypes vary based on the following characteristics:
• Ownership and Rental. Three of the prototypes include only for-sale units (Prototypes 1, 2, and
3) and two are rental developments (Prototypes 4 and 5).
• Mixed-Use and Residential Only. Two of the prototypes (Prototypes 1 and 2) are 100%
residential while the attached multifamily prototypes have a ground-floor retail component
(Prototypes 3, 4, and 5).
• Project Density and Size
o The single-family detached prototype 1 represents detached single-family custom-built
homes with an average density of 4.5 dwelling units per acre. Because this prototype
has fewer than eight units, it would be allowed to pay the in-lieu fee or provide one
BMR unit under the current BMR policy. The small number of units in this prototype
reflects the fact that there are few potential single-family detached sites in Cupertino
that can accommodate more than 7 units.
o Prototype 2 represents two-story small lot single-family and townhome developments
with a density of 15 dwelling units per acre.
o Prototype 3 is a three-story multi-family condominium building with a density of 35
units per acre. Parking is accommodated in an above-ground podium.
5 Keyser Marston Associates (2015). Residential Below Market Rate Housing Nexus Analysis.
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o Prototype 4 is a three-story multifamily rental building with a density of 40 units per
acre. Parking is accommodated in an above-ground podium.
o Prototype 5 is a higher-density six-story project with a density of 76 units per acre. This
prototype is based on a Housing Element site that allows six to eight story heights.
Parking is accommodated in an above-ground podium.
• Parking Ratios. The City requires 2 parking spaces per unit. However, for the multi-family
prototypes there are opportunities to achieve parking reductions under certain conditions. The
assumptions in the pro forma are as follows.
o For Prototype 1 and Prototype 2, the assumption is that the development would
provide all of the required parking.
o For the condominium prototype 3, developers can lower parking by 10%, assuming
that the reduction is justified by a parking study.
o For multi-family rental housing prototypes 4 and 5, developers can receive parking
reductions on residential units in the scenarios where 5% of the housing units are for
very low-income households, in accordance with Gov’t Code Sec. 65915(p).
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FIGURE 1: DESCRIPTION OF PROTOTYPES
Prototype 1 Prototype 2 Prototype 3 Prototype 4 Prototype 5
Detached Single
Family
Small Lot Single
Family/Townhome
Condominium Lower Density
Rental
Apartments
Higher Density
Rental Apartments
Tenure For-Sale For-Sale For-Sale Rental Rental
Unit Mix 5 bedrooms 3 bedrooms 2 and 3 bedrooms Studios, 1, 2, and
3 bedrooms
Studios, 1, 2, and 3
bedrooms
Format Low-rise, large sites Low-rise, small
sites
Mid-rise, small
sites
Mid-rise, small
sites
Higher density,
small sites
Number of Units 7 50 100 100 100
Parcel Size (Acres) 1.6 3.3 2.9 2.9 1.3
Residential Program
Studios - - - 10 10
1-BD - - - 45 45
2-BD - - 50 40 40
3-BD - 50 50 5 5
4-BD 0 - - - -
5-BD 7 - - - -
Total 7 50 100 100 100
Dwelling Units Per Acre 4.5 15 35 35 76
Ground Floor Retail (Sq. Ft.) 0 0 10,000 10,000 15,000
Parking 2-Car Garage +
Driveway
2-Car Garage +
Driveway
Podium Podium Podium
Parking Requirement (Per Unit) 4 2.8 2 2 2
Parking Requirement (Commercial) n/a n/a 4 per 1,000 sq. ft. 4 per 1,000 sq. ft. 4 per 1,000 sq. ft.
Required Parking Spaces 28 140 240 240 260
Reduced Parking Spaces (a) 28 140 216 185 205
(a) For the condominium prototype 3, developers can lower parking by 10%, assuming that the reduction is justified by a parking study. For multi-family rental housing prototypes 4 and
5, developers can receive parking reductions on residential units in the scenarios where 5% of the housing units are for very low-income households (50% AMI), in accordance with
Gov’t Code Sec. 65915(p).
Source: Strategic Economics, City of Cupertino.
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BMR HOUSING PROGRAM ASSUMPTIONS
Strategic Economics built a pro forma model that tested the feasibility of various inclusionary housing
scenarios under the existing BMR housing program and alternative scenarios. Below is a summary of
the existing BMR program:
• The City currently has a BMR Housing Program that imposes an inclusionary
requirement of 15% on for-sale and rental residential developments with seven or
more units. For rental developments, the BMR units must be affordable to very low or
low-income households6. For-sale developments must provide BMR units affordable to
median- and moderate-income households.7
• Small residential projects of less than seven units can pay the housing mitigation fee
or provide one BMR unit. The housing mitigation fees are based on the 2015 Nexus
Study, and are currently set at $17.82 per square feet for detached single family,
$19.60 per square feet for small lot single family/townhomes, $23.76 for attached
multifamily residences (ownership and rental), and $11.88 per square foot for
commercial/retail uses.
• The BMR program uses income limits published annually by the California Department
of Housing and Community Development (HCD) for Santa Clara County, per household
size. For some income categories, the income targets for pricing BMR units are slightly
different from household income limits that determine eligibility. Maximum BMR sales
and rent prices are determined by the City and its BMR program administrator, Hello
Housing, based on the maximum affordable housing cost provisions of Section
50052.5 of the California Health and Safety Code, Section 6920 of the California Code
of Regulations, and most recent published HCD income limits. The household income
limits for BMR eligibility as well as the income targets for pricing BMR units are shown
in Figure 2.
FIGURE 2: CITY OF CUPERTINO BMR INCOME LIMITS AND INCOME TARGET FOR PRICING BMR UNITS
Household Income
Limits
Income Target for
Pricing BMR Units
Ownership
Median 100% AMI 90% AMI
Moderate 120% AMI 110% Ami
Rental
Extremely Low 30% AMI 30% AMI
Very Low 50% AMI 50% AMI
Low 80% AMI 60% AMI
Sources City of Cupertino Housing Element; City of Cupertino Housing Mitigation Program Procedural Manual.
The inclusionary housing scenarios tested in this analysis reflect the range of policy options under
consideration by the City for ownership and rental development. They are summarized below and
shown in Figure 3 and Figure 4.
6 Rental BMR policy states that 40% of affordable units must be set aside for low income, and 60% for very low-income units.
7 For-Sale BMR policy states that half of affordable units must be set aside for median income households, and half for moderate income
households.
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OWNERSHIP DEVELOPMENT
Strategic Economics tested the economic feasibility of the development of ownership housing (single-
family, townhouse, and condominium prototypes) under five different inclusionary scenarios:
• Scenario 0 (No Requirements): This scenario assumes that the project is 100% market-
rate, with no affordable units and no in-lieu fees required.
• Scenario 1 (Existing Policy): This scenario mirrors the City’s existing inclusionary
housing requirement. The development projects must provide 15% of the units at
prices affordable to median- (100% AMI) and moderate-income households (120%
AMI).
• Scenario 2 (20% Inclusionary): This scenario requires new ownership projects to
include at least 20% BMR units, targeting median and moderate-income households.
• Scenario 3 (25% Inclusionary): This scenario requires new ownership projects to
include at least 25% BMR units, targeting median and moderate-income households.
• Scenario 4 (In-Lieu Fees): This scenario assumes that the development is required to
pay in-lieu fees instead of providing affordable units on-site.
These scenarios are summarized in Figure 3 below.
FIGURE 3: INCLUSIONARY HOUSING SCENARIOS TESTED FOR OWNERSHIP PROTOTYPES (DETACHED SINGLE-FAMILY
PROTOTYPE 1, SMALL LOT/TOWNHOUSE PROTOTYPE 2, AND CONDOMINIUM PROTOTYPE 3)
Inclusionary Housing
Scenarios
% of Units at BMR
Prices
Income Targets for BMR
Units*
In-Lieu Fee Payment
Scenario 0 (No Requirements) 0% N/A No
Scenario 1 (Existing Policy) 15% 8% of units at 90% AMI
7% of units for 110% AMI
No
Scenario 2 (20% Inclusionary) 20% 10% of units at 90% AMI
10% of units at 110% AMI
No
Scenario 3 (25% Inclusionary) 25% 13% of units at 90% AMI
12% of units at 110% AMI
No
Scenario 4 (In-Lieu Fees) 0 N/A Yes
*Per the City of Cupertino Housing Mitigation Program Procedural Manual, the maximum sales price for median income BMR units is
set at 90% AMI. The maximum sales price for moderate income BMR units is set at 110% AMI.
Sources: City of Cupertino Housing Mitigation Program Procedural Manual, 2018; Strategic Economics, 2018.
RENTAL DEVELOPMENT
Strategic Economics tested the economic feasibility of the development of ownership housing (single-
family, townhouse, and condominium prototypes) under five different inclusionary scenarios:
• Scenario 0 (No Requirements): This scenario assumes that the project is 100% market-
rate, with no affordable units and no in-lieu fees required.
• Scenario 1 (Existing Policy): This scenario mirrors the City’s existing inclusionary
housing requirement. The development projects must provide 15% of the units at
prices affordable to low-income (80% AMI) and very low-income households (50% AMI).
• Scenario 2 (20% Inclusionary): This scenario requires new ownership projects to
include at least 20% BMR units, targeting median and moderate-income households.
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• Scenario 3 (25% Inclusionary): This scenario has a higher inclusionary requirement of
25% and targets lower income groups. The income targets include low-income (80%
AMI), very low-income (50% AMI), and extremely low-income households (30% AMI).
• Scenario 4 (In-Lieu Fees): This scenario assumes that the development is required to
pay in-lieu fees instead of providing affordable units on-site.
These scenarios are summarized in Figure 4 below.
FIGURE 4: INCLUSIONARY HOUSING SCENARIOS TESTED FOR RENTAL PROTOTYPES (LOWER DENSITY RENTAL
PROTOTYPE 4 AND HIGHER DENSITY RENTAL PROTOTYPE 5)
Inclusionary Housing Scenarios % of Units at BMR Rents Income Targets for BMR
Units*
In-Lieu Fee Payment
Scenario 0 (No Requirements) 0% N/A No
Scenario 1 (Existing Policy) 15% 9% of units at 50% AMI
6% of units at 60% AMI
No
Scenario 2 (20% Inclusionary) 20% 10% of units at 50% AMI
10% of units at 60% AMI
No
Scenario 3 (25% Inclusionary) 25% 10% of units at 50% AMI
10% of units at 60% AMI
5% of units at 30% AMI
No
Scenario 4 (In-Lieu Fees) 0 N/A Yes
*Per City policy, pricing for low-income BMR units is set at 60% AMI.
Sources: City of Cupertino Housing Mitigation Program Procedural Manual, 2018; Strategic Economics, 2018.
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Financial Feasibility Methodology
This section describes the method used to measure financial feasibility and the major cost and
revenue assumptions underlying the analysis. Additional information is provided in the Appendix.
MEASURING FINANCIAL FEASIBILITY
The financial feasibility of each prototype is measured using a static pro forma model that solves for
the profit to the developer. A pro forma model is a tool that is commonly used to estimate whether a
project is likely to be profitable. For a policy analysis like this one, we use development prototypes to
represent typical projects. However, it is important to note that individual development projects may
be less or more profitable than these prototypes, depending on the specifics of the development
program, development costs (construction and land), sources of financing, and other factors.
Furthermore, because it is a static model reflecting today’s market conditions, the pro forma analysis
does not factor in changes in prices/rents, construction costs, or financing.
For the purposes of measuring financial feasibility in this analysis, developer profit was measured by
using one of two metrics:
• Return on cost (ROC) for ownership housing. ROC is a common measure of project profitability
for residential ownership development. The pro forma model tallies all development costs,
including land costs, hard costs (construction costs), soft costs, and financing costs. The pro
forma also tallies the project’s total value. The project’s total value is the sum of (1) the
estimated value of the condominiums or townhomes (i.e. the average per unit sale price
multiplied by the number of units), and (2) if applicable, the capitalized value of retail. The
project’s ROC is then calculated by dividing the project’s net revenue (i.e. total value minus
total development costs), by total development costs.
• Yield on cost (YOC) for rental housing. YOC is a common measure of profitability for income-
generating projects, such as residential rental development. The pro forma model tallies all
development costs (land costs, hard costs, soft costs, and financing costs). The pro forma also
estimates total revenues: the project’s net annual operating income is the stabilized income
from the property (i.e. rental income generated from both the residential and retail uses),
minus operating expenses and an allowance for vacancy. The YOC is estimated by dividing the
total annual net operating income by total development costs.
RETURN THRESHOLDS
To understand the potential impact of inclusionary requirements on financial feasibility, the ROC and
YOC results for each prototype and inclusionary housing scenario are compared to developers’ typical
expectation of return. These return thresholds are summarized in Figure 5 and discussed below:
• For the Single-Family Detached Prototype 1, the minimum ROC threshold ranges between 10
to 15%, based on developer interviews for new single-family development in Cupertino.
• For the Small Lot Single-Family/Townhouse Prototype 2 and the Condominium Prototype 3,
the minimum ROC threshold ranges between 18 to 20%, based on a review of pro forma
models for new multifamily ownership projects in Santa Clara County.
• For the Lower Density Apartment Prototype 4 and the Higher Density Apartment Prototype 5,
the minimum YOC threshold ranges between 4.75% and 5.25%. According to the developers
interviewed for this study, and a review of recent development project pro formas in the Silicon
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Valley, the minimum YOC for a new multi-family development project should usually be 1.0 to
1.5 points higher than the published capitalization rate (cap rate). The current cap rate for
multifamily properties in the San José Metropolitan Area is between 3.75 to 4.25%.8 The cap
rate, measured by dividing the net operating income generated by a property by the total
project value, is a commonly used metric to estimate the value of an asset. Cap rates rise and
fall along with interest rates. In a climate of rising interest rates, it is important to set the
expectations of YOC at a conservative level, to allow for a margin between the cap rate and the
rate of return. It is also important to consider that investors consider a wide range of factors
to determine if a development project makes financial sense, and some investors may have
different levels of risk tolerance than others.
FIGURE 5: MINIMUM RETURN THRESHOLDS BY PROTOTYPE
Return on Cost Thresholds
Prototype 1: Detached Single Family 10-15%
Prototype 2: Small Lot/Townhomes 18-20%
Prototype 3: Condominiums 18-20%
Yield on Cost Thresholds
Prototype 4: Lower-Density Rental Apartments 4.75-5.25%
Prototype 5: Higher-Density Rental Apartments 4.75-5.25%
Source: Developer interviews and a review of recent project pro formas, 2018; Strategic Economics, 2018.
REVENUE ASSUMPTIONS
MARKET RATE RESIDENTIAL
There is significant pent-up housing demand in Santa Clara County and the broader Bay Area region,
as housing development has not kept up with employment growth. Between 2009 and 2015, Santa
Clara County added over 170,000 new jobs between 2010 and 2015, but only 29,000 new housing
units.9 Apartment rents accelerated beginning in 2011, as the economy emerged from the Great
Recession, and continued growing at an average annual rate of nearly eight percent until 2015. Since
then rents have continued to grow at a slower pace of about four percent.
Sales prices in Cupertino and Santa Clara County have been escalating at a rapid rate over the last
five years. In Cupertino, the median sales price for a single-family home increased from $1.68 million
in 2014 to $2.37 million in 2018. 10 Similarly, the median sales price for a condominium climbed from
$895,500 in 2014 to $1.4 million in 2018.11
The market-rate sale prices and rents assumed for each prototype are summarized in Figure 6. The
values are calculated as a weighted average to reflect that different types of units have different unit
8 CBRE Investor’s Cap Rate Survey (H1, 2018).
9 SPUR, “Room for More: Housing Agenda for San José,” August 2017.
10 Santa Clara County Association of Realtors, 2014 and 2018.
https://www.sccaor.com/pdf/stats/2014.pdf
https://www.sccaor.com/pdf/stats/2018.pdf.
11 Ibid
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values. For new single-family detached development (Prototype 1), sale prices were based on sales of
newly built single-family homes in Cupertino as reported by Redfin. Sales prices for small lot single-
family/townhomes (Prototype 2) and condominium projects (Prototype 3) were based on recent re-
sales in Cupertino as reported by Redfin. The Appendix to this report (Figures A-1 through A-3) includes
detailed information on the project comparables used to inform these estimates.
Because of the lack of recently built apartment projects in Cupertino, the rental rate estimates for
rental units (Prototypes 4 and 5) were based on developer interviews and a review of recently built,
comparable apartment projects in Cupertino and neighboring cities (Mountain View, Sunnyvale,
Campbell, and Santa Clara), as reported by Costar. Since Cupertino’s apartment buildings command
higher rents than in the other cities, a 5% premium was applied over the market area’s weighted
average. Figure A-4 in the Appendix includes detailed information on the project comparables used to
inform these estimates.
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FIGURE 6: MARKET RATE RESIDENTIAL SALE PRICES AND MONTHLY RENTS, BY PROTOTYPE
Unit Mix
Unit Size (Sq.
Ft.)
Sale Price
Per Sq. Ft.
Sale Price
Per Unit
Prototype 1: Single Family
5-BD 100% 3,700 $946 $3,500,200
Prototype 2: Small Lots/Townhomes
3-BD 100% 1,850 $970 $1,794,500
Prototype 3: Condominiums
2-BD 50% 1,350 $1,100 $1,485,000
3-BD 50% 1,600 $1,000 $1,600,000
Weighted Average Unit Size/Sale Price 1,475 $1,050 $1,542,500
Prototype 4: Lower-Density Rental
Studios 10% 680 $4.94 $3,360
1-BD 45% 800 $4.73 $3,780
2-BD 40% 1,100 $4.30 $4,725
3-BD 5% 1,400 $4.13 $5,775
Weighted Average Unit Size/Monthly Rent 938 $4.54 $4,216
Prototype 5: Higher-Density Rental
Studios 10% 680 $4.94 $3,360
1-BD 45% 800 $4.73 $3,780
2-BD 40% 1,100 $4.30 $4,725
3-BD 5% 1,400 $4.13 $5,775
Weighted Average Unit Size/Monthly Rent $4.54 $4,216
Source: Strategic Economics, 2018.
The total value of market-rate units is summarized in Figure 7. For the ownership prototypes
(Prototypes 1, 2, and 3), the total project value is obtained by multiplying the per unit sale price by the
total number of units. For the rental prototypes (Prototypes 4 and 5), an income capitalization
approach is used. This approach first estimates the annual net operating income (NOI) of the
prototype, which is the difference between project income (annual rents) and project expenses
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(operating costs and vacancies). The NOI is then divided by the current cap rate to derive total project
value.12
FIGURE 7. MARKET RATE RESIDENTIAL VALUE CALCULATION, BY PROTOTYPE
Prototype 1 Prototype 2 Prototype 3 Prototype 4 Prototype 5
Detached
Single Family
Small Lot
Single
Family/
Townhome
Condo
Lower
Density
Rental
Apartments
Higher
Density
Rental
Apartments
Weighted Average Monthly
Rent (a) per unit n/a n/a n/a $4,216 $4,216
Annual Rent per unit n/a n/a n/a $50,589 $50,589
Vacancy Allowance n/a n/a n/a 5.00% 5.00%
Operating Expenses % gross
revenue n/a n/a n/a 30.00% 30.00%
Annual Net Operating Income per unit n/a n/a n/a $32,883 $32,883
Capitalization Rate (b) n/a n/a n/a 4.25% 4.25%
Sales Value/Capitalized Value per unit $3,500,200 $1,794,500 $1,542,500 $773,714 $773,714
Total Units 7 50 100 100 100
Total Residential Value (c) total
project $24,501,400 $89,725,000 $154,250,000 $77,371,412 $77,371,412
(a) See Figure 5 for details on how the per unit sale price was derived.
(b) CBRE, H1 2018 Cap Rate Survey. Cap rates for the San José Metropolitan Area were between 3.75% and 4.25% for infill
multifamily Class A.
(c) Assuming all units are market rate. Total residential value is calculated by multiplying the per unit sales value/capitalized value
(which is a weighted average) by the total number of units.
Sources: CBRE, 2018; CoStar, 2018; Strategic Economics, 2018.
BELOW MARKET RATE HOUSING
BMR residential values at different AMI levels are summarized in Figure 8. Maximum sales prices and
rents were provided by Hello Housing, the City’s BMR program administrator. Sales prices and rents
for BMR units were calculated using the method and parameters established in the City’s Policy and
Procedures Manual for Administering Deed Restricted Affordable Housing Units (“BMR Manual”).13
An income capitalization approach is also applied to BMR units to derive total residential value.
12 As mentioned above, the CBRE Investor’s Cap Rate Survey (H1, 2018) estimates the cap rate for infill multifamily Class A in San José
Metro Area to range from 3.75 to 4.25%.
13 Maximum sales price calculations incorporate a 10% down payment, as well as an interest rate based on a 10-year rolling average for 30-
year fixed-rate mortgages, according to data from Freddie Mac. Resale prices for existing BMR units are determined by the City. Annual
housing costs associated with BMR rental units, including rent, utility costs, parking fees, and other costs, may not in sum exceed 30% of
the annual income associated with the income target for which the unit is designated.
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FIGURE 8. BELOW MARKET RATE RESIDENTIAL VALUES, BY PROTOTYPE AND AMI LEVEL
Prototype 1 Prototype 2 Prototype 3 Prototype 4 Prototype 5
Income Target for Pricing
BMR Units
Detached
Single Family
Small Lot
Single Family/
Townhomes
Condominium
Lower Density
Rental
Apartments
Higher Density
Rental
Apartments
30% AMI (Extremely Low) n/a n/a n/a $116,806 $116,806
50% AMI (Very Low) n/a n/a n/a $211,968 $211,968
60% AMI (Low)* n/a n/a n/a $260,224 $260,224
90% AMI (Median)* $483,270 $344,879 $322,981 n/a n/a
110% AMI (Moderate)* $612,662 $462,872 $435,374 n/a n/a
*Per policy, the maximum price for BMR units for low income is set at 60% AMI, median income at 90% AMI, and moderate income
at 110% AMI.
Note: All values are weighted averages, according to each prototype’s unit mix. Affordable sale prices and rents were provided by the
City of Cupertino and Hello Housing, based on 2018 Santa Clara County income and rent limits, published by the California Tax Credit
Allocation Committee, and the 2018 Santa Clara County maximum utility allowance, published by HUD.
RETAIL COMMERCIAL
Retail lease assumptions were developed from Costar listings for comparable ground floor retail
spaces in Cupertino, with capitalization rates reported by CBRE for the San José Metro Area. The
annual net operating income and capitalized value were calculated based on the assumptions shown
in Figure 9.
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FIGURE 9. RETAIL REVENUE ASSUMPTIONS AND CAPITALIZED VALUE
Unit New Retail (NNN)
Assumptions
Monthly Rent, Triple Net (a) Per SF $4.25
Vacancy Percent 10%
Operating Expenses Percent Pass through
Capitalization Rate Percent 7.00%
Capitalized Value
Gross Annual Retail Income Per SF $51.00
Less Retail Vacancy Per SF -$5.10
Less Operating Expenses Per SF $0.00
Annual Net Operating Income Per SF $45.90
Capitalized Value Per SF $655.71
(a) Based on recent lease transactions in Cupertino for recently constructed ground-floor retail. Under a triple net
lease (NNN) the tenant pays operating expenses, including real estate taxes, building insurance, and
maintenance (the three "nets") on the property in addition to the rents.
(b) Based on the CBRE H1 2018 Cap Rate Survey. Cap rates for the San José Metropolitan Area were between
4.5% to 5.5% for (Class A) and 6.25% to 7.25% (Class B) for Neighborhood Retail.
Source: CBRE, 2018; Costar, 2018; Strategic Economics, 2018.
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DEVELOPMENT COSTS
The development costs incorporated into the pro forma analysis include land costs, hard costs
(construction materials and labor), soft costs, and financing costs. Cost assumptions are summarized
in Figure 10 and described below.
LAND COSTS
A critical factor for development feasibility is the cost of land. To determine the market value of sites
zoned for residential use in Cupertino, Strategic Economics interviewed developers and reviewed
recent pro formas for similar development projects in Cupertino and nearby communities. Recognizing
that one of the key factors that drives the value of the site is the permitted density, this analysis
assumes that sites zoned for single family detached homes are valued at $9 million per acre ($207
per square foot), while sites zoned for higher-density housing are valued at $10 million per acre ($230
per square foot).
Note that these values are approximations for the purposes of the feasibility analysis; in reality, the
value of any particular site is likely to vary based on its location, amenities, and property owner
expectations.
HARD COSTS
Hard costs are based on Strategic Economics’ review of pro formas for similar development projects,
as well as interviews with developers active in Cupertino and surrounding cities. The assumptions for
hard costs, shown in Figure 10, include estimates for basic site improvements and construction costs
for residential areas, retail areas, and parking structures.
It should be noted that construction costs have been escalating rapidly in the Bay Area in the last
several years14; project feasibility is highly sensitive to changes in construction cost assumptions.
SOFT COSTS AND FINANCING COSTS
Soft costs include items such as architectural fees, engineering fees, insurance, taxes, legal fees,
accounting fees, marketing costs, developer overhead, and city fees, as shown in Figure 10. City fees
and other development impact fees were calculated for the individual prototypes based on data
provided by City staff. Detailed fee calculations are shown in Figure 21. Other soft costs were estimated
based on standard industry ratios, calculated as a percentage of hard costs.
14 Terner Center for Housing Innovation, UC Berkeley. Understanding the Drivers of Rising Construction Costs in California (Ongoing
Research), https://ternercenter.berkeley.edu/construction-costs.
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FIGURE 10: DEVELOPMENT COST ASSUMPTIONS
Metric Estimate
Land Costs
Land zoned for single-family per site acre $9 million
Land zoned for townhomes/multi-family/mixed-use per site acre $10 million
Hard Costs
Site Costs (demo, infrastructure, etc.) per site sq. ft. $30
Residential Area
Single Family (includes 2-car garage) per gross sq. ft. $95
Townhomes (includes 2-car garage) per gross sq. ft. $150
Stacked condominiums (Type V) per gross sq. ft. $275
Stacked apartments (Type V) per gross sq. ft. $235
Higher density apartments (Type 3 modified) per gross sq. ft. $300
Retail Area (Including T.I) per gross retail sq. ft. $130
Surface parking per space $10,000
Podium parking per space $35,000
Soft Costs
Architectural, Engineering, Consulting % of hard costs 6%
Taxes, Insurance, Legal, Accounting % of hard costs 3%
Other % of hard costs 3%
Contingency % of hard costs 5%
Developer Overhead and Fees % of hard costs 4%
City Permits and Fees (a)
Prototype 1 per unit $153,022
Prototype 2 per unit $83,463
Prototype 3 per unit $67,755
Prototype 4 per unit $65,949
Prototype 5 per unit $67,241
Financing Costs
Financing % of hard and soft costs 6%
(a) Includes City fees and permits, school district fees, and sanitation district fees paid on the residential and retail component of
each prototype for market rate units. Includes housing mitigation fee for the retail component.
Sources: Developer interviews, 2018; City of Cupertino, 2018; Cupertino School District and Fremont High School District, 2018;
Strategic Economics, 2018.
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Key Results
This section summarizes the findings of the financial feasibility analysis under different inclusionary
housing scenarios for each prototype. Figure 11 and Figure 12 demonstrate the return obtained by
each prototype, compared to the minimum threshold for feasibility. Figure 21 shows development
costs by type and detailed City fees. Figure 22 through Figure 26 provide the pro forma results for each
prototype.
Ownership residential development can feasibly support higher inclusionary requirements than rental
development. While growth in apartment rents has reportedly started to plateau in Santa Clara County
in the last year, ownership prices (including condominium prices) continue to increase, making it
generally more feasible to build ownership projects.15
Detached single-family development (Prototype 1) can support an inclusionary requirement of 15%,
20%, or the payment of Housing Mitigation Fees. As shown in Figure 11, the single-family detached
Prototype 1 shows positive project revenues for Scenarios 1, 2, and 4, achieving a return on cost (ROC)
well above the minimum threshold of 10%. Recent sales prices of newly constructed single-family
homes in Cupertino are sufficient to offset development costs as well as support inclusionary
requirements or the payment of Housing Mitigation Fees. However, the single-family detached
prototype cannot support an inclusionary requirement of 25% (Scenario 3), which generates a return
of less than 1%. Figure 22 provides more detailed pro forma results for this prototype.
Small lot/townhome development (Prototype 2) can also support all inclusionary requirement of 15%,
20%, or the payment of Housing Mitigation Fees. As shown in Figure 11, Prototype 2 shows positive
project revenues for Scenarios 1, 2, and 4, achieving a return exceeding the minimum threshold of
15% required for feasibility. Although there has been limited townhome construction in recent years
in Cupertino, recent townhome re-sales suggest that prices for new construction would generate
sufficient revenues to offset development costs as well as support any inclusionary requirement or the
payment of Housing Mitigation Fees. Figure 23 provides more detailed pro forma results for this
prototype.
A mixed-use condominium prototype (Prototype 3) can support inclusionary requirements of 15%,
20%, or the payment of Housing Mitigation Fees. As shown in Figure 11, Prototype 3 shows positive
project revenues for Scenarios 1, 2, and 4, achieving a return well above the minimum threshold of
15%. Despite the lack of recent condominium construction in Cupertino, condominium re-sales
suggest that prices for new construction would support any of the scenarios that impose an
inclusionary requirement or the payment of in-lieu fees. Figure 24 provides more detailed pro forma
results for this prototype.
The lower density mixed-use apartment prototype (Prototype 4) is nearly feasible as a 100% market-
rate project. Without any BMR requirements, the lower density rental prototype achieves a yield on
cost of 4.5%, below the minimum requirement of 4.75%, as shown in Figure 12. The lower density
rental prototype does not generate sufficient revenues to support inclusionary requirements or in-lieu
fees under current rents and costs. Figure 25 provides the pro forma for this prototype.
15 Mercury News, Louis Hansen, May 16, 2018. Bay Area condo market heats up as alternative to pricey homes.
https://www.mercurynews.com/2018/05/16/bay-area-condo-market-heats-up-as-alternative-to-pricier-homes/
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The higher density rental multifamily prototype (Prototype 5) can support Housing Mitigation Fee
payments (Scenario 4) but cannot feasibly provide inclusionary BMR units under current market rents,
construction costs, and land costs. Prototype 5 achieves a higher YOC than Prototype 4, largely due to
the greater efficiencies of a higher density project, and is financially feasible in Scenario 1 and
Scenario 4 (see Figure 12). Figure 26 provides more detailed pro forma results.
The lower density mixed-use apartment prototype (Prototype 4) can feasibly provide up to 15%
inclusionary BMR units if it could command 15% higher revenues or if construction and land costs
were reduced by 15%. If a lower density rental project were able to achieve higher revenues (15%
higher) on the apartment units and on the ground-floor retail space, as shown in Figure 13 and Figure
14, the project could feasibly accommodate an inclusionary requirement of 15% BMR units.
Alternatively, if a development project were able to secure a construction bid and purchase a site that
reduced these costs by 15%, the lower density mixed-use apartment prototype could feasibly provide
15% inclusionary BMR units (see Figure 15 and Figure 16).
The higher density mixed-use apartment prototype (Prototype 5) can feasibly provide inclusionary BMR
units if it can command 10% higher revenues or if construction and land costs were reduced by 5%. If
a higher density rental project can achieve 10% higher rents on the apartments and retail space, the
project can feasibly accommodate an inclusionary requirement of 15% BMR units (see Figure 17 and
Figure 18). In another scenario, if a higher density mixed-use apartment could secure a construction
bid and site that is 5% less expensive, this prototype could also feasibly provide 15% inclusionary BMR
units (see Figure 19 and Figure 20).
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FIGURE 11: RETURN ON COST FOR OWNERSHIP PROTOTYPES BY INCLUSIONARY HOUSING SCENARIO
Inclusionary Housing Scenarios
Prototype 1: Prototype 2: Prototype 3:
Single Family
Detached
Small Lot
SF/Townhouse Condominiums
Minimum Required Return 10-15% 18-20% 18-20%
Scenario 0 (No Requirements) 31% 41% 38%
Scenario 1 (Existing Policy) 15% 26% 23%
Scenario 2 (20% Inclusionary) 14% 21% 19%
Scenario 3 (25% Inclusionary) 1% 16% 14%
Scenario 4 (In-Lieu Fees) 28% 37% 33%
Source: Strategic Economics, 2019.
FIGURE 12: YIELD ON COST UNDER DIFFERENT INCLUSIONARY HOUSING SCENARIOS FOR MULTI-FAMILY RENTAL
PROTOTYPES 4 AND 5
Inclusionary Housing Scenarios
Prototype 4: Prototype 5:
Lower Density Rental Higher Density Rental
Minimum Required Yield on Cost 4.75%-5.25% 4.75%-5.25%
Scenario 0 (No Requirements) 4.52% 4.93%
Scenario 1 (15% Inclusionary) 4.22% 4.63%
Scenario 2 (20% Inclusionary) 4.10% 4.50%
Scenario 3 (25% Inclusionary) 3.94% 4.34%
Scenario 4 (In Lieu Fees) 4.40% 4.76%
Source: Strategic Economics, 2019.
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FIGURE 13: YIELD ON COST UNDER DIFFERENT REVENUE ASSUMPTIONS FOR LOWER DENSITY MULTI-FAMILY RENTAL
(PROTOTYPE 4) WITH 15% BMR REQUIREMENT
Revenue Assumptions
Monthly Market
Rate Apt. Rent
per Unit
Monthly
Retail Rent
per SF
Yield on
Cost
Feasibility
Results
Current Apartment and Retail Rents $4,216 $4.25 4.22% Not Feasible
Increased Rents (15% Higher Revenues) $4,848 $4.89 4.82% Feasible
Source: Strategic Economics, 2019.
FIGURE 14: FEASIBILITY OF LOWER DENSITY MULTI-FAMILY RENTAL PROTOTYPE (PROTOTYPE 4) WITH 15%
INCLUSIONARY BMR REQUIREMENT AND INCREASED REVENUES
Source: Strategic Economics, 2019.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
Current Apartment and Retail Rents Increased Rents (15% Higher
Apartment and Retail Revenues)Profit (Yield on Cost) Minimum Threshold for Feasibility of 4.75%
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FIGURE 15: YIELD ON COST UNDER DIFFERENT COST ASSUMPTIONS FOR LOWER DENSITY MULTI-FAMILY RENTAL
(PROTOTYPE 4) WITH 15% BMR REQUIREMENT
Cost Assumptions
Construction Cost
per Unit
Land Cost
per Unit Yield on Cost
Feasibility
Results
Current Costs $385,958 $250,000 4.22% Not Feasible
Reduced Costs (15% Lower Costs) $328,064 $212,500 4.90% Feasible
Source: Strategic Economics, 2019.
FIGURE 16: FEASIBILITY RESULTS OF LOWER DENSITY MULTI-FAMILY RENTAL PROTOTYPE (PROTOTYPE 4) WITH 15%
INCLUSIONARY BMR REQUIREMENT AND LOWER COSTS
Source: Strategic Economics, 2019.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
Current Costs Reduced Costs (15% Lower Costs)Yield on CostMinimum Threshold for Feasibility of 4.75%
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FIGURE 17: YIELD ON COST UNDER DIFFERENT REVENUE ASSUMPTIONS FOR HIGHER DENSITY MULTI-FAMILY RENTAL
(PROTOTYPE 5) WITH 15% BMR REQUIREMENT
Revenue Assumptions
Monthly
Market Rate
Apt. Rent per
Unit
Monthly Retail
Rent per SF
Yield on
Cost
Feasibility
Results
Current Rents $4,216 $4.25 4.63% Not Feasible
Increased Rents (10% Higher Revenues) $4,637 $4.68 4.91% Feasible
Source: Strategic Economics, 2019.
FIGURE 18: FEASIBILITY RESULTS OF HIGHER DENSITY MULTI-FAMILY RENTAL PROTOTYPE (PROTOTYPE 5) WITH 15%
INCLUSIONARY BMR REQUIREMENT AND HIGHER REVENUES
Source: Strategic Economics, 2019.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
Current Rents Increased Rents (10% Higher
Apartment and Retail Revenues)Yield on Cost Minimum Threshold for Feasibility of 4.75%
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FIGURE 19: YIELD ON COST UNDER DIFFERENT COST ASSUMPTIONS FOR HIGHER DENSITY MULTI-FAMILY RENTAL
(PROTOTYPE 5) WITH 15% BMR REQUIREMENT
Cost Assumptions Construction Cost per Unit Land Cost per Unit Yield on Cost Feasibility Results
Current Costs $460,195 $131,579 4.63% Not Feasible
Reduced Costs (5% Lower Costs) $437,185 $125,000 4.85% Feasible
Source: Strategic Economics, 2019.
FIGURE 20: FEASIBILITY RESULTS OF HIGHER DENSITY MULTI-FAMILY RENTAL PROTOTYPE (PROTOTYPE 5) WITH 15%
INCLUSIONARY BMR REQUIREMENT AND LOWER COSTS
Source: Strategic Economics, 2019.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
Current Costs Reduced Costs (5% Lower)Yield on Cost Minimum Threshold for Feasibility of 4.75%
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FIGURE 21. DETAILED CALCULATION OF THE CITY OF CUPERTINO’S PERMITS AND FEES FOR EACH PROTOTYPE (PER UNIT)
Prototype 1 Prototype 2 Prototype 3 Prototype 4 Prototype 5
Detached Single
Family
Small Lot Single
Family/Townhome Condominium
Lower Density
Rental
Apartments
Higher Density
Rental
Apartments
Planning Fees
Planning Applications $9,210 $1,289 $645 $400 $400
CEQA $3,571 $2,447 $1,223 $1,223 $1,223
Consultant Review $2,111 $296 $148 $148 $148
Housing Mitigation Fee (Non-residential only) $0 $0 $1,188 $1,188 $1,782
Public Works Fees
Transportation Impact Fee $6,177 $3,380 $4,374 $4,374 $4,871
Grading $420 $59 $29 $29 $29
Tract Map $1,350 $189 $94 $94 $94
Plan Check and Inspection $543 $76 $38 $38 $38
Storm Drain Fees $4,902 $501 $367 $354 $312
Parkland Dedication (a) $105,000 $60,000 $54,000 $54,000 $54,000
Building Division Fees
Building Fees $11,428 $10,592 $1,664 $1,133 $1,199
Construction Tax $752 $752 $1,075 $1,075 $1,237
Other Fees
School District Fees (b) $7,012 $3,506 $2,826 $1,808 $1,823
Sanitary Sewer District Connection Permit Fee $350 $350 $70 $70 $70
Stormwater Management Fee $197 $28 $14 $14 $14
Estimated City Fees, Total Per Unit $153,022 $83,463 $67,755 $65,949 $67,241
(a) Parkland dedication fees waived for affordable units.
(b) Based on the average of Cupertino School District and Fremont Union High School District school fees.
Sources: City of Cupertino, 2018; Fremont Union School District; Cupertino School District; Cupertino Sanitary Sewer District, 2018.
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FIGURE 22: FINANCIAL FEASIBILITY RESULTS FOR SINGLE-FAMILY DETACHED PROTOTYPE 1
Scenario 0
(No BMR Req.)
Scenario 1
(15% On-Site)
Scenario 2
(20% On-Site)
Scenario 3
(25% On-Site)
Scenario 4
(In-Lieu Fees)
Total Units 7 7 7 7 7
Market Rate Units 7 6 6 5 7
Affordable Units 0 1 1 2 0
Fractional Units 0 0.05 0.4 0 0
Revenues
Residential Capitalized Value $24,501,400 $21,484,470 $21,484,470 $18,596,932 $24,501,400
Per Unit $3,500,200 $3,069,210 $3,069,210 $2,656,705 $3,500,200
Development Costs
Land Costs
Land Costs $14,000,000 $14,000,000 $14,000,000 $14,000,000 $14,000,000
Per Unit $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
Direct Costs
Gross Residential Area (a) $2,775,564 $2,775,564 $2,775,564 $2,775,564 $2,775,564
Subtotal Direct Costs $2,775,564 $2,775,564 $2,775,564 $2,775,564 $2,775,564
Per Unit $396,509 $396,509 $396,509 $396,509 $396,509
Per Gross Sq. Ft. $95 $95 $95 $95 $95
Indirect Costs
City Fees (b) $1,071,155 $991,537 $1,169,211 $861,155 $1,532,693
Other Soft Costs (c) $582,868 $582,868 $582,868 $582,868 $582,868
Per Unit $83,266.92 $83,266.92 $83,266.92 $83,266.92 $83,266.92
Subtotal Indirect Costs $1,654,023 $1,574,405 $1,752,079 $1,444,023 $2,115,561
Per Unit $236,289 $224,915 $250,297 $206,289 $302,223
Financing $265,775 $260,998 $271,659 $253,175 $293,468
Per Unit $37,968 $37,285 $38,808 $36,168 $41,924
Total Development Costs $18,695,363 $18,610,968 $18,799,302 $18,472,763 $19,184,593
Per Unit $2,670,766 $2,658,710 $2,685,615 $2,638,966 $2,740,656
Per Gross Sq. Ft. $640 $637 $643 $632 $657
Feasibility
Net Revenue (d) $5,806,037 $2,873,502 $2,685,168 $124,169 $5,316,807
Return on Cost (e) 31% 15% 14% 1% 28%
(a) Includes costs for site prep and 2-car parking garage
(b) Figure 14 shows detailed City fees. Includes fractional in-lieu housing mitigation fee for scenario 1 and 2. Parkland dedication fees waived for affordable units.
(c) Includes architectural fees, engineering fees, insurance, taxes, legal fees, accounting fees, marketing costs, and developer overhead
(d) Net revenue is the project total revenue minus total development costs. (d) Return on cost is the net revenue, divided by total development costs.
(e) Return on cost is the net revenue, divided by total development costs.
Source: Strategic Economics, 2018.
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FIGURE 23: FINANCIAL FEASIBILITY RESULTS FOR SMALL LOT SINGLE-FAMILY/TOWNHOUSE PROTOTYPE 2
Scenario 0
(No BMR Req.)
Scenario 1
(15% On-Site)
Scenario 2
(20% On-Site)
Scenario 3
(25% On-Site)
Scenario 4
(In-Lieu Fees)
Total Units 50 50 50 50 50
Market Rate Units 50 42 40 37 50
Affordable Units 0 8 10 13 0
Revenues
Residential Capitalized Value $89,725,000 $79,265,818 $75,818,755 $72,312,696 $89,725,000
Retail Capitalized Value $0 $0 $0 $0 $0
Total Capitalized Value $89,725,000 $79,265,818 $75,818,755 $72,312,696 $89,725,000
Per Unit $1,794,500 $1,585,316 $1,516,375 $1,446,254 $1,794,500
Development Costs
Land Costs
Land Costs $33,333,333 $33,333,333 $33,333,333 $33,333,333 $33,333,333
Per Unit $666,667 $666,667 $666,667 $666,667 $666,667
Direct Costs
Site Prep/Demo $4,356,000 $4,356,000 $4,356,000 $4,356,000 $4,356,000
Gross Residential Area (a) $15,651,677 $15,651,677 $15,651,677 $15,651,677 $15,651,677
Subtotal Direct Costs $20,007,677 $20,007,677 $20,007,677 $20,007,677 $20,007,677
Per Unit $400,154 $400,154 $400,154 $400,154 $400,154
Per Gross Sq. Ft. $192 $192 $192 $192 $192
Indirect Costs
City Fees (b) $4,173,154 $3,693,154 $3,573,154 $3,393,154 $5,986,154
Other Soft Costs (c) $4,201,612 $4,201,612 $4,201,612 $4,201,612 $4,201,612
Per Unit $84,032 $84,032 $84,032 $84,032 $84,032
Subtotal Indirect Costs $8,374,767 $7,894,767 $7,774,767 $7,594,767 $10,187,767
Per Unit $167,495 $157,895 $155,495 $151,895 $203,755
Financing $1,702,947 $1,674,147 $1,666,947 $1,656,147 $1,811,727
Per Unit $34,059 $33,483 $33,339 $33,123 $36,235
Total Development Costs $63,418,723 $62,909,923 $62,782,723 $62,591,923 $65,340,503
Per Unit $1,268,374 $1,258,198 $1,255,654 $1,251,838 $1,306,810
Per Gross Sq. Ft. $608 $603 $602 $600 $626
Feasibility
Net Revenue (d) $26,306,277 $16,355,895 $13,036,032 $9,720,772 $24,384,497
Return on Cost (e) 41% 26% 21% 16% 37%
(a) Includes 2-car parking garage
(b) Figure 14 shows applicable city fees. Only Scenario 4 pays in-lieu housing mitigation fees. Parkland dedication fees waived for affordable units.
(c) Includes architectural fees, engineering fees, insurance, taxes, legal fees, accounting fees, marketing costs, and developer overhead
(d) Net revenue is the project total revenue minus total development costs. (d) Return on cost is the net revenue, divided by total development costs.
(e) Return on cost is the net revenue, divided by total development costs.
Source: Strategic Economics, 2018.
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FIGURE 24: FINANCIAL FEASIBILITY RESULTS FOR CONDOMINIUM PROTOTYPE 3
Scenario 0
(No BMR Req.)
Scenario 1
(15% On-Site)
Scenario 2
(20% On-Site)
Scenario 3
(25% On-Site)
Scenario 4
(In-Lieu Fees)
Total Units 100 100 100 100 100
Market Rate Units 100 85 80 75 100
Affordable Units 0 15 20 25 0
Revenues
Residential Capitalized Value $154,250,000 $136,743,959 $130,983,540 $125,110,729 $154,250,000
Retail Capitalized Value $6,557,143 $6,557,143 $6,557,143 $6,557,143 $6,557,143
Total Capitalized Value $160,807,143 $143,301,101 $137,540,683 $131,667,871 $160,807,143
Per Unit $1,608,071 $1,433,011 $1,375,407 $1,316,679 $1,608,071
Development Costs
Land Costs
Land Costs $28,571,429 $28,571,429 $28,571,429 $28,571,429 $28,571,429
Per Unit $285,714 $285,714 $285,714 $285,714 $285,714
Direct Costs
Site Prep/Demo $3,733,714 $3,733,714 $3,733,714 $3,733,714 $3,733,714
Gross Residential Area $50,703,125 $50,703,125 $50,703,125 $50,703,125 $50,703,125
Gross Retail Area $1,300,000 $1,300,000 $1,300,000 $1,300,000 $1,300,000
Parking $7,560,000 $7,560,000 $7,560,000 $7,560,000 $7,560,000
Subtotal Direct Costs $63,296,839 $63,296,839 $63,296,839 $63,296,839 $63,296,839
Per Unit $632,968 $632,968 $632,968 $632,968 $632,968
Per Gross Sq. Ft. $343 $343 $343 $343 $343
Indirect Costs
City Fees (a) $6,775,479 $5,965,479 $5,695,479 $5,425,479 $10,398,879
Other Soft Costs (b) $13,292,336 $13,292,336 $13,292,336 $13,292,336 $13,292,336
Per Unit $132,923 $132,923 $132,923 $132,923 $132,923
Subtotal Indirect Costs $20,067,815 $19,257,815 $18,987,815 $18,717,815 $23,572,415
Per Unit $200,678 $192,578 $189,878 $187,178 $235,724
Financing $5,001,879 $4,953,279 $4,937,079 $4,920,879 $5,212,155
Per Unit $50,019 $49,533 $49,371 $49,209 $52,122
Total Development Costs $116,937,963 $116,079,363 $115,793,163 $115,506,963 $120,652,839
Per Unit $1,169,380 $1,160,794 $1,157,932 $1,155,070 $1,206,528
Per Gross Sq. Ft. $634 $630 $628 $626 $654
Feasibility
Net Revenue (c) $43,869,180 $27,221,739 $21,747,520 $16,160,909 $40,154,304
Return on Cost (d) 38% 23% 19% 14% 33%
(a) Figure 14 shows detailed city fees. In-lieu housing mitigation fees apply to non-residential sq. ft. and Scenario 4. Parkland dedication fees waived for affordable units.
(b) Includes architectural fees, engineering fees, insurance, taxes, legal fees, accounting fees, marketing costs, and developer overhead.
(c) Net revenue is the project total revenue minus total development costs.
(d) Return on cost is the net revenue, divided by total development costs.
Source: Strategic Economics, 2018.
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FIGURE 25: FINANCIAL FEASIBILITY RESULTS FOR LOWER DENSITY RENTAL APARTMENTS PROTOTYPE 4
Scenario 0
(No BMR Req.)
Scenario 1
(15% On-Site)
Scenario 2
(20% On-Site)
Scenario 3
(25% On-Site)
Scenario 4
(In-Lieu Fees)
Total Units 100 100 100 100 100
Market Rate Units 100 85 80 75 100
Affordable Units 0 15 20 25 0
Revenues
Residential Net Operating Income $3,288,285 $2,942,477 $2,831,310 $2,691,717 $3,288,285
Retail Net Operating Income $459,000 $459,000 $459,000 $459,000 $459,000
Total Net Operating Income $3,747,285 $3,401,477 $3,290,310 $3,150,717 $3,747,285
Total Capitalized Value $83,928,555 $75,791,903 $73,176,197 $69,891,657 $83,928,555
Per Unit $839,286 $757,919 $731,762 $698,917 $839,286
Development Costs
Land Costs
Land Costs $25,000,000 $25,000,000 $25,000,000 $25,000,000 $25,000,000
Per Unit $250,000 $250,000 $250,000 $250,000 $250,000
Direct Costs
Site Prep/Demo $3,267,000 $3,267,000 $3,267,000 $3,267,000 $3,267,000
Gross Residential Area $27,553,750 $27,553,750 $27,553,750 $27,553,750 $27,553,750
Gross Retail Area $1,300,000 $1,300,000 $1,300,000 $1,300,000 $1,300,000
Parking $7,560,000 $6,475,000 $6,475,000 $6,475,000 $7,560,000
Subtotal Direct Costs $39,680,750 $38,595,750 $38,595,750 $38,595,750 $39,680,750
Per Unit $396,808 $385,958 $385,958 $385,958 $396,808
Per Gross Sq. Ft. $338 $329 $329 $329 $338
Indirect Costs
City Fees (a) $6,594,875 $5,784,875 $5,514,875 $5,244,875 $8,942,363
Other Soft Costs (b) $8,332,958 $8,105,108 $8,105,108 $8,105,108 $8,332,958
Per Unit $83,329.58 $81,051.08 $81,051.08 $81,051.08 $83,329.58
Subtotal Indirect Costs $14,927,832 $13,889,982 $13,619,982 $13,349,982 $17,156,520
Per Unit $149,278 $138,900 $136,200 $133,500 $171,565
Financing $3,276,515 $3,149,144 $3,132,944 $3,116,744 $3,410,236
Per Unit $32,765 $31,491 $31,329 $31,167 $34,102
Total Development Costs $82,885,097 $80,634,876 $80,348,676 $80,062,476 $85,247,506
Per Unit $828,851 $806,349 $803,487 $800,625 $852,475
Per Gross Sq. Ft. $707 $688 $685 $683 $727
Feasibility
Net Revenue (c) $1,043,457 ($4,842,973) ($7,172,479) ($10,170,819) ($1,318,952)
Yield on Cost (d) 4.5% 4.2% 4.1% 3.9% 4.4%
(a) Appendix shows detailed city fees. Excludes affordable housing mitigation in-lieu fee, except in Scenario 4. Parkland dedication fees waived for affordable units.
(b) Includes architectural fees, engineering fees, insurance, taxes, legal fees, accounting fees, marketing costs, and developer overhead.
(c) Net revenue is the project total revenue minus total development costs.
(d) Yield on cost is the total project net operating income divided by total development costs.
Source: Strategic Economics, 2018.
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FIGURE 26: FINANCIAL FEASIBILITY RESULTS FOR HIGHER DENSITY RENTAL APARTMENTS PROTOTYPE 5
Scenario 0
(No BMR Req.)
Scenario 1
(15% On-Site)
Scenario 2
(20% On-Site)
Scenario 3
(25% On-Site)
Scenario 4
(In-Lieu Fees)
Total Units 100 100 100 100 100
Market Rate Units 100 85 80 75 100
Affordable Units 0 15 20 25 0
Revenues
Residential Net Operating Income $3,288,285 $2,942,477 $2,831,310 $2,691,717 $3,288,285
Retail Net Operating Income $688,500 $688,500 $688,500 $688,500 $688,500
Total Net Operating Income $3,976,785 $3,630,977 $3,519,810 $3,380,217 $3,976,785
Total Capitalized Value $87,207,126 $79,070,475 $76,454,769 $73,170,229 $87,207,126
Per Unit $872,071 $790,705 $764,548 $731,702 $872,071
Development Costs
Land Costs
Land Costs $13,157,895 $13,157,895 $13,157,895 $13,157,895 $13,157,895
Per Unit $131,579 $131,579 $131,579 $131,579 $131,579
Direct Costs
Site Prep/Demo $1,719,474 $1,719,474 $1,719,474 $1,719,474 $1,719,474
Gross Residential Area $35,175,000 $35,175,000 $35,175,000 $35,175,000 $35,175,000
Gross Retail Area $1,950,000 $1,950,000 $1,950,000 $1,950,000 $1,950,000
Parking $8,190,000 $7,175,000 $7,175,000 $7,175,000 $8,190,000
Subtotal Direct Costs $47,034,474 $46,019,474 $46,019,474 $46,019,474 $47,034,474
Per Unit $470,345 $460,195 $460,195 $460,195 $470,345
Per Gross Sq. Ft. $401 $392 $392 $392 $401
Indirect Costs
City Fees (a) $6,724,069 $5,914,069 $5,644,069 $5,374,069 $9,688,129
Other Soft Costs (b) $9,877,239 $9,664,089 $9,664,089 $9,664,089 $9,877,239
Per Unit $98,772 $96,641 $96,641 $96,641 $98,772
Subtotal Indirect Costs $16,601,308 $15,578,158 $15,308,158 $15,038,158 $19,387,168
Per Unit $166,013 $155,782 $153,082 $150,382 $193,872
Financing $3,818,147 $3,695,858 $3,679,658 $3,663,458 $3,985,299
Per Unit $38,181 $36,959 $36,797 $36,635 $39,853
Total Development Costs $80,611,823 $78,451,384 $78,165,184 $77,878,984 $83,564,835
Per Unit $806,118 $784,514 $781,652 $778,790 $835,648
Per Gross Sq. Ft. $688 $669 $667 $664 $713
Feasibility
Net Revenue (c) $6,595,303 $619,090 ($1,710,416) ($4,708,755) $3,642,291
Yield on Cost (d) 4.9% 4.6% 4.5% 4.3% 4.8%
(a) Appendix shows detailed city fees. Excludes affordable housing mitigation in-lieu fee, except in Scenario 4. Parkland dedication fees waived for affordable units.
(b) Includes architectural fees, engineering fees, insurance, taxes, legal fees, accounting fees, marketing costs, and developer overhead.
(c) Net revenue is the project total revenue minus total development costs.
(d) Yield on cost is the total project net operating income divided by total development costs.
Source: Strategic Economics, 2018.
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Peer Cities
Strategic Economics researched BMR housing programs in peer cities, including: San Jose, Santa
Clara, Campbell, Mountain View, Sunnyvale, and Palo Alto. The key findings from the research are
explained below and summarized in Figure 27.
INCLUSIONARY REQUIREMENTS
As shown in Figure 27, all of the cities have inclusionary requirements for ownership housing. They are
typically set at 15%, with the exception of Mountain View and Sunnyvale, which have requirements of
10% and 12.5%, respectively. For rental housing, Palo Alto and Sunnyvale have a housing mitigation
fee, but no inclusionary requirements. However, both cities are considering revising their policies on
rental housing.
TARGET INCOME
For inclusionary requirements on ownership housing, all of the peer cities have targeted moderate-
income households, roughly defined as between 80 and 120% of AMI. For rental housing, the income
target is typically low-income (up to 80% AMI), although San Jose also targets very low-income
households (up to 50% AMI). Santa Clara has targeted moderate-income households for both
ownership and rental housing requirements.
Cities that charge housing mitigation fees on rental or ownership housing have set their fees based on
nexus studies that measure the affordable housing needs of very-low, low-, and moderate-income
households.
None of the peer cities have targeted extremely-low income households for their inclusionary
requirements. However, city staff from Sunnyvale and San Jose have indicated that they are providing
funding to develop housing for extremely-low income households through the revenues they have
collected from housing mitigation fees, in-lieu fees, and other housing funds. Local revenues are often
combined with Santa Clara County Measure A funds – which are specifically targeted to extremely-low
income households – as well as 9% and 4% Low Income Housing Tax Credits (LIHTC) and Section 8
vouchers from the Santa Clara County Housing Authority.
ALTERNATIVE MEANS OF COMPLIANCE
All of the cities prefer that units are built onsite, but they allow alternative means of complying with
inclusionary requirements. Developers can typically satisfy the requirement by providing units off-site,
paying in-lieu fees, or dedicating land for affordable housing. However, in some cases, the developer
must first demonstrate that the inclusionary requirement is not feasible. For example, the City of Palo
Alto requires that the applicant present “substantial evidence to support a finding of infeasibility” and
of “feasibility of any proposed alternative.” In other cities, like Mountain View, Sunnyvale, and Santa
Clara, developers must receive approval from the City Council for the alternative. In Sunnyvale and
San Jose, developers that pursue an alternative to the onsite inclusionary requirement must provide
a higher number of affordable units.
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FIGURE 27: INCLUSIONARY HOUSING REQUIREMENTS AND HOUSING MITIGATION FEES IN PEER CITIES
City
Inclusionary
Requirement Target Income for BMR Policy Housing Mitigation Fee/In Lieu Fees
Alternatives to compliance Ownership Rental Ownership Rental Ownership Rental
Cupertino 15% 15%
1/2 of BMR
units at
Median
(100% AMI)
and 1/2 of
BMR units at
Moderate
(120% AMI)*
60% of BMR
units at Very
Low (50%
AMI) and 40%
of BMR units
at Low (60%
AMI)
-Single family:
$17.82/sf
-Small lot single
family/Townhome:
$19.60/sf
-Multifamily
attached:
$23.76/sf
-Multifamily
Attached (up
to 35 du/ac):
$23.76/sf
-Multifamily
attached (over
35 du/ac):
$29.70/sf
Onsite units are preferred, but alternatives
may be possible with City Council approval.
These include: on-site BMR rental units
where ownership units or a fee is required;
purchase of off-site units to be
dedicated/rehabbed as for-sale or rental
BMR units; development of off-site units to
be dedicated as for-sale or rental BMR
units; land for development of affordable
housing. An Affordable Housing Plan is
required.
Mountain View 10% 15%
Moderate
(80 - 120%
AMI)
Low (50-80%
AMI)
In-lieu fee of 3% of
sales price
$34/sf
(applies to
fractional
units only)
Onsite units are preferred, but City Council
can approve other alternatives.
Sunnyvale 12.5% None
Moderate
(Below 120%
AMI)
Low (Below
80% AMI)
In-lieu fee of 7% of
sales price $17/sf
For ownership units, onsite units are
preferred. With Council approval,
developers may provide alternatives if they
result in a higher number of BMR units.
San Jose 15% 15%
Moderate
(Below 120%
AMI)
9% Mod (80%
AMI)
6% VLI (30-
50% AMI)
In-lieu fee of
$153,000 per unit.
$17.41/sf for
projects of 3
to 19 units in
size
Developers have the option of providing
units off-site or paying in-lieu fees, but the
affordable housing requirement is 20%,
and the target income is lower.
Santa Clara 15% 15%
Moderate
(Below 100%
AMI)
Moderate
(Below 100%
AMI)
$20-$30/sf,
depending on
housing type
Alternatives include dedication of land for
affordable housing, development of
affordable units at an off-site location, or
some combination thereof, with approval
from City Council through a Development
Agreement.
Campbell 15% 15%
Moderate
(Below 110%
AMI)
Low (Below
70% AMI)
$34.50/sf for
projects of 6 units
or less None
Developers can dedicate land or pay in lieu
fees.
Palo Alto 15% None
2/3 BMR
units at 80-
100% AMI
and 1/3 BMR
units at 100-
120% AMI
Mod (80-
120% AMI)
Low (50-80%
AMI)
VLI (30-50%
AMI)
$50-$75/sf
depending on
housing type $20/sf
Developers can dedicate land, pay in lieu
fees, provide rental units within the
ownership project, convert or rehabilitate
affordable housing units. They must first
demonstrate that the inclusionary
requirement is not feasible.
*Sales prices set at 110% for BMR moderate income unit and 90% for a BMR median income unit.
Source: Interviews with City staff, BMR housing ordinances, Strategic Economics,
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NON-RESIDENTIAL LINKAGE FEE
The City is considering updating non-residential fees, otherwise known as commercial linkage fees, on
new workplace buildings (office, R&D, hotel, and retail development projects). Linkage fees are used
to mitigate the impacts of an increase in affordable housing demand associated with a net increase
in worker households. as employees at new non-residential developments seek housing nearby. The
funds raised by the linkage fees are deposited into a housing fund specifically reserved for use by a
local jurisdiction to increase the supply of affordable housing for the workforce. Linkage fees are one
of several funding sources that jurisdictions can use to help meet affordable housing needs of new
workers.
The City first adopted linkage fees for office and R&D projects in 1992, and expanded the program to
apply to retail and hotel developments in 2004. Following a 2015 nexus study update completed by
Keyser Marston Associates, the City amended the fees for all three uses to their current levels--$23.76
for office/R&D uses, and $11.88 for hotel and retail uses.16 This memo report provides updated policy
analysis, including a financial feasibility analysis, and a review of current non-residential linkage fees
in neighboring cities to establish a recommendation on updated linkage fees in Cupertino.
Approach
METHODOLOGY
The financial feasibility of establishing updated non-residential linkage fees in Cupertino was tested
using a pro forma model that measures profit for the developer or investor. Yield on cost (YOC) is a
commonly used metric indicating the profitability of a non-residential project. The pro forma model
tallies all development costs, including land, direct construction costs, indirect costs (including
financing), and developer fees. Revenues from lease rates or hotel room rates are the basis for
calculating annual income from the new non-residential development. The total operating costs are
subtracted from the total revenues to calculate the annual net operating income. The YOC is then
estimated by dividing the annual net operating income by the total development costs. The fee levels
were then added as an additional development cost to measure the resulting change in the YOC.
DEVELOPMENT PROTOTYPES
The analysis estimates the feasibility of potential linkage fees for three non-residential prototypes:
office/R&D, hotel, and retail. The building characteristics of each development prototype, including
size, density (floor-area-ratio), and parking assumptions are based on a review of projects that were
recently built, and in planning stages in Cupertino, as well as recently built and pipeline projects in
surrounding areas.
Based on the development activity in Cupertino, the following is assumed regarding each prototype:
• Office/R&D: Based on a review of market activity in the City, recent and proposed
developments in neighboring cities, it is assumed that the office/R&D development project
would be a speculative building serving the tech industry.
16 Keyser Marston Associates, “City of Cupertino: Non-residential Jobs-Housing Nexus Analysis,” City of Cupertino, April 2015.
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• Hotel: Newer hotel development projects in Cupertino and surrounding areas are typically
upscale, select-service chains that serve business travelers.
• Retail: The retail development prototype is assumed to be a small low-density retail center.
The details regarding the size, density (floor-area ratio), parking, and other key assumptions for each
prototype are summarized in Figure 28 below.
FIGURE 28. DESCRIPTION OF DEVELOPMENT PROTOTYPES
Prototype Description Office/R&D Hotel Retail
Project Type
Class A Office
Speculative Building
Select-Service Upscale
Business Hotel
Neighborhood Retail
Shopping Center
Parcel Size (Sq. Ft.)
174,240
87,120
21,780
Parcel Size (Acres) 4 2 0.5
Total Stories 4 5 1
Floor-Area Ratio (without parking) (a) 1.50 1.20 0.35
Gross Building Area (GSF)
261,360
104,544
7,623
Efficiency Ratio (b) 90% n/a 90%
Net area (NSF)
235,224 n/a
6,861
Number of rooms n/a 140 n/a
Total Parking Spaces 825 155 30
Surface 93 70 30
Structured Garage 732 0 0
Underground 0 85 0
Parking Ratio (per room) n/a 1.1 n/a
Parking Ratio (per 1,000 SF) 3.2 1.5 4.0
Notes:
(a) The Floor-Area Ratio (FAR) is often used as a measure of density. In this analysis, it is calculated as the gross building area, not
including parking, divided by the parcel size.
(b) The Efficiency Ratio refers to the ratio of gross building area to ne leasable area. An efficiency ratio of 90% means that 90% of the
gross building area is leasable space. In hotels, revenue is informed by room count, rather than square footage, and therefore the net area
is omitted.
DEVELOPMENT COSTS
The development costs incorporated into the pro forma analysis include hard costs, (construction
materials and labor) land costs, soft costs (indirect costs), and financing costs.
HARD COSTS
Hard costs are based on Strategic Economics’ review of pro formas for similar development projects,
industry publications, and interviews with developers with projects in Cupertino and nearby
jurisdictions. The assumptions for hard costs by prototype are described in Figure 29. They include
estimates for basic site improvements, construction costs for the building, and costs for parking by
type. In addition, the cost of construction includes a tenant improvement allowance for office/R&D
and retail uses, as well as a Furniture, Fixtures, and Equipment (FF&E) allotment for hotel uses, which
are both typical for this market.
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FIGURE 29. HARD COSTS ASSUMPTIONS BY PROTOTYPE
Cost Category Metric Office/R&D Hotel Retail
Site Prep Per Site Sq. Ft. $3 $3 $3
Construction Costs Per Gross Building Sq. Ft. $300 $250 $165
Per Room $342,472
Parking Costs Cost per Space
Surface $7,000
Structured Garage $30,000
Underground $60,000
Land Costs
Entitled Land Per Site St. Ft. $137.74 $137.74 $75.00
Per Acre $6,000,000 $6,000,000 $3,267,000
Tenant Improvement
Allowance Per Building Net Sq. Ft. $75 n/a $35
Furniture, Fixtures,
Equipment Per Room n/a $35,000 n/a
Source: Costar, 2019; HVS Consulting, 2017; review of pro formas for comparable development projects in Santa Clara
County; interviews with developers in Cupertino and Santa Clara County, 2019; Strategic Economics, 2019.
LAND COSTS
One of the critical cost factors for a non-residential development project is land cost. To determine the
land value of sites zoned for commercial uses, Strategic Economics analyzed recent sales transactions
and estimates for properties in Santa Clara County and interviewed developers.
Land values are similar for both hotel and office development in the Cupertino area, based on a review
of recent transactions. Comparable values for office and hotel sites are showed in Figure 22 below. As
shown, the land values typically range from $120 to $185 per square foot. One exception in the
Cinnabar Street land sale for over $200 per square foot, which is in the Diridon Station Area, and
planned for higher intensity development projects than the prototypes for this study. For the purposes
of this analysis, it is assumed that sites zoned for office/R&D or hotel would have a land value of $138
per square foot ($6 million per acre).
There are fewer land sales transactions for sites that are entitled for low-density retail development.
However, a review of smaller retail property transactions shows that typically the land values are
usually under $100 per square foot. For the purposes of this analysis, it is assumed that a low-density
retail site in Cupertino would have a land value of $75 per square foot (about $3.2 million per acre).
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FIGURE 30. LAND COMPARABLES FOR OFFICE AND HOTEL
Property Jurisdiction Year Sold Acres
Estimated Value
Per Sq. Ft. Land
Proposed
Land Use
4995 Patrick Henry Dr. Santa Clara 2016 48.6 $118
Office
357-387 Cinnabar St. (a) San Jose 2017 5.6 $210
Office
767 Mathilda Ave. Sunnyvale 2017 3.28 $146
Hotel
10801 N. Wolfe Rd. (b) Cupertino 2018 1.72 $185
Hotel
Notes:
(a) 357-387 Cinnabar St. is in the Diridon Station area, and part of Google's transit village, which will have a significantly
higher FAR than the office prototype.
(b) Estimated value for 10801 N. Wolfe Rd. is based on valuation from CBRE in 2018 rather than a sales transaction.
Sources: Costar, 2019; CBRE, 2018;
SOFT COSTS
Soft costs (often referred to as indirect costs) include items such as architectural fees, engineering
fees, insurance, taxes, legal fees, accounting fees, city fees, and marketing costs. Cupertino’s Traffic
Impact Fee was calculated based on the City’s fee schedule. Other permits and fees were calculated
for each prototypes based on estimates generated for new development projects as part of the
feasibility analysis for the Vallco Specific Plan. Soft costs were estimated based on standard industry
ratios, calculated as a percentage of hard costs. These assumptions are shown in Figure 31.
FIGURE 31. SOFT COST ASSUMPTIONS BY PROTOTYPE
Soft Cost Metric Office/R&D Hotel Retail
City Permits and Fees
Traffic Impact Fee
Office Per Gross Building Sq. Ft. $17.40 $4.70 $9.94
Hotel Per Room $3,387
Other Permits and Fees Per Gross Building Sq. Ft. $48.01 $38.34 $57.16
Subtotal City Permits and Fees Per Gross Building Sq. Ft. $65.41 $43.04 $67.10
Other Soft Costs
Arch, Eng., & Consulting % of Hard Costs 5% 5% 5%
Taxes, Insurance, Legal, Acct % of Hard Costs 3% 3% 3%
Developer Overhead % of Hard Costs 4% 4% 4%
Subtotal Other Soft Costs (Excluding
Fees)
% of Hard Costs 12% 12% 12%
Construction Financing % of Hard + Soft Costs 6% 6% 6%
Source: Review of pro formas for comparable development projects in Cupertino, 2019; Individual developer interviews, 2019;
Vallco Specific Plan Feasibility Analysis, 2018; Strategic Economics, 2019.
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REVENUES
Revenue assumptions for each prototype are informed by a range of resources, including commercial
broker reports, hospitality industry reports, and Costar, as well as from interviews with developers and
brokers active in Cupertino and Santa Clara County. They are summarized in Figure 32.
Office: For office rents, Strategic Economics reviewed Cupertino’s office market and the greater Santa
Clara County office market. The largest office development in Cupertino has been the Apple Park
project, which is a build-to-suit development specifically intended for Apple. There has been minimal
recent speculative office development in Cupertino targeting other users. (Main Street was the only
such project completed in the last five years, and most of the space has also been leased to Apple.)
Buildings that are leased by Apple typically achieve rents of $4 per square foot per month (NNN),
compared to lease rates of $4.50-$5.00 per square foot for tech office buildings in neighboring West
San Jose and Sunnyvale (see Figure 33). This is due to the fact that landlords are willing to accept a
lower rent for a long-term lease with Apple, due to the low risk associated with a major corporation.
According to brokers and developers, there is potential to achieve higher rents for buildings that attract
other smaller tech office tenants. For the purposes of this analysis, the rental rate assumption is $4.50
per square foot per month (NNN). While this rental rate is higher than the current average office rent
in Cupertino, it is a reasonable estimate for a new, multi-tenant tech office building in the Silicon Valley.
Hotel: The assumptions of hotel revenues are based on a combination of data sources, including
interviews with hotel developers in Cupertino, and data from STR, a hotel research firm that tracks
hotel room rates, vacancy rates, and revenues per available room for properties in Cupertino (see
Figure 32).
Retail: Strategic Economics reviewed leases from 2018 and 2019 for retail spaces in Cupertino, as
summarized in Figure 34. Average lease rates (asking NNN) were between 4.25 to 5.42. All of these
recent leases were for restaurant spaces on Stevens Creek Boulevard. For the purposes of this
analysis, it is assumed that the retail space would lease for about $4 per square foot per month (NNN).
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FIGURE 32. REVENUE ASSUMPTIONS BY PROTOTYPE
Prototypes Metric Assumption
Retail
Annual Rent (NNN) Per Net Sq. Ft. $48.00
Vacancy Rate 5%
Operating Expenses % of Gross Revenue 10%
Annual Net Operating Income Per Net Sq. Ft. $40.80
Office/R&D
Annual Rent (NNN) Per Net Sq. Ft. $54.00
Vacancy Rate 5%
Operating Expenses % of Gross Revenue 7%
Annual Net Operating Income Per Net Sq. Ft. $47.52
Hotel
Gross annual Room Income RevPAR (a) $79,154
Gross Annual Other Revenue (b) Per Room $27,704
Gross Revenue Per Room $106,858
Vacancy Rate (c) n/a
Operating Expenses 70% of Gross Revenue ($74,800)
Annual Net Operating Income $32,057
Source: Costar, 2019; STR Trends Report, 2019; Individual developer interviews, 2019; Strategic Economics,
2019.
Notes:
(a) RevPAR is a measure of revenue per room, calculated as occupancy percentage times average daily rate.
(b) Other Revenue for hotels based on data from STR Consulting, and from hotel developer interviews.
(c) Vacancy is already reflected in RevPAR estimate.
FIGURE 33. OFFICE COMPARABLES
Project Name Address City Year Built
Mo. Rent/
Sq. Ft.
Lease
Type Source
Lot 11 @ Santana Row 500 Santana Row San Jose 2017 $4.45 NNN Costar
Santana Row 700 Santana Row San Jose 2019 $4.45 NNN Costar
Bldg. 5 Pathline Park
(a) 700 Mary Ave Sunnyvale 2019 $4.95 NNN Costar
Main Street 19319 Stevens Ck. Cupertino 2016 $3.75-$4.00 NNN Interviews
FIGURE 34: RETAIL COMPARABLES IN CUPERTINO
Project Name Address Year Built
Mo. Rent/
Sq. Ft. Lease Type Source
The Biltmore 20030-80 Stevens Creek Blvd 2015 $4.50 NNN (asking) Costar
Main Street 19369 Stevens Creek Blvd 2016 $5.42 full service Costar
Saich Way Station 20803 Stevens Creek Blvd 2015 $4.25 NNN (asking) Costar
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YIELD ON COST THRESHOLDS
In order to understand how the introduction of non-residential linkage fees impacts financial feasibility,
the yield on cost (YOC) results can be compared to an investor’s expectations of return for each type
of development. The YOC thresholds for this analysis were established relative to capitalization rates
(cap rates) for each product type in the Bay Area. The cap rate, which is measured by dividing net
income generated by a property by the total project value, is a commonly used metric to estimate
potential returns.
To ensure that the financial analysis is conservative and does not reflect peak market conditions, the
thresholds selected for determining project feasibility are slightly higher than the published cap rates.
Office/R&D projects with a YOC of above 6.0% and hotel projects with a YOC above 7.5% were
considered feasible in this analysis. Retail projects were considered feasible with a YOC higher than
7.0%. These thresholds are summarized in the Figure 35 below.
FIGURE 35: YIELD ON COST THRESHOLDS BY PROTOTYPE
Prototype
Yield on Cost
Threshold
Published
Cap Rate
Office/R&D (Class AA) 6.0% 4.50%-5.25%
Hotel (Select Service) 7.5% 7.0%-8.0%
Retail 7.0% 6.25-7.25%
Source: CBRE Cap Rate Survey, H2 2018; HVS, 2019; Developer interviews.
RESULTS
Using the YOC thresholds defined above, the following summarizes the results of the financial
feasibility of different linkage fee scenarios for each prototype. The pro formas for each prototype is
shown in Figure 39, Figure 40, and Figure 41.
OFFICE/ R&D
As shown in Figure 36 and Figure 39, the prototypical office/R&D project can support the existing
linkage fee of $23.76 per square foot, which generates a YOC of 6.04%. A linkage fee of $25 (Scenario
2) would also be feasible. However, the prototype cannot feasibly support a fee higher than $30 per
square foot. At this fee level, the prototype is only marginally feasible, with a yield on cost of 5.99%.
FIGURE 36. SUMMARY OF FINANCIAL FEASIBILITY OF OFFICE/R&D PROTOTYPE
Fee Scenario Fee Level Per Sq. Ft. Yield on Cost Office Feasibility
Current Linkage Fee $23.76 6.04% Feasible
Scenario 1 (No Fee) $0 6.25% Feasible
Scenario 2 $25 6.03% Feasible
Scenario 3 $30 5.99% Marginally Feasible
Note: Office/R&D projects must have a minimum yield on cost of 6.0% to be considered feasible
Source: Strategic Economics, 2019.
HOTEL
As summarized in Figure 37 for hotel projects, the existing linkage fee of $11.88 is financially feasible,
with a yield of cost of 7.65%. A fee of $15 per square foot (Scenario 2) is marginally feasible, resulting
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in a YOC of 7.46%. A higher linkage fee of $20 per square foot (Scenario 3) is not feasible (see Figure
40).
FIGURE 37. SUMMARY OF FINANCIAL FEASIBILITY OF HOTEL PROTOTYPE
Fee Scenario Fee Level Per Sq. Ft. Yield on Cost Hotel Feasibility
Current Linkage Fee $11.88 7.50% Feasible
Scenario 1 (No Fee) $0 7.65% Feasible
Scenario 2 $15 7.46% Marginally Feasible
Scenario 3 $20 7.39% Not Feasible
Note: Hotel projects must have a minimum yield on cost of 7.5% to be considered feasible
Source: Strategic Economics, 2019.
RETAIL
The financial feasibility analysis shows that retail developments are not financially feasible under
current market conditions. Even without a linkage fee (Scenario 1), the retail project achieves a yield
on cost that is lower than the threshold of 7.0 % (see Figure 38 and Figure 41). There may be cases
in which a retail project could support the current Housing Mitigation Fee if it were combined with other
land uses (residential or office) in a mixed-use project.
FIGURE 38. SUMMARY OF FINANCIAL FEASIBILITY OF RETAIL PROTOTYPE
Fee Scenario Fee Level Per Sq. Ft. Yield on Cost Retail Feasibility
Current Linkage Fee $11.88 6.35% Not Feasible
Scenario 1 (No Fee) $0 6.48% Not Feasible
Scenario 2 $15 6.32% Not Feasible
Scenario 3 $20 6.26% Not Feasible
Note: Retail projects must have a minimum yield on cost of 7.0% to be considered feasible.
Source: Strategic Economics, 2019.
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FIGURE 39. OFFICE/R&D PRO FORMA RESULTS
Office/R&D
Site and Building Characteristics
Parcel Size (Sq. Ft.) 174,240
Parcel Size (acres) 4.00
Total Stories 4 - 5 stories
Building Type Steel
FAR (without parking) 1.50
Revenues
Income $12,702,096
Net Operating Income $11,177,844
Project Costs
Land Costs $24,000,000
Direct Costs
Site Prep $522,720
Gross Building Area $78,408,000
Tenant Improvement Allowance $17,641,800
Parking $22,611,000
Subtotal Direct Costs $119,183,520
per net Sq. Ft. $507
per gross Sq. Ft. $456
Indirect Costs
Soft Costs $14,302,022
City Permits and Fees (excl. non-residential linkage) $12,548,925
Subtotal Indirect Costs $26,850,948
Financing Costs $8,762,068
Total Development Cost Including Land (TDC) $178,796,536
per net Sq. Ft. $760
Fee as % of Total Development Cost
Scenario 1: No Linkage Fee 0%
Scenario 2: Linkage Fee of $25/Sq. Ft. 2.84%
Scenario 3: Linkage Fee of $30/Sq. Ft. 3.53%
Current Linkage Fee ($23.76/Sq. Ft.) 3.36%
Yield on Cost (NOI/TDC)
Scenario 1: No Linkage Fee 6.25%
Scenario 2: Linkage Fee of $25/Sq. Ft. 6.03%
Scenario 3: Linkage Fee of $30/Sq. Ft. 5.99%
Current Linkage Fee ($23.76/Sq. Ft.) 6.04%
Source: Strategic Economics, 2019.
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FIGURE 40. HOTEL PRO FORMA RESULTS
Hotel
Site and Building Characteristics
Parcel Size (Sq. Ft.) 87,120
Parcel Size (acres) 2.00
Total Stories 5 stories
Building Type Concrete
FAR (without parking) 1.20
Revenues
Income $15,494,376
Net Operating Income $4,648,313
Project Costs
Land Costs $12,000,000
Direct Costs
Site Prep $261,360
Gross Building Area $26,136,000
FF&E $5,075,000
Parking $5,590,000
Subtotal Direct Costs $37,062,360
per gross Sq. Ft. $355
Indirect Costs
Soft Costs $4,447,483
City Permits and Fees (excl. non-residential linkage) $4,499,679
Subtotal Indirect Costs $8,947,162
Financing Costs $2,760,571
Total Development Cost Including Land (TDC) $60,770,093
per room $419,104
Fee as % of Total Development Cost
Scenario 1: No Linkage Fee 0%
Scenario 2: Linkage Fee of $15/Sq. Ft. 1.69%
Scenario 3: Linkage Fee of $20/Sq. Ft. 2.52%
Current Linkage Fee ($11.88/Sq. Ft.) 2.00%
Yield on Cost (NOI/TDC)
Scenario 1: No Linkage Fee 7.65%
Scenario 2: Linkage Fee of $15/Sq. Ft. 7.46%
Scenario 3: Linkage Fee of $20/Sq. Ft. 7.39%
Current Linkage Fee ($11.88/Sq. Ft.) 7.50%
Source: Strategic Economics, 2019.
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FIGURE 41. RETAIL PRO FORMA RESULTS
Retail
Site and Building Characteristics
Parcel Size (Sq. Ft.) 21,780
Parcel Size (acres) 0.50
Total Stories 1 story
Building Type Concrete
FAR (without parking) 0.35
Revenues
Income $329,314
Net Operating Income $279,917
Project Costs
Land Costs $1,633,500
Direct Costs
Site Prep $65,340
Gross Building Area $1,257,795
Tenant Improvement Allowance $266,805
Parking $213,444
Subtotal Direct Costs $1,803,384
per net Sq. Ft. $263
per gross Sq. Ft. $237
Indirect Costs
Soft Costs $216,406
City Permits and Fees (excl. non-residential linkage) $511,470
Subtotal Indirect Costs $727,876
Financing Costs $151,876
Total Development Cost Including Land (TDC) $4,316,636
per net Sq. Ft. $629
Fee as % of Total Development Cost
Scenario 1: No Linkage Fee 0%
Scenario 2: Linkage Fee of $15/Sq. Ft. 1.74%
Scenario 3: Linkage Fee of $20/Sq. Ft. 2.58%
Current Linkage Fee ($11.88/Sq. Ft.) 2.05%
Yield on Cost (NOI/TDC)
Scenario 1: No Linkage Fee 6.48%
Scenario 2: Linkage Fee of $15/Sq. Ft. 6.32%
Scenario 3: Linkage Fee of $20/Sq. Ft. 6.26%
Current Linkage Fee ($11.88/Sq. Ft.) 6.35%
Source: Strategic Economics, 2019.
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Peer Cities
A large share of municipalities in San Mateo and Santa Clara counties, particularly cities that are
desirable locations for tech and biotech companies, have adopted non-residential linkage fees. Figure
42 summarizes non-residential linkage fees in these jurisdictions.
For office/R&D uses, most cities have set linkage fees between $15 and $25 per square foot. The
majority of cities have lower fee levels for retail uses, typically in the range of $5 to $10 per square
foot. The non-residential linkage fees for hotel uses are usually between $5 and $15 per square foot.
The cities of Palo Alto and San Francisco have higher linkage fees than the rest of the local
jurisdictions. These cities also have higher average retail and office rents, and hotel room rates than
other Bay Area locations.
Many municipalities provide exemptions or fee reductions for the following types of projects:
• Smaller non-residential projects. For example, non-residential linkage fees do not apply to
projects adding less than 5,000 gross square feet in Redwood City, San Carlos, San Mateo
City, Colma, or Burlingame. Projects adding less than 3,500 gross square feet in
unincorporated land in San Mateo County, and less than 10,000 gross square feet in Menlo
Park or East Palo Alto are also exempt. Some cities also tie their fee to building size on a sliding
scale. Mountain View offers a 50% fee reduction for office projects under 10,000 square feet,
and hotel or retail projects under 25,000 square feet. Sunnyvale also offers a 50% fee discount
for the first 25,000 square feet of any project.
• Prevailing wage. Multiple jurisdictions, including Redwood City, San Carlos, San Mateo City,
and San Mateo County, provide 25% fee reductions for projects that pay prevailing wage.
• Community-serving facilities. Most cities exempt projects such as hospitals/clinics, child care,
public, educational, religious, and/or non-profit uses. Additionally, projects that are replacing
property damaged from natural disasters are also often exempted.
It is common for jurisdictions to allow alternative means of complying with non-residential linkage fee
requirements. Developers can typically satisfy the requirement by providing affordable housing either
on or off-site, or by dedicating land for affordable housing. East Palo Alto and Palo Alto allow for the
requirement to be met by either converting market-rate units to affordable units, or by rehabilitating
existing affordable units. In most cases, the applicant must first prove that an alternative is necessary.
For example, Palo Alto requires that the applicant present “substantial evidence to support a finding
of infeasibility” of paying the fee, and of “feasibility of any proposed alternative.”
Many cities have either enacted or updated their fees in the last four years, and fees are typically
adjusted annually, based on either ENR’s Construction Cost Index for the San Francisco Bay area, or
on the national Consumer Price Index.
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FIGURE 42. NON-RESIDENTIAL LINKAGE FEES (PER GROSS S. FT. OF NET NEW SPACE) IN NEARBY CITIES
Jurisdiction Office/ R&D/ Medical
Office Hotel Retail/ Restaurant/
Services
Date Fee Was
Adopted
Burlingame (a) $18 - $25 $12 $7 2017
Colma $5 $5 $5 2006
Cupertino $23.76 $11.88 $11.88 2015
East Palo Alto $10.72 none none 2016
Foster City $27.50 $12.50 $6.25 2016
Los Altos $25 $15 $15 2018
Menlo Park $17.79 $9.66 $9.66 2018
Mountain View (a) $13.14 - $26.27 $1.41 - $2.81 $1.41 - $2.81 2014
Palo Alto $36.22 $21.08 $21.08 2017
Redwood City $20 $5 $5 2015
San Bruno $12.50 $12.50 $6.25 2015
San Carlos $20 $10 $5 2017
San Francisco (b) $19.04 - $28.57 $21.39 $26.66 1996
San Mateo City $25 $10 $7.50 2016
San Mateo County $25 $10 $5 2016
Santa Clara City (a) $10 - $20 $5 $5 2017
South San Francisco $15 $5 $2.50 2018
Sunnyvale (a) $8.25 - $16.50 $8.25 $8.25 2015
Source: City Ordinances and Fee Schedules; 21 Elements, 2019; Silicon Valley at Home, 2019; Strategic Economics, 2019
Notes:
(a) Fees vary based on project size in four cities: Burlingame, Mountain View, Santa Clara, and Sunnyvale. Hotel and retail projects
under 25,000 sq. ft, and office projects under 10,000 sq. ft. in Mountain View are charged the lower fee; In Burlingame, Santa Clara
and Sunnyvale, office projects under 50,000 sq. ft., 20,000 sq. ft. and 25,000 sq. ft. respectively pay the lower fee.
(b) San Francisco's fees for R&D are $19.04 per sq. ft., while its fees for office are $28.57 per sq ft. Small Enterprise Workspace
and Production/Distribution/Repair fees are $22.46 per sq. ft.
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KEY TAKEAWAYS
Based on the economic feasibility analysis, Strategic Economics offers the following conclusions
regarding the City Council’s direction on the BMR Housing Program.
Is it financially feasible to increase the inclusionary requirements to 20% or 25%?
• For ownership housing prototypes, it would be financially feasible to raise the inclusionary
requirement from 15% to 20%. The analysis indicates that the existing requirement of 15%
and a higher requirement of 20% are economically feasible for single-family detached, small
lot single-family/townhouse, and condominium developments.
• Ownership housing prototypes can support a higher Housing Mitigation Fee per square foot.
The analysis shows that single-family detached, small lot single-family/townhouse, and
condominium developments could support paying the maximum housing mitigation fee (in-lieu
fee). The maximum nexus-based fees are $30.10-$30.60 per square foot for single-family
detached; $35.60 per square foot for small lot single-family/townhouse development; and
$35.10 per square foot for condominiums. The City’s Housing Mitigation Fees cannot exceed
the maximum housing impact fees justified by the 2015 Nexus Study (see Figure 43 below).
Exceeding the amounts shown below would require conducting a new nexus study.
FIGURE 43: CURRENT AND MAXIMUM HOUSING MITIGATION FEES BASED ON NEXUS FOR OWNERSHIP PROTOTYPES
Prototype
Current Housing
Mitigation Fee
Maximum Nexus-
Based Fee
Return on Cost
At Maximum Fee
Is Maximum
Fee Feasible?
Single-Family Detached $17.82 $30.10-$30.60 25.5% Yes
Small Lot SF/ Townhouse $19.60 $35.60 34.2% Yes
Condominium $23.76 $35.10 31.4% Yes
Source: Keyser Marston Associates (2015). Residential Below Market Rate Housing Nexus Analysis
• The rental apartment prototypes cannot feasibly support an inclusionary requirement under
current rents and construction/land costs. The higher density rental housing prototype can
support payment of Housing Mitigation Fees of nearly $30 per square foot, but cannot feasibly
provide inclusionary BMR units under today’s rents, construction costs and land costs.
However, with increases in rental revenues or decreases in construction costs and land costs,
rental housing development could potentially support the current inclusionary requirement of
15%.
Can the inclusionary housing policy be amended to include units for extremely low income/ disabled
persons?
The results from the feasibility analysis show that rental development in Cupertino cannot feasibly
provide BMR units on-site under current market conditions. An increase in revenues or a decrease in
construction and land costs could make it possible for lower density and higher density rental
prototypes to provide 15% inclusionary BMR units for very low income and low income households.
Under current market conditions, it is not financially feasible for the inclusionary housing policy to
include units for extremely low-income households.
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However, there are strategies that could allow the City to generate funding for the development of
extremely low-income units, and for disabled persons. City staff from Sunnyvale and San Jose have
indicated that they are providing funding to develop housing for extremely low-income households
through the revenues they have collected from housing mitigation fees, in-lieu fees, and other housing
funds. These local revenues are often combined with Santa Clara County Measure A funds – which
are specifically targeted to extremely-low income households – as well as 9% and 4% Low Income
Housing Tax Credits (LIHTC) and Section 8 vouchers from the Santa Clara County Housing Authority.
Can the inclusionary housing policy be amended to include median-income and moderate-income
units in rental projects?
The results from the feasibility analysis show that rental housing development in Cupertino is not
feasible with an inclusionary requirement of 15% under current conditions (see Figure 25 and Figure
26). However, a 15% increase in project revenues or a decrease in construction and land costs of 15%
could make the low density rental prototype feasible with a 15% BMR requirement. The higher-density
rental prototype can feasibly provide Housing Mitigation Fees at the current level. An increase in
revenues of 10% or a decrease in construction and land costs of 5% can make the higher density
rental prototype feasible with a 15% BMR requirement.
Adding a requirement for median-income and moderate-income units in addition to the existing
inclusionary requirement of 15% would not be economically feasible for the rental prototypes. For this
reason, it is not financially feasible for the inclusionary housing policy to be amended to also require
units for median-income and moderate-income households.
Can the BMR requirements for non-residential development (linkage fees) be increased for
office/R&D, hotel, and retail developments?
• For office and R&D development, it would be possible to raise the Housing Mitigation Fees to
a level between $25 to $30 per square foot. As shown in Figure 39, the office/R&D prototype
is feasible with a non-residential linkage fee of $25 per square foot. At $30 per square foot,
the prototype achieves a yield on cost that is slightly under the threshold required for feasibility.
• For hotel development, it may be possible to increase the Housing Mitigation Fees to between
$12 and $15 per square foot. At the current fee level of $11.88, a hotel project is feasible
(Figure 37). With a fee of $15 per square foot, the project achieves a yield on cost that is
slightly lower than the threshold for feasibility.
• The financial feasibility analysis shows that retail developments are not financially feasible
under current market conditions. Even without a Housing Mitigation Fees, the retail project
achieves a yield on cost that is lower than the threshold of 7.0% (see Figure 38). There may be
cases in which a retail project could support the current Housing Mitigation Fee if it were
combined with other land uses (residential or office) in a mixed-use project.
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APPENDIX
The appendix includes additional information on:
• Recent single-family sales for new construction in Cupertino (Figure A-1)
• Recent townhome re-sales in Cupertino (Figure A-2)
• Recent condominium re-sales in Cupertino (Figure A-3)
• Recent rental project comparables in Cupertino and surrounding cities (Figure A-4)
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FIGURE A-1: RECENTLY BUILT SINGLE FAMILY COMPARABLES
Address City Lot Size Beds Baths Price Square Feet Price/Sq. Ft. Year Built
21825 Lomita Ave Cupertino 9,671 5 4.5 $3,380,000 3,891 $869 2016
21800 Almaden Ave Cupertino 11,098 5 3.5 $3,220,000 3,555 $906 2017
10240 Lebanon Dr Cupertino 9,048 5 4.5 $4,100,000 3,623 $1,132 2018
10257 Glencoe Dr Cupertino 9,375 5 4.5 $3,593,800 3,727 $964 2016
7425 Heatherwood Dr Cupertino 9,396 5 4 $3,650,000 3,763 $970 2017
805 Rose Blossom Dr Cupertino 8,660 5 4.5 $2,980,000 3,339 $892 2017
10308 N Stelling Rd Cupertino 9,612 5 4.5 $3,350,000 3,769 $889 2017
10381 Bret Ave Cupertino 9,374 5 4.5 $3,270,000 3,727 $877 2016
20861 Dunbar Dr Cupertino 9,750 5 3.5 $3,998,000 3,949 $1,012 2016
Weighted
Average $3,512,995 3,705 $946
Sources: Redfin, 2018; Strategic
Economics, 2018.
Sources: Redfin, 2018; Strategic Economics, 2018.
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FIGURE A-2: RECENTLY BUILT TOWNHOME COMPARABLES
Address City Lot Size Beds Baths Price Square Feet Price/Sq. Ft. Year Built
10280 Park Green Ln #836 Cupertino 2,176 3 2.5 $1,760,000 1,670 $1,054 2006
10281 Torre Ave #817 Cupertino 2,176 3 2.5 $1,800,000 1,670 $1,078 2006
10700 Stevens Canyon Rd Cupertino 1,570 3 2.5 $1,852,000 2,239 $827 2007
20652 Gardenside Cir Cupertino 1,480 3 2.5 $1,680,000 1,704 $986 1990
20679 Gardenside Cir Cupertino 1,440 3 2 $1,665,000 1,640 $1,015 1990
23020 Stonebridge St Cupertino 3,348 3 2 $1,830,000 2,202 $831 1980
23030 Stonebridge Cupertino 3,348 3 2 $1,698,000 2,202 $771 1980
22981 Stonebridge Cupertino 3,348 3 2 $1,710,000 2,202 $777 1980
10910 Lucky Oak St Cupertino 1,312 3 3.5 $1,780,000 2,082 $855 1980
10826 Northridge Sq Cupertino 1,487 3 2 $1,455,000 1,389 $1,048 1978
10107 Lamplighter Sq Cupertino 1,753 3 2.5 $1,740,000 1,727 $1,008 1975
10174 Potters Hatch Cmn Cupertino 1,575 3 2.5 $1,816,000 1,785 $1,017 1974
10020 Mossy Oak Ct Cupertino 1,662 3 2.5 $1,680,000 1,645 $1,021 1972
10142 Amador Oak Ct Cupertino 1,854 3 2.5 $1,600,000 1,614 $991 1970
Weighted Averages:
All years $1,728,250 1,841 $934
Since 2000 $1,808,896 1,860 $970
Sources: Redfin, 2018; Strategic Economics, 2018.
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FIGURE A-2: RECENT RE-SALES OF TOWNHOME COMPARABLES
Address City Beds Baths Price Square Feet Price/Sq. Ft. Year Built
20488 Stevens Creek Blvd #2207 Cupertino 2 2 $1,338,000 1,171 $1,143 2003
20488 Stevens Creek Blvd #2309 Cupertino 2 2 $1,430,000 1,171 $1,221 2003
19999 Stevens Creek Blvd #209 Cupertino 2 2 $1,266,000 1,039 $1,218 2003
19999 Stevens Creek Blvd #101 Cupertino 2 2 $1,265,000 1,192 $1,061 2003
19503 Stevens Creek Blvd #317 Cupertino 2 2 $1,400,000 1,158 $1,209 2006
19503 Stevens Creek Blvd #251 Cupertino 2 2 $1,200,000 1,087 $1,104 2006
19503 Stevens Creek Blvd #139 Cupertino 2 2 $1,468,000 1,130 $1,299 2006
19503 Stevens Creek Blvd #261 Cupertino 2 2 $1,530,000 1,359 $1,126 2006
19503 Stevens Creek Blvd #331 Cupertino 3 2 $1,728,000 1,502 $1,150 2006
20488 Stevens Creek Blvd #1813 Cupertino 3 3 $1,930,000 1,766 $1,093 2003
20488 Stevens Creek Blvd #1401 Cupertino 3 2 $1,480,000 1,578 $938 2003
Weighted Averages:
2-Bd $1,367,604 1163 $1,171
3-Bd $1,720,858 1615 $1,060
Sources: Redfin, 2018; Strategic Economics, 2018.
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FIGURE A-3: RECENT RE-SALES OF CONDOMINIUM COMPARABLES
Address City Beds Baths Price Square Feet Price/Sq. Ft. Year Built
20488 Stevens Creek Blvd #2207 Cupertino 2 2 $1,338,000 1,171 $1,143 2003
20488 Stevens Creek Blvd #2309 Cupertino 2 2 $1,430,000 1,171 $1,221 2003
19999 Stevens Creek Blvd #209 Cupertino 2 2 $1,266,000 1,039 $1,218 2003
19999 Stevens Creek Blvd #101 Cupertino 2 2 $1,265,000 1,192 $1,061 2003
19503 Stevens Creek Blvd #317 Cupertino 2 2 $1,400,000 1,158 $1,209 2006
19503 Stevens Creek Blvd #251 Cupertino 2 2 $1,200,000 1,087 $1,104 2006
19503 Stevens Creek Blvd #139 Cupertino 2 2 $1,468,000 1,130 $1,299 2006
19503 Stevens Creek Blvd #261 Cupertino 2 2 $1,530,000 1,359 $1,126 2006
19503 Stevens Creek Blvd #331 Cupertino 3 2 $1,728,000 1,502 $1,150 2006
20488 Stevens Creek Blvd #1813 Cupertino 3 3 $1,930,000 1,766 $1,093 2003
20488 Stevens Creek Blvd #1401 Cupertino 3 2 $1,480,000 1,578 $938 2003
Weighted Averages:
2-Bd $1,367,604 1163 $1,171
3-Bd $1,720,858 1615 $1,060
Sources: Polaris Pacific, 2018; Redfin, 2018; Strategic Economics, 2018.
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FIGURE A-4: RECENTLY BUILT RENTAL COMPARABLES
Rent Per Unit Unit Size Rent Per Sq. Ft.
Project Name City
Year
Built Stories Studios 1-BD 2-BD 3-BD Studios 1-BD 2-BD 3-BD Studios 1-BD 2-BD 3-BD
Nineteen 800 Cupertino 2014 6 $4,026 $5,477 0 1,339 1,562 $3.01 $3.51
Main Street Lofts Cupertino 2018 4 $3,508 $3,995 916 1,044 $3.83 $3.83
Verve Mountain View 2017 3 $3,860 $5,071 $6,195 737 1,112 1,286 $5.24 $4.56 $4.82
Domus on the
Boulevard Mountain View
2015 4 $3,868 $4,876 788 1,061 $4.91 $4.60
Elan Mountain View Mountain View 2018 4 $3,860 $5,071 $6,195 737 1,112 1,286 $5.24 $4.56 $4.82
Montrose Mountain View 2016 4 $3,816 $5,443 739 1,154 $5.16 $4.72
Madera Apartments Mountain View 2013 4 $4,113 $5,510 849 1,181 $4.84 $4.67
Carmel the Village Mountain View 2013 5 $3,282 $3,623 $5,866 573 797 1,258 $5.73 $4.55 $4.66
6tenEAST Sunnyvale 2017 4 $3,309 $3,515 $4,414 $5,185 701 808 1,136 1,406 $4.72 $4.35 $3.89 $3.69
Naya Sunnyvale 2016 4 $3,250 $4,336 693 1,038 - $4.69 $4.18
481 On Mathilda Sunnyvale 2016 4 $3,098 $3,251 $4,160 701 781 1,174 $4.42 $4.16 $3.54
Encasa Apartments Sunnyvale 2016 3 $2,854 $3,356 $4,235 $5,854 572 856 1,163 1,688 $4.99 $3.92 $3.64 $3.47
Anton 1101 Sunnyvale 2015 4 $3,145 $3,280 $4,490 569 704 1,069 $5.53 $4.66 $4.20
2295-2305
Winchester Blvd Sunnyvale
2014 3 $3,371 $4,248 662 1,005 $5.09 $4.23
Ironworks Sunnyvale 2017 7 $3,520 $4,036 $5,109 . 784 1,174 1,365 $4.49 $3.44 $3.74
Solstice Sunnyvale 2013 6 $2,955 $3,329 $4,099 462 778 1,122 $6.40 $4.28 $3.65
Orchard City Lofts Campbell 2018 3 $2,946 $3,707 $4,817 607 924 1,237 $4.85 $4.01 $3.89
Revere Campbell Campbell 2015 5 $3,662 $3,912 $5,219 1,015 1,198 1,233 $3.61 $3.27 $4.23
Monticello Village Santa Clara 2016 6 $3,356 $3,244 $4,074 920 842 1,251 $3.65 $3.85 $3.26
Weighted
Average $3,225 $3,568 $4,541 $5,516 677 790 1,137 1,383 $4.71 $4.49 $3.98 $3.98
Sources: Costar, 2018; Strategic Economics, 2018.
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MEMORANDUM
To: Kerri Heusler, City of Cupertino
From: Sujata Srivastava
Date: July 16, 2019
Project: Economic Feasibility Report of BMR Program
Subject: Response to Peer Review Questions
INTRODUCTION
Strategic Economics submitted a draft report summarizing the results of an economic feasibility
analysis of the City of Cupertino’s Below Market Rate (BMR) Housing program. The City of Cupertino
then retained Lesar Development Consultants to peer review the draft report. Lesar Development
Consultants identified a number of key questions to assist with the peer review. This memo report
provides responses to those questions.
RESIDENTIAL ANALYSIS
1. It is hard to understand the step‐by‐step process that SE used for its methodology. The report lacks
a clear narrative how it got from point A to point B to point C. It would be helpful to explain in simple
language how the process works and why the particular data points are used.
Strategic Economics has edited the draft report to include a summary of the financial feasibility
methodology and the data sources.
2. Most inclusionary feasibility studies we typically see are based on a residual land cost analysis,
rather than on a return on cost (ROC) or yield on cost (YOC). Can SE provide more background as to
why ROC and YOC analysis were used rather than a residual land cost analysis and if that difference
would meaningfully change any of the reported results?
There is no single methodology used by economic consultants to measure the financial feasibility of
inclusionary requirements. Last year, the Terner Center, Grounded Solutions Network, and the Lincoln
Land Institute convened a group of stakeholders to identify “best” practices in feasibility analysis,
bringing together economic consultants (including a participant from Strategic Economics), as well as
academic researchers, nonprofits, and public agencies that commission these studies.1 According to
1 Grounded Solutions Network, UC Berkeley Terner Center, and Lincoln Land Institute, “Strengthening Inclusionary Housing Feasibility
Studies Convening Report,” December 2018. https://inclusionaryhousing.org/wp-content/uploads/2018/11/ih-feasibility-studies-
convening-report.pdf
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the summary report, return on cost and yield on cost were more commonly used to measure feasibility
than residual land value; however, the “participants generally agreed that there was no one best
measure in all cases and no reason to encourage every study to use the same metrics.”2
Strategic Economics chose to use the yield on cost metric because it is a commonly used approach
that allows one to compare the return achieved from the development project to other real estate
investments. This method is often more intuitive for stakeholders than the residual land value of a
project. Nevertheless, because the key inputs (developer return and land prices) would be the same
using either of these approaches, the outcome of the analysis would not change if we had solved for
the residual land value instead.
3. The ROC analysis’s sources on page 10 reference “recent project proformas” and developer
interviews. Can further documentation be provided on what recent proformas were analyzed, and what
developers were interviewed?
Some of the pro formas reviewed are not public documents. Strategic Economics interviewed the
following developers and brokers for this analysis:
• Alex Kang, single-family builder
• Suejane Han, single-family builder
• Christopher Huang, Marina Plaza (retail)
• Brandon Bain, Cushman & Wakefield (office)
• Edward Chan, Hyatt House (hotel)
• Michael Strahs, Kimco (hotel)
• Reed Moulds, Sand Hill (multi-family residential and office)
• Tim Steele, Sobrato (multi-family residential and office)
Strategic Economics also reached out to the following stakeholders, but did not receive a response:
• Mike Ducote, Prometheus
• Nandy Kumar, Main Street Apartments
• Greg DeLong and Mike Benevento, CBRE
• Phil Mahoney
• Alexandra Reynolds, Federal Realty
• Steve Horton, Cushman & Wakefield
• Jill Arias, Newmark Knight Frank
• Andy Poppink, Jones Lang Lasalle
• Mark Calvano, Calvano
• Curtis Leigh, Hunter Properties
• Gene Payne, Broadreach Capital Partners
4. I am curious about the use of Redfin for data in the analysis. There are a number of professional
data aggregators that one typically sees, such as DataQuick, Costar, etc. which SE does use for some
2 Ibid, page 6.
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of the analysis. What was the thought behind using Redfin (which I personally experienced containing
incorrect data in reporting sales)?
Costar only tracks rental apartments, and does not contain information on ownership residential data,
so it cannot be used to determine the sales prices on ownership products. CoreLogic (formerly
DataQuick) reports on transactions for ownership residential (single-family and
condominiums/townhouses); However, CoreLogic data has a significant cost, and frequently the data
shows many errors. It can also be very difficult to break out the multi-family ownership from the single-
family ownership products using the CoreLogic dataset. For these reasons, Strategic Economics used
Redfin for the analysis.
5. The report uses comps for townhomes and other housing types in Cupertino that are quite old.
Typically, if the review of comps finds that no development is currently taking place, then adding an
additional requirement would further constrain the development of housing. Is that the case here, or
are there other market factors influencing the types of projects proposed and approved in Cupertino?
It is preferable to use new development projects as comparables for a feasibility analysis. However, in
the case of Cupertino, there were no recent examples of newly built townhomes. Based on our
understanding of the strong demand for housing of all types in Cupertino, Strategic Economics believes
that the market for townhouse development is strong. There may be many other factors that have
inhibited recent development of townhomes, including a scarcity of sites, competition from other types
of land uses that can pay more for land (including multi-family residential and nonresidential uses),
and the complexity of the approvals/entitlements process.
6. Figure A‐3 in the appendix is titled “Recent Re‐Sales of Condominium Comparables” when in fact
the table shows rents. Figure A‐4 repeats this information but calls the table “Recently Built Rental
Comparables.” Can SE update the table to include the dates when these comps were built?
This was an error. Strategic Economics has inserted the correct table under Figure A-3. Strategic
Economics added a column in Figure A-4 showing the year that the project was built.
7. On page 11, the sales prices per unit are in some cases significantly different than what was shown
in the KMA report just four years ago. For example, condominiums in the 2015 report were on the
order of $800,000. What accounts for the more than 100% increase in four years? Is this the result
of construction cost escalation, and can SE say more about the market's ability to sustain the higher
current sale prices while absorbing additional affordability requirements?
Strategic Economics cannot comment on KMA’s data sources and research from the 2015 nexus
study. However, a review of data collected by the Santa Clara County Association of Realtors shows
that the median price for existing condominiums increased from $895,500 in 2014 to $1.4 million in
2018.3 This feasibility analysis assumes average price of $1,485,000 for a new two-bedroom
condominium unit, and an average price of $1.6 million for a new three-bedroom unit . This is slightly
higher than the median in 2018, because the assumption is that a newly built condominium unit would
3 Santa Clara County Association of Realtors, 2014 and 2018.
https://www.sccaor.com/pdf/stats/2014.pdf
https://www.sccaor.com/pdf/stats/2018.pdf.
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be priced higher than the median for all existing condos, which include older units. Using a lower sales
price assumption would make it less likely that a new development project could feasibly provide
inclusionary units.
The report has been amended to discuss general trends in sales prices and rents in the city and region.
8. In addition, rents shown on that page are also substantially higher than in KMA’s study. Can SE
provide some additional explanation about the market forces that are driving these increases?
Similar to the dynamics described above with condominium prices, rental rates in Santa Clara County
have increased rapidly in the last five years. There is significant pent-up demand in Santa Clara County
and the broader Bay Area region, as housing development has not kept up with employment growth.
Between 2009 and 2015, Santa Clara County added over 170,000 new jobs between 2010 and 2015,
but only 29,000 new housing units.4 Apartment rents accelerated beginning in 2011, as the economy
emerged from the Great Recession, and continued growing at an average annual rate of nearly eight
percent until 2015. Since then rents have continued to grow at a slower pace of about four percent.
The report has been amended to discuss general trends in sales prices and rents in the city and region.
9. On page 13, should the income limits be updated to the 2019 counts? Would showing increased
rents using the 2019 data result in higher affordability requirements being feasible?
Strategic Economics completed the technical modeling and analysis before the new limits were
published for 2019. In 2019, the area median income (AMI) for Santa Clara County is $131,400. This
is a slight increase from the AMI of $125,200 in 2018. Because the income change from 2018 to
2019 is relatively minor, Strategic Economics does not believe that updating the affordable rents to
2019 figures would create significant differences in the feasibility findings.
Non‐Residential Analysis
1. KMA provided information on mitigation fees as a percentage of total development cost as one way
to measure a fee’s reasonableness. How does SE’s methodology compare?
The pro forma model provides more information about the feasibility of a development by comparing
the revenues and costs of a development, and determining whether it would be likely to attract
development. Measuring the commercial linkage fees as a percentage of total development cost
provides information about the extent to which proposed fees would increase overall development
costs, but it does not allow one to draw conclusions about feasibility.
In order to provide some consistency between the 2015 nexus study and this report, Strategic
Economics has added rows to the pro forma showing the commercial linkage fee levels tested in the
pro forma analysis as a percentage of total development costs.
2. The pool of comparables used in the analysis is quite small. Would that impact the resulting
outcomes?
Strategic Economics reviewed comparables – recently built nonresidential development projects and
property transactions – to estimate land values, office rents, hotel room rates, and retail rents. The
analysis of comparables was not the only source of data. It was supplemented with findings from
4 SPUR, “Room for More: Housing Agenda for San José,” August 2017.
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stakeholder interviews, as well as data vendors like Costar and Smith Travel Research. Because we
have used a mix of sources to inform our inputs, we feel comfortable that we used selected
comparables that represent the market conditions in Cupertino.
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DRAFT MINUTES
CUPERTINO CITY COUNCIL
Tuesday, August 6, 2019
SPECIAL CITY COUNCIL MEETING
At 5:30 p.m. Mayor Steven Scharf called the Special City Council meeting to order in the
Cupertino Community Hall Council Chambers, 10350 Torre Avenue.
ROLL CALL
Present: Mayor Steven Scharf, Vice Mayor Liang Chao, and Councilmembers Darcy Paul, Rod
Sinks, and Jon Robert Willey. Absent: None.
STUDY SESSION
1. Subject: Study session regarding policy options to prevent youth access to tobacco products,
including flavored tobacco products, and to reduce the density of tobacco retailers.
Recommended Action: Provide direction on policy options to prevent youth access to
tobacco products, including flavored tobacco products, and to reduce the density of tobacco
retailers.
Written communications for this item included two presentations.
Assistant to the City Manager Katy Nomura introduced Consultant Leslie Zellers, JD from
the Santa Clara County Department of Public Health who reviewed the presentation.
Tanya Payyappilly, Project Director for Breathe California Tobacco Prevention Program,
gave a presentation regarding a public opinion survey about flavored tobacco products.
Mayor Scharf opened public comment and the following individuals spoke:
Carol Booker (Cupertino resident)
Rosalyn Moya on behalf of Bay Area Community Resources
Randy Wang on behalf of Breathe California
Mayor Scharf closed public comment.
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Staff and consultant answered questions from Council.
Graham Clark and Polly Bove of the Fremont Union High School District (FUHSD) spoke.
Council comments included:
Willey: Was unaware of the extent of this; glad to be brought up to speed with study session;
happy to be hearing from residents with real experiences; the samples explain what’s out
there; had no idea that things looked like candy and are behind counters for kids to see;
have to act quick before it’s too ingrained in the community; supports extensive outreach
to gauge support verses non-support and the strength of the controls to put in place; include
mailers, make visible at parks and City events, and ask people the degree of measures for
addressing; need prohibiting ordinance in place to help parents to be more concerned and
alert.
Paul: Supports staff going back and looking at possibility of banning list of products
including e-cigarettes, menthol, little cigars, smokeless tobacco products, components and
accessories, and products marketed as flavors; supports examining repercussions of the
CVS ban on products and any staff recommendations to support that; phasing period is a
good idea but let members of business community weigh -in; agrees with Councilmember
Willey in reaching-out to the community to gauge community sentiment; look at various
mechanisms of outreach like Nextdoor, OpenGov, WeChat, and WhatsApp.
Scharf: Interested in Sheriff’s enforcement of the law now in relation to tobacco sales to
minors and efforts to change State law with greater penalties for violations; and effect of a
ban if people buy from adjacent cities without one; staff come back with some proposed
ordinances and also look at what’s being done in nearby cities; weak State laws; State
legislatures are not being productive.
Chao: Look at adopting stronger violation penalties beyond the county’s for annual license
renewals, such as license suspension and then revocation; look at adoptions that make it
easier for schools to enforce on school grounds; it’s worth looking into doing outreach; look
into going beyond the Santa Clara County policy dashboard requirements and what is
required to get better scores in the American Lung Association and Healthy Cities
programs; would like to have terminology for flavored cigarettes, tobacco, e-cigarettes, and
etc. when it comes back to Council; bring back more information about current enforcement
efforts in our high schools and middle schools.
Sinks: Appreciates former County Supervisor Ken Yaeger’s efforts for a heathier county; we
should take a lead from the County and do the outreach; seriously consider adopting the
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County’s program, including a local license to help collect funds for better enforcement and
programming; the Sheriff can’t do very much with the funds that we have; we should
consider taking some action here with the epidemic going on; we have a serious problem;
would be helpful to understand online sales when this comes back; bring back information
on the degree to which restricting sales in local retailers will reduce access.
Council provided the following direction to staff on policy options to prevent youth access
to tobacco products, including flavored tobacco products, and to reduce the density of
tobacco retailers:
Wanted outreach to the public on these measures.
Want to look into the policy options recommended by the County.
Look into local Tobacco Retailer License.
ADJOURNMENT
REGULAR CITY COUNCIL MEETING
PLEDGE OF ALLEGIANCE
At 6:45 p.m. Mayor Steven Scharf called the Regular City Council meeting to order in the
Cupertino Community Hall Council Chambers, 10350 Torre Avenue and led the Pledge of
Allegiance.
ROLL CALL
Present: Mayor Steven Scharf, Vice Mayor Liang Chao, and Councilmembers Darcy Paul, Rod
Sinks, and Jon Robert Willey. Absent: None.
CEREMONIAL MATTERS AND PRESENTATIONS
1. Subject: Presentation from the Cupertino Youth Climate Action Team regarding climate
solutions
Recommended Action: Receive presentation from the Cupertino Youth Climate Action
Team regarding climate solutions
Written communications for this item included two presentations and informational
handouts.
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Tara Sreekrishnan (introduced) and the Cupertino Youth Climate Action Team gave a
presentation regarding climate solutions.
Mayor Scharf opened public comment and the following individuals spoke:
Janet Walworth, on behalf of Peninsula Interfaith Climate Alliance
Peri Plantenberg (Sunnyvale resident) on behalf of Sunrise Movement
Linda Sell (Sunnyvale resident) (provided written comments)
Dashiell Leeds on behalf of Sierra Club Loma Prieta Chapter
Don Weiden (Los Altos resident)
Gary Latshaw (Cupertino resident) on behalf of Youth Climate and Secure the Future 2100
(provided written comments)
Emily Fan (Cupertino resident)
John Zhao (Cupertino resident)
Shiv Shah on behalf of the Cupertino High School Environmental Club
Mayor Scharf closed public comment.
Staff answered questions from Council.
Council directed staff to agendize the following items:
Ordinance consideration on banning gas powered lawn equipment (including leaf
blowers) (Paul/Chao)
Divestment of fossil fuels from City investments (Paul/Chao)
Council received the presentation.
2. Subject: Presentation of a new report on the status of seniors in Cupertino
Recommended Action: Receive presentation of a new report on the status of seniors in
Cupertino
Written communications for this item included a presentation.
Richard Adler on behalf of Age-Friendly Cupertino gave a presentation regarding a new
report on the status of seniors in Cupertino.
Mayor Scharf opened public comment and the following individuals spoke:
Jean Bedord (provided written comments)
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Jennifer Griffin
Mayor Scharf closed public comment.
Council received the presentation.
POSTPONEMENTS
3. Subject: Continue Item No. 16 for consideration of Municipal Code Amendments to the
Cupertino Municipal Code to clarify City standards for size of Accessory Dwelling Units
(Chapter 19.112 -Accessory Dwelling Units), for clarifications, and consistency. Application
No(s).: MCA-2018-04; Applicant(s): City of Cupertino; Location: citywide to a date to be
determined. This item will be re-noticed.
Recommended Action: Continue Item No. 16 for consideration of Municipal Code
Amendments to the Cupertino Municipal Code to clarify City standards for size of
Accessory Dwelling Units (Chapter 19.112 -Accessory Dwelling Units), for
clarifications, and consistency. Application No(s).: MCA-2018-04; Applicant(s): City of
Cupertino; Location: citywide to a date to be determined. This item will be re -noticed.
Deputy City Clerk Kirsten Squarcia noted that staff requested Item No. 16 be continued to
a date to be determined and that the item would be re-noticed.
Council concurred unanimously to continue Item No. 16 for consideration of Municipal
Code Amendments to the Cupertino Municipal Code to clarify City standards for size of
Accessory Dwelling Units (Chapter 19.112 -Accessory Dwelling Units), for clarifications,
and consistency. Application No(s).: MCA-2018-04; Applicant(s): City of Cupertino;
Location: citywide to a date to be determined. This item will be re-noticed.
ORAL COMMUNICATIONS
Richard Abdalah talked about comments made by Planning Commission Chair R. Wang and
consideration of removing him from the Commission.
Michelle Chen, Rachel Chen (Cupertino resident), and Connie Liang talked about Lehigh Cement
pollutants and Lehigh Quarry expansion, and a City letter to the County opposing expansion.
Danessa Techmanski (Cupertino resident) talked about a Mercury News article about the State
threating a lawsuit against the City for not conforming to housing quotas at Vallco.
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Brenda Boyle (Cupertino resident) talked about Regnart Creek Trail and an incident on the
proposed path near her home, and the traffic flow from Creekside path onto Blaney.
Erik Lindskog (Cupertino resident) talked about Regnart Creek Trail; walking, biking, and
running infrastructure; and public support, cost and safety of creek trails.
Gary Wong (Cupertino resident) on behalf of Campo De Lozano HOA talked about Regnart
Creek Trail, addressed remarks about the HOA’s designated trail property lines, and portable
planters in the 65% design.
Jiong Hee Yee talked about Regnart Creek Trail, the proposed 65% design, construction cost
escalation, and privacy and safety fencing costs.
Stella talked about Regnart Creek Trail, Wilson Park Baseball Field, water district services, path
width, cost, and safety.
Jean Bedord (Cupertino resident) talked about removing Ray Wang from the Planning
Commission, referenced article about a past sentence, comments on social media and at a recent
commission meeting.
Eleanor Chan (Cupertino resident) talked about bullying and Planning Commission Chair’s R.
Ray Wang’s behavior on social media and removal from the commission.
Jennifer Griffin talked about the Planning Commission and open discussions on SB 35 and
housing legislation coming out of Sacramento.
Benaifer Dastoor (Cupertino resident) talked about the health and cleanliness of creeks and
promoting a carbon-free society in environmental plans.
Kitty Moore (Cupertino resident) talked about broadening the scope of the Environmental
Review Committee (ERC).
Council recessed from 8:40 p.m. to 8:46 p.m.
STUDY SESSION
4. Subject: Study Session regarding Application and Review Procedures for Projects Proposed
Pursuant to Senate Bill 35. (Application No(s): CP-2019-04; Applicant(s): City of Cupertino;
Location: Citywide)
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Recommended Action: That the City Council conduct the study session, receive this report
and provide direction regarding the proposed Application and Review Procedures and
draft Application Package for Projects Proposed Pursuant to Senate Bill 35.
Written communications for this item included a presentation and corrected redline of
Supplemental Staff Report Attachment B - SB 35 Application Form
Caitlin Brown from Shute, Mihaly & Weinberger reviewed the presentation.
Mayor Scharf opened public comment and the following individuals spoke:
Jennifer Griffin
Lisa Warren ceded time to Kitty Moore
Kitty Moore (provided written comments)
Mayor Scharf closed public comment.
Staff answered questions from Council.
Council comments included:
Willey: Might need to be following some of the issues raised by Kitty Moore; duty not to
take away from what the residents have a right to because of not checking or noticing
correctly; make sure community is served; follow the laws but being ignorant is no excuse;
surprised things have had to be brought up outside of the City review process; make sure
CEQA aspects are intact otherwise the community is at risk; CEQA is meant to catch things
like hazardous waste sites and need to make sure we don’t inadvertently miss things when
sending through a ministerial approval; include how to understand and implement this
without inadvertently missing things and for things that could be confusing; important to
have one or more examples so it’s easier to understand how to calculate the 2/3; when staff
needs to work quickly through a ministerial approval, have examples instead of trying to
discern the textual description and avoid something that was not truly intended; protect
the residents, follow the law, and make sure housing gets addressed and designated;
projects can move forward but were inadvertently done incorrectly; want to make it so that
330 doesn’t get by if it is truly meant for 300; will explain again when we come back to make
sure correct how staff is to move forward.
Paul: 1) Regarding the checklist that we’re operating under SB 35; put more thought in the
checklist at the outset; maintain our discretion because discretion is curtailed to the
maximum extent; too much flexibility due to nebulous procedure and abbreviated
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timetable; make checklist as solidified as possible instead of one that morphs in accordance
with factors; 2) Regarding the language of resolution; has to do with treatment of overall
BMR housing; troubled by what’s happened legislatively; budget rider wasn’t caught;
wasn’t specific to SB 35 or affordable housing and designed to get slipped in there; affected
one project in California by toxicity and calculation of BMR units; if saying to simplify the
calculation of BMR units when trying to promote the delivery of affordable housing then
should say your residential square footage has to be calculated before applying density
bonus; legislation with budget rider suddenly passed in the middle of this Cupertino
process; very quickly authority from State legislation said to take the density bonus and
add it to the square footage to help you get to the 2/3 number; you would not include that
in the calculation if you really wanted to promote creation of BMR housing because would
make it more residential proportionately; concerned doesn’t deliver as many BMR units
and BMR sq. ft. and at the systemic perspective; if particular project being targeted then can
lobby and buy into legislation in right moment; concerned if going to make process
inefficient and circumventing idea of going to a neutral arbiter; as a jurisdiction, go forward
in our recitals with history of this legislation and our position on BMR housing; personally
support BMR housing and need to encourage more; recent change in HCD guidance says
you don’t listen to HCD guidance when works to benefit developer which is what staff did ;
but when works to benefit developer and the law changes you can ignore the HCD
guidance that was made midstream so fundamental inconsistencies; put in recitals to let
future know what happened and we are a work in progress systemically; very inefficient
now and put under guise of delivering more BMR housing/housing and pointing finger at
us when in fact tremendous office and jobs but not enough housing; put history and support
BMR housing in our recitals but no longer consider the pre-density bonus within the
calculation of residential if legislation changes at any time; 3) Planning Chair Kitty Moore
had good suggestions; have follow-up’s on Section 9 regarding the appeal process and
language related to toxic sites; have legal staff examine and determine feasibility of adding
those suggestions; good job of identifying some of the process points; would generally
adopt the staff recommendations and checklist, and Planning Commission
recommendations.
Scharf: Echoed almost everything said by Councilmember Paul, except would be nice if
intent of SB 35 and some of the housing bills were to increase amount of BMR housing but
not the case as we see with trailer bills; intent is to build more market rate housing with as
little BMR as possible and units as small as possible for BMR housing in Cupertino project
case; unfortunately, have gut-and-amend and it’s how we ended up with SB 592; these
trailer bills are almost secretly modifying thing; didn’t know about these changes; the only
positive is that the hazardous waste thing is not retroactive to this project.
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Chao: Having the public oversight meeting 5 days before the deadline is too late; wouldn’t
say SB 35 was so bad if had good objective standards in our plan and ordinances; this just
gives developer a clear guideline to follow; what’s wrong with the Vallco project is they
submitted a project on the site without a specific plan; so no height limit or plan and that
was a problem; so that wasn’t real problem with SB 35; in future SB 35 projects we want to
help developer give us a good project that’s compliant, qualifies, and meets plan; want to
let them know early if we disagree with their calculation; Berkeley sent applicant letter after
one month with reasons why it didn’t qualify; that gave applicant a chance to revise project
and resubmit and correct; is good even if it restarts the clock; so have one hearing 1 month
after with initial assessment and open discussion and then have a second hearing; of the
two oversight hearings, the first would be mainly about qualification under SB 35 and with
big parameters but the second would be about other objective standards in our plan so
might take more time; can make at least one optional at discretion of staff; concerned about
the developer/applicant submitting multiple active proposals and we’re expected to
respond to each one within the timeline, especially for streamlined project with specific
timeline; if submitting a revised proposal then first application will be paused to focus on
second one and not have to respond; because project is deemed approved under SB 35 if
you don’t respond; and multiple submitted versions would be confusing; this to have good
governance with due process and to focus on one project at a time; BMR housing projects
might need to propose multiple versions on different grant requirement so maybe have that
requirement but with exceptions; be sure to have all of the information upfront with
streamlined projects for staff to review; require them to provide justification for concessions
at time of project proposal so we don’t have to request later; ask them to provide all
information upfront because don’t liberty to go back later with streamline project s; in
checklist, be more specific in what “sufficient information” means in determining 2/3
residential; provide upfront exactly what we need to determine the use and size of each
area of the building so it’s easier for staff to figure out and doesn’t require guesswork; hope
this is a requirement of all projects and requires project’s specify the number of BMR units,
size of BMR units, number of bedrooms, and total sq. ft. of all the BMR living space.
Sinks: 1) Appreciates that this is a workable process for planning staff to get their job done
expeditiously and not burdensome and helpful in clarifying; planning staff are the
professionals that make this happen; first time we went through this was unchartered water
and now there is more known; 2) Good that this process won’t affect interaction with HCD
and the State; last time Council wasn’t really involved; would hear reports about what was
happening but had no public hearing; it is without Council making the determination but
looking at the process and having staff clarify how they reached certain information but
without being told by the Council how they must interpret; good that it’s an opportunity
for public to hear about; we want transparency; appreciative of this effort and generally
supportive of it; seems like a great step forward.
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Council received the report and gave the following direction to staff regarding the proposed
Application and Review Procedures and draft Application Packet for Projects Proposed
Pursuant to Senate Bill 35:
1. Staff will review Kitty Moore’s proposed changes and advise on them.
2. Staff will also look at the BMR section to make sure it reflects the City’s BMR
program to the extent it can.
3. Add language that items will not be added to the checklist midstream when an
application has been submitted.
4. Add to the recitals language that reflects the history and policy consequences of AB
101. And add some language that if in the future it becomes possible to calculate
excluding density bonus additions (per HCD’s November 2018 guidance), the City
intends to do so.
5. Add sample calculations for how you calculate 2/3 residential use requirement.
6. Clarify that staff has the option to hold the oversight hearing earlier than 5 days
before the consistency determination for larger projects if necessary.
7. There shall be at least one oversight hearing, and a second hearing earlier is optional
at discretion of staff. If staff is able to do so earlier, they should hold a second hearing
10 days prior to consistency determination (or 45 days after application is submitted
if possible) on the 2/3 residential use calculation.
8. The section that says the application “needs sufficient” detail/information to
determine the 2/3 residential use determination, try to amend to have more specific
language. Clarify what “sufficient” would be.
9. Require applicants to specify the size and number of bedrooms for BMR units (if the
draft procedures don’t do this already).
Council directed staff to add a future agenda item regarding an open letter to the Governor
regarding the process on trailer bills (Chao/Scharf).
REPORTS BY COUNCIL AND STAFF (10 minutes)
5. Subject: Report on Committee assignments
Recommended Action: Report on Committee assignments
Councilmember Paul submitted written comments.
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Councilmembers highlighted the activities of their committees and various community
events.
CONSENT CALENDAR
Paul moved and Willey seconded to approve the items on the Consent Calendar as presented
with the exception of item numbers 13 and 15 which were pulled for discussion. Ayes: Scharf,
Chao, Paul, Sinks, and Willey. Noes: None. Abstain: None. Absent: None.
6. Subject: Approve the July 8 City Council minutes
Recommended Action: Approve the July 8 City Council minutes
7. Subject: Approve the July 16 City Council minutes
Recommended Action: Approve the July 16 City Council minutes
8. Subject: Accept Accounts Payable for the period ending May 3, 2019
Recommended Action: Adopt Resolution No. 19-099 accepting Accounts Payable for the
period ending May 3, 2019
9. Subject: Accept Accounts Payable for the period ending May 10, 2019
Recommended Action: Adopt Resolution No. 19-100 accepting Accounts Payable for the
period ending May 10, 2019
10. Subject: Accept Accounts Payable for the period ending May 17, 2019
Recommended Action: Adopt Resolution No. 19-101 accepting Accounts Payable for the
period ending May 17, 2019
11. Subject: Accept Accounts Payable for the period ending May 24, 2019
Recommended Action: Adopt Resolution No. 19-102 accepting Accounts Payable for the
period ending May 24, 2019
12. Subject: Accept Accounts Payable for the period ending May 31, 2019
Recommended Action: Adopt Resolution No. 19-103 accepting Accounts Payable for the
period ending May 31, 2019
13. Subject: Authorization of Resolution declaring interest for the participation by the City of
Cupertino in the initial planning for potential future use of the Sunnyvale SMaRT Station
Recommended Action: Adopt Resolution No. 19-104 Declaring Interest for the Participation
by the City of Cupertino in the Initial Planning for Potential Future Use of the Sunnyvale
SMaRT Station
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Director of Public Works Roger Lee reviewed the staff report and answered questions from
Council.
Paul moved and Sinks seconded to approve items 13 and 15 on the Consent Calendar. The
motion carried unanimously.
Council adopted Resolution No. 19-104 Declaring Interest for the Participation by the City
of Cupertino in the Initial Planning for Potential Future Use of the Sunnyvale SMaRT
Station.
14. Subject: Accept offer of dedication and waiver of future reimbursement at 10475 Byrne
Avenue related to the Byrne Avenue Sidewalk Improvements Project
Recommended Action: Adopt Resolution No. 19-105 accepting the offer of dedication at
10475 Byrne Avenue and waiver of future reimbursement from the property owner for the
construction of the Byrne Avenue Sidewalk Improvement Project
15. Subject: Authority to increase the construction contingency budget for the McClellan Road
Separated Bikeways-Phase 1A Project
Recommended Action: Authorize an increase in the construction contingency budget from
$182,183 (10% of construction amount) to $291,493 (16%) of construction amount) for the
McClellan Road Separated Bikeways-Phase 1A Project
Director of Public Works Roger Lee reviewed the staff report and answered questions from
Council.
Paul moved and Sinks seconded to approve items 13 and 15 on the Consent Calendar. The
motion carried unanimously.
Council authorized an increase in the construction contingency budget from $182,183 (10%
of construction amount) to $291,493 (16%) of construction amount) for the McClellan Road
Separated Bikeways-Phase 1A Project.
SECOND READING OF ORDINANCES - None
PUBLIC HEARINGS
16. Subject: Municipal Code Amendments to the Cupertino Municipal Code to clarify City
standards for size of Accessory Dwelling Units (Chapter 19.112 -Accessory Dwelling Units),
for clarifications, and consistency. Application No(s).: MCA-2018-04; Applicant(s): City of
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Cupertino; Location: citywide was continued to a date to be determined. This item will be
re-noticed.
Recommended Action: Under Postponements, Municipal Code Amendments to the
Cupertino Municipal Code to clarify City standards for size of Accessory Dwelling Units
(Chapter 19.112 -Accessory Dwelling Units), for clarifications, and consistency. Application
No(s).: MCA-2018-04; Applicant(s): City of Cupertino; Location: citywide was continued to
a date to be determined. This item will be re-noticed.
Under Postponements, this item was continued to a date to be determined and will be re -
noticed.
ORDINANCES AND ACTION ITEMS
17. Subject: Hearing to approve lien assessment and collection of fees on private parcels
resulting from abatement of public nuisance (weeds and/or brush) for the annual Weed and
Brush Abatement Programs.
Recommended Action: Conduct a hearing to consider objections from any property owners
listed on the assessment report; and adopt Resolution No. 19 -106 approving the lien
assessment and collection of fees on private parcels for the annual Weed and Brush
Abatement Programs to allow the County to recover the cost of abatement.
Deputy City Clerk Kirsten Squarcia reviewed the staff report.
Mayor Scharf opened the public hearing and the following individuals spoke:
Nageshwara Vempaty (11841 Upland Way)
Lance Chang (20592 and 20616 McClellan Road)
Sherwin de la Cruz (Cupertino resident)
Santa Clara County Weed Abatement Program Manager Moe Kumre and staff answered
questions from Council.
Council recessed from 10:43 p.m. to 10:51 p.m.
Mayor Scharf closed the public hearing.
Paul moved and Sinks seconded to adopt Resolution No. 19-106 approving the lien
assessment and collection of fees on private parcels for the annual Weed and Brush
Abatement Programs to allow the County to recover the cost of abatement with the
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exception of the property at 11841 Upland Way which was removed from the list until next
year. The motion carried unanimously.
18. Subject: Approve City-hosted Town Hall events and add Town Halls to the FY 2019-20 City
Work Program.
Recommended Action: Approve City-hosted Town Hall events and add Town Halls to the
FY 2019-20 City Work Program.
Mayor Scharf opened public comment and the following individuals spoke:
Jean Beadord
Jennifer Griffin
Lisa Warren
Mayor Scharf closed public comment.
Assistant to the City Manager Katy Nomura reviewed the staff report.
Paul moved and Sinks seconded to approve City-hosted Town Hall events and add Town
Halls to the FY 2019-20 City Work Program. The motion carried unanimously.
19. Subject: Designate a voting delegate and up to two alternates in order to vote at the Annual
Business Meeting (General Assembly) during the League of California Cities Annual
Conference, October 16 - 18 in Long Beach.
Recommended Action: Designate a voting delegate and up to two alternates in order to vote
at the Annual Business Meeting (General Assembly) during the League of California Cities
Annual Conference, October 16 - 18 in Long Beach.
Mayor Scharf reviewed the staff report.
Scharf moved and Sinks seconded to designate Mayor Scharf as the voting delegate and
Chao and Paul as the alternates to vote at the Annual Business Meeting (General Assembly)
during the League of California Cities Annual Conference, October 16 - 18 in Long Beach.
The motion carried unanimously.
20. Subject: Cancel the Tuesday, October 15, 2019 Regular City Council Meeting and call for a
Special Meeting on Monday, October 14, 2019 instead, in order to accommodate those
Councilmembers attending the League of California Cities Annual Conference in Long
Beach, CA.
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Recommended Action: Cancel the Tuesday, October 15, 2019 Regular City Council Meeting
and call for a Special Meeting on Monday, October 14, 2019 instead, in order to
accommodate those Councilmembers attending the League of California Cities Annual
Conference in Long Beach, CA.
Mayor Scharf reviewed the staff report.
Council took no action on this item.
ORAL COMMUNICATIONS - CONTINUED (As necessary) - None
COUNCIL AND STAFF COMMENTS AND FUTURE AGENDA ITEMS
Councilmember Paul submitted written comments.
Added a future agenda item to consider expanding the scope of the Environmental Review
Committee (ERC) (Paul/Chao)
Added a study session to consider the Plan Bay Area 2050 regional growth forecast methodology,
prior to the September 19 methodology comment period deadline (Chao/Scharf).
Added a future agenda item to discuss drafting a comment letter supporting the County Grand
Jury’s report on Valley Transportation Authority (VTA) management, before the comment
deadline (Sinks/Scharf).
ADJOURNMENT
At 11:41 p.m., Mayor Scharf adjourned the meeting in memory of the gun violence victims in
Gilroy, El Paso, and Dayton.
________________________________
Kirsten Squarcia, Deputy City Clerk
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DRAFT MINUTES
CUPERTINO CITY COUNCIL
Tuesday, August 20, 2019
SPECIAL CITY COUNCIL MEETING
At 5:32 p.m. Mayor Steven Scharf called the Special City Council meeting to order in the
Cupertino Community Hall Council Chambers, 10350 Torre Avenue.
ROLL CALL
Present: Mayor Steven Scharf, Vice Mayor Liang Chao, and Councilmembers Darcy Paul, Rod
Sinks (5:33 p.m.), and Jon Robert Willey (5:34 p.m.). Absent: None.
STUDY SESSION
1. Subject: Study session to discuss how the 2016 Bicycle Transportation Plan and 2018
Pedestrian Transportation Plan Projects have been brought to Council for consideration,
how currently funded projects are being scheduled for completion, and recommendation
of project information and impacts staff is to consider and describe for future funding
requests
Recommended Action: Receive presentation and provide input
Written communications for this item included emails to Council, amended Attachment D
– Bike-Ped Project Schedules, and a presentation.
Director of Public Works Roger Lee and Capital Improvement Program (CIP) Manager
Michael Zimmerman reviewed the presentation.
Business Systems Analyst Adam Araza demonstrated an online GIS CIP project viewer
application.
Mayor Scharf opened public comment and the following individuals spoke:
Linda Wyckoff (Cupertino resident) talked about Regnart Creek Trail, and asked how
bicycle boulevards would link to schools.
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Jennifer Griffin talked about the experimental bollards, and trees on Stevens Creek Blvd.
between Tantau and Wolfe.
Benaifer Dastoor (Cupertino resident) talked about Regnart Creek Trail, and bicycle
collision maps noting stress areas.
Mayor Scharf closed public comment.
Council comments included:
Paul: Place greater scrutiny on projects outside annual CIP process; modify flow chart to
include Planning Commission recommendation of conformance to the General Plan before
goes to Council; Planning Commission agenda item #4 from 5-28-19 meeting includes text
of General Plan conformance and Cupertino Municipal Code (CMC) that governs review
of CIP; our CMC requires only annual review but Government Code could possibly
include additional review; maybe amend CMC to cover certain projects and have City
Attorney’s Office look into this. (Chao support last item).
Chao: Make sure to include all attachments in agenda packet for Bike Ped Commission
meetings; when the Bike & Ped Plan is updated next year, review scoring to be more
objective when giving points to projects; include project initiation forms; for projects
outside normal annual CIP process (such as donations) need to consider and explain delay
to high priority projects and/or other projects added; schedule (attachment D) is nice; work
with community more on Bike Plan update.
Willey: Have schedule (Attachment D – Bike-Ped Project Schedules) starting from 2016
when Bike Plan was approved.
Council direction to staff included:
Modify the “Projects outside the Annual CIP” flowchart to include Planning
Commission recommendation of conformance to the GP before returning to Council.
When the Bike & Ped plan is updated, review scoring to be more objective when giving
points to projects.
Include more details about the project when considering approval, consider including
the project initiation forms.
Projects outside normal annual CIP process need to consider and explain impact to high
priority projects. This also applies to other projects proposed annually.
Expand the schedules in Attachment D – Bike-Ped Project Schedules to show prior years
and out-years.
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ADJOURNMENT
REGULAR CITY COUNCIL MEETING
PLEDGE OF ALLEGIANCE
At 6:45 p.m. Mayor Steven Scharf called the Regular City Council meeting to order in the
Cupertino Community Hall Council Chambers, 10350 Torre Avenue and led the Pledge of
Allegiance.
ROLL CALL
Present: Mayor Steven Scharf, Vice Mayor Liang Chao, and Councilmembers Darcy Paul, Rod
Sinks (6:47 p.m.), and Jon Robert Willey. Absent: None.
Mayor Scharf reported out from the closed session held on August 19, 2019.
Before Council went into closed session, the following individual spoke in open session:
Sandra James (Cupertino resident)
1. Subject: Conference with Real Property Negotiators (Government Code Section 54956.8);
Property: Cupertino Municipal Water System; Agency Negotiators: Roger Lee and
Deborah Feng; Negotiating Parties: City of Cupertino and San Jose Water Company; Under
Negotiation: Terms for City Leased Asset.
Council provided direction to its negotiators regarding potential terms for a renegotiated
lease of the Cupertino Municipal Water system. No reportable action was taken.
2. Subject: Conference with Legal Counsel pursuant to Government Code sectio n
54956.9(d)(1); Re: Pending Litigation; Friends of Better Cupertino, et al. v. City of
Cupertino; Santa Clara County Superior Court, Case No. 18CV330190 (SB 35 Vallco
Project).
The Council discussed with legal counsel this pending litigation for which discussion in
open session would prejudice the City in the litigation. No reportable action was taken.
3. Subject: Conference with Legal Counsel - Anticipated Litigation. Significant exposure to
litigation pursuant to Government Code section 54956.9(d)(2): One potential case.
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No reportable action was taken.
4. Subject: Conference with Legal Counsel - Anticipated Litigation; Initiation of litigation
pursuant to Government Code Section 54956.9(d)(4): Two potential cases.
No reportable action was taken on the first potential case. No reportable action was taken
on the second potential case.
CEREMONIAL MATTERS AND PRESENTATIONS - None
POSTPONEMENTS - None
ORAL COMMUNICATIONS
Muni Madhdhipatla (Cupertino resident) talked about the Ride4Diabetes community event to be
held in Memorial Park on 9/8/19 sponsored by Lions Club International (provided flyers).
Brooke Ezzat (Cupertino resident) talked about housing policy in Cupertino.
Sidhar M (Cupertino resident) talked about support for Regnart Creek Trail.
Larry Dean (Cupertino resident) on behalf of Walk-Bike Cupertino talked about support for
Regnart Creek Trail.
Ignatius Y Ding (Cupertino resident) talked about removing David Fung from the Planning
Commission (provided written comments).
Greg Schaffer (Cupertino resident) talked about outsider influence on the community.
Richard Mehlinger (Sunnyvale resident) talked about removing Ray Wang from the Planning
Commission.
Dolly Sandoval (Cupertino resident) talked about the recent ribbon cutting at Veranda, and
concern over Planning Commissioner Ray Wang’s remarks.
Heather Dean (Cupertino resident) talked about concern over the recent Cupertino Town Hall
Meeting being recorded by a member of the public.
J.R. Fruen (Cupertino resident) talked about concern over Planning Commissioner Ray Wang’s
remarks.
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Rhoda Fry talked about Lehigh Cement Company and a Bay Area Air Quality Management
District (BAAQMD) meeting (provided written comments).
Ed Hirshfield (Cupertino resident) talked about removing item #11 regarding Vallco from the
agenda as it wasn’t properly noticed.
Jeonghee Yi (Cupertino resident) talked about Bike/Ped priorities and Regnart Creek Trail, and
to spend money on other projects rather than Regnart Creek Trail to address collision problem
areas.
Goeff Paulsen (Cupertino resident) talked about transportation issues.
Danessa Techmanski (Cupertino resident) talked about disappointment over California housing
bills.
James Moore (Cupertino resident) talked about unfair accusations against Planning
Commissioner Ray Wang.
Lisa Warren talked about respecting the General Plan and Vallco decisions made in 2014
(provided written comments).
Tessa Parish (Cupertino resident) talked about unfair attacks on Planning Commissioner Ray
Wang.
Cup Rez (Cupertino resident) talked about the California housing crisis and Cupertino having a
good housing/jobs balance.
REPORTS BY COUNCIL AND STAFF (10 minutes)
1. Subject: Report on Committee assignments
Recommended Action: Report on Committee assignments
Councilmembers highlighted the activities of their committees and various community
events.
CONSENT CALENDAR
Willey moved and Sinks seconded to approve the items on the Consent Calendar as presented
except for item numbers 4 and 8 which were pulled for discussion. Ayes: Scharf, Chao, Paul,
Sinks, and Willey. Noes: None. Abstain: None. Absent: None.
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2. Subject: FY 2017-18 Comprehensive Annual Financial Report (CAFR) and related
supplemental reports.
Recommended Action: Approve the FY 2017-18 Comprehensive Annual Financial Report
(CAFR) and related supplemental reports.
3. Subject: Treasurer’s Investment Report for period ending June 30, 2019
Recommended Action: Approve the Treasurer's Investment Report for period ending June
30, 2019.
4. Subject: Updated Joint Use Agreement between the City of Cupertino and Cupertino
Union School District (CUSD) pertaining to maintenance and improvements of certain
open space areas within specific school sites for reimbursement of authorized Clean Water
and Storm Protection Fees
Recommended Action: 1. Authorize the City Manager to execute an updated Joint Use
Agreement between the City of Cupertino and CUSD; and 2. Authorize expenditures in
the amount of $8,705.80 from the Non-Point Source Fund to reimburse CUSD for Clean
Water and Storm Protection Fees associated with certain open space areas within specific
school sites
Written communications for this item included an email to Council.
Director of Public Works Roger Lee reviewed the item.
Mayor Scharf opened public comment and the following individuals spoke:
Peggy Griffin (Cupertino resident) said Sedgewick and Lawson should be on the list.
Lisa Warren agreed with Peggy Griffin and asked about meetings with CUSD regarding
this topic and others.
Mayor Scharf closed public comment.
Paul moved and Sinks seconded to authorize the City Manager to execute an updated Joint
Use Agreement between the City of Cupertino and CUSD; and 2. Authorize expenditures
in the amount of $8,705.80 from the Non-Point Source Fund to reimburse CUSD for Clean
Water and Storm Protection Fees associated with certain open space areas within specific
school sites; and 3. Provide direction to staff and the CM to approach the CUSD
administration and its Superintendent regarding the subsequent inclusion of both Lawson
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Middle School and Sedgewick Elementary School properties in the Joint Use Agreement.
The motion carried unanimously.
5. Subject: Adopt the City of Cupertino Annex to the Santa Clara County Community
Wildfire Protection Plan as the City of Cupertino Community Wildfire Protection Plan.
Recommended Action: Adopt Resolution No. 19-107 which adopts the City of Cupertino
Annex to the Santa Clara County Community Wildfire Protection Plan as the City of
Cupertino’s Community Wildfire Protection Plan.
6. Subject: Award Byrne Avenue Sidewalk Improvements, Project Number 2016-10
Recommended Action: Authorize the City Manager to award a contract to Granite
Construction Company in the amount of $1,853,984 and approve a construction
contingency of $185,398, for a total of $2,039,382 for the Byrne Avenue Sidewalk
Improvements, Project Number 2016-10
7. Subject: Authorize the City Manager to execute a lease agreement with the Regents of the
University of California for the Rolling Hills 4H Club for facilities at the McClellan Ranch
Preserve
Recommended Action: Authorize the City Manager to execute a lease agreement with the
Regents of the University of California for the Rolling Hills 4H Club for facilities at the
McClellan Ranch Preserve for a period of five years, from September 1, 2019 through
August 31, 2024
8. Subject: Agreement with Nomad Transit LLC (Via Transportation Inc.) for the 18-month
On-Demand Community Shuttle Pilot Program
Recommended Action: Authorize the City Manager to execute an agreement with Nomad
Transit LLC (Via Transportation Inc.) for the 18-month On-Demand Community Shuttle
Pilot Program with a not-to-exceed cost of $1,750,000
City Attorney Heather Minner noted a CEQA statutory exemption requirement action that
Council also needed to take.
Sinks moved and Paul seconded to find that the approval to execute the agreement with
Nomad Transit LLC (Via Transportation Inc.) for the 18-month On-Demand Community
Shuttle Pilot Program is statutorily exempt from the California Environmental Quality Act
pursuant to Public Resources Code section 21080(b)(10), and direct staff to file a Notice of
Exemption and further finding that the approval is exempt from CEQA pursuant to Title
14 of the California Code of Regulations Chapter 3, Article 5, Section 15061(b)(3) because
it is certain that there is no possibility that this approval would have a significant effect on
the environment; and Authorize the City Manager to execute an agreement with Nomad
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Transit LLC (Via Transportation Inc.) for the 18-month On-Demand Community Shuttle
Pilot Program with a not-to-exceed cost of $1,750,000. Councilmember Paul encouraged
staff to make sure the program rolls out as quickly and efficiently as possible and to ensure
there is a significant roll out not just with public relations but also outreach to the
community to ensure everyone is aware of the availability. The motion carried
unanimously.
9. Subject: Accept termination of Audit Committee member James (Jim) Luther and direct
staff to fill the unscheduled vacancy in January 2020 concurrent with the annual
recruitment for all commission and committee members’ terms expiring in January, 2020.
Recommended Action: Accept termination of Audit Committee member James (Jim)
Luther and direct staff to fill the unscheduled vacancy in January 2020 concurrent with the
annual recruitment for all commission and committee members’ terms expiring in January,
2020.
SECOND READING OF ORDINANCES
10. Subject: Second reading of Ordinance No. 19-2186, approving a development agreement
between the City of Cupertino and Cupertino Village LP for the Cupertino Village Hotel
project located at 10801 and 10805 North Wolfe Road; APN #316-45-017, 316-05-056
Recommended Action: Conduct the second reading of Ordinance No. 19-2186: "An
Ordinance of the City Council of the City of Cupertino Approving a Development
Agreement for the Development of a new 5-story, 185 room hotel with associated site and
landscaping improvements located at 10801 and 10805 North Wolfe Road (APN: 316-45-
017 and 316-05-056.”
Mayor Scharf opened public comment and the following individual spoke:
Jennifer Griffin spoke in support for this item.
Mayor Scharf closed public comment.
City Clerk Grace Schmidt read the title Ordinance No. 19-2186: "An Ordinance of the City
Council of the City of Cupertino Approving a Development Agreement for the
Development of a new 5-story, 185 room hotel with associated site and landscaping
improvements located at 10801 and 10805 North Wolfe Road (APN: 316-45-017 and 316-
05-056.”
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Paul moved and Sinks seconded to read Ordinance No. 19-2186 by title only and that the
City Clerk’s reading would constitute the second reading thereof. Ayes: Scharf, Chao, Paul,
Sinks, and Willey. Noes: None. Abstain: None. Absent: None.
Paul moved and sinks seconded to enact Ordinance No. 19-2186. Ayes: Scharf, Chao, Paul,
Sinks, and Willey. Noes: None. Abstain: None. Absent: None.
Scharf moved and Willey seconded to move item numbers 12 and 13 under Ordinances and Action
Items before item number 11 under Public Hearings. The motion carried unanimously.
ORDINANCES AND ACTION ITEMS
12. Subject: Establish a Residential Clean Water Rebate Program offering various financial
incentives to decrease storm water runoff and establish a 20% cost -share of Clean Water
and Storm Protection Fees for extremely low and very low-income property owners
Recommended Action:
1. Authorize expenditures not to exceed $25,000 per year from the Environmental
Management/Clean Creeks Fund to: A. fund the Santa Clara Valley Water District’s
Rainwater Capture Program to match rebates for rain barrels, cisterns, and rain garden
construction for Cupertino residential property owners offered through the Santa Clara
Valley Water District’s new program, and
B. to fund a separate City program that would provide property owners up to $3.00 per
square foot of impervious surface removed and replaced with pervious hardscape; and
2. Adopt Resolution No. 19-111 to approve a Budget Adjustment in the amount of $25,000
in the Non-Point Source Fund for the Santa Clara Valley Water District’s Rainwater
Capture Program, and the new impervious pavement conversion rebate pilot program
(230-81-802); and
3. Authorize a 20% cost-share of Clean Water and Storm Protection Fees for extremely low
and very low-income property owners; and
4. Authorize expenditures not to exceed $14,000 per year from the Non-Point Source Fund
for a 20% cost-share of the 2019 Clean Water and Storm Protection fee for extremely low
and very low-income property owners (230-81-802)
Written communications for this item included a presentation.
Director of Public Works Roger Lee reviewed the presentation.
Paul moved and Scharf seconded to:
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1. Authorize expenditures not to exceed $25,000 per year from the Environmental
Management/Clean Creeks Fund to:
A. Fund the Santa Clara Valley Water District’s Rainwater Capture Program to
match rebates for rain barrels, cisterns, and rain garden construction for Cupertino
residential property owners offered through the Santa Clara Valley Water District’s
new program; and
B. Fund a separate City program that would provide property owners up to $3.00
per square foot of impervious surface removed and replaced with pervious
hardscape; and
2. Adopt Resolution No. 19-111 to approve a Budget Adjustment in the amount of
$25,000 in the Non-Point Source Fund for the Santa Clara Valley Water District’s
Rainwater Capture Program, and the new impervious pavement conversion rebate
pilot program (230-81-802); and
3. Authorize a 20% cost-share of Clean Water and Storm Protection Fees for extremely
low and very low-income property owners; and
4. Authorize expenditures not to exceed $14,000 per year from the Non-Point Source
Fund for a 20% cost-share of the 2019 Clean Water and Storm Protection fee for
extremely low and very low-income property owners (230-81-802)
Council also directed staff to keep track of administrative outreach required and report
back to Council after the trial period. The motion carried unanimously.
13. Subject: Amendment to the FY 2019-2020 City Council Work Program to add a new
Community Development Work Program Item related to increasing noticing for
development projects.
Recommended Action: That the City Council decide whether to amend the 2019/2020 City
Work Program as proposed and appropriate funds to complete the project.
Director of Community Development Ben Fu reviewed the presentation.
Mayor Scharf opened public comment and the following individual spoke:
Jennifer Griffin talked about lack of noticing regarding the Urban Villages in San Jose.
Mayor Scharf closed public comment.
Council comments included: Want commitment from staff if have extra hours to pick back
up other items; add this item on wait list bucket; study and bring with fee schedule; bigger
projects with Citywide impact; add to next year’s work program because other items
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important; leave up to staff for this year; not intended for single family residence but for
projects with significant impacts; rate noticing area depending on number of stories.
Council directed staff to place the item on next year’s Work Program and as a policy, to
start requiring/encouraging applicants of large and/or controversial projects to implement
greater noticing radius and time period.
Council recessed from 8:50 p.m. to 8:55 p.m.
PUBLIC HEARINGS
11. Subject: Vallco Shopping District Special Area General Plan Amendments and Associated
Zoning Amendments; and Second Addendum to the Environmental Impact Report for the
2014 General Plan Amendment, Housing Element Update, and Associated Rezoning
Project
Recommended Action: That the City Council: 1. Conduct the public hearing; and 2. Adopt:
a. Resolution No. 19-108, a resolution adopting a Second Addendum to the Environmental
Impact Report for the 2014 General Plan Amendment, Housing Element Update, and
Associated Rezoning Project (Attachment 1) b. Resolution No. 19-109 (GPA-2019-01), a
resolution amending the General Plan to remove Office as a permitted use from the Vallco
Shopping District Special Area and remove associated office allocations (Attachment 2); c.
Resolution No. 19-110 (GPA-2019-02), a resolution amending the General Plan and General
Plan Land Use Map to establish height limits and enact development standards for
residential uses within the Vallco Shopping District Special Area and identifying a
recommended location for future residential development on 13.1 acres of the Special Area
(Attachment 3); 2. Introduce and conduct the first reading of: a. Ordinance No. 19-2187
(MCA-2019-01), "An Ordinance of the City Council of the City of Cupertino eliminating
references in the Municipal Code to the Vallco Town Center Specific Plan and adding
language establishing development standards for a new Mixed Use Planned Development
with Multifamily (R3) Residential and General Commercial zoning designation
(P(R3,CG))" (Attachment 4); and b. Ordinance No. 19-2188 (Z-2019-01), "An Ordinance of
the City Council of the City of Cupertino amending the zoning map to rezone 13.1 acres
within the Vallco Shopping District Special Area to Mixed Use Planned Development with
Multifamily (R3) Residential zoning P(R3,CG) and General Commercial uses and the
remainder of the Special Area to General Commercial (CG)" (Attachment 5).
Vice Mayor Chao recused herself on this item.
Written communications for this item included emails and letters to Council, presentation,
resolution and ordinance amendments, and Councilmember Paul’s comments (which can
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be found under “written communications” on the agendas/minutes webpage for this
meeting and also in Council agendas and packets under the “public records” link on the
City’s website.
Director of Community Development Ben Fu reviewed the presentation.
Mayor Scharf opened the public hearing and the following individuals spoke:
Jennifer Griffin – no support for SB35 and concern over loss of retail in Cupertino.
Muni Madhdhipatla (Cupertino resident) - misleading communications from property
owner.
Edward Hirshfield (Cupertino resident) - support for Vallco development.
Kevin McClelland - no support for this item.
Lisa Warren - previous decision on GPA in 2014.
Charmaine Yu on behalf of the Vallco Property Owner - no support for the GP
amendments and litigation risks to the City (provided written comments).
Richard Mehlinger (Sunnyvale resident) - need to build housing and no support for the GP
amendments.
Peggy Griffin (Cupertino resident) - support for the GP amendments.
Connie Cunningham (Cupertino resident) - support for the Planning Commission
resolution to move forward with more community outreach first; support for Vallco
Specific Plan with communication with developer.
James Moore (Cupertino resident) - jobs/housing balance.
Jean Bedord (Cupertino resident) - no support for the GP amendments (provided written
comments).
Ignatius Y. Ding (Cupertino resident) - support for the GP amendments.
Geoff Paulsen (Cupertino resident) - being compassionate regarding housing needs.
Ethan Lipman (Cupertino resident) - need for a diverse housing stock in Cupertino.
John McGuigan (Cupertino resident) - support for the GP amendments.
Al DiFrancesco (Cupertino resident) - support for the GP amendments.
Albert Liu (Cupertino resident) - no support for the GP amendments.
Rick Kitson on behalf of Cupertino Chamber of Commerce - need for mixed-use
development for economic viability.
Sujatha Venkatraman on behalf of West Valley Community Services - need for affordable
housing in Cupertino.
Vinod Balakrishnan (Cupertino resident) - support for the GP amendments.
Marie Liu on behalf of Cupertino for All - no support for the GP amendments and lack of
notice.
Celia House (Cupertino resident) - support for Vallco development as soon as possible.
Qin Pan (Cupertino resident) - support for the GP amendments.
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Yuva Athur (Cupertino resident) - support for the GP amendments.
Tessa Parish (Cupertino resident) - support for the GP amendments.
Naidu Bollineni (Cupertino resident) – concern over a Planning Commissioner influence
on Vallco process.
Venkat Ranganathan (Cupertino resident) – need compromise on Vallco development.
Siva Gandikota (Cupertino resident) - support for the GP amendments.
Bill Kerr (Cupertino resident) - no support for the GP amendments.
Hung Wei (Cupertino resident) - no support for the GP amendments.
Joan Chin (Cupertino resident) - support for the GP amendments.
Rahul Vasanth (Cupertino resident) - support for the GP amendments.
Mayor Scharf closed the public hearing.
Council recessed from 10:40 p.m. to 10:45 p.m.
Council comments included:
Scharf: 13.1 acres most appropriate next to Rose Bowl; Scenario A includes housing at
Vallco; Scenario B is no housing at Vallco and change numbers at Oaks and Hamptons;
help solve regional jobs/housing balance; don’t add so many jobs with office that will need
more housing in the future due to RHNA; need community engagement process; maybe
some office could go there with commensurate amount of housing; want City to work with
property owner and community input to have a development that won’t crowd local
schools; City Manager authority to bring residents, Council, and property owner together
to find a solution that will work for everyone; need to do 13.1 acres for RHNA needs; not
4000 due to school enrollment in area, maybe 2000 would be okay; could be some office
but commiserate with housing.
Willey: Community input most important thing; must represent Cupertino residents first
and foremost; make sure checks and balances are firmly in place for the community (GPA);
next to houses on west side of Vallco make sure have slope, building plane and heights;
cap at 60 feet, building plane 3 in and 1 up; want BMR for low and very low, individu als
with disabilities, seniors; majority of residents gets his vote; redevelop Vallco ASAP; keep
height at 60 rather than 75 as would grow with BMR requirement.
Paul: (provided written comments) Supports 1 to 1.5 building plane; okay to see 1:2 with
future intent for staff to prepare GPA in future to allow for 1500 units and 400,000 square
feet of retail to be added.
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Sinks: Support Scharf to empower City Manager to negotiate on Council’s behalf; support
long on housing with BMR at all income levels; add housing and reduce office efforts; start
with SB35 project, decrease office, increase housing and increase diversity in BMR; OR start
with Specific Plan and reduce office from there and increase housing; concern about
brining office to zero is negative contribution to a project whereas in mixed-use, homes
help evening sales and office helps daytime sales for retail; can’t support moving forward
with no dialogue with property owner; must be economically feasible for property owner
or nothing will get done; good faith negotiation with viable options; need more dialogue
with the public; look at whole site and not just a piece of it; 3000-4000 housing units with
all economic levels.
Council selected Location D: East of Wolfe Road and North of Vallco Parkway, as shown
on Exhibit 10 of the Staff Report, as the location of approximately 13.1 acres on the site to
be designated and zoned for residential use.
Paul moved and Willey seconded to adopt Resolution No. 19-108, a resolution adopting a
Second Addendum to the Environmental Impact Report for the 2014 General Plan
Amendment, Housing Element Update, and Associated Rezoning Project. The motion
carried with Sinks voting no and Chao recusing.
Paul moved and Willey seconded to adopt Resolution No. 19-109 (GPA-2019-01), a
resolution amending the General Plan to remove Office as a permitted use from the Vallco
Shopping District Special Area and remove associated office allocations. The motion
carried with Sinks voting no and Chao recusing.
Paul moved and Willey seconded to adopt Resolution No. 19-110 (GPA-2019-02), a
resolution amending the General Plan and General Plan Land Use Map to establish height
limits and enact development standards for residential uses within the Vallco Shopping
District Special Area and identifying a recommended location for future residential
development on 13.1 acres of the Special Area based on location D as shown on Attachment
10 of the staff report, as amended to (1) reflect changes shown on dais materials provided
to Council and made available on the City’s website as written communications from staff;
(2) add a required building plane adjoining the western side of the shopping district
shopping area also known as the Portal neighborhood with a slope line of two feet of
setback for every one foot of vertical building; (3) add of the following language to the
resolution: "Now therefore be it further resolved that the City Council directs staff to
initiate a Specific Planning process for the portion of the site designated “Regional
Shopping” and consider as part of that process a plan that would include a maximum of
1,500 units of housing for the entirety of the Vallco Shopping District's special area
inclusive of any and all housing and density bonuses, including added incentives for
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features such as housing for extremely low income households and housing for persons
with disabilities including developmental disabilities, and reduce the amount of retail
required to 400,000 square feet exclusive of the parcel known colloquially as the Simeon
Property;" (4) set a 60-foot height limitation for the entirety of the Vallco Shopping District
Special Area; and (5) designate 13.1 acres of the Vallco site as Regional
Shopping/Residential in location D as shown on Attachment 10 of the staff report. The
motion carried with Sinks voting no and Chao recusing.
City Clerk Grace Schmidt read the title of Ordinance No. 19 -2187 (MCA-2019-01): "An
Ordinance of the City Council of the City of Cupertino eliminating references in the
Municipal Code to the Vallco Town Center Specific Plan and adding language
establishing development standards for a new Mixed Use Planned Development with
Multifamily (R3) Residential and General Commercial zoning designation (P(R3,CG))"
Paul moved and Willey seconded to read Ordinance No. 19-2187 by title only and that the
City Clerk’s reading would constitute the first reading thereof as amended to reflect
changes shown on dais materials provided to Council and made available on the City’s
website as written communications from staff. Ayes: Scharf, Paul, and Willey. Noes: Sinks.
Abstain: None. Absent: None. Recuse: Chao.
City Clerk Grace Schmidt read the title of Ordinance No. 19-2188 (Z-2019-01), "An
Ordinance of the City Council of the City of Cupertino amending the zoning map to
rezone 13.1 acres within the Vallco Shopping District Special Area to Mixed Use Planned
Development with Multifamily (R3) Residential zoning P(R3,CG) and General
Commercial uses and the remainder of the Special Area to General Commercial (CG)"
Paul moved and Willey seconded to read Ordinance No. 19-2188 by title only and that the
City Clerk’s reading would constitute the first reading thereof. Ayes: Scharf, Paul, and
Willey. Noes: Sinks. Abstain: None. Absent: None. Recuse: Chao.
Council also directed the City Manager to attempt to engage with the property owner to
discuss potential alternatives.
ORAL COMMUNICATIONS - CONTINUED (As necessary) - None
COUNCIL AND STAFF COMMENTS AND FUTURE AGENDA ITEMS
Councilmembers highlighted the activities of their various community events.
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City Manager Deborah Feng noted that the City received a Silicon Valley Business Journal
Structures Award for The Veranda in the category of Best Affordable Residential Project and a
ceremony will be held September 19.
ADJOURNMENT
At 12:10 a.m. on Wednesday, August 21, Mayor Scharf adjourned the meeting.
_______________________
Grace Schmidt, City Clerk
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CITY COUNCIL STAFF REPORT
Meeting: September 3, 2019
Subject
Resolution adopting the City of Cupertino’s State-mandated Green Stormwater
Infrastructure (GSI) Plan.
Recommended Action
Adopt Resolution No. 19-____ adopting the City of Cupertino’s Green Stormwater
Infrastructure (GSI) Plan which demonstrates the City’s long-term commitment to
implementation of green stormwater infrastructure as required by the City’s Municipal
Regional Stormwater Permit for the San Francisco Bay Region.
Discussion
The City of Cupertino is one of 76 municipalities (cities, towns, and counties) and flood
control agencies that are subject to the requirements of the reissued Municipal Regional
Stormwater NPDES Permit (MRP) for municipalities and agencies that discharge
stormwater into San Francisco Bay (Order R2-2015-0049). The current MRP, which became
effective on January 1, 2016, requires each permittee to adopt a long-term GSI Plan by
September 30, 2019. This demonstrates a shift from traditional storm drainage
infrastructure which is designed to rapidly convey stormwater and collected pollutants
through impervious pipes directly to creeks with no opportunity for infiltration and
pollutant removal. Conversely, GSI creates a more resilient and sustainable storm drain
system that reduces the velocity of stormwater runoff, facilitates capture and infiltration
of rainwater into soil, and provides treatment and filtering of urban stormwater runoff.
Examples of GSI include:
Landscape-based “biotreatment” areas that use soil and plants to treat stormwater
Pervious paving systems (e.g., interlocking concrete pavers, porous asphalt,
pervious concrete) which allows stormwater to soak into the ground
Green roofs
Rainwater harvesting systems (e.g., cisterns and rain barrels) which capture
stormwater for non-potable uses, such as toilet flushing and landscape irrigation
Other methods to capture, infiltrate and/or treat stormwater
GSI Plan Requirements
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At a minimum, GSI plans must identify, prioritize, and map areas of opportunity for
potential GSI projects over the next 20 years and, if applicable, identify planned or
completed projects as noted in section 2.4 of the City’s GSI Plan (Attachments A and B).
As other municipal plans (such as the General Plan, Storm Drain Master Plan, Parks
Master Plan, Climate Action Plan, etc.), are updated or developed, they are required to
align with the City’s adopted GSI Plan. The benefits of green infrastructure have been
discussed with the Water Board for many years before the MRP mandated development
of a plan. As a result, the City’s environmental staff has worked closely with other City
departments to ensure inclusion of GSI in all municipal plans (see GSI Plan section 3.1
Integration with other Planning Documents). The GSI Plan must also include potential
funding mechanisms such as grant funding, new development and redevelopment cost
sharing, etc.
The first step in formalizing a GSI plan, as required by the MRP, is for the City’s Council
to adopt a GSI Plan Framework by June 30, 2017, describing specific tasks and timeframes
for development of the City’s Green Infrastructure Plan. The GSI Plan Framework
(Attachment C) was approved by City Council on April 18, 2017 and submitted to the San
Francisco Bay Regional Water Quality Control Board (Water Board) as part of the City’s
Annual FY 16-17 Stormwater Report.
GSI Plan Development
The City retained a stormwater engineering consulting firm, EOA Inc. (EOA), to develop
its Plan based on years of meetings with City staff and records from the City’s annual
stormwater reports. EOA provides assistance to public agencies in managing the impacts
of stormwater and wastewater on local creeks, rivers and the Bay, and serves as the Santa
Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP) Management
team. SCVURPPP is a collaborative of 15 government agencies in Santa Clara Valley,
including the City of Cupertino, that work together to implement the MRP requirements
cost efficiently and effectively.
Public Education Outreach and Commission Review
GSI Plan development and implementation includes a strong public education and
outreach component. A GSI presentation was given to City Council by EOA on July 16,
2019 followed by comments and questions from Councilmembers and the public. Since
the July 16th council meeting, EOA and City staff have presented to and asked for input
from the Planning Commission (August 13, 2019) and the Sustainability Commission
(August 15, 2019). Both commissions provided comments which have been included in
the revised Plan brought to Council for adoption this evening. Both Commissions
encouraged the City to expand GSI awareness and to look for more opportunities for
incorporation into public projects.
The Planning Commission suggested looking at Wolfe Road as a future opportunity. The
Sustainability Commission expressed interest in GSI demonstration gardens, similar to
the one at City Hall, to be considered at all City parks to enhance public awareness and
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inspire private property owners to use GSI. Both Commissions asked for cost estimates.
Though data is being gathered regionally to provide costs for implementation and
maintenance, each potential GSI project, ranging in size from a few hundred square feet
to a more than a hundred acres, will have unique site conditions, opportunities, and
feasible designs. Therefore, cost and funding for each project will vary significantly
depending on the site, features selected, and opportunities for cost-sharing partnerships
(e.g., with schools, Caltrans, and adjacent jurisdictions).
Private Funding Option
The Planning Commission is interested in opportunities for private developers to
contribute funding for GSI projects on City property. This concept is consistent with
section C.3.e of the Permit, which allows a city to establish and implement alternative or
in-lieu compliance options for private development projects that must meet low impact
development (LID) requirements (regulated projects), but have limited space or
opportunity on their site. A regulated project may provide alternative compliance by: 1)
treating a portion of the amount of runoff with Low Impact Development (LID) measures
onsite or at a joint stormwater treatment facility; and 2) pay equivalent in-lieu fees to treat
the remaining portion of the runoff with LID treatment measures at a regional or
municipal (stormwater treatment) project site that discharges into the same watershed as
the regulated project. This allows the City to prioritize a public GSI project and collect
money via in-lieu fees from private developers to help fund it.
Permit Requirements
During the current stormwater permit term (approximately 5 years), there are no specific
requirements to implement GSI. The mandate is focused on ensuring that there are “no
missed opportunities”. Permittees must conduct an annual review of each project on their
Capital Improvement Program (CIP) list and identify all those that have potential to
incorporate GSI. In each subsequent annual report, the permittee must provide a reason
for any project that did not incorporate GSI in its design phase. The City of Cupertino has
a GSI workgroup of staff from Public Works Engineering, Transportation, Maintenance,
Trees, Environmental Programs, Sustainability, Planning, Parks and Recreation, and
Geographic Information Systems (GIS). The group meets once or twice annually to discuss
the City’s GSI opportunities, and the potential cost and feasibility of potential projects.
Council Action
The City’s Plan has been prepared for adoption by City Council. Without being
prescriptive or requiring any commitment to build a specific project or number of projects,
it addresses all of the MRP requirements and incorporates comments from the Planning
and Sustainability Commissions.
Sustainability Impact
The benefits of GSI as a replacement for impervious hardscape include improving water
and air quality, water conservation, preserving and creating habitat and biodiversity,
traffic calming, increasing pedestrian mobility, urban greening, and enhancing urban
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forests. It is a forward-thinking approach to creating sustainable public streets, parking
lots, and buildings.
CEQA Review
There is no environmental assessment required for the adoption of the GSI Plan. City staff
has independently studied the GSI Plan and determined that it is exempt from
environmental review pursuant to the exemption in Title 14-California Code of
Regulations, §15061(b)(3), and §15378, in that it can be seen with certainty that there is no
possibility that the approval of the GSI Plan will have a significant effect on the
environment given that it does not involve approval of any specific project. Potential GSI
projects will be evaluated for the application of CEQA to it and, as applicable, each project
will conduct the appropriate level of environmental analysis before construction.
Fiscal Impact
The GSI Plan describes the City’s goals, opportunities, and priorities for implementing
GSI on approved capital improvement projects (CIP) over a 20-year time frame (2020 to
2040). The adoption of the GSI Plan will not result in an immediate fiscal impact; however,
the City’s CIP list must be evaluated annually to determine the feasibility of each project
to include GSI. The total cost of GSI includes costs for planning, capital (design,
engineering, construction) and on-going expenditures, including operations and
maintenance, utility relocation, and future replacement. Specific explanation must be
reported in the City’s annual report to the Water Board for any CIP project that does not
contain a GSI element.
_____________________________________
Prepared by: Cheri Donnelly, Environmental Programs Manager
Alex Wykoff, Environmental Specialist
Reviewed by: Roger Lee, Director of Public Works
Approved for Submission by: Deborah Feng, City Manager
Attachments:
A - GSI Plan
B - GSI Plan Appendices
C - GSI Plan Framework
D - Resolution
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City of Cupertino
Green Stormwater Infrastructure Plan
DRAFT
Approved on: September 3, 2019
Approved by: The City Council of the City of Cupertino
Submitted by:
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014
In compliance with Provision C.3.j.i.(2) of Order R2-2015-0049
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ACKNOWLEDGEMENTS
The City of Cupertino gratefully acknowledges the following individuals and organizations that
contributed to this Green Stormwater Infrastructure Plan:
City of Cupertino
Public Works Department
• Roger Lee
• Chad Mosley, P.E.
• Cheri Donnelly
• Alex Wykoff
• Ursula Syrova
EOA, Inc.
• Jill Bicknell, P.E.
• Vishakha Atre
• Liesbeth Magna
The City would like to thank and acknowledge the City of Palo Alto and the City of San Jose for sharing
text from their Green Stormwater Infrastructure Plans.
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Table of Contents
EXECUTIVE SUMMARY .................................................................................................................................. 1
1. INTRODUCTION ..................................................................................................................................... 3
Purpose and Goals of the GSI Plan ................................................................................................ 3
City Description ............................................................................................................................. 3
1.2.1 Population Size and Growth.................................................................................................. 3
1.2.2 City Characteristics ................................................................................................................ 4
1.2.3 Roadways .............................................................................................................................. 4
1.2.4 Hillsides and Water Resources .............................................................................................. 5
Regulatory Context ....................................................................................................................... 5
1.3.1 Federal and State Regulations and Initiatives ....................................................................... 5
1.3.2 Municipal Regional Stormwater Permit ................................................................................ 5
GSI Plan Development Process ..................................................................................................... 6
1.4.1 GSI Plan Development and Adoption.................................................................................... 6
1.4.2 Regional Collaboration .......................................................................................................... 7
1.4.3 Education and Outreach ....................................................................................................... 7
GSI Plan Structure and Required Elements ................................................................................... 8
2. WHAT IS GREEN STORMWATER INFRASTRUCTURE? .......................................................................... 10
Green Stormwater Infrastructure ............................................................................................... 10
Benefits of Green Stormwater Infrastructure ............................................................................. 10
Types of Green Stormwater Infrastructure Facilities.................................................................. 11
2.3.1 Biotreatment/Bioretention ................................................................................................. 11
2.3.2 Stormwater Tree Well Filters and Suspended Pavement Systems ..................................... 12
2.3.3 Pervious Pavement ............................................................................................................. 13
2.3.4 Infiltration Facilities ............................................................................................................ 13
2.3.5 Green Roofs......................................................................................................................... 14
2.3.6 Rainwater Harvesting and Use ............................................................................................ 14
Existing GSI Facilities ................................................................................................................... 14
2.4.1 Stevens Creek Corridor and Creek Restoration project ...................................................... 15
2.4.2 McClellan West Parking Lot ................................................................................................ 16
2.4.3 Apple Park ........................................................................................................................... 16
3. INTEGRATION WITH OTHER PLANNING DOCUMENTS ....................................................................... 17
City Planning Document Review ................................................................................................. 17
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3.1.1 General Plan – Community Vision 2040.............................................................................. 17
3.1.2 Pedestrian Transportation Plan .......................................................................................... 19
3.1.3 Storm Drain Master Plan ..................................................................................................... 19
3.1.4 Bicycle Transportation Plan ................................................................................................ 19
3.1.5 Climate Action Plan ............................................................................................................. 19
3.1.6 Heart of the City Specific Plan ............................................................................................. 20
3.1.7 Citywide Parks & Recreation System Master Plan (Draft) .................................................. 21
3.1.8 Workplan for Integration of GSI Language into Existing and Future City Planning
Documents .......................................................................................................................................... 21
Regional Plans ............................................................................................................................. 22
3.2.1 Santa Clara Basin Stormwater Resource Plan ..................................................................... 22
3.2.2 Santa Clara Valley Water District’s One Water Plan ........................................................... 22
3.2.3 Bay Area Integrated Regional Water Management Plan .................................................... 23
4. GSI DESIGN GUIDELINES, DETAILS, AND SPECIFICATIONS .................................................................. 24
Design Guidelines ........................................................................................................................ 24
Details and Specifications ........................................................................................................... 24
Incorporation of SCVURPPP Details and Specifications into City Standards .............................. 25
5. GSI PROJECT PRIORITIZATION AND IMPERVIOUS TARGETS ............................................................... 26
Project Types ............................................................................................................................... 26
5.1.1 Early Implementation Projects ............................................................................................ 26
5.1.2 Regulated Projects .............................................................................................................. 26
5.1.3 LID Projects ......................................................................................................................... 26
5.1.4 Regional Projects ................................................................................................................. 27
5.1.5 Green Street Projects .......................................................................................................... 27
Identification and Prioritization Process ..................................................................................... 27
5.2.1 Step 1: Stormwater Resource Plan Prioritization ............................................................... 27
5.2.2 Step 2: City-Specific Prioritization ....................................................................................... 30
Prioritization Output ................................................................................................................... 37
6. GSI Implementation Plan .................................................................................................................... 39
City-wide GSI Strategy ................................................................................................................. 39
Process for Identifying and Evaluating GSI Project Opportunities ............................................. 40
Workplan to Complete Early Implementation Projects .............................................................. 40
Legal Mechanisms for GSI Implementation ................................................................................ 41
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Evaluation of Funding Options .................................................................................................... 41
6.5.1 Current Funding Sources for GSI Program Elements .......................................................... 41
6.5.2 Potential Future Funding Options ....................................................................................... 42
Impervious Area Targets ............................................................................................................. 42
6.6.1 Methodology ....................................................................................................................... 42
6.6.2 Results ................................................................................................................................. 49
Project Tracking System .............................................................................................................. 52
6.7.1 City Project Tracking System (Regulated and GSI) .............................................................. 52
6.7.2 SCVURPPP Project Tracking System .................................................................................... 52
TABLES
Table 1-2 Summary of GSI Plan Elements required by Provision C.3.j.i of the MRP. ................................... 9
Table 5-1 Screening factors for parcel-based and right-of-way project opportunities .............................. 29
Table 6-2 Potential GSI Funding Options .................................................................................................... 43
Table 6-2 Projected cumulative land area (acres) anticipated to be addressed via Green Stormwater
Infrastructure facilities via private redevelopment in the City of Cupertino by 2020, 2030, and 2040. .... 50
Table 6-3 Actual (2002-2018) and predicted (2019-2040) extent of impervious surface retrofits via GSI
implementation on privately- and publicly-owned parcels in the City of Cupertino by 2020, 2030, and
2040. ........................................................................................................................................................... 51
FIGURES
Figure 2-1 Stormwater curb extension, Southgate Neighborhood, Palo Alto (Source: EOA) ..................... 11
Figure 2-2 Stormwater planter, Hacienda Avenue, Campbell (Source: City of Campbell) ......................... 12
Figure 2-3 Stormwater tree well filter conceptual examples: modular suspended pavement system (left),
column suspended pavement system (right). (Courtesy of Philadelphia Water Department) .................. 12
Figure 2-4 Permeable interlocking concrete pavers, Mayfield Playing Fields, Palo Alto (Source: EOA) .... 13
Figure 2-5 Infiltration trench, San Jose (Source: City of San Jose) .............................................................. 13
Figure 2-6 Subsurface infiltration system (Source: Conteches.com) .......................................................... 13
Figure 2-7 Green roof at Fourth Street Apartments, San José (Source: EOA) ............................................ 14
Figure 2-8 Rainwater harvesting cistern, Environmental Innovation Center, San José (Source: City of San
Jose) ............................................................................................................................................................ 14
Figure 2-9 Subsurface vault, under construction (Source: Conteches.com) .............................................. 14
Figure 2-10 Completed green parking bays (above left) and parking bays under construction, showing
the recycled plastic geocells that support vehicle weight (above right).(Source: City of Cupertino) ........ 15
Figure 2-11 Pervious concrete bike path and walkway at Blackberry Farm. (Source: City of Cupertino) .. 15
Figure 5-1 City of Cupertino Public Parcels and Street Segments with Opportunities for GSI (Source: EOA,
and Santa Clara Basin Stormwater Resource Plan, 2018)........................................................................... 31
Figure 5-2. City of Cupertino Special Project Areas and Priority Development Area (Source: City of
Cupertino General Plan).............................................................................................................................. 33
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Figure 5-3. City of Cupertino Public Projects with Potential for GSI (Source: City of Cupertino FY 17-18
Annual Report, and 2018 Santa Clara Basin Stormwater Resource Plan) .................................................. 36
Figure 5-5 City of Cupertino GSI Overview ................................................................................................. 38
Figure 6-1 Existing and projected cumulative land area (acres) anticipated to be addressed via Green
Stormwater Infrastructure facilities installed via private redevelopment in the City of Cupertino by 2020,
2030, and 2040. .......................................................................................................................................... 49
APPENDICES
Appendix A Prioritization Metrics for Scoring GSI Project Opportunities
Appendix B Street Segments and Parcels in Cupertino with Opportunities for GSI
Appendix C GSI concept for the Mary Avenue Greenbelt and Trail Project
Appendix D Guidance for Identifying Green Infrastructure Potential in Municipal Capital Improvement
Plan Projects
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LIST OF ACRONYMS
ABAG Association of Bay Area Governments
BASMAA Bay Area Stormwater Management Agencies Association
Caltrans California Department of Transportation
CFD Community Facilities District
CIP Capital Improvement Program
DOF Department of Finance
EPA United States Environmental Protection Agency
FY Fiscal Year
GI Green Infrastructure
GIS Geographic Information System
GSI Green Stormwater Infrastructure
IRWMP Integrated Regional Water Management Plan
LID Low Impact Development
MRP Municipal Regional Stormwater NPDES Permit
MS4 Municipal Separate Storm Sewer System
NPDES National Pollutant Discharge Elimination System
NRCS National Resource Conservation Service
O&M Operation and Maintenance
PDA Priority Development Area
PICP Permeable Interlocking Concrete Pavers
PP Permeable Pavers
SCVURPPP Santa Clara Valley Urban Runoff Pollution Prevention Program
State Water Board State Water Resource Control Board
STORMS Strategy to Optimize Resource Management of Stormwater
SWRP Storm Water Resource Plan
Valley Water Santa Clara Valley Water District
Regional Water Board San Francisco Bay Regional Water Quality Control Board
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EXECUTIVE SUMMARY
Development of this Green Stormwater Infrastructure (GSI) Plan is required by the City’s Municipal
Regional Stormwater National Pollutant Discharge Elimination System (NPDES) Permit. Urban
development has traditionally involved replacing natural landscapes with solid pavements and buildings,
using underground metal-pipe storm drainage systems to carry increased amounts of stormwater runoff
and pollutants directly into local creeks, which empty into San Francisco Bay. To reduce the impact of
urban development on waterways, Bay Area municipalities are required to begin augmenting traditional
stormwater drainage systems with Green Stormwater Infrastructure (GSI) treatments.
GSI features mimic nature, and use plants, soils, and/or pervious surfaces to collect stormwater, allowing
it to soak into the ground and be filtered by the soil. This reduces the quantity of water and pollutants
flowing directly into local creeks. The City began the process of incorporating GSI into public projects in
2014, with the completion of the 18-acre Stevens Creek Corridor Park and Restoration.
The City of Cupertino has prepared this GSI Plan, specifically in accordance with its MRP requirements, to
guide the siting, implementation, tracking, and reporting of GSI projects on City-owned land, including the
public right of way, over the next several decades (2020 – 2040).
Cupertino’s GSI Plan describes the City’s approach to identifying and prioritizing potential areas for
implementing GSI, and estimating targets for the City’s area that could be addressed by GSI through 2040.
The Plan lays out the City’s GSI implementation strategy and includes maps of the City’s prioritized areas
and potential project opportunities. Key elements of the strategy include: coordination with State-
mandated GSI requirements for private development and opportunities in adjacent public rights-of-way;
identification of GSI opportunities in capital projects; and aligning GSI goals and policies with other City
planning documents to achieve multiple benefits and provide safer, sustainable, and attractive public
streetscapes. The Plan contains guidance and standards for GSI project design and construction, and
describes how the City will track and map constructed GSI projects and make the information available to
the public. Lastly, it explains existing legal mechanisms to implement the GSI Plan, and identifies potential
sources of funding for the design, construction, and maintenance of GSI projects.
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1. INTRODUCTION
Urban development has traditionally involved replacing natural landscapes with solid pavements and
buildings, and using storm drain systems to carry increased amounts of stormwater runoff and
pollutants directly into local streams. Green stormwater infrastructure (GSI), however, uses plants and
soils to mimic natural watershed processes, capture stormwater and create healthier environments. Bay
Area cities and counties are required by State and regional regulatory agencies to move from traditional
(grey) stormwater conveyance systems to GSI systems over time. This GSI Plan serves as an
implementation guide for the City of Cupertino (City) to incorporate GSI into storm drain infrastructure
on public and private lands where feasible over the next several decades.
Purpose and Goals of the GSI Plan
The purpose of the City’s GSI Plan is to demonstrate the City’s commitment to gradually transform its
traditional storm drainage infrastructure to green stormwater infrastructure. The GSI Plan will guide the
identification, implementation, tracking, and reporting of green stormwater infrastructure projects
within the City. The GSI Plan will be coordinated with other City plans, such as the General Plan, the
Climate Action Plan, the Bicycle Transportation Plan, the Pedestrian Transportation Plan, and other
specific and master plans, to achieve multiple potential benefits to the community, including improved
water and air quality, reduced local flooding, increased water supply, traffic calming, safer pedestrian
and bicycle facilities, climate resiliency, improved wildlife habitat, and a more pleasant urban
environment.
Specific goals of the GSI Plan are to:
• Align the City’s goals, policies and implementation strategies for GSI with the General Plan and
other related planning documents;
• Identify and prioritize GSI opportunities throughout the City;
• Establish targets for the extent of City area to be addressed by GSI over certain timeframes;
• Provide a workplan and legal and funding mechanisms to implement prioritized projects; and
• Establish a process for tracking, mapping, and reporting completed projects
City Description
Incorporated in 1955, the City of Cupertino is located in Santa Clara County, on the western edge of
Silicon Valley against the foothills of the Santa Cruz Mountains. It has a jurisdictional area of 7,235 acres
(11.3 square miles).
1.2.1 Population Size and Growth
According to the General Plan, “Community Vision 2040”, Cupertino’s population grew from 3,664 in
1960 to over 50,500 in 2000. Most of the population growth was from tract development during the
1970s and 1980s and annexation of unincorporated County land. Between 2000 and 2010 the City of
Cupertino’s population increased by 15.3 percent, from 50,546 (18,204 households) to 58,302 persons
(20,181 households), with a population density of 5,179 people per square mile and average household
size of 2.87. A portion of this population growth can be attributed to the City’s annexation of 168 acres
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of land between 2000 and 2008. As of 2019 according to the California Department of Finance (DOF)1,
the estimated population is 59,879. The City’s population is projected to grow to 66,110 by 2040 (Plan
Bay Area, 2013), which is approximately a 12% increase over 30 years.
1.2.2 City Characteristics
Cupertino’s land use pattern was largely built on a conventional suburban model, with predominantly
single-family residential subdivisions and distinct commercial and employment centers. This
development pattern was also heavily influenced by the topography of the area, with more intensive
growth located on the valley floor and lower design residential on the foothills. The western area by the
foothills is semi-rural with steep terrain, larger residential lots and access to open space. The pattern
becomes more suburban immediately west of Highway 85 where residential neighborhoods have a
more uniform pattern with smaller lots and older commercial and industrial areas along Stevens Creek
Boulevard and Bubb Road. The land use pattern becomes more urban east of Highway 85, with a
relatively connected street grid and commercial development along major boulevards such as Stevens
Creek, De Anza, Homestead, Stelling and Wolfe. This area also has significant amounts of multi-family
development in and around the major boulevards.
The suburban pattern is also reflected in building locations, with most of the older buildings set back
from the street with parking lots in the front. Streets have also been historically widened to
accommodate larger volumes of traffic, often to the detriment of other forms of transportation such as
walking, biking and transit. According to the 2015 General Plan Land Use Element, the City has made
strides in the last 20 years towards improving walkability and bikeability by retrofitting existing streets
to include bike lanes; creating sidewalks lined with trees along major boulevards; and encouraging
development to provide a more pedestrian-oriented frontage with active uses, gathering places and
entries lining the street.
1.2.3 Roadways
The City is defined by its four major roadways: Homestead Road, Wolfe Road, De Anza Boulevard and
Stevens Creek Boulevard. These major mixed-use corridors have been the center of retail, commercial,
office and multi-family housing in Cupertino for decades.
Common residential street widths range from 20 feet (for streets with no street parking) to 36 feet (for
those with parking on both sides). Developers are typically required to install curb, gutters, and
sidewalks. The City prefers detached sidewalks with a landscaped buffer in between the street and the
pedestrian walk to enhance community aesthetics and improve pedestrian safety.
Two state highways traverse Cupertino. The City is linked to the cities of San Francisco and San José by
Interstate Highway 280 which runs along most of the its northern border. State Route 85, which runs
from Mountain View to South San José, cuts diagonally across the City at its northwest boundary to its
southeast boundary. All state highways are owned and maintained by the California Department of
Transportation (Caltrans).
1 Source: State of California, Department of Finance, E-1 Population Estimates for Cities, Counties and the State with Annual
Percent Change — January 1, 2018 and 2011. Sacramento, California, May 2019. Online at
http://www.dof.ca.gov/Forecasting/Demographics/Estimates/E-1/.
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The City has approximately 1.5 miles of rural road in the residential hillside area.
1.2.4 Hillsides and Water Resources
Cupertino’s hillsides are an irreplaceable resource shared by the entire Santa Clara Valley. They provide
important habitat for plants and wildlife; watershed capacity to prevent flooding in downstream areas; a
wide vegetative belt that cleanses the air of pollutants; and a natural environment that provides a
contrast to the built environment. Significant water bodies and water sources within Cupertino are:
• Stevens Creek
• Permanente Creek
• Regnart Creek
• Heney Creek
• Calabazas Creek
Regulatory Context
1.3.1 Federal and State Regulations and Initiatives
The U.S. Environmental Protection Agency (EPA) has authority under the Clean Water Act to promulgate
and enforce stormwater related regulations. For the State of California, EPA has delegated the
regulatory authority to the State Water Resources Control Board (State Water Board), which in turn, has
delegated authority to the San Francisco Bay Regional Water Quality Control Board (Regional Water
Board) to issue National Pollutant Discharge Elimination System (NPDES) permits in the San Francisco
Bay Region. Stormwater NPDES permits allow stormwater discharges from municipal separate storm
sewer systems (MS4s) to local creeks, San Francisco Bay, and other water bodies as long as they do not
adversely affect the beneficial uses of or exceed any applicable water quality standards for those waters.
Since the early 2000’s, the EPA has recognized and promoted the benefits of using GSI in protecting
drinking water supplies and public health, mitigating overflows from combined and separate storm
sewers and reducing stormwater pollution, and it has encouraged the use of GSI by municipal agencies
as a prominent component of their MS4 programs.
The State and Regional Water Boards have followed suit in recognizing not only the water quality
benefits of GSI but the opportunity to augment local water supplies in response to the impacts of
drought and climate change as well. The 2014 California Water Action Plan called for multiple benefit
stormwater management solutions and more efficient permitting programs. This directive created the
State Water Board’s “Strategy to Optimize Resource Management of Stormwater” (STORMS). STORMS’
stated mission is to “lead the evolution of storm water management in California by advancing the
perspective that storm water is a valuable resource, supporting policies for collaborative watershed-
level storm water management and pollution prevention, removing obstacles to funding, developing
resources, and integrating regulatory and non-regulatory interests.”
These Federal and State initiatives have influenced approaches in Bay Area municipal stormwater NPDES
permits, as described in Section 1.3.2.
1.3.2 Municipal Regional Stormwater Permit
The City is subject to the requirements of the Municipal Regional Stormwater NPDES Permit (MRP) for
Phase I municipalities and agencies in the San Francisco Bay area (Order R2-2015-0049), which became
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effective on January 1, 2016. The MRP applies to 76 municipalities and flood control agencies that
discharge stormwater to San Francisco Bay, collectively referred to as permittees.
Over the last 13 years, under Provision C.3 of the MRP and previous permits, new development and
redevelopment projects on private and public property that exceed certain size thresholds (“regulated
projects”) have been required to mitigate impacts on water quality by incorporating “Low Impact
Development” (LID) measures, including site design, pollutant source control, stormwater treatment
and flow control measures as appropriate. LID treatment measures, such as rainwater harvesting and
use, infiltration, and biotreatment, have been required on most regulated projects since December
2011.
Provision C.3.j of the 2016 MRP requires the City to develop and implement a long-term GSI Plan2 for
the inclusion of LID measures into storm drain infrastructure on public and private lands, including
streets, roads, storm drains, parking lots, building roofs, and other elements. The GSI Plan must be
completed and submitted to the Regional Water Board by September 30, 2019.
While Provision C.3.j of the MRP contains the GSI program planning and analysis requirements, other
provisions (C.11 and C.12) establish a linkage between public and private GSI features and required
reductions of pollutants in stormwater discharges. Permittees in Santa Clara County (County),
collectively, must implement GSI on public and private property to achieve specified pollutant load
reduction goals by the years 2020, 2030, and 2040. These efforts will be integrated and coordinated
countywide for the most effective and resource-efficient program. As an indication as to whether these
load reductions will be met, Permittees must include in their GSI Plans estimated “targets” for the
amounts of impervious surface to be “retrofitted” as part of public and private projects (i.e.,
redeveloped or changed such that runoff from those surfaces will be captured in a stormwater
treatment system or GSI measure) over the same timeframes (2020, 2030, and 2040).
A key part of the GSI definition in the MRP is the inclusion of GSI systems at both private and public
property locations. This has been done in order to plan, analyze, implement and credit GSI systems for
pollutant load reductions on a watershed scale, as well as recognize all GSI accomplishments within a
municipality. The focus of the GSI Plan is the integration of GSI systems into public buildings, parks,
parking lots, and rights-of-way (e.g. road or bike path). However, the GSI Plan may also establish
opportunities to include GSI facilities at private properties or in conjunction with private development,
so they can contribute to meeting the target load reductions on a county-wide level as well as
implement GSI on a larger scale.
GSI Plan Development Process
1.4.1 GSI Plan Development and Adoption
The GSI Plan development process began with the preparation of the City’s GSI Plan Framework
(Framework), a work plan describing the goals, approach, tasks, and schedule needed to complete the
GSI Plan. Development of the Framework was a regulatory requirement (Provision C.3.j.i(1) of the MRP)
2 Although the MRP uses the term green infrastructure (GI), the agencies within Santa Clara County, including the
City of Cupertino, prefer to use the term green stormwater infrastructure (GSI). Therefore, the term GSI is used in
this document.
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to demonstrate the City’s commitment to completing the GSI Plan by September 30, 2019. The City
completed the Framework and City Council approved it on April 18, 2017.
The City established a GSI Work Group, consisting of staff from the City’s Public Works and Planning
Departments. The GSI Work Group worked with a consultant team to develop the GSI Plan. Staff
attended the Sustainability Commission on March 16, 2017 where SFEI’s (San Francisco Estuary
Institute) Robin Grossinger gave a presentation on healthier landscapes for people in nature (GSI
concepts). City staff followed with an overview of the GSI Framework that City staff was in the process
of developing. More recently, an overview of the MRP requirements and summary of the proposed
Plan was presented to City Council on July 16, 2019. GSI presentations for soliciting comments and
feedback were given to the Planning Commission on August 13, 2019 and the Sustainability Commission
on August 15, 2019. The final GSI Plan was adopted by the City Council on September 3, 2019.
1.4.2 Regional Collaboration
The City is a member of the Santa Clara Valley Urban Runoff Pollution Prevention Program (SCVURPPP),
an association of thirteen cities and towns in the Santa Clara Valley, the County of Santa Clara, and the
Santa Clara Valley Water District (Valley Water) that collaborate on stormwater regulatory activities and
compliance. The City’s GSI Plan was developed in collaboration with SCVURPPP; SCVURPPP input
included technical guidance, templates, and completion of certain GSI Plan elements at the countywide
level. SCVURPPP guidance and products are discussed in more detail in relevant sections of the GSI Plan.
The City, via SCVURPPP, also coordinated with the Bay Area Stormwater Management Agencies
Association (BASMAA) on regional GSI guidance and received feedback through BASMAA from MRP
regulators on GSI expectations and approaches. BASMAA members include other countywide
stormwater programs in Alameda, Contra Costa, and San Mateo Counties, and area-wide programs in
the Vallejo and Fairfield-Suisun portions of Solano County, whose participating municipalities are
permittees under the MRP.
1.4.3 Education and Outreach
One of the first and most important steps in the development of the GSI Plan is educating a
municipality's department staff, managers, and elected officials about the purposes and goals of green
infrastructure, the required elements of the GSI Plan, and steps needed to develop and implement the
GSI Plan, and get their support and commitment to the Plan and this new approach to urban
infrastructure. Another important first step is local community and stakeholder outreach to gain public
support. The City of Cupertino began this process in FY 15-16 and FY 16-17 and completed the following
tasks:
• Convened 3-4 interdepartmental meetings with Public Works, GIS, Capital Improvement
Program (CIP), and Environmental staff and management to discuss GSI requirements and
assigned tasks.
• Discussed with appropriate department staff the MRP requirements to analyze proposed
capital projects for opportunities to incorporate GSI and completed the first list of planned
and potential GSI projects.
• Provided training to department staff on GSI requirements and strategies via presentations
and workshops.
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• Invited elected officials to a SCVURPPP Green Infrastructure presentation to raise awareness
of the goals and requirements in the MRP and the concepts, intent and multiple benefits of
GSI.
• At the suggestion of the Vice Mayor, the Sustainability Commission invited guest speaker
Robin Grossinger, a scientist from San Francisco Estuary Institute (SFEI), to give his
presentation on the vision for a resilient Silicon Valley landscape 3.
• Public Works Environmental staff participated in the Green Infrastructure Leadership
Conversation and the Regional Roundtable on Sustainable Streets
Public and stakeholder support is also essential for the successful implementation of the GSI Plan and
future GSI projects. To this end, the City has coordinated with SCVURPPP and the Watershed Education
and Outreach subgroup on a comprehensive outreach and education program. Key audiences include:
the general public (countywide, and in the neighborhood or municipality where GSI projects are
located); the development community (e.g., developers, engineers, landscape architects, and
contractors); and elected officials. The GSI outreach and education program includes a GSI website 4,
public presentations, and radio and online advertising to promote GSI features. The City of Cupertino
will conduct or continue to conduct education and outreach activities as part of development of the GSI
Plan and seek community input as specific projects are designed and constructed.
GSI Plan Structure and Required Elements
The remainder of the GSI Plan is structured as follows:
Chapter 2 describes the definition, purpose, and benefits of GSI, and describes the different types of GSI
facilities.
Chapter 3 describes the relationship of the GSI Plan to other planning documents and how those
planning documents have been updated or modified, if needed, to support and incorporate GSI
requirements. For documents whose desired updates and modifications have not been accomplished by
the completion of the GSI Plan, a work plan and schedule are laid out to complete them.
Chapter 4 outlines the materials being developed by SCVURPPP and the City to provide guidelines,
typical details, specifications and standards for municipal staff and others in the design, construction,
and operation and maintenance of GSI measures.
Chapter 5 presents information on the different types of GSI projects and the methodology and results
for identifying and prioritizing areas for potential GSI projects.
Chapter 6 outlines the City’s strategy for implementing potential GSI projects within the next ten years
and through 2040, discusses the variety of mechanisms to be employed by the City in order to
3 SFEI's recommendations for a more sustainable South Bay looks at what the City can do to integrate resilient
landscape within the reality of new and re-development. From a practical perspective, the City of Cupertino can
consider actions over the course of the next generations to improve the ecology of the area and how it can work
with larger developments to incorporate these types of principles in its planning.
4 http://www.mywatershedwatch.org/residents/green-streets/
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implement the GSI Plan, and presents the estimated targets for the amounts of impervious surface to be
“retrofitted” as part of public and private projects by 2020, 2030, and 2040.
The GSI Plan elements required by Provision C.3.j.i.(2) of the MRP and the section of the document in
which each component can be found are summarized in Table 1-2 below.
Table 1-1 Summary of GSI Plan Elements required by Provision C.3.j.i of the MRP.
MRP Provision GSI Plan Elements GSI Plan Section
C.3.j.i.(2)(a) Project Identification and Prioritization Mechanism Chapter 5
C.3.j.i.(2)(b) Prioritized Project Locations Section 5.3
C.3.j.i.(2)(c) Impervious Surface Targets Section 6.6
C.3.j.i.(2)(d) Completed Project Tracking System Section 6.7
C.3.j.i.(2)(e,f) Guidelines and Specifications Chapter 4
C.3.j.i.(2)(g) Alternative Sizing Requirements for Green Street Projects Section 4.1
C.3.j.i.(2)(h,i) Integration with Other Municipal Plans Chapter 3
C.3.j.i.(2)(i) Workplan for Integration of GSI Language into City Planning
Documents Section 3.1.8
C.3.j.i.(2)(j) Workplan to Complete C.3.j. Early Implementation Projects Section 6.3
C.3.j.i.(2)(k) Evaluation of Funding Options Section 6.5
C.3.j.i.(3) Legal and Implementation Mechanisms Section 6.4
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2. WHAT IS GREEN STORMWATER INFRASTRUCTURE?
In natural landscapes, most of the rainwater soaks into the soil or is taken up by plants and
trees. However, in urban areas, building footprints and paved surfaces such as driveways, sidewalks, and
streets prevent rain from soaking into the ground. As rainwater flows over and runs off these impervious
surfaces, this “urban runoff” or “stormwater runoff” can pick up pollutants such as motor oil, metals,
pesticides, sediment, pet waste, and litter. It then carries these pollutants into the City’s storm drains,
which flow directly to local creeks and San Francisco Bay, without any cleaning or filtering to remove
pollutants. Stormwater runoff is therefore a major contributor to water pollution in urban areas.
As urban areas develop, the increase in impervious surface also results in increases in peak flows and
volumes of stormwater runoff from rain events. Traditional “gray” stormwater infrastructure, like most
of the City’s storm drain system, is designed to convey stormwater flows quickly away from urban areas.
However, the increased peak flows and volumes can cause erosion, flooding, and habitat degradation in
downstream creeks to which stormwater is discharged, damaging habitat, property, and infrastructure.
Green Stormwater Infrastructure
A new approach to managing stormwater is to implement green stormwater infrastructure. GSI uses
vegetation, soils, and other elements and practices to capture, treat, infiltrate and slow urban runoff
and thereby restore some of the natural processes required to manage water and create healthier urban
environments. GSI facilities can also be designed to capture stormwater for uses such as irrigation and
toilet flushing.
GSI integrates building and roadway design, complete streets, drainage infrastructure, urban forestry,
soil conservation and sustainable landscaping practices to achieve multiple benefits. At the city or
county scale, GSI is a patchwork of natural areas that provides habitat, flood protection, cleaner air, and
cleaner water. At the neighborhood or site scale, GSI comprises stormwater management systems that
mimic nature and soak up and store water.5
Benefits of Green Stormwater Infrastructure
GSI can provide multiple benefits beyond just managing rainfall and runoff. These benefits include
environmental, economic, and social improvements.
GSI measures can mitigate localized flooding and reduce erosive flows and quantities of pollutants being
discharged to local creeks and the San Francisco Bay. Vegetated GSI systems can beautify public places
and help improve air quality by filtering and removing airborne contaminants from vehicle and industrial
sources. They can also reduce urban heat island effects by providing shade and absorbing heat better
than paved surfaces, and provide habitat for birds, butterflies, bees, and other local species. When GSI
facilities are integrated into traffic calming improvements such as curb extensions and bulb-outs at
intersections, they can help increase pedestrian and bicycle safety and promote active transportation,
which in turn can result in improved human health.
5 https://www.epa.gov/green-infrastructure/what-green-infrastructure
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GSI facilities designed with extra storage can capture stormwater for later use as irrigation water or non-
potable uses such as toilet flushing and cooling tower supply, thus conserving potable water supplies.
Widespread implementation of GSI potentially offers significant economic benefits, such as deferring or
eliminating the need for some gray infrastructure projects. By providing more storage within the
watershed, GSI can help reduce the costs of conveyance and pumping of stormwater. When cost-benefit
analyses are performed, GSI is often the preferred alternative due to the multiple benefits provided by
GSI as compared to conventional infrastructure.
Types of Green Stormwater Infrastructure Facilities
Integrating GSI into public spaces typically involves construction of stormwater capture and treatment
measures in public streets, parks, and parking lots or as part of public buildings. Types of GSI measures
that can be constructed in public spaces include: (1) bioretention; (2) stormwater tree well filters; (3)
pervious pavement, (4) infiltration facilities, (5) green roofs, and 6) rainwater harvesting and use
facilities. A description of these facility types is provided below.
2.3.1 Biotreatment/Bioretention
Bioretention areas are depressed landscaped
areas that consist of a ponding area, mulch
layer, plants, and a special biotreatment soil
media composed of sand and compost,
underlain by drain rock and an underdrain, if
required. Bioretention is designed to retain
stormwater runoff, filter stormwater runoff
through biotreatment soil media and plant
roots, and either infiltrate stormwater runoff
to underlying soils as allowed by site
conditions, or release treated stormwater
runoff to the storm drain system, or both.
They can be of any shape and are adaptable
for use on a building or parking lot site or in the street right-of-way.
Figure 2-1 Stormwater curb extension, Southgate Neighborhood,
Palo Alto (Source: EOA)
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Bioretention systems in the streetscape have specific names: stormwater
planters, stormwater curb extensions (or bulb-outs), and stormwater tree well
filters (described in the next section).
A stormwater curb extension (Figure 2-1) is a bioretention system that extends
into the roadway and involves modification of the curb line and gutter.
Stormwater curb extensions may be installed midblock or at an intersection.
Curb bulb-outs and curb extensions installed for pedestrian safety, traffic
calming, and other transportation benefits can also provide opportunities for
siting bioretention facilities.
A stormwater planter is a linear bioretention facility in the public right-of-way
along the edge of the street, often in the planter strip between the street and
sidewalk. They are typically designed with vertical (concrete) sides. However, as
shown in Figure 2-2, they can also have sloped sides depending on the amount
of space that is available.
2.3.2 Stormwater Tree Well Filters and Suspended Pavement Systems
A stormwater tree well filter is a type of bioretention system consisting of an
excavated pit or vault that is filled with biotreatment soil media, planted with a tree and other
vegetation, and underlain with drain rock and an underdrain, if needed. Stormwater tree well filters can
be constructed in series and linked via a subsurface trench or underdrain. A stormwater tree well filter
can require less dedicated space than other types of bioretention areas.
Suspended pavement systems may be used to provide increased underground treatment area and soil
volume for tree well filters. These are structural systems designed to provide support for pavement while
preserving large volumes of uncompacted soil for tree roots. Suspended pavement systems may be any
engineered system of structural supports or commercially available proprietary structural systems.
Stormwater tree well filters and suspended pavements systems are especially useful in settings between
existing sidewalk elements where available space is at a premium. They can also be used in curb
extensions or bulb-outs, medians, or parking lots if surrounding grades allow for drainage to those areas.
The systems can be designed to receive runoff through curb cuts or catch basins or allow runoff to enter
through pervious pavers on top of the structural support.
Figure 2-3 Stormwater tree well filter conceptual examples: modular suspended pavement system (left), column
suspended pavement system (right). (Courtesy of Philadelphia Water Department)
Figure 2-2 Stormwater planter,
Hacienda Avenue, Campbell
(Source: City of Campbell)
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2.3.3 Pervious Pavement
Pervious pavement is hardscape that allows water to pass through its surface into a storage area filled
with gravel prior to infiltrating into underlying soils. Types of pervious pavement include permeable
interlocking concrete pavers, pervious concrete, porous asphalt, and grid pavement. Pervious pavement
is often used in parking areas or on streets where
bioretention is not feasible due to space constraints or if
there is a need to maintain parking. Pervious pavement
does not require a dedicated surface area for treatment
and allows a site to maintain its existing hardscape.
There are two types of pervious pavers: Permeable
Interlocking Concrete Pavers (PICP) and Permeable Pavers
(PP). PICP allows water to pass through the joint spacing
between solid pavers, and PP allows water to pass through
the paver itself and therefore can have tighter joints.
Porous asphalt and pervious concrete are similar to
traditional asphalt and concrete, but do not include fine
aggregates in the mixture, allowing water to pass through the surface. All types are supported by several
layers of different sizes of gravel to provide structural support and water storage.
2.3.4 Infiltration Facilities
Where soil conditions permit, infiltration facilities can be used
to capture stormwater and infiltrate it into native soils. The
two primary types are infiltration trenches and subsurface
infiltration systems.
An infiltration trench is an excavated trench backfilled with a
stone aggregate and lined with a filter fabric. Infiltration
trenches collect and detain runoff, store it in the void spaces
of the aggregate, and allow it to infiltrate into the underlying
soil. Infiltration trenches can be used along roadways,
alleyways, and the edges or medians of parking lots. An
example of an infiltration trench is shown in Figure 2-5.
Subsurface infiltration systems are another type of GSI
measure that may be used beneath parking lots or parks to
infiltrate larger quantities of runoff. These systems, also known
as infiltration galleries, are underground vaults or pipes that
store and infiltrate stormwater while preserving the uses of the
land surface above parking lots, parks and playing fields. An
example is shown in Figure 2-6. Storage can take the form of
large-diameter perforated metal or plastic pipe, or concrete
arches, concrete vaults, plastic chambers or crates with open
bottoms. Prefabricated, modular infiltration galleries are
available in a variety of shapes, sizes, and material types that are
strong enough for heavy vehicle loads.
Figure 2-4 Permeable interlocking concrete
pavers, Mayfield Playing Fields, Palo Alto
(Source: EOA)
Figure 2-6 Subsurface infiltration system
(Source: Conteches.com)
Figure 2-5 Infiltration trench, San Jose
(Source: City of San Jose)
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2.3.5 Green Roofs
Green roofs are vegetated roof systems that filter, absorb,
and retain or detain the rain that falls upon them. Green roof
systems are comprised of a layer of planting media planted
with vegetation, underlain by other structural components
including waterproof mem branes, synthetic insulation,
geofabrics, and underdrains. A green roof can be either
“extensive”, with 3 to 7 inches of lightweight planting media
and low-profile, low-maintenance plants, or “intensive”, with
a thicker (8 to 48 inches) of media, more varied plantings, and
a more garden-like appearance. Green roofs can provide high
rates of rainfall retention via plant uptake and
evapotranspiration and can decrease peak flow rates in storm
drain systems because of the storage that occurs in the planting media during rain events.
2.3.6 Rainwater Harvesting and Use
Rainwater harvesting is the process of collecting rainwater from
impervious surfaces and storing it for later use. Storage facilities that
can be used to capture stormwater include rain barrels, above-ground
or below-ground cisterns (Figure 2-8), open storage reservoirs (e.g.,
ponds), and various underground storage devices (tanks, vaults, pipes,
and proprietary storage systems)(Figure 2-9). The captured water is
then fed into irrigation systems or non-potable water plumbing
systems, either by pumping or by gravity flow. Uses of captured water
may include irrigation, vehicle washing, and indoor non-potable use
such as toilet flushing, heating and cooling, or industrial processing.
The two most common applications of rainwater harvesting are 1)
collection of roof runoff from buildings; and 2) collection of runoff from
at-grade surfaces or diversion of water from storm drains into large
underground storage facilities below parking lots or parks. Rooftop
runoff usually contains lower quantities of pollutants than at-grade
surface runoff and can be collected via gravity flow. Underground
storage systems typically include pre-treatment facilities to remove
pollutants from stormwater prior to storage and use.
Existing GSI Facilities
The City of Cupertino completed an 18-acre Stevens Creek Corridor
Park and Restoration project in July 2014. The City is also installing GSI measures at the McClellan Ranch
Preserve as part of expansion and improvements at the site, with construction expected to be
completed by September 1, 2019. GSI projects such as this, completed by the City prior to or during the
current permit term (2016-2020), are also referred to in the permit as “Early Implementation” projects
(see Section 5.1.1 of this GSI Plan). Both projects are described below. A description of the Apple Park
project, which included GSI improvements in the public right-of-way, is also described below.
Figure 2-7 Green roof at Fourth Street
Apartments, San José (Source: EOA)
Figure 2-8 Rainwater harvesting cistern,
Environmental Innovation Center, San
José (Source: City of San Jose)
Figure 2-9 Subsurface vault, under
construction (Source: Conteches.com)
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2.4.1 Stevens Creek Corridor and Creek Restoration project
The Stevens Creek Corridor and Creek Restoration project at Blackberry Farm in Cupertino consisted of
two phases.
Phase 1 of the project restored a portion of Stevens Creek, enhanced natural hydrologic processes, and
improved wildlife and habitat values. Impervious cover was reduced by 3.4 acres, including removal of
an asphalt driveway and parking lot, and concrete surfaces in the creek corridor. The former parking lot,
which drained directly into the creek, was replaced by a smaller green parking area, set back from the
creek and made entirely of permeable material. Drive aisles are made of porous concrete that is colored
to reduce heat gain. Parking bays were constructed using recycled plastic geocells to support vehicle
weight filled with special soil and planted with turf grass (see Figure 2-10). During heavy rains, excess
water flows to bioretention areas in a center median. Dozens of native trees were also planted. The
design aimed to use all rain and storm flows to water native plantings. The project site is located within
a flood plain. It was designed to accommodate being submerged during unusually high creek flows
without damage to new infrastructure, water quality or wildlife and to retain stormwater onsite. The
design enables the site’s ability to attenuate flooding, and naturally filter and return rainfall and runoff
from the site to groundwater.
Phase 2 of the Stevens Creek Corridor project included four
new bioswales and an infiltration area installed on the
adjacent golf course to capture and infiltrate runoff from
the golf course, buildings, and the parking lot that
previously flowed directly into the creek. Additionally, an
all-weather trail was installed using pervious concrete
(Figure 2-11). The trail material is compatible with
floodplain standards and protects the fishery and wildlife.
Figure 2-10 Completed green parking bays (above left) and parking bays under construction, showing the
recycled plastic geocells that support vehicle weight (above right).(Source: City of Cupertino)
Figure 2-11 Pervious concrete bike
path and walkway at Blackberry
Farm. (Source: City of Cupertino)
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2.4.2 McClellan West Parking Lot
McClellan Ranch Preserve overflow parking had historically been relegated to the 1.4 acre vacant
unimproved parcel which lies west of the Preserve and adjacent to Stevens Creek. The site experienced
poor drainage and contributed to track out of sediment during all seasons. With the construction of the
Environmental Education Center and other improvements within the Preserve, expanded community
and school use, there was need for additional parking during large events and for oversized vehicles
such as school buses. To meet the parking demand and provide habitat restoration, the project was
designed to create a “green” meadow-style parking area compatible with the existing riparian setting.
Components of this improvement include 0.53 acres of parking surface paved with permeable concrete
including a gravel overflow area, planting thirty-seven native species trees, and adding approximately
20,000 square feet of new native riparian plants which will enhance the existing native habitat along
Stevens Creek. Construction is expected to be completed by September 1, 2019.
2.4.3 Apple Park
Apple Park lies on 152 acres of land that was formerly occupied by more traditional office space with
expansive impervious parking lots and multiple office buildings. Putting parking underground and
emphasizing California native landscaping, the Apple project reduced the impervious surface from
5,085,000 square feet (117 acres) to 2,615,000 square feet (60 acres). There was an emphasis on
planting native trees, enlisting the expertise of Stanford arborist, David Muffly. The campus drains to
flow-through planter bioretention treatment before entering the Calabazas watershed and features
9,000 trees, nearly double the 4,596 trees at the pre-project site. The project exceeded regulatory
requirements by providing stormwater treatment in the public right-of-way.
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3. INTEGRATION WITH OTHER PLANNING DOCUMENTS
To ensure the success of the GSI Plan and its implementation, its goals, policies and implementation
strategies should align with the City’s General Plan and other related planning documents. The MRP
requires that municipal agencies review such documents and include in their GSI Plans a summary of any
planning documents aligned with the GSI Plan or updated or modified to appropriately incorporate GSI
requirements. The GSI Plan must also include a workplan identifying how GSI measures will be included
in future plans.
City Planning Document Review
The City completed a review of its existing planning documents to determine the extent to which GSI-
related language, concepts and policies have been incorporated. The plans that were reviewed are listed
below, with the General Plan as guiding planning document first, followed by remaining plans in order of
most recently prepared/adopted:
• General Plan – Community Vision 2040 (2015)
• Pedestrian Transportation Plan (2018)
• Storm Drain Master Plan (2018)
• Bicycle Transportation Plan (2016)
• Climate Action Plan (2015)
• Heart of the City Specific Plan (2014)
• Citywide Parks & Recreation System Master Plan (Draft)
The following sections provide a brief discussion of each plan and the extent to which it supports GSI
implementation. A prioritized workplan for the integration of GSI language into existing and future City
planning documents is provided in Section 3.1.8.
3.1.1 General Plan – Community Vision 2040
The City’s Community Vision 2040 functions as the City of Cupertino’s State-mandated General Plan and
covers a time frame of 2015–2040. Community Vision 2040 provides a framework for integrating the
aspirations of residents, businesses, property owners and public officials into a comprehensive strategy
for guiding future development and managing change. It describes long-term goals and guides decision-
making by the City Council and appointed commissions. The document was last amended in October
2015 and includes language that is very supportive of GSI. Examples of supportive language in the plan
are summarized below. No updates related to GSI are recommended at this time.
ES-3: Context, Urban Ecosystems (page ES-6):…the City is committed to enhancing the urban
ecosystem in the form of urban forestry management, integration of green infrastructure,
treatment of parks and open space, landscape and building requirements.
Strategy ES-1.1.1: Climate Action Plan (Page ES-14): Integrate multiple benefits of green
infrastructure with climate resiliency and adaptation
Goal ES-2.1.5 Urban Forest (Page ES-16): Encourage the inclusion of additional shade trees,
vegetated stormwater treatment and landscaping to reduce the “heat island effect” in
development projects.
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SE-5.1.1 Landscaping (page ES-21): Ensure that the City’s tree planting, landscaping and open
space policies enhance the urban ecosystem by encouraging medians, pedestrian crossing and
curb-extension planting that is native, drought-tolerant, treats stormwater and enhances
urban plant, aquatic and animal resources in both, private and public development.
ES-5.1.2: Built Environment (page ES-21): Ensure that sustainable landscaping design is
incorporated in the development of City facilities, parks and private projects with the inclusion
of measures such as tree protection, stormwater treatment and planting of native, drought
tolerant landscaping that is beneficial to the environment.
Policy ES-7.1 Natural Water Bodies and Drainage Systems (page ES-24): In public and private
development, use Low Impact Development (LID) principles to manage stormwater by
mimicking natural hydrology, minimizing grading and protecting or restoring natural drainage
systems.
Policy ES-7.2: Reduction of Impervious Surfaces (page ES-24): Minimize stormwater runoff
and erosion impacts resulting from development and use low impact development (LID)
designs to treat stormwater or recharge groundwater
Strategy ES-7.2.1: Lot Coverage (page ES-24): Consider updating lot coverage requirements
to include paved surfaces such as driveways and ongrade impervious patios to incentivize the
construction of pervious surfaces.
Strategy ES-7.2.2: Pervious Walkways and Driveways (page ES-24): Encourage the use of
pervious materials for walkways and driveways…
Policy ES-7.2.3: Maximize Infiltration (page ES-25): Minimize impervious surface areas, and
maximize on-site filtration and the use of on-site retention facilities.
Strategy ES-7.3.1: Development Review (Page ES-25): Require LID designs such as vegetated
stormwater treatment systems and green infrastructure to mitigate pollutant loads and flows.
Strategy ES-7.4.1 Storm Drainage Master Plan (Page ES-25): Develop and maintain a Storm
Drainage Master Plan which identifies facilities needed to prevent “10-year” event street
flooding and “100-year” event structure flooding and integrate green infrastructure to meet
water quality protection needs in a cost effective manner.
Strategy ES-7.11.5 On-site Recycled Water (Page ES-27): Encourage on-site water recycling
including rainwater harvesting and gray water use.
Strategy ES-7.11.7 Green Business Certification and Water Conservation (Page ES-27):
Continue to support the City’s Green Business Certification goals of long-term water
conservation within City facilities, vegetated stormwater infiltration systems, parks and
medians, including installation of low-flow toilets and showers, parks, installation of
automatic shut-off valves in lavatories and sinks and water efficient outdoor irrigation.
Strategy INF-4.1.1: Stormwater Management (page INF-14): Reduce the demand on storm
drain capacity through implementation of programs that meet and even exceed on-site
drainage requirements
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3.1.2 Pedestrian Transportation Plan
Cupertino adopted its Pedestrian Transportation Plan (PTP) in 2002; an update was completed in
February 2018. The purpose of the PTP is to establish a guiding framework for the development and
maintenance of pedestrian facilities throughout Cupertino and recommend policies, programs, and
messaging to support and promote walking. Existing language in the PTP to support GSI is summarized
here:
Curb Extension Benefits (Page 38): Extended sidewalk space can be used for plantings, street
furniture, or green stormwater infrastructure.
Choker/Pinch Point Benefits (Page 41) Stormwater and greenspace elements can be
combined to calm traffic while also making the street more attractive.
3.1.3 Storm Drain Master Plan
The latest version of the City’s Storm Drain Master Plan (SDMP) dated September 2018, was accepted by
City Council Resolution on January 15, 2019. The objective of the SDMP is to provide an examination of
the flood risks within the City limits and recommend actions necessary to accomplish defined levels of
service for storm drain systems owned by the City so as to appropriately manage flood risks. The SDMP
includes a discussion of the C.3 MRP Requirements and a discussion of GSI. Existing language to support
GSI is summarized here:
Section 2.2.2 Future Land Use: The majority of future development will involve the
redevelopment of sites, such as infill projects. Future development will need to comply with
C.3 requirements of the Municipal Regional Permit (MRP) for the Bay Area. These
requirements to treat storm water runoff may result in a reduction of impervious surface…
Section 5.7 Green Infrastructure: The City should look for and evaluate opportunities to
incorporate green infrastructure and LID facilities into the design of capital projects
recommended in the master plan.
3.1.4 Bicycle Transportation Plan
The City adopted a Bicycle Transportation Plan (BTP) in 2011 that describes long-term goals with respect
to the creation of a safe, convenient, and comprehensive network of bicycle facilities throughout the
City. The BTP was updated in 2016 to identify which priority projects have already been completed and
which remain to be implemented, and to identify any new projects that should be included for
prioritization. The BTP currently does not include language to support GSI. However, all bike lane
projects will be CIP projects and therefore reviewed annually as part of the review of projects for
potential GSI opportunities (See Section 6.2).
3.1.5 Climate Action Plan
The Climate Action Plan (CAP) defines Cupertino’s path toward creating a healthy, livable, and vibrant
place for its current and future residents to live, learn, work, and play. The CAP seeks to identify
emissions reduction strategies that are informed by the goals, values, and priorities of the community.
The document was completed in January 2015. The CAP emissions reduction measures are organized
into five goals, one of which is “Expand Green Infrastructure”. Existing language in support of GSI is
summarized below.
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GHG Overarching Goals (Pages ES-14 and 66): Expand Green Infrastructure: enhance the
City’s existing urban forest and landscapes on public and private land.
Measure C-W-2 Recycled Water Irrigation Program (Page 116): As an alternative to recycled
water use…small-scale, on-site rainwater catchment systems could be installed to better
utilize natural precipitation for irrigation purposes, as opposed to use of scarce potable water
resources. The City will develop a demonstration project on municipal property …
Goal 5 – Expand Green Infrastructure (Page 127): In Cupertino, green space includes the
urban forest, parks, landscaped medians and parkways, and natural stormwater-absorbing
landscapes. Healthy and robust green infrastructure systems can mitigate the urban heat
island effect, lower building energy use, provide natural stormwater management and wildlife
habitat, improve local air quality, and increase community pride.
Measure C-G-1 Urban Forest Program (Page 128): The City should incentivize Green roofs for
their role in “protecting water resources adversely impacted by climate change by reducing
electricity usage and improving air quality.
Measure C-G-1 Action D (Page 130): Evaluate opportunities to expand current ordinances and
codes to prioritize expansion of City’s green and cool roofs, as well as pervious and cool
pavement.
Measure C-G-1 Action F (Page 130): Expand community and school gardens, and evaluate
opportunities to develop prevalent demonstration garden that incorporates water-sensitive
design and advanced irrigation control technology (if irrigation system is necessary.
Measure M-F-7 Action E. Install Graywater and Rainwater Catchment Systems in New
Construction and Major Retrofit Projects (page 186): In the absence of access to utility-
supplied recycled water in our community, Cupertino will strive to lead by example by installing
graywater and rainwater catchment systems in new municipal construction and major retrofit
projects…These projects can also serve as models for community members and businesses
seeking to achieve the same environmental and financial benefits, and should be showcased
to reconnect Cupertino’s suburban residents to their backyard gardens and the natural water
cycle.
3.1.6 Heart of the City Specific Plan
The Heart of the City Specific Plan provides specific development guidance for the most important
commercial corridor in the City of Cupertino. The purpose of the specific plan is to guide the future
development and redevelopment of the Stevens Creek Boulevard Corridor in a manner that creates a
greater sense of place and community identity in Cupertino. The Streetscape Element implements
community design goals contained in the 1993 General Plan, design concepts subsequently developed
and revised in the 1993 “Heart of the City” Design Charette, and any new policies and concepts
identified in the 2005 General Plan. The document was enacted by the City Council in December 2014
and does not include language to support GSI. However, consistent with the City’s strategy to ensure no
missed opportunities (Section 6), any development related to the Heart of the City will go through the
CIP review for identifying and evaluating GSI opportunities.
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3.1.7 Citywide Parks & Recreation System Master Plan (Draft)
The City is preparing a Citywide Parks & Recreation System Master Plan (Draft), which provides guidance
to create a park system for the future aligned with the community’s values and priorities. The Master
Plan creates a vision through the year 2040 to guide future development, renovation, management and
activation of City parks and recreation facilities. Elements of the Master Plan goals include conservation
of trees and natural areas which support wildlife and ecological functions and establish sustainable
practices in management of parks and recreation facilities. Existing language in support of GSI in the
draft plan dated January 2019 is summarized here:
Conservation Goal 1.D.v (Page 39): Embrace storm water management, incorporating
green infrastructure elements such as rain gardens, bioswales, permeable pavers and
detention ponds to help reduce flooding, filter pollutants and replenish groundwater during
storm events.
Sustainability Goal 7.C.ix (Page 73): Train staff in maintenance and stewardship of natural
areas, green infrastructure, and bioswales, so that these features thrive and the integrity of
natural resources on City property is maintained. Involve expert professional services as
needed to support informed and ongoing care for habitat areas.
Sustainability Goal 7.C.xi (Page 74): Focus on storm water management and green
infrastructure when designing or renovating City parks. For example, consider installing a
‘storm water management garden’ on City or public property to showcase green
infrastructure techniques.
Enhancements to Existing Parks, Creekside Park and Connection to Regnart Creek Trail
(page 84): Consider adding trail amenities, enhancing and protecting the riparian corridor,
and adding green infrastructure. Encourage connections between school, parks and trail.
Enhancements to Existing Parks, Saratoga Creek Trail (Page 84): Consider adding trail
amenities, enhancing and protecting the riparian corridor, and adding green infrastructure.
Encourage connections northward to Stevens Creek Blvd. and to regional destinations.
Enhancements to Existing Parks, Stevens Creek Trail (Page 84): Consider adding trail
amenities and adding green infrastructure. Encourage pedestrian and bike connections
between trail, City parks, County parks and nearby schools.
3.1.8 Workplan for Integration of GSI Language into Existing and Future City Planning
Documents
The General Plan, Climate Action Plan, Pedestrian Transportation Plan, Storm Drain Master Plan, and the
draft Citywide Parks and Recreation System Master Plan all include adequate language to support the
implementation of GSI in Cupertino. The Heart of the City Plan was last amended with the General Plan
in 2014. Unless there are development triggers, the Heart of the City Plan will be updated with GSI
language during future General Plan amendments. Consistent with the City’s strategy (See Section 6.1),
any progress on the Heart of the City will go through the CIP review and green stormwater
infrastructure will be considered as part of that review.
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When preparing new planning documents, the City will review GSI Plan requirements during the
planning process to ensure that GSI requirements and policies are incorporated. Examples of GSI related
language can be found in existing City plans, and in references such as SCVURPPP’s Model Green
Infrastructure Language for Incorporation into Municipal Plans (2016).
Regional Plans
The City is collaborating with SCVURPPP, Valley Water, and other agencies on several large-scale
planning efforts including those described below.
3.2.1 Santa Clara Basin Stormwater Resource Plan
A collaboration between SCVURPPP and Valley Water during 2017 and 2018, the Santa Clara Basin
Storm Water Resources Plan (SWRP) supports municipal GSI Plans by identifying and prioritizing
potential multi-benefit GSI opportunities on public parcels and street rights-of-way throughout the Basin
(i.e., Santa Clara Valley) and allows them to be eligible for State bond-funded implementation grants.
The SWRP includes a list of prioritized GSI opportunity locations for each SCVURPPP agency, including
Cupertino. As described in Section 5.2, the City’s GSI Plan builds on the SWRP output to further identify,
evaluate, and prioritize potential projects.
3.2.2 Santa Clara Valley Water District’s One Water Plan
Valley Water’s Watershed Division is leading an effort to develop an Integrated Water Resources Master
Plan to identify, prioritize, and implement activities at a watershed scale to maximize established water
supply, flood protection, and environmental stewardship goals and objectives. The “One Water Plan”
establishes a framework for long-term management of Santa Clara County water resources, which
eventually will be used to plan and prioritize projects that maximize multiple benefits. The One Water
Plan incorporates knowledge from past planning efforts, builds on existing and current related planning
efforts; and coordinates with relevant internal and external programs. The One Water Plan has five
goals:
1. “Valued and Respected Rain” – Manage rainwater to improve flood protection, water supply,
and ecosystem health.
2. “Healthful and Reliable Water” – Enhance the quantity and quality of water to support
beneficial uses.
3. “Ecologically Sustainable Streams and Watersheds” – Protect, enhance and sustain healthy and
resilient stream ecosystems.
4. “Resilient Baylands” – Protect, enhance and sustain healthy and resilient baylands ecosystems
and infrastructure.
5. “Community Collaboration” – Work in partnership with an engaged community to champion
wise decisions on water resources.
Tier 1 of the effort, for which a draft plan was completed in 2016 6, is a countywide overview of major
resources and key issues along with identified goals and objectives. Tier 2 (2016 to 2020) will include
greater detail on each of the County’s major watersheds. The City’s GSI Plan aligns with the goals of the
6 Santa Clara Valley Water District. 2016. One Water Plan for Santa Clara County. An Integrated Approach to Water
Resources Management. Preliminary Draft Report 2016.
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One Water Plan and may be able to coordinate with specific projects yet to be identified in the West
Valley area.
3.2.3 Bay Area Integrated Regional Water Management Plan
The Bay Area Integrated Regional Water Management Plan (IRWMP) is a comprehensive water
resources plan for the Bay region that addresses four functional areas: 1) water supply and water
quality; 2) wastewater and recycled water; 3) flood protection and stormwater management; and 4)
watershed management and habitat protection and restoration. It provides a venue for regional
collaboration and serves as a platform to secure state and federal funding. The IRWMP includes a list of
over 300 project proposals, and a methodology for ranking those projects for the purpose of submitting
a compilation of high priority projects for grant funding. The Santa Clara Basin SWRP was submitted to
the Bay Area IRWMP Coordinating Committee and incorporated into the IRWMP as an addendum. As
SWRP projects are proposed for grant funding, they will be added to the IRWMP list using established
procedures.
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4. GSI DESIGN GUIDELINES, DETAILS, AND SPECIFICATIONS
The MRP requires that the GSI Plan include general design and construction guidelines, standard
specifications and details (or references to those documents) for incorporating GSI components into
projects within the City. These guidelines and specifications should address the different street and
project types within the City, as defined by its land use and transportation characteristics, and allow
projects to provide a range of functions and benefits, such as stormwater management, bicycle and
pedestrian mobility and safety, public green space, and urban forestry.
The City, along with other SCVURPPP agencies, helped fund and provided input to the development of
countywide guidelines by SCVURPPP to address the MRP requirements and guide the implementation of
GSI Plans. The resulting SCVURPPP GSI Handbook (Handbook)7 is a comprehensive guide to planning and
implementation of GSI projects in public streetscapes, parking lots and parks. The Handbook consists of
two parts, the contents of which are described in the following sections. The City intends to use this
Handbook as a reference when creating City-specific guidelines and specifications to meet the needs of
the various departments.
Design Guidelines
Part 1 of the Handbook provides guidance on selection, integration, prioritization, sizing, construction,
and maintenance of GSI facilities. It includes sections describing the various types of GSI, their benefits,
and design considerations; how to incorporate GSI with other uses of the public right-of-way, such as
bicycle and pedestrian infrastructure and parking; and guidelines on utility coordination and landscape
design for GSI. In addition, the Handbook also provides guidance on post-construction maintenance
practices and design of GSI to facilitate maintenance.
Part 1 also contains a section on proper sizing of GSI measures. Where possible, GSI measures should be
designed to meet the same sizing requirements as Regulated Projects, which are specified in MRP
Provision C.3.d. In general, the treatment measure design standard is capture and treatment of 80% of
the annual runoff (i.e., capture and treatment of the small, frequent storm events). However, if a GSI
measure cannot be designed to meet this design standard due to constraints in the public right-of-way
or other factors, the City may still wish to construct the measure to provide some runoff reduction and
water quality benefit and achieve other benefits. For these situations, the Handbook describes (in
Section 4.2) regional guidance on alternative design approaches developed by the Bay Area Stormwater
Management Agencies Association (BASMAA) for use by MRP permittees.
Details and Specifications
Part 2 of the Handbook contains typical details and specifications that have been compiled from various
sources within California and the U.S. and modified for use in Santa Clara County. The Handbook
includes details for pervious pavement, stormwater planters, stormwater curb extensions, bioretention
in parking lots, infiltration measures, and stormwater tree wells, as well as associated components such
as edge controls, inlets, outlets, and underdrains. It also provides typical design details for GSI facilities
7 SCVURPPP (2019) Green Stormwater Infrastructure Handbook. February. Online at
http://scvurppp.org/scvurppp_2018/swrp/resource-library/
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in the public right-of-way that address utility protection measures and consideration of other
infrastructure in that space.
Incorporation of SCVURPPP Details and Specifications into City Standards
The City plans to reference the SCVURPPP GSI Guidelines and Specifications for design of GSI projects.
The City will review these for consistency with its own local standards, and revise existing guidelines,
standard specifications, design details, and department procedures as needed. The City will also
reference details and build on its experience from design and construction of the Stevens Creek Corridor
and Creek Restoration Project (Section 2.4.1).
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5. GSI PROJECT PRIORITIZATION AND IMPERVIOUS TARGETS
To meet the requirements of the MRP, the City’s GSI Plan must contain a mechanism to prioritize and
map areas for potential and planned projects, both public and private, for implementation over the
2020, 2030, and 2040 milestones. The mechanism must include the criteria for prioritization and outputs
that can be incorporated into the City’s long-term planning and capital improvement processes.
This chapter describes different GSI project categories considered within the City, followed by a
description of the process employed by the City to identify public lands that offer opportunities to
implement GSI and prioritize those opportunities, and the results of the process.
Project Types
GSI project types that have been or may be implemented in the City fall into the following categories:
Early Implementation Projects, C3 Regulated Projects, Green Streets, LID Retrofits, and Regional
Projects. Green Streets, LID Retrofits, and Regional Projects are types of GSI capital projects that the
City may implement to meet the water quality goals in the MRP and multi-benefit objectives defined in
the GSI Plan. GSI capital projects are typically not regulated projects (although they must conform to the
sizing and design requirements contained in Provision C.3, except under certain circumstances) and they
are primarily public projects under control of the City. These three project types are the focus of the
prioritization process described in Section 5.2, but all five GSI project types are considered as part of the
City wide GSI strategy presented in Chapter 6. Several factors, such as change in scope of work, funding,
site conditions, etc. determine the ability of the City to implement GSI capital projects.
5.1.1 Early Implementation Projects
Early Implementation Projects are GSI projects that have already been implemented by the City or are
already scheduled and funded for implementation during the permit term (i.e., through December
2020). The City has already implemented one GSI projects, as discussed in Section 2.4. The City has
identified an additional Early Implementation project through a review of its Capital Improvement
Program (CIP), as discussed in Section 5.2.2 below.
5.1.2 Regulated Projects
C3 Regulated Projects are those implemented as part of new and redevelopment within the City, both
private and public, that must meet the post-construction stormwater treatment requirements per
Provision C.3 of the MRP. Regulated projects include private development or redevelopment projects,
such as multi-family residential buildings, commercial office buildings, or shopping plazas, as well as
public projects, such as libraries, police stations, and parking lots, exceeding the impervious surface
thresholds. The “Apple Park” project, a 176-acre site that replaced the former Hewlett Packard industrial
campus and includes LID measures, is an example of a regulated project.
5.1.3 LID Projects
LID projects mitigate stormwater impacts by reducing runoff through capture and/or infiltration and
treating stormwater on-site before it enters the storm drain system. LID projects may include
bioretention facilities, infiltration trenches, detention and retention areas in landscaping, pervious
pavement, green roofs, and systems for stormwater capture and use. For the purposes of the GSI Plan,
LID projects are GSI facilities that treat runoff generated from a publicly-owned parcel on that parcel.
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5.1.4 Regional Projects
Regional projects capture and treat stormwater runoff from on-site and off-site sources, including
surface runoff and diversions from storm drains. Benefits of regional stormwater capture projects can
include flood risk reduction, stormwater treatment and use, and groundwater recharge. These projects
may take a variety of forms such as detention and retention basins and subsurface vaults and infiltration
galleries. The site characteristics will determine what types of regional projects are feasible, e.g.,
whether a project is on-line or off-line from the storm drain network, whether it is desirable to change
the functionality of the site, whether the project is above ground or underground, and the size of the
project.
5.1.5 Green Street Projects
Green street projects are GSI opportunities in the public right-of-way that capture runoff from the street
and adjacent areas that drain to the street. The technologies used for green streets are similar to those
used in LID projects but are limited to designs that can be used in the right-of-way. Green street projects
may include bioretention (e.g., stormwater planters, stormwater curb extensions or stormwater tree
filters), pervious pavement, and/or infiltration trenches. Green street GSI features can be incorporated
into other improvements in the right-of-way, including complete streets designs and improvements for
pedestrian and cyclist safety.
Identification and Prioritization Process
The City of Cupertino GSI opportunity identification and prioritization process involved two steps. The
first step was the screening and prioritization methodology used in the Santa Clara Basin SWRP (see
Section 3.2.1) to identify and prioritize GSI opportunities on public parcels and street segments within
the region. The second step in the process involved overlaying City-specific priorities, planning areas,
and upcoming City projects onto the regional prioritization results to align the results of the SWRP
prioritization process with the City’s priorities. These steps are described in detail below.
City projects in areas associated with a project opportunity identified in the SWRP can qualify for State
bonded-funded stormwater capture project implementation grants (e.g., Proposition 1). Opportunities
for GSI implementation that arise in areas that are not adjacent to a prioritized project opportunity
identified in the SWRP may be considered on a case by case basis for feasibility, cost effectiveness, and
availability of funding.
5.2.1 Step 1: Stormwater Resource Plan Prioritization
Building on existing documents that describe the characteristics and water quality and quantity issues
within the Santa Clara Basin (i.e., the portion of Santa Clara County that drains to San Francisco Bay), the
SWRP identified and prioritized multi-benefit GSI opportunities throughout the Basin, using a metrics-
based approach for quantifying project benefits such as volume of stormwater infiltrated and/or
treated, and quantity of pollutants removed. The metrics-based analysis was conducted using
hydrologic/ hydraulic and water quality models coupled with Geographic Information System (GIS)
resources and other tools. The products of these analyses were a map of opportunity areas for GSI
projects throughout the watershed, an initial prioritized list of potential project opportunities, and
strategies for implementation of these and future projects.
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The process began by identifying and screening public parcels and public rights-of-way 8 that can support
GSI. Project opportunities were split into the three categories described above – LID, regional, and green
streets projects -- because of fundamental differences in GSI measures used, project scale, and
measures of treatment efficiency. Screening factors are presented in Table 5-1.
After the identification of feasible GSI opportunity locations, screened streets and parcels were
prioritized to aid in the selection of project opportunities that would be the most effective and provide
the greatest number of benefits. In addition to physical characteristics, several special considerations
were included in the prioritization methodology to consider coordination with currently planned
projects provided by agencies, as well as consideration of additional benefits that projects could
provide. A discussion of the screening and prioritization process for each project category is presented
in the subsequent sections. Figure 5-1 presents the results of the various steps.
LID and Regional Stormwater Capture Project Opportunities
The screening criteria for LID and regional projects were ownership (focusing only on public parcels),
land use, and site slope. As shown in Table 5-1, parcel size was used to determine whether a location
could support a regional or LID project.
Parcels that met the screening criteria were prioritized based on physical characteristics such as soil
group, slope, and percent impervious area, proximity to storm drains, proximity to flood-prone creeks
and areas, proximity to potential pollutant sources (e.g., PCBs 9), whether they were in a priority
development area (PDA), whether they were within a defined proximity to a planned project, and
whether the project was expected to have other benefits such as augmenting water supply, providing
water quality source control, re-establishing natural hydrology, creating or enhancing habitat, and
enhancing the community. Prioritization metrics for LID project scoring and regional project scoring are
shown in separate tables in Appendix A. The result of the parcel prioritization was a list and map of
potential project locations based on the above criteria. This subset of projects from the SWRP was
carried over into Step 2 City-Specific Prioritization (Section 5.2.2).
8 Public parcels can include those not owned by the City, such as public school grounds, County, State, and Federal properties,
and property owned by the Water District.
9 Polychlorinated biphenyls – manmade chemicals which resist extreme temps, and were used in electrical equipment such as
transformers and capacitors; and building materials such as caulking, adhesives, mastics etc. primarily from 1950s through
1981. PCBs pose developmental or neurological risks to fetuses, babies, and children, and have been shown to cause cancer in
animals and evidence supports cancer causing effect in PCB workers.
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Table 5-1 Screening factors for parcel-based and right-of-way project opportunities
Screening
Factor Characteristic Criteria Reason
Parcel-based
Public
Parcels
Ownership
County, City, Town,
Valley Water, State,
Open Space
Agencies
Identify all public parcels for regional
stormwater capture projects or onsite LID
retrofits
Land Use Park, School, Other
(e.g., Golf Course)
Suitability
Parcel Size ≥ 0.25 acres Opportunity for regional stormwater capture
project
< 0.25 acres Opportunity for on-site LID project
Site Slope < 10 % Steeper grades present additional design
challenges
Right-of-Way
Selection Ownership Public Potential projects are focused on public right-
of-way opportunities
Suitability
Surface Paved Only roads with paved surfaces are considered
suitable. Dirt roads were not considered.
Slope < 5% Steep grades present additional design
challenges; reduced capture opportunity due
to increased runoff velocity
Speed ≤ 45mph Excludes higher speed roads such as major
arterials and highways
Green Street Project Opportunities
The screening criteria for green streets projects in the public right-of-way were ownership, surface
material, slope, and speed limit (Table 5-1). The screened public right-of-way street segments were then
prioritized based on physical characteristics, proximity to storm drains, proximity to flood-prone creeks
and areas, proximity to potential pollutant sources (e.g., PCBs 10), whether they were in a priority
development area, whether they were in proximity to a planned project, and whether the project was
10 Polychlorinated biphenyls – manmade chemicals which resist extreme temps, and were used in electrical equipment such as
transformers and capacitors; and building materials such as caulking, adhesives, mastics etc. primarily from 1950s through
1981. PCBs pose developmental or neurological risks to fetuses, babies, and children, and have been shown to cause cancer in
animals and evidence supports cancer causing effect in PCB workers.
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expected to have other benefits (similar to LID and regional projects). Prioritization metrics for green
streets projects are shown in Appendix A.
The initial prioritization process resulted in a large number of potential green streets project
opportunities within the Santa Clara Basin. In order to identify the optimal locations for green street
projects, the street segments in each municipality’s jurisdiction with scores in the top 10 percent of
ranked green street opportunities were identified and mapped.
5.2.2 Step 2: City-Specific Prioritization
The City reviewed the results from the SWRP prioritization (Section 5.2.1) and refined the list of parcels
and street segments based on current knowledge of City plans and project opportunities. The resulting
parcel-based and green street opportunities for the City of Cupertino are presented in Figure 5-1. The
City’s list of parcel-based and green street opportunities is provided in tabular format in Appendix B.
Next, as discussed in the remainder of this section, the City-specific prioritization incorporated local
priorities for GSI project implementation, which include: 1) opportunities to implement GSI projects in
conjunction with anticipated areas of private development and 2) upcoming capital improvement
projects that can potentially be combined with GSI projects.
Priority Development Areas
Priority Development Areas, commonly known as PDAs, are areas within existing communities that local
city or county governments have identified and approved for future growth. These areas typically are
accessible by one or more transit services; and they are often located near established job centers,
shopping districts and other services. PDAs are expected to accommodate 78% of new housing
production (over 500,000 units) and 62% of employment growth (almost 700,000 jobs) in the Bay Area
through the year 204011. As PDAs are developed, they offer good opportunities to construct GSI
facilities.
Cupertino’s PDA area includes properties within a quarter mile of Stevens Creek Boulevard from
Highway 85 to its eastern border and a portion of North and South De Anza Boulevards. The boundary of
the PDA is shown in Figure 5-2.
11 From Table 4.2 and Table 4.3 of the Association of Bay Area Governments and Metropolitan Transportation Commission
“Plan Bay Area 2040” Report, adopted July 26, 2017.
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Figure 5-1 City of Cupertino Public Parcels and Street Segments with Opportunities for GSI (Source: EOA, and
Santa Clara Basin Stormwater Resource Plan, 2018).
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Special Areas
The City’s General Plan identifies nine Special Areas within Cupertino:
• Heart of the City
• Vallco Shopping District
• North Vallco Park
• South De Anza
• North De Anza
• Homestead
• Bubb Road
• Monta Vista Village
• Other Non-Residential/ Mixed-Use Special Areas
Each Special Area is located along one of the four major mixed-use corridors in the city, which represent
key areas within Cupertino where future development and reinvestment will be focused. Goals for these
areas include more bicycle- and pedestrian-friendly streets and improved walkable, bikeable
connectivity to adjacent areas and services. Because these Special Areas are where the most
development is expected to occur, they will likely have the best opportunities to construct GSI facilities.
The GSI projects could be part of private redevelopment projects or public improvement projects.
The location of the Special Areas are shown on Figure 2-2, with the exception of the Other Non-
Residential/ Mixed-Use Special Areas. These Other Non- Residential/Mixed-Use Special Areas are
located throughout Cupertino and include the following: west side of Stevens Canyon Road across from
McClellan Road; intersection of Foothill Boulevard and Stevens Creek Boulevard; Homestead Road near
Foothill Boulevard; northwest corner of Bollinger Road and Blaney Avenue; and all other non-residential
properties not referenced in an identified commercial area.
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Figure 5-2. City of Cupertino Special Project Areas and Priority Development Area (Source: City of Cupertino
General Plan)
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Capital Improvement Projects
As required by the MRP, the City reviews its CIP project list annually to identify opportunities for GSI.
Based on this review, the City prepares and maintains a list of any public GSI projects that are planned
for implementation during the permit term and a list of public projects that have potential for GSI
measures.
As discussed in Section 2.4.2, the City has completed one public GSI project (Stevens Creek Corridor and
Creek Restoration Project). The second public GSI project (McClellan Ranch West Parking Lot
Improvement) is under construction and expected to be completed in September 2019. The project
locations are shown on the map in Figure 5-4.
In addition, through its CIP project review, the City identified the following projects as having potential
to include GSI:
• South Foothill Blvd and N. Foothill Blvd. Green Street: Reconstruct the medians to reduce
runoff and better infiltrate stormwater, and consider bioretention areas along the outer edges
of the boulevard
• Union Pacific Railroad Trail Feasibility Study: Incorporate bioretention areas and pervious trails,
if the study results in a project. Currently this is just a study.
• Mary Avenue Greenbelt and Trail Project: Create a wide bioretention-enhanced green belt on
the west side of Mary Avenue. Include a pervious multi-use pathway to accommodate bicyclists,
pedestrians, strollers, and joggers. Install bioretention tree wells at optimal intervals on the east
side of the street to treat stormwater, and on the west side of the street where feasible to
create a future tree canopy over Mary Ave.
• Junipero Serra Trail Extension: Incorporate bioretention areas and pervious trails where
feasible.
• Memorial Park Renovation: Look for an opportunity to construct an infiltration basin at the park
to treat runoff from Stevens Creek Blvd.
• Regnart Creek Trail: Incorporate bioretention areas and pervious trails where feasible.
• Lawrence Mitty Park: Pending the City acquiring the land, look for opportunities to incorporate
GSI features to treat runoff from the adjacent expressway.
• Stelling Road Potential Future Storm Drain and Street Upgrades: Incorporate bioretention
areas to treat street runoff where feasible.
• Rainbow Drive Storm Drain Pipeline Rehabilitation: Incorporate bioretention areas to treat
street runoff where feasible.
• Wolfe Road Widening: Incorporate bioretention areas where feasible
• Bike Boulevard Projects: Cupertino is planning a network of bicycle-friendly routes along
residential streets throughout the City in order to encourage bicycling. Traffic circles and bulb
outs will be considered and designed, where feasible, to include GSI features.
• Citywide Parks and Recreation Master Plan: Install GSI at Linda Vista, Memorial, Monte Vista,
Wilson, Portal, Creekside and other parks where feasible, which could include enhanced
educational signage explaining the function and purpose of the GSI improvements.
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These potential CIP project locations are shown on the map in Figure 5-3. A GSI concept for the Mary
Avenue Greenbelt and Trail Project was completed for the SWRP. The project is currently unfunded, and
the concept design is intended to assist with the grant application process should the City decide to
pursue funding via Proposition 1 or other State bond-funded grant program.
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Figure 5-3. City of Cupertino Public Projects with Potential for GSI (Source: City of Cupertino FY 17-18 Annual
Report, and 2018 Santa Clara Basin Stormwater Resource Plan)
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Prioritization Output
The map in Figure 5-4 presents a compilation of the factors used to identify and prioritize the City’s
opportunities for GSI projects: the City’s list of parcel-based and green street project opportunities,
overlaid with the City’s PDA, Special Areas, and CIP projects that may have potential to include GSI. The
locations of the City’s completed GSI projects, including the McClellan Ranch West Parking Lot project
which is under construction and expected to be completed by September 2019, are also shown. As
shown in Figure 5-4, a large number of the green street opportunities identified in the SWRP are located
within the City’s PDA and Special Areas. This indicates a strong correlation between the areas identified
as having potential for GSI and the City’s construction and redevelopment plans.
The City’s list of parcel-based and green street opportunities is provided in tabular format in Appendix B.
The list includes additional information for each parcel and green street opportunity, including general
information such as APN, landowner and land use or street name, the SWRP prioritization score for each
project opportunity, and co-location with a City criteria for prioritization (CIP project, PDA or Special
Area).
An implementation plan is described in Section 6 to guide the development, design, and construction of
GSI projects.
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Figure 5-4 City of Cupertino GSI Overview
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6. GSI Implementation Plan
This chapter provides an overall strategy and steps for implementing GSI within the City of Cupertino
over the long term. The implementation plan has the following components: (1) the Citywide GSI
strategy; (2) a process for identifying and evaluating GSI opportunities, (3) a workplan to complete Early
Implementation Projects, (4) the legal and funding mechanisms that enable implementation, (5)
estimated targets for the amounts of impervious surface to be “retrofitted” (i.e., redeveloped with GSI
facilities to treat runoff from impervious surfaces), and (5) the technical tools that ensure the tracking of
implemented projects.
City-wide GSI Strategy
The City of Cupertino’s approach to GSI planning will be consistent with the City’s Community Vision
2040 (See Section 3.1.1), which has as guiding principle to:
“Preserve Cupertino’s environment by enhancing or restoring creeks and hillsides to their
natural state, limiting urban uses to existing urbanized areas, encouraging environmental
protection, promoting sustainable design concepts, improving sustainable municipal
operations, adapting to climate change, conserving energy resources and minimizing
waste.”
The City’s approach will also be guided by various other existing plans that support the implementation
of GSI, such as the Climate Action Plan, and the Storm Drain Master Plan. Cupertino has already
completed one project, the Stevens Creek Corridor and Restoration Project (Section 2.1.4), which
incorporated GSI and preserved an 18-acre site and restored creek habitat in the City to maintain
biodiversity and ecological integrity of local natural systems. As the City seeks to achieve sustainability
and community health objectives, future growth and retrofitting of existing infrastructure will create
mixed-use, commercial, employment and neighborhood centers; pedestrian-oriented and walkable
spaces for the community to gather; and distinct and connected neighborhoods with easy walkable and
bikeable access to services, including schools, parks and shopping.
The City of Cupertino’s GSI implementation strategy consists of the following:
• Priority Development Areas - The City will focus future change within the Special Areas that are
located on Cupertino’s major mixed-use corridors. These areas already have a mix of
commercial, office, hotel and residential uses, and are located along roadways that will be
enhanced with “Complete Streets” features, improved landscaping and expanded public spaces
(e.g., parks and plazas). Complete Streets can be enhanced with GSI features to become green
“Sustainable Streets”.
• Evaluation of CIP Projects for Opportunities – The City will continue to review its CIP list annually
for opportunities to incorporate GSI into CIP projects and evaluate the feasibility of such
projects. The City has established a process for CIP review to avoid missing GSI opportunities
(see Section 6.2).
• Evaluation of Opportunities Identified in the Stormwater Resource Plan – The public parcels and
street segments identified in the SWRP (See Section 5.1 of this report) are opportunity areas for
GSI projects. The City will use the SWRP list to help identify potential project locations for GSI
implementation, as described in Section 6.2.
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• Evaluation of Non-CIP Project Opportunities - As awareness of GSI increases, municipal staff or
local community members may also identify and recommend GSI projects opportunities. These
projects will be considered using the methodology described in Section 6.2.
• Coordination with Private Development – The City of Cupertino will explore working with private
property developers to install green infrastructure facilities in public rights-of-way near the
properties they are developing, such as along street frontages.
• Community Outreach and Engagement – The City will provide outreach to the Sustainability
Commission, the Bike and Pedestrian Commission, the local community, and other stakeholders
to get input and support for the implementation of the GSI Plan. The City will also continue to
engage with San Francisco Estuary Institute (SFEI) and/or other potential partners that offer a
regional perspective for enhancing sustainable natural landscaping with multi-faceted benefits.
The City will also continue to require future development projects to comply with C.3 requirements of
the Municipal Regional Permit (MRP), and include site design, source control, treatment control, and
hydromodification management measures as applicable.
Process for Identifying and Evaluating GSI Project Opportunities
The City will use the various mechanisms described in its strategy (Section 6.1) to identify GSI
opportunities in public projects.
The City will use the guidance developed by BASMAA12 (see Appendix D) and the SWRP prioritization
criteria to evaluate public projects to determine the potential for the inclusion of GSI measures at the
project planning level. The evaluation may include site reconnaissance, drainage area delineation, and
cost analysis. If not already on the CIP list, projects identified through this process will be added to the
CIP list when it is updated. Projects with a GSI component may be included in the CIP as funded or
unfunded projects. An unfunded project’s inclusion in the CIP demonstrates that it is a City priority
pending adequate funding. The City prepares the CIP Budget biennially. The next Biennial CIP Budget will
be prepared in 2020 covering FY 2020-21 and FY 2021-22.
The City will map all potential GSI project opportunities to determine their proximity to green street or
parcel-based project opportunities identified in the SWRP (Section 5.2.1). Potential GSI projects that are
adjacent to SWRP opportunity areas may be eligible for state bond funding. Projects with opportunities
for GSI measures may be submitted to the SWRP during the SWRP update process if they are not already
included in the SWRP. This will allow those projects to be eligible for future state bond funding. The
SWRP will likely be updated in the 2022-2023 timeframe. At this time, SCVURPPP will reach out to all
member agencies to provide their project lists for prioritization and inclusion in the updated SWRP.
Workplan to Complete Early Implementation Projects
As discussed in Section 5.2.2 of this GSI Plan, Provision C.3.j. of the MRP requires that the City identify,
prepare, and maintain a list of GSI projects that are planned for implementation during the permit term
(i.e., through December 2020), and infrastructure projects that have potential for GSI measures. The list
12 BASMAA Development Committee (2016) Guidance for Identifying Green Infrastructure Potential in Municipal
Capital Improvement Program Projects. May.
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is submitted with each Annual Report to the Regional Water Board. Projects with GSI that are scheduled
and funded for implementation during the permit term are considered “Early Implementation Projects”.
The City has already identified and completed one early implementation project (Stevens Creek Corridor
and Creek Restoration Project), with a second project (McClellan West Parking Lot) currently under
construction and expected to be completed by September, 2019(see Section 2.4).
The City will continue to review its CIP list annually, using the SWRP prioritization and the guidance
developed by BASMAA for identifying opportunities to incorporate GSI into CIP projects. A copy of the
BASMAA Guidance is provided in Appendix D.
Legal Mechanisms for GSI Implementation
Provision C.3.j.i.(3) of the MRP requires permittees to “Adopt policies, ordinances, and/or other
appropriate legal mechanisms to ensure implementation of the Green Infrastructure Plan in accordance
with the requirements of this provision.”
As described in Section 1.3.2, the City of Cupertino and other municipalities subject to Provision C.3 of the
MRP must require post-construction stormwater control measures on regulated development projects.
Post-construction stormwater controls reduce pollutants from flowing to streams, creeks, and the Bay
and reduce the risk of flooding by managing peak flows. Section 9.18.100 (Permanent Stormwater
Measures Required for Development and Redevelopment Projects) of the City’s Municipal Code provides
legal authority for the City to require regulated private development projects to comply with MRP
requirements.
GSI projects are typically not regulated projects (although they must conform to the sizing and design
requirements contained in Provision C.3 except under certain circumstances) and they are primarily
public projects under control of the City. As part of the GSI Plan process, the City reviewed its existing
policies, ordinances, and other legal mechanisms related to the implementation of stormwater NPDES
permit requirements and found that it has sufficient legal authority to implement the GSI Plan. Adoption
of the GSI Plan by the City Council will further strengthen the authority.
Evaluation of Funding Options
The GSI Plan prioritizes specific projects for near-term integration into CIPs and long-term integration into
City planning efforts. Implementation of these projects is contingent upon the City identifying funding
sources for GSI planning, design, construction, and maintenance.
The total cost of GSI includes costs for planning, capital (design, engineering, construction) and ongoing
expenditures, including operations and maintenance (O&M), utility relocation, and feature replacement.
It is likely that no single source of revenue will be adequate to fund implementation of GSI, and a
portfolio of funding sources will be needed. There are a variety of approaches available to help fund up-
front and long-term investments. This section discusses the City’s current stormwater management
funding sources and then describes additional funding strategies available to implement GSI that are
being considered by the City for future funding.
6.5.1 Current Funding Sources for GSI Program Elements
The City of Cupertino currently uses a combination the City’s General Fund and Federal, State, and other
applicable grants to fund construction of projects in its capital improvement program (CIP) and other
projects. The General Fund, and when applicable, CalRecycle grants, are used for public street, parking
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lot and building maintenance; maintenance of stormwater control measures installed at public projects;
and maintenance of other landscaped areas (e.g., parks, medians, public plazas, etc.)
6.5.2 Potential Future Funding Options
As required by the MRP, the City analyzed possible funding options to raise additional revenue for
design, construction, and long-term operation and maintenance (O&M) of GSI projects. The City used
the guidance on stormwater funding options developed by SCVURPPP (2018) as a reference for
conducting its analysis. Table 6-1 summarizes the funding options that will be considered by the City as
the Plan is implemented. For each type of funding mechanism, the table provides a brief overview and
specifics related to GSI, pros and cons, and applicability to funding planning, capital, and/or long-term
O&M costs.
Impervious Area Targets
As mentioned in Section 1.3.2, the focus of the GSI Plan is the integration of GSI systems into public
rights-of-way. However, the MRP (Provisions C.11 and C.12) establishes a linkage between public and
private GSI features and required reductions of pollutants in stormwater discharges. To help estimate
the pollutant load reductions that can be achieved by GSI during the 2020, 2030, and 2040 timeframes,
the MRP requires that Permittees include in their GSI Plans estimated targets for the amounts of
impervious surface to be “retrofitted” (i.e. redeveloped with GSI facilities to treat runoff from
impervious surfaces) as part of public and private projects during the same timeframes.
The City worked with SCVURPPP staff to develop a methodology to predict the extent and location of
privately- and publicly-owned land areas that will be redeveloped in their jurisdictions and whose
stormwater runoff will be addressed via GSI facilities, and to derive impervious surface targets for GSI
retrofits associated with these redevelopment projects. The methodology and results are described in
Sections 6.6.1 and 6.6.2 below.
6.6.1 Methodology
The first step in the process used historic development trends and City staff’s knowledge of
planned/projected redevelopment in the City to estimate the acres of redevelopment that will occur in
the City by 2020, 2030, and 2040 via redevelopment of privately- and publicly-owned parcels that would
trigger C.3 requirements under the current MRP (i.e. C.3 regulated projects). Stormwater runoff
associated with these parcels will be addressed via GSI facilities, as required by the permit.
The second step was to estimate the acres of impervious surface associated with future redevelopment
of these private and public parcels. To do this, it was necessary to predict the likely locations and types
of land areas that are anticipated to be addressed by GSI in the future. Growth patterns and time
horizons for development, along with algorithms to identify which parcels are likely to redevelop,
resulted in preliminary estimates of the land area that is predicted to be addressed by GSI facilities in
the City of Cupertino by 2020, 2030, and 2040. Using the current land uses of the predicted locations of
GSI implementation and associated impervious surface coefficients for each land use type, estimates of
the amount of impervious surface that would be retrofitted with GSI on privately-owned parcels were
developed.
The methodology focused on parcel-based redevelopment as the location and timing of projects in the
public right-of-way is uncertain and the contribution of these projects to overall impervious surface area
treated by GSI expected to be minor relative to the acreage projected to be treated by C.3 projects.
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Table 6-1 Potential GSI Funding Options
Section/Overview GSI Specifics Pros Cons Type of Funding
Parcel Taxes: revenue
stream through taxing
property or other
system.
Can be used to set up,
fund and maintain a
stormwater program
and MRP compliance.
• Well understood tax
• Stable revenue stream
over many years
• Legally reliable
• Can also be done by
mail.
• High political threshold
• Vulnerable to competition with other
measures on the ballot.
• Considerable effort and resources
required with uncertain odds of
success.
• Planning
• Capital
• O&M
Property-related Fees:
fees on real property.
• Fee on property
contributing
stormwater
runoff to MS4.
• Can be used to
set up, fund and
maintain a
stormwater
program and MRP
compliance.
• Most-commonly used
mechanism for funding
stormwater programs.
• Easier to pass with 50%
threshold and mailing
process.
• Property-based fees must use a
standardized methodology for
calculating the fee.
• Considerable effort and resources
required with uncertain odds of
success.
• Approval process is more time
consuming and expensive for staff.
• Schools may have large fees and public
schools may be exempt from fees
depending on the agency’s specific
ordinance.
• Planning
• Capital
• O&M
General Obligation
Bonds
• Tax on property
owners through
debt obligation
taken on by
municipality.
• Long term
payback period
typically 10-30
years.
• Typically a lower
interest rate than what
is available from
commercial banks.
• Allows funds to be used
in the near term and
paid back over the long
term.
• Interest rate variable depending on
financial markets
• Some risk to general fund for
municipality if payments cannot be
made.
• Can only be used for capital costs –
not O&M
• Planning
• Capital
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Section/Overview GSI Specifics Pros Cons Type of Funding
Development Impact
Fees: paid by an
applicant seeking
approval of a
development project.
Could potentially be
used to fund retrofits
of adjacent public
right-of-way areas
with GSI as part of
development or
redevelopment
projects.
Cost for retrofitting streets
can be leveraged through
development activities.
If a fee is found to not relate to the impact
created by the development project, or to
exceed the reasonable cost of providing
the public service, then the fee may be
declared a “special tax” subject to approval
by a two-thirds majority of voters.
• Planning
• Capital
Grants: one time funds
that require an
application from a
funding agency.
Could be used to plan,
design and/or build
GSI.
Can fund programs or
systems that would
otherwise take up significant
general fund revenues.
• Usually a one-time source of funding
only.
• May need to create new programs and
systems for each grant.
• Usually have strings attached for
matching funds and other
requirements.
• Little control over timing of
applications and payment can lead to
difficulties in coordination with other
programs and grants.
• Can be very competitive and resource
intensive to apply.
• No guarantee of success.
• Post-project O&M costs must be
borne by the agency.
• Planning
• Capital
Benefit Assessment and
Community Facility
Districts
Typically used to build
and/or maintain
facilities such as GSI
improvements and/or
services.
Can be used to fund
maintenance and
operations.
Requires property owners and/or
businesses to agree that the need is
present and that they should be (at least
partially) responsible for funding it.
• Capital
• O&M
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Section/Overview GSI Specifics Pros Cons Type of Funding
Business Improvement
Districts
Businesses and
property owners tax
themselves and
manage the funds to
build or maintain GSI
assets.
Can provide sense of
ownership and pride in the
neighborhood when results
are visible.
Can burden businesses, property owners
and others to the extent that they are
unwilling to approve other funding
measures.
• Planning
• Capital
• O&M
Infrastructure Financing
Districts
Captures increase in
ad valorum tax
increases (similar to
redevelopment
agencies) for
infrastructure
improvements such
as GSI
Can be jointly done with
multiple cities.
Cannot capture any of the local school
district’s portion of tax increment.
• Planning
• Capital
• O&M
Motor Vehicle License
Fees: fees on each motor
vehicle that is registered.
Could be used to plan,
design and/or build
GSI.
Can be flexible in purpose
and can supply a long-term
stable revenue source.
• If the total number of new annual
motor vehicle registrations decline
over time (as may happen with car-
sharing, transit increases, biking and
walking and the rollout of automated
vehicles) revenues will decline.
• Difficult to achieve the 2/3 majority
needed to pass due to Prop 26.
• Only for activities that are deemed to
help mitigate impacts from motor
vehicles.
• Planning
• Capital
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Section/Overview GSI Specifics Pros Cons Type of Funding
Realignment of
Municipal Services:
municipalities shift costs
to programs where
revenue can be increased
such as sewer, water and
trash.
Could be used to plan,
design, build and/or
maintain GSI where
there is a nexus
between the two
programs.
A means of leveraging
existing or new resources
funded by non-balloted fee
structures.
• Bureaucratic issues can be difficult to
overcome.
• Sewer, trash and water may be
controlled by different agencies that
may not be able to coordinate or
share resources.
• There may be political restrictions to
significant increases in rates.
• Planning
• Capital
• O&M
Integration with
Transportation Projects:
transportation funding is
leveraged to cost-
effectively include
stormwater quality
elements.
Installation and
maintenance of GSI
facilities as part of
integrated roadway
programs.
• Roadway projects have
more funding than
stormwater programs
and are generally more
popular with the public.
• Complete and green
streets may be more
popular with the public
than traditional car-
focused streets.
• Green streets may be
less expensive than
traditional streets based
on a life cycle cost
analysis.
• Roadways have been designed in
certain ways with expectations of
costs and purposes for decades.
• Many roadways are in poor condition
and there is not enough funding to fix
them all.
• GSI is perceived as an “added” cost
which, could reduce the number of
roadways that can be maintained.
• Transportation funding is often
restricted to certain roadway
construction elements.
• Planning
• Capital
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Section/Overview GSI Specifics Pros Cons Type of Funding
Alternative Compliance:
Allows developers the
flexibility to build, or
fund through payment of
an in-lieu fee, off-site
stormwater treatment
systems for regulated
projects or set up credit
trading programs.
Leveraging
development activities
to build and maintain
GSI systems. In lieu
fees can be used by
developers who would
rather make a lump
sum payment and
quickly complete their
compliance
requirements. Credit
trading programs can
incentivize non-
regulated properties
to retrofit impervious
surfaces.
• Gives flexibility to site
GI systems in locations
that optimize pollutant
loading reduction and
other benefits to the
community.
• Allows for off-site
stormwater treatment
when stormwater
management
requirements can’t be
met within a regulated
project site.
• An in-lieu fee and/or
credit trading system
can be used to achieve
additional retrofits and
installation of GSI.
• Can be difficult to come up with viable
alternative locations for GSI
installations.
• Can be difficult to quantify how much
a developer should pay upfront for
long-term maintenance costs that the
municipality will bear.
• May require agencies to modify the
stormwater sections of their municipal
codes to allow for the creation and/or
use of the desired options/programs.
• Planning
• Capital
• O&M
Existing Permittee
Resources: Utilize
general funds for GSI.
Could be used to plan,
design, build and/or
maintain GSI.
Voter approval or new
revenue sources not
required.
• GSI must compete with many other
municipal priorities and essential
services.
• Normally not a viable option for
substantial GI implementation.
• Planning
• Capital
• O&M
Long Term Debt: borrow
money up-front against a
dedicated stream of
revenue projected over
the life of the program.
Can borrow money
from future revenues
to construct GSI
systems in the
present.
• Well understood
process of raising funds.
• Allows acceleration of
improvements to
compliance deadlines
• Need a dedicated stream of revenue
to pay off debt.
• If the general fund is used, can put the
general fund at risk if jurisdiction
cannot make the payments, credit
rating will be downgraded jeopardizing
other programs.
• Planning
• Capital
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Section/Overview GSI Specifics Pros Cons Type of Funding
Public-Private
Partnerships (P3s):
agreements or contracts
between a municipality
and a private company to
perform specific tasks.
Can provide for the
design, construction
and maintenance of
GSI systems over a
long period.
• Leverages public funds
while minimizing
impacts to a
municipality’s debt
capacity.
• Access to advanced
technologies.
• Improved asset
management.
• Draws on private sector
expertise and financing.
• Benefits local economic
development and
“green jobs.”
• Relieves pressure on
internal local
government resources.
• Stormwater fee or other source of
stable revenue over the life of the P3
contract is required.
• Contracts out to the private sector the
construction and maintenance of GSI
systems, possibly removing some
municipal control.
• Planning
• Capital
• O&M
Volunteer Programs:
provide community-
based volunteer labor for
specific tasks.
Use volunteer
programs to help build
or maintain GSI
facilities.
• A low-cost source of
labor.
• Educational program for
community.
• Can build support for a
stormwater fee or other
funding source.
• Can be time intensive for staff to set
up and administer.
• May not be dependable in the long
run
• May result in loss of municipal control
depending on program specifics.
• Planning
• Capital
• O&M
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6.6.2 Results
Using the methodology described above, a predicted redevelopment rate of 15 acres per year was
calculated for the City of Cupertino. “Best” estimates of the magnitude of land areas that is predicted to
be addressed by future GSI facilities by the 2020, 2030, and 2040 milestones were calculated using the
rate. “High” (i.e., 50% > “best”) and “Low” (i.e., 50% < “best”) estimates of future GSI implementation
were also calculated to provide a range of potential redevelopment levels and account for uncertainty in
the “Best” estimate. Figure 6-1 and Table 6-2 present the outputs of the analysis and represent the total
acreage known to be addressed by GSI in Cupertino through 2018, and the best estimate of the
cumulative land area that will be addressed in 2020 (363 acres), 2030 (513 acres), and 2040 (663 acres)
by GSI on privately- and publicly-owned parcels in the City of Cupertino.
1High estimate – projected from 150% of “Best Estimate; 2Best estimate – rate of redevelopment based on 10-year average
(2008-2017); and 3Low estimate – projected from 50% of “Best Estimate”. The large increase in GSI in 2017-2018 was due to
the completion of the Apple Park Campus and surrounding buildings.
Figure 6-1 Existing and projected cumulative land area (acres) anticipated to be addressed via Green
Stormwater Infrastructure facilities installed via private redevelopment in the City of Cupertino by 2020,
2030, and 2040.
0
100
200
300
400
500
600
700
800
900
Area (acres) Addressed by GSIProjectedReported
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Table 6-2 Projected cumulative land area (acres) anticipated to be addressed via Green Stormwater
Infrastructure facilities via private redevelopment in the City of Cupertino by 2020, 2030, and 2040.
Year Low1 Best2 High3
Existing GSI4 - 333 -
2020 348 363 378
2030 423 513 603
2040 498 663 828
1Low estimate – projected from 50% of “Best Estimate”; 2Best estimate – rate of redevelopment based on 10-year average (2009-2018); and
3High estimate – projected from 150% of “Best Estimate”; 4Total area addressed by parcel-based redevelopment projects with GSI completed
through 2018 (excludes non-jurisdictional and green street and regional projects).
Table 6-3 lists the impervious surface percentage for each land use class, based on impervious surface
coefficients typically utilized, and the estimated impervious surfaces that are predicted to be retrofitted
by 2020, 2030, and 2040 in the City via GSI implementation on private and public parcels: 275 acres by
2020, 431 acres by 2030 and 557 acres by 2040. Note that these predictions do not include impervious
surface that may be addressed by projects in the public right-of-way, and that these predictions have a
high level of uncertainty because future redevelopment rates may increase or decrease relative to the
historic development trends and staff knowledge that the rate for Cupertino was based on. Therefore,
actual impervious surface addressed by GSI by the various milestones may increase or decrease relative
to what is presented in Table 6-3.
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Table 6-3 Actual (2002-2018) and predicted (2019-2040) extent of impervious surface retrofits via GSI implementation on privately- and publicly-owned parcels in the
City of Cupertino by 2020, 2030, and 2040.
Previous Land Use % of Area
Impervious a
Retrofits via GSI Implementation
2002-2018 2019-2020 2021-2030 2031-2040 Total (2002-2040)
Total
Area
(acres)
Impervious
Area
(acres)
Total
Area
(acres)c
Impervious
Area
(acres)
Total
Area
(acres)
Impervious
Area
(acres)
Total
Area
(acres)
Impervious
Area (acres)
Total
Area
(acres)
Impervious
Area (acres)
Commercial 83% 26 22 1 0 45 37 99 83 171 142
Industrial 91% 189 172 0 0 25 23 4 4 219 199
Residential - High Density 82% 26 21 0 0 24 20 16 13 66 54
Residential - Low Density 47% 4 2 0 0 0 0 0 0 4 2
Retail 96% 58 55 3 2 78 75 27 26 166 159
Urban Parks 20% 0 0 0 0 0 0 3 1 3 1
Open Spaceb 1% 30 0 1 0 3 0 0 0 34 0
Totals 333 272 4 3 176 155 150 126
662 557
Cumulative d 333 272 337 275 512 431 662 557
a Source: Existing Land Use in 2005: Data for Bay Area Counties, Association of Bay Area Governments (ABAG), January 2006
b Development totals from 2002-2018 may include new development of open space and vacant properties.
c The total area for 2019-2020 is based on facilities that are currently under construction or planned to occur prior to 2020 and not the Phase I redevelopment rate and may therefore deviate from the “Best”
acres presented for 2020 in Table 6-2.
d Totals in this table differ slightly from predictions presented in Table 6-2 due to the inclusion of entire parcels in this table, as opposed to more generic “land areas” projections presented in Table 6-2.
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Project Tracking System
A required component of the GSI Plan is to develop a process for tracking and mapping completed
public and private GSI projects and making the information available to the public. The City will continue
to implement existing internal tracking procedures for processing public and private projects with GSI,
meeting MRP reporting requirements, and managing inspections of stormwater treatment facilities. In
addition, the City will provide data to SCVURPPP for countywide tracking of completed public and
private GSI projects. This countywide tracking tool can be used to document a project’s pollutant
reduction performance as well as overall total progress toward city or county-level stormwater goals
6.7.1 City Project Tracking System (Regulated and GSI)
The City currently utilizes an internal tracking system to manage information about installed stormwater
treatment measures (including GSI), operation and maintenance (O&M) of public facilities, O&M
verification program inspections, and enforcement actions. The tracking system consists of a site specific
GIS layer for installed stormwater treatment measures, an internal database (CityWorks) for O&M of
public facilities, and a spreadsheet for installed LID O&M and enforcement actions on private property.
6.7.2 SCVURPPP Project Tracking System
SCVURPPP has developed a centralized, web-based data management system, with a connection to GIS
platforms, for tracking and mapping all GSI projects in the Santa Clara Valley. The GSI Database provides
a centralized, accessible platform for municipal staff to efficiently and securely collect, upload, and store
GSI project data, and enhances SCVURPPP’s ability to efficiently and accurately calculate and report
water quality benefits associated with GSI projects. It also allows portions of the GSI project information
to be made publicly available.
City staff will collect and manage information on GSI projects locally using the data management
systems described above. City staff will directly enter project data into the SCVURPPP GSI Database on
an annual basis through a web-based data entry portal for individual projects or upload data for multiple
projects in batch using standardized formats.
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Appendix A
Prioritization Metrics for Scoring GSI Project Opportunities
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Table A-1. Prioritization Metrics for LID Project Opportunities
Metric
Points Weighting
Factor 0 1 2 3 4 5
Parcel Land Use Schools/ Golf
Courses Park / Open Space Public Buildings Parking Lots
Impervious Area (%) X < 40 40 ≤ X < 50 50 ≤ X < 60 60 ≤ X < 70 70 ≤ X < 80 80 ≤ X < 100 2
Hydrologic Soil Group C/D B A
Slope (%) 10 > X > 5 5 ≥ X > 3 3 ≥ X > 2 2 ≥ X > 1 1 ≥ X
Within flood-prone storm drain
catchments No Yes
Contains PCB Interest Areas None Moderate High 2
Within Priority Development
Area No Yes
Co-located with another agency
project No Yes
Augments water supply No Opportunity for
capture and use
Above groundwater recharge
area and not above
groundwater contamination
area
2
Water quality source control No Yes
Reestablishes natural hydrology No Yes
Creates or enhances habitat No Yes
Community enhancement No
Opportunities
for other
enhancements
Within DAC or MTC
Community of Concern
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Table A-2. Prioritization Metrics for Regional Stormwater Capture Project Opportunities
Metric
Points Weighting
Factor 0 1 2 3 4 5
Parcel Land Use Schools/Golf
Courses
Public
Buildings Parking Lot Park / Open Space
Impervious Area (%) X < 40 40 ≤ X < 50 50 ≤ X < 60 60 ≤ X < 70 70 ≤ X < 80 80 ≤ X < 100 2
Parcel Size (acres) 0.25 ≤ X < 0.5 0.5 ≤ X < 1 1 ≤ X < 2 2 ≤ X < 3 3 ≤ X < 4 4 ≤ X
Hydrologic Soil Group C/D B A
Slope (%) 10 > X > 5 5 ≥ X > 3 3 ≥ X > 2 2 ≥ X > 1 1 ≥ X
Proximity to Storm Drain (feet) X > 1,000 1,000 ≥ X > 500 500 ≥ X > 200 200 ≥ X
Within flood-prone storm drain
catchments No Yes
Contains PCB Interest Areas None Moderate High 2
Within Priority Development Area No Yes
Co-located with another agency
project No Yes
Augments water supply No Opportunity for
capture and use
Above groundwater
recharge area and not
above groundwater
contamination area
2
Water quality source control No Yes
Reestablishes natural hydrology No Yes
Creates or enhances habitat No Yes
Community enhancement No
Opportunities for
other
enhancements
Within DAC or MTC
Community of Concern
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Table A-3. Prioritization Metrics for Green Street Project Opportunities
Metric
Points Weighting
Factor 0 1 2 3 4 5
Imperviousness (%) X < 40 40 ≤ X < 50 50 ≤ X < 60 60 ≤ X < 70 70 ≤ X < 80 80 ≤ X < 100 2
Hydrologic Soil Group C/D B A
Slope (%) 5 > X > 4 4 ≥ X > 3 3 ≥ X > 2 2 ≥ X > 1 1 ≥ X > 0
Within flood-prone
storm drain catchments No Yes
Contains PCB Interest
Areas None Moderate High 2
Within Priority
Development Area No Yes
Co-located with
another agency project No Yes
Augments water supply No Opportunity for
capture and use
Above groundwater recharge
area and not above
groundwater contamination
area
2
Water quality source
control No Yes
Reestablishes natural
hydrology No Yes
Creates or enhances
habitat No Yes
Community
enhancement No
Opportunities for
other
enhancements
Within DAC or MTC
Community of Concern
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Appendix B
City of Cupertino Street Segments and Parcels with
Opportunities for GSI
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City of Cupertino Potential Parcel‐based GSI OpportunitiesAPN OwnerLand UseCo‐location with Special AreaCo‐location with Public projectLand Use ScoreImpervious ScoreSoil Group ScoreSlope ScoreFlood‐prone Catchment ScorePCB Area ScorePDA ScoreCo‐located Project ScoreAugments Water Supply ScoreWQ Source Control ScoreRe‐established Natural Habitat ScoreEnhances Habitat ScoreCommunity ScoreTOTAL SCORE36230098 City of CupertinoPark/Open Space301 2000010 1 1011935706018 City of CupertinoPark/Open Space305 2000010 1 1012336915002 City of CupertinoPark/Open Space301 2000010 1 1011932614005 City of CupertinoPark/Open Space301 1000010 1 1011832609071 City of CupertinoPublic BuildingsHomestead4 6 1 4 0 0 0 0 10 1 1 0 1 2832649036 City of CupertinoPark/Open Space301201000101 1012931631041 City of CupertinoPark/Open SpaceCitywide Parks and Recreation System Master Plan ‐ Portal Park; Bike Boulevard Project301 2000510 1 1012436904044 City of CupertinoPark/Open SpaceCitywide Parks and Recreation System Master Plan ‐ Wilson Park301 4000510 1 1012635925024 City of CupertinoPark/Open SpaceJollyman Park pathway installation301 3000510 1 1012537523047 City of CupertinoPublic BuildingsLawrence Mitty Park401 2000510 1 1012532627030 City of CupertinoPark/Open SpaceMary Avenue Rennovation and Park381 2000510 1 10132Parcel InformationCity Prioritization CriteriaSWRP Project Scoring1City of Cupertino GSI Plan ‐ Appendix C1 of 209/03/19 242 of 532
City of Cupertino Potential Parcel‐based GSI Opportunities32606052 City of CupertinoPublic BuildingsMary Avenue Rennovation and Park481201005101 1014332629022 City of CupertinoPark/Open SpaceHeart of the CityMemorial Park Renovation; Stevens Creek Blvd protected bike lanes (separated bike 461 3005510 1 1013732629006 City of CupertinoPark/Open SpaceHeart of the CityMemorial Park Renovation; Stevens Creek Blvd protected bike lanes (separated bike 301 3005510 1 1013034215038 City of CupertinoPark/Open SpaceS Foothill Blvd and N Foothill Blvd Green Street; Citywide Parks and Recreation Master Plan301 3000510 1 1012535710008 City of CupertinoPark/Open SpaceBlackberry Farm Retreat Center; Orange and Byrne Avenue sidewalk improvements305 1000510 1 101271SWRP = Stormwater Resources Plan (SCVURPPP, 2018). See Appendix A for prioritization metrics and scoring of GSI opportunities.City of Cupertino GSI Plan ‐ Appendix C2 of 209/03/19 243 of 532
City of Cupertino Potential Green Street Project OpportunitiesSWRP Project IDStreet Name JurisdictionCo‐location with Public projectCo‐location with Special AreaImpervious ScoreSoil Group ScoreSlope ScoreFlood‐prone Catchment ScorePCB Area ScorePriority Development Area ScoreCo‐located Project ScoreAugments Water Supply ScoreWQ Source Control ScoreReestablishes Natural Hydrology ScoreEnhances Habitat ScoreCommunity Enhancement ScoreTOTAL SCORE60501447 WHEATON DRCUPERTINO Bike Boulevard Project615005510 1 1113660501446 WHEATON DRCUPERTINO Bike Boulevard Project615005510 1 1113660501557 WHEATON DRCUPERTINOCitywide Parks and Recreation System Master Plan; Bike Boulevard Project415005510 1 1113460500926 BILICH PLCUPERTINO Bike Boulevard Project415005510 1 1113460500612 S DE ANZA BLVDCUPERTINO Bike Boulevard Project South De Anza 10 1 5 0 0 5 5 10 1 1 1 1 4060501621 BOLLINGER RDCUPERTINO Bike Boulevard Project1014000510 1 111341000715919 CIVIK PARK LNCUPERTINO Bike Boulevard Project Heart of the City811005510 1 1113460501804 RODRIGUES AVECUPERTINO Bike Boulevard Project South De Anza10 1 4 0 0 5 5 10 1 1 1 1 391000715916 TOWN CENTER LNCUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560501620 BOLLINGER RDCUPERTINO Bike Boulevard Project1014000510 1 1113460502513 RODRIGUES AVECUPERTINO Bike Boulevard Project South De Anza 10 1 4 0 0 5 5 10 1 1 1 1 3960502170 N DE ANZA BLVDCUPERTINO Bike Boulevard Project North De Anza615005510 1 1113660500883 INFINITE LOOPCUPERTINO Bike Boulevard Project North De Anza613005510 1 1113460502172 N DE ANZA BLVDCUPERTINO Bike Boulevard Project North De Anza613005510 1 1113460500901 MARY AVECUPERTINO Bike Boulevard Project814 010 0 510 1 1 1 14260500368 DORADO CUPERTINO Bike Boulevard Project412 010 0 510 1 1 1 13660502363 MARY AVECUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560500370 MARY AVECUPERTINO Bike Boulevard Project614 010 0 510 1 1 1 14060500369 MARY AVECUPERTINO Bike Boulevard Project614 010 0 510 1 1 1 140City Prioritization CriteriaStreet InformationSWRP Project Scoring1City of Cupertino GSI Plan ‐ Appendix C1 of 709/03/19 244 of 532
City of Cupertino Potential Green Street Project OpportunitiesSWRP Project IDStreet Name JurisdictionCo‐location with Public projectCo‐location with Special AreaImpervious ScoreSoil Group ScoreSlope ScoreFlood‐prone Catchment ScorePCB Area ScorePriority Development Area ScoreCo‐located Project ScoreAugments Water Supply ScoreWQ Source Control ScoreReestablishes Natural Hydrology ScoreEnhances Habitat ScoreCommunity Enhancement ScoreTOTAL SCORECity Prioritization CriteriaStreet InformationSWRP Project Scoring160500362 SEGOVIA CUPERTINO Bike Boulevard Project614 010 0 510 1 1 1 14060500367 DORADO CUPERTINO Bike Boulevard Project613 010 0 510 1 1 1 13960500902 METEOR DRCUPERTINO Bike Boulevard Project814 010 0 510 1 1 1 14260502362 PARKWOOD DRCUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560502218 MILLARD LNCUPERTINO Bike Boulevard Project615 010 0 510 1 1 1 14160502720 PACIFICA RDCUPERTINO Bike Boulevard Project South De Anza 10 1 4 0 0 0 5 10 1 1 1 1 3460500741 MARY AVECUPERTINOMemorial Park Renovation; Stevens Creek Blvd protected bike lanes (separated bike lanes)Heart of the City614005510 1 1113560500568 GRANADA AVECUPERTINO Bike Boulevard Project Monta Vista Village 4 1 4 0 6 0 5 10 1 1 1 1 3460501097 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760501095 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City613005510 1 1113460501156 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City415005510 1 1113460501496 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City615005510 1 1113660501501 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560500619 S STELLING RDCUPERTINO Bike Boulevard Project Heart of the City613005510 1 1113460500096 N WOLFE RDCUPERTINO Bike Boulevard Project Heart of the City 10 1 4 0 0 5 5 10 1 1 1 1 3960500913 SAICH WAYCUPERTINO Bike Boulevard Project Heart of the City814005510 1 11137City of Cupertino GSI Plan ‐ Appendix C2 of 709/03/19 245 of 532
City of Cupertino Potential Green Street Project OpportunitiesSWRP Project IDStreet Name JurisdictionCo‐location with Public projectCo‐location with Special AreaImpervious ScoreSoil Group ScoreSlope ScoreFlood‐prone Catchment ScorePCB Area ScorePriority Development Area ScoreCo‐located Project ScoreAugments Water Supply ScoreWQ Source Control ScoreReestablishes Natural Hydrology ScoreEnhances Habitat ScoreCommunity Enhancement ScoreTOTAL SCORECity Prioritization CriteriaStreet InformationSWRP Project Scoring160500623 S STELLING RD CUPERTINO Bike Boulevard Project Heart of the City615005510 1 1113660501267 CAMPUS DRCUPERTINO Bike Boulevard Project Heart of the City613005510 1 1113460501940 PENINSULA AVECUPERTINO Bike Boulevard Project Monta Vista Village 8 1 4 0 10 0 5 10 1 1 1 1 4260502506 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760502021 S PORTAL AVECUPERTINO Bike Boulevard Project Heart of the City613005510 1 1113460500628 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760502508 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560501977 IMPERIAL AVECUPERTINO Bike Boulevard Project Monta Vista Village 8 1 4 0 10 0 5 10 1 1 1 1 4260500744 FINCH AVECUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760500443 N TANTAU AVECUPERTINO Bike Boulevard Project Heart of the City813005510 1 1113660501096 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City813005510 1 1113660501556 N PORTAL AVECUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560501525 N WOLFE RDCUPERTINO Bike Boulevard Project Heart of the City 10 1 4 0 0 5 5 10 1 1 1 1 3960501507 STEVENS CREEK BLVDCUPERTINOBike Boulevard Project Heart of the City 10 1 4 0 0 5 5 10 1 1 1 1 3960501508 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City 10 1 4 0 0 5 5 10 1 1 1 1 3960501509 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City815005510 1 1113860500889 SAICH WAYCUPERTINO Bike Boulevard Project Heart of the City 10 1 4 0 0 5 5 10 1 1 1 1 39City of Cupertino GSI Plan ‐ Appendix C3 of 709/03/19 246 of 532
City of Cupertino Potential Green Street Project OpportunitiesSWRP Project IDStreet Name JurisdictionCo‐location with Public projectCo‐location with Special AreaImpervious ScoreSoil Group ScoreSlope ScoreFlood‐prone Catchment ScorePCB Area ScorePriority Development Area ScoreCo‐located Project ScoreAugments Water Supply ScoreWQ Source Control ScoreReestablishes Natural Hydrology ScoreEnhances Habitat ScoreCommunity Enhancement ScoreTOTAL SCORECity Prioritization CriteriaStreet InformationSWRP Project Scoring160501502 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City615005510 1 1113660501503 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City415005510 1 1113460502679 TORRE AVECUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760501494 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City615005510 1 1113660500105 E ESTATES DRCUPERTINO Bike Boulevard Project Heart of the City815005510 1 1113860500206 PASADENA AVECUPERTINO Bike Boulevard Project Monta Vista Village 8 1 4 0 10 0 5 10 1 1 1 1 4260500097 N WOLFE RDCUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760502335 TANTAU AVECUPERTINO Bike Boulevard Project Heart of the City 10 1 4 0 0 5 5 10 1 1 1 1 3960501500 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560501571 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760502035 BIANCHI WAYCUPERTINO Bike Boulevard Project Heart of the City613005510 1 1113460502507 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City815005510 1 1113860502493 N BLANEY AVECUPERTINO Bike Boulevard Project Heart of the City813005510 1 1113660501217 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Monta Vista Village 8 1 3 0 10 0 5 10 1 1 1 1 4160501524 MILLER AVECUPERTINO Bike Boulevard Project Heart of the City815005510 1 1113860500104 E ESTATES DRCUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760500095 MILLER AVECUPERTINO Bike Boulevard Project Heart of the City815005510 1 11138City of Cupertino GSI Plan ‐ Appendix C4 of 709/03/19 247 of 532
City of Cupertino Potential Green Street Project OpportunitiesSWRP Project IDStreet Name JurisdictionCo‐location with Public projectCo‐location with Special AreaImpervious ScoreSoil Group ScoreSlope ScoreFlood‐prone Catchment ScorePCB Area ScorePriority Development Area ScoreCo‐located Project ScoreAugments Water Supply ScoreWQ Source Control ScoreReestablishes Natural Hydrology ScoreEnhances Habitat ScoreCommunity Enhancement ScoreTOTAL SCORECity Prioritization CriteriaStreet InformationSWRP Project Scoring160502505 PORTAL PLZ CUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560502197 S TANTAU AVECUPERTINO Bike Boulevard Project Heart of the City815005510 1 1113860502331 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City 10 1 5 0 0 5 5 10 1 1 1 1 4060502367 VISTA DRCUPERTINO Bike Boulevard Project Heart of the City613005510 1 1113460502180 CAMPUS DRCUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560500666 BANDLEY DRCUPERTINO Bike Boulevard Project Heart of the City813005510 1 1113660501504 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City415005510 1 1113460502755 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760500745 FINCH AVECUPERTINO Bike Boulevard Project Heart of the City 10 1 4 0 0 5 5 10 1 1 1 1 3960500449 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Monta Vista Village 10 1 4 0 10 0 5 10 1 1 1 1 4460502650 BANDLEY DRCUPERTINO Bike Boulevard Project North De Anza613005510 1 1113460502179 CAMPUS DRCUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560502756 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760501523 N WOLFE RDCUPERTINO Bike Boulevard Project814005510 1 1113760502753 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560501499 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City815005510 1 1113860501497 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City 10 1 4 0 0 5 5 10 1 1 1 1 39City of Cupertino GSI Plan ‐ Appendix C5 of 709/03/19 248 of 532
City of Cupertino Potential Green Street Project OpportunitiesSWRP Project IDStreet Name JurisdictionCo‐location with Public projectCo‐location with Special AreaImpervious ScoreSoil Group ScoreSlope ScoreFlood‐prone Catchment ScorePCB Area ScorePriority Development Area ScoreCo‐located Project ScoreAugments Water Supply ScoreWQ Source Control ScoreReestablishes Natural Hydrology ScoreEnhances Habitat ScoreCommunity Enhancement ScoreTOTAL SCORECity Prioritization CriteriaStreet InformationSWRP Project Scoring160502425 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Monta Vista Village 10 1 4 0 0 0 5 10 1 1 1 1 3460500624 S STELLING RDCUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760501506 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project813005510 1 1113660501495 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City615005510 1 1113660501505 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project815005510 1 1113860500740 MARY AVECUPERTINO Bike Boulevard Project Heart of the City613005510 1 1113460501093 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City812005510 1 1113560500618 S STELLING RDCUPERTINO Bike Boulevard Project Heart of the City814005510 1 1113760502509 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560501094 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City614005510 1 1113560502328 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City 10 1 5 0 0 5 5 10 1 1 1 1 4060501252 N STELLING RDCUPERTINO Bike Boulevard Project Heart of the City815005510 1 1113860502326 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City 10 1 4 0 0 5 5 10 1 1 1 1 3960501572 STEVENS CREEK BLVDCUPERTINOBike Boulevard Project Heart of the City815005510 1 1113860500155 STEVENS CREEK BLVD CUPERTINO Bike Boulevard Project Heart of the City 10 1 3 0 0 5 5 10 1 1 1 1 3860500451 MC CLELLAN RDCUPERTINOUnion Pacific RR Trail Feasibility Study; McClellan Road Bike Corridor (separated bike lanes)Monta Vista Village 8 1 1 0 10 0 5 10 1 1 1 1 39City of Cupertino GSI Plan ‐ Appendix C6 of 709/03/19 249 of 532
City of Cupertino Potential Green Street Project OpportunitiesSWRP Project IDStreet Name JurisdictionCo‐location with Public projectCo‐location with Special AreaImpervious ScoreSoil Group ScoreSlope ScoreFlood‐prone Catchment ScorePCB Area ScorePriority Development Area ScoreCo‐located Project ScoreAugments Water Supply ScoreWQ Source Control ScoreReestablishes Natural Hydrology ScoreEnhances Habitat ScoreCommunity Enhancement ScoreTOTAL SCORECity Prioritization CriteriaStreet InformationSWRP Project Scoring160501944 BUBB RDCUPERTINOCitywide Parks and Recreation System Master Plan; Bike Boulevard ProjectMonta Vista Village 6 1 4 0 10 0 5 10 1 1 1 1 401 SWRP = Stormwater Resources Plan (SCVURPPP, 2018). See Appendix A for prioritization metrics and scoring of GSI opportunities.City of Cupertino GSI Plan ‐ Appendix C7 of 709/03/19 250 of 532
Appendix C
GSI concept for the Mary Avenue Greenbelt and Trail Project
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Preliminary concept for discussion purposes only
Mary Avenue Green Street
Mary Avenue is an important connector road
in the City of Cupertino that is at the hub of many
important destinations: Homestead High School,
Dan Burnett bicycle-pedestrian bridge over I-280,
Mary Avenue Dog Park, City of Cupertino Service
Center, The Oaks shopping center, Cupertino
Senior Citizen Center, De Anza College, Memorial
Park, and the commercial corridor on Stevens
Creek Blvd. The road has an 80-ft wide right-of-way
with a variety of abutting land uses running 0.72
miles from Stevens Creek Blvd to I-280. It presents
a tremendous opportunity for a “complete street”
retrofit integrating stormwater management with
multiple community and environmental benefits.
The City has been considering a complete street
concept on Mary Avenue for several years, with
a vision of transforming the existing inefficient
roadway into a multi-functional corridor.
Surveys have identified “trails and pathways” and
“access to nature” as the top two most sought after
community benefits among Cupertino residents.
Stormwater, habitat, and community benefits will be
realized by creating a wide bioretention-enhanced
green belt on the west side of the street containing
a pervious multi-use pathway to accommodate
bicyclists, pedestrians, strollers, and joggers. Tree
wells will be installed every 100 feet on the east side
of the street to treat stormwater and, along with new
trees in the green beltway, eventually form an arbor
archway of green canopy over Mary Avenue. To
create space for the proposed improvements, the
City plans to remove the center turn lane, convert
20’-wide angled parking on the west side to 7’-
wide parallel parking, and incorporate the existing
bike lane on the west side into the green belt . A
typical cross-section has been developed to show
how the roadway could be reconfigured. Pervious
pavement will be employed in the roadway closer to
the Stevens Creek Blvd intersection where space
is in higher demand. Bioretention has a 5% sizing
ratio (based on available space and to achieve
better performance), and the pervious pavement
has a 20% sizing ratio (4 parts run-on area to 1
part pervious pavement).
Concept Description Concept Metrics
Drainage Management Area
12.1 AC
Total Facility Area
23,958 SF
Number of Facilities
40
Maximum Surface Ponding
0.5 FT
WATERSHED CHARACTERISTICS
Total Facility Area
9,583 SF
located in parking lane
BIORETENTION
Cupertino
Pre-construction (top) & Post-construction (bottom) Street Section
2-1
Total Runoff Volume
6.6 AC-FT/YR
Infiltration Rate
0.2 IN/HR
% Impervious of DMA
90
Total Runoff Captured
6.6 AC-FT/YR (100%)
DESIGN CRITERIA
PERvIOuS PAvEMENT
Watershed
SUNNYVALE EAST CHANNEL
FACILITY INFORMATION
Storage Volume
0.7 AC-FT
Total Storage
0.9 AC-FT
Storage Volume
0.2 AC-FT
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Preliminary concept for discussion purposes only
Pervious Pavement
Greenway with Integrated Stormwater Treatment Tree WellsCatch Basins
Storm Drain Network
Flow Direction
Drainage Management Area A See Precedent Image on Next Page
LEGEND 0 250 500 ft
Mary Ave
CA-85 Stevens Creek BlvdMeteor StMillard LnMilford DrLubec StCUPERTINO
Concept Basemap
2-2
A
B
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Preliminary concept for discussion purposes only
Mary Avenue Green Street
2-3Fabian da CostaExample of Integration of Bioretention with Bike and Pedestrian Crossings in Lyon,
France
Example of Stormwater and Multi-modal Transportation Options in Lyon, FranceFabian da CostaBA
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Preliminary concept for discussion purposes only
Within Priority
Development Area
Reestablishes Natural
Hydrology
Groundwater Recharge
DESCRIPTION uNIT COST uNIT QuANTITY SuBTOTAL
Utilities Protection/Relocation $90,000 LS 1 $90,000
Demo, Excavation & Offhaul $10 SF 33,541 $335,400
Curb and 36” Sidewalls $185 LF 9,073 $1,678,600
Bio-soil Media $250 CY 1,331 $332,800
Pervious pavement $15 SF 9,583 $143,700
Underdrains $5 SF 33,541 $167,700
Drain Rock Subbase $150 CY 1,242 $186,300
Plantings & Mulch $22 SF 23,958 $527,100
Catch Basin Relocation $7,500 EA 11 $82,500
Storm Drain Connections $5,000 EA 20 $100,000
CONSTRuCTION SuBTOTAL $3,644,000
Mobilization (10% Construction)$364,000
Contingency (30% Construction)$1,093,000
Design (15% Total)$765,000
TOTAL PROJECT COST (DESIGN + CONSTRuCTION)$5,866,000
Budget-Level Cost Estimates
2-4
• These are planning-level cost estimates ($2018) for design and construction. Soft costs for City administration and project management and post-con-struction operations and maintenance are not included. Other factors that may affect the cost of future construction include escalation and market
conditions.
• This cost estimate only includes stormwater management components appropriately sized to treat runoff from the project area. The City of Cupertino will procure additional funding for non-stormwater related components of the complete street retrofit.
Augments Water Supply
Community Enhancement
Additional Potential Benefits
3.0 INF
(Bioretention & PP)
2.6
3.5 T/R
(Bioretention)
0.0100.010
B
0% 20% 40% 60% 80% 100%
Runoff Captured
(ac-ft/yr)
Se diment Re duced
(tons/yr)
INF -Infiltrati on T/R -Tre at & Re lease B-By pass
Tota l -2.8
Tota l -6.6
• Effectiveness is defined as the modeled ability of the proposed project to capture stormwater runoff from the management area, remove the identified
constituents from that stormwater, and infiltrate or reuse the captured water.
• For planning purposes, recharge is approximated as being equivalent to infiltration if the project is located in the groundwater recharge zone.• Modeling and performance estimates are based on an historical rainfall time series from water year 2007 through water year 2015.
Concept Effectiveness (Annual Average)
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Preliminary concept for discussion purposes only
This project concept is planning-level and subject to revision as
additional information related to geotechnical, environmental,
and stakeholder considerations becomes available. Factors to
be considered include but are not limited to the following:
»Infiltration Potential. The project is in a designated recharge area.
The map of Depth to First Groundwater for the Santa Clara Basin in
Appendix A of the SCVURPPP C.3 Stormwater Handbook shows depth
to groundwater as approximately 50 feet; therefore, no conflicts with
groundwater are anticipated. The NRCS SSURGO database lists soils
in the projects area as having an infiltration capacity of 0.20-0.57 in/
hr; facilities are assumed to require installation of an underdrained.
Undrained facilities are not lined and, therefore, a portion of the
stormwater entering the facility will infiltrate into underlying soil. Site-
specific infiltration tests should be performed during early design so that
facilities are adequately sized and drained.
»Parking Analysis. Mary Avenue is currently used for all-day parking by
visitors, particularly DeAnza College students. Instituting metering or
parking permits would encourage students to park at the college, which
appears to have capacity but is not free of charge.
»Utility Coordination. Additional spatial data showing all utility mains along
the roadway corridor should be collected and evaluated for potential
conflicts; proposed facility locations should be adjusted as necessary to
avoid any identified conflicts.
»Historical Lead Contamination. There is historical lead contamination in
the landscape between Mary Avenue and Hwy 85. Lead was detected
above background levels and impacted soil offhauled for proper disposal
during construction of the Mary Avenue Dog Park.
»Stakeholder Coordination. Outreach should be conducted to area
residents and others that may be affected by roadway configuration
changes and less on-street parking.
»The Oaks shopping center at the intersection of Stevens Creek Blvd is
likely to be redeveloped in the coming years, and retrofit of its parking lot
area may provide an additional synergy opportunity.
»Maintaining traffic flow and adequate parking while improving pedestrian
and bicycle safety will transform Mary Avenue into a critical link in
Cupertino’s Safe Routes to School network.
Additional Considerations
2-5
Mary Avenue Green Street
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Appendix C
Guidance for Identifying Green Infrastructure Potential in
Municipal Capital Improvement Program Projects
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BASMAA Development Committee
Guidance for Identifying Green Infrastructure Potential
in Municipal Capital Improvement Program Projects
May 6, 2016
Background
In the recently reissued Municipal Regional Stormwater Permit (“MRP 2.0”), Provision C.3.j.
requires Permittees to develop and implement Green Infrastructure Plans to reduce the adverse
water quality impacts of urbanization on receiving waters over the long term. Provisions C.11
and C.12 require the Permittees to reduce discharges of Mercury and PCBs, and portion of
these load reductions must be achieved by implementing Green Infrastructure. Specifically,
Permittees collectively must implement Green Infrastructure to reduce mercury loading by 48
grams/year and PCB loading by 120 grams/year by 2020, and plan for substantially larger
reductions in the following decades. Green Infrastructure on both public and private land will
help to meet these load reduction requirements, improve water quality, and provide multiple
other benefits as well. Implementation on private land is achieved by implementing stormwater
requirements for new development and redevelopment (Provision C.3.a. through Provision
C.3.i.). These requirements were carried forward, largely unchanged, from MRP 1.0.
MRP 2.0 defines Green Infrastructure as:
Infrastructure that uses vegetation, soils, and natural processes to manage water and
create healthier urban environments. At the scale of a city or county, green
infrastructure refers to the patchwork of natural areas that provides habitat, flood
protection, cleaner air, and cleaner water. At the scale of a neighborhood or site, green
infrastructure refers to stormwater management systems that mimic nature by soaking
up and storing water.
In practical terms, most green infrastructure will take the form of diverting runoff from existing
streets, roofs, and parking lots to one of two stormwater management strategies:
1. Dispersal to vegetated areas, where sufficient landscaped area is available and slopes
are not too steep.
2. LID (bioretention and infiltration) facilities, built according to criteria similar to those
currently required for regulated private development and redevelopment projects under
Provision C.3.
In some cases, the use of tree-box-type biofilters may be appropriate 1. In other cases, where
conditions are appropriate, existing impervious pavements may be removed and replaced with
pervious pavements.
In MRP 2.0, Provision C.3.j. includes requirements for Green Infrastructure planning and
implementation. Provision C.3.j. has two main elements to be implemented by municipalities:
1. Preparation of a Green Infrastructure Plan for the inclusion of LID drainage design into
storm drain infrastructure on public and private land, including streets, roads, storm
drains, etc.
2. Early implementation of green infrastructure projects (“no missed opportunities”),
This guidance addresses the second of these requirements. The intent of the “no missed
opportunities” requirement is to ensure that no major infrastructure project is built without
assessing the opportunity for incorporation of green infrastructure features.
Provision C.3.j.ii. requires that each Permittee prepare and maintain a list of green
infrastructure projects, public and private, that are already planned for implementation during
the permit term (not including C.3-regulated projects), and infrastructure projects planned for
1 Standard proprietary tree-box-type biofilters are considered to be non-LID treatment and will only be
allowed under certain circumstances. Guidance on use and sizing of these facilities will be provided in a
separate document.
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implementation during the permit term that have potential for green infrastructure measures.
The list must be submitted with each Annual Report, including:
“… a summary of how each public infrastructure project with green infrastructure
potential will include green infrastructure measures to the maximum extent practical
during the permit term. For any public infrastructure project where implementation of
green infrastructure measures is not practicable, submit a brief description for the
project and the reasons green infrastructure measures were impracticable to
implement”.
This requirement has no specified start date; “during the permit term” means beginning January
1, 2016 and before December 31, 2020. The first Annual Report submittal date will be September
30, 2016.
Note that this guidance primarily addresses the review of proposed or planned public projects
for green infrastructure opportunities. The Permittee may also be aware of proposed or planned
private projects, not subject to LID treatment requirements, that may have the opportunity to
incorporate green infrastructure. These should be addressed in the same way as planned
public projects, as described below.
Procedure for Review of Planned Public Projects and Annual Reporting
The municipality’s Capital Improvement Program (CIP) project list provides a good starting
point for review of proposed public infrastructure projects. Review of other lists of public
infrastructure projects, such as those proposed within separately funded special districts (e.g.,
lighting and landscape districts, maintenance districts, and community facilities districts), may
also be appropriate. This section describes a two-part procedure for conducting the review.
Part 1 – Initial Screening
The first step in reviewing a CIP or other public project list is to screen out certain types of
projects from further consideration. For example, some projects (e.g., interior remodels, traffic
signal replacement) can be readily identified as having no green infrastructure potential. Other
projects may appear on the list with only a title, and it may be too early to identify whether
green infrastructure could be included. Still others have already progressed past the point
where the design can reasonably be changed (this will vary from project to project, depending
on available budget and schedule).
Some “projects” listed in a CIP may provide budget for multiple maintenance or minor
construction projects throughout the jurisdiction or a portion of the jurisdiction, such as a tree
planting program, curb and sidewalk repair/upgrade, or ADA curb/ramp compliance. It is
recommended that these types of projects not be included in the review process described
herein. The priority for incorporating green infrastructure into these types of projects needs to
be assessed as part of the Permittees’ development of Green Infrastructure Plans, and standard
details and specifications need to be developed and adopted. During this permit term,
Permittees will evaluate select projects, project types, and/or groups of projects as case studies
and develop an approach as part of Green Infrastructure planning.
The projects removed through the initial screening process do not need to be reported to the
Water Board in the Permittee’s Annual Report. However, the process should be documented
and records kept as to the reason the project was removed from further consideration. Note
that projects that were determined to be too early to assess will need to be reassessed during
the next fiscal year’s review.
The following categories of projects may be screened out of the review process in a given fiscal
year:
1. Projects with No Potential - The project is identified in initial screening as having no
green infrastructure potential based on the type of project. For example, the project
does not include any exterior work. Attachment 1 provides a suggested list of such
projects that Permittees may use as a model for their own internal process.
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2. Projects Too Early to Assess – There is not yet enough information to assess the
project for green infrastructure potential, or the project is not scheduled to begin design
within the permit term (January 2016 – December 2020). If the project is scheduled to
begin within the permit term, an assessment will be conducted if and when the project
moves forward to conceptual design.
3. Projects Too Late to Change – The project is under construction or has moved to a
stage of design in which changes cannot be made. The stage of design at which it is too
late to incorporate green infrastructure measures varies with each project, so a
“percent-complete” threshold has not been defined. Some projects may have funding
tied to a particular conceptual design and changes cannot be made even early in the
design process, while others may have adequate budget and time within the
construction schedule to make changes late in the design process. Agencies will need to
make judgments on a case-by-case basis.
4. Projects Consisting of Maintenance or Minor Construction Work Orders – The
“project” includes budgets for multiple maintenance or minor construction work orders
throughout the jurisdiction or a portion of the jurisdiction. These types of projects will
not be individually reviewed for green infrastructure opportunity but will be considered
as part of a municipality’s Green Infrastructure Plan.
Part 2 – Assessment of Green Infrastructure Potential
After the initial screening, the remaining projects either already include green infrastructure or
will need to go through an assessment process to determine whether or not there is potential to
incorporate green infrastructure. A recommended process for conducting the assessment is
provided later in this guidance. As a result of the assessment, the project will fall into one of
the following categories with associated annual reporting requirements. Attachment 2 provides
the relevant pages of the FY 15-16 Annual Report template for reference.
Project is a C.3-regulated project and will include LID treatment.
Reporting: Follow current C.3 guidance and report the project in Table C.3.b.iv.(2) of the
Annual Report for the fiscal year in which the project is approved.
Project already includes green infrastructure and is funded.
Reporting: List the project in “Table B-Planned Green Infrastructure Projects” in the
Annual Report, indicate the planning or implementation status, and describe the green
infrastructure measures to be included.
Project may have green infrastructure potential pending further assessment of
feasibility, incremental cost, and availability of funding.
Reporting: If the feasibility assessment is not complete and/or funding has not been
identified, list the project in “Table A-Public Projects Reviewed for Green Infrastructure”
in the Annual Report. In the “GI Included?” column, state either “TBD” (to be
determined) if the assessment is not complete, or “Yes” if it has been determined that
green infrastructure is feasible. In the rightmost column, describe the green
infrastructure measures considered and/or proposed, and note the funding and other
contingencies for inclusion of green infrastructure in the project. Once funding for the
project has been identified, the project should be moved to “Table B-Planned Green
Infrastructure Projects” in future Annual Reports.
Project does not have green infrastructure potential. A project-specific assessment
has been completed, and Green Infrastructure is impracticable.
Reporting: In the Annual Report, list the project in “Table A-Public Projects Reviewed for
Green Infrastructure”. In the “GI Included?” column, state “No.” Briefly state the
reasons for the determination in the rightmost column. Prepare more detailed
documentation of the reasons for the determination and keep it in the project files.
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Process for Assessing Green Infrastructure Potential of a Public Infrastructure Project
Initial Assessment of Green Infrastructure Potential
Consider opportunities that may be associated with:
Alterations to roof drainage from existing buildings
New or replaced pavement or drainage structures (including gutters, inlets, or pipes)
Concrete work
Landscaping, including tree planting
Streetscape improvements and intersection improvements (other than signals)
Step 1: Information Collection/Reconnaissance
For projects that include alterations to building drainage, identify the locations of roof leaders
and downspouts, and where they discharge or where they are connected to storm drains.
For street and landscape projects:
Evaluate potential opportunities to substitute pervious pavements for impervious
pavements.
Identify and locate drainage structures, including storm drain inlets or catch basins.
Identify and locate drainage pathways, including curb and gutter.
Identify landscaped areas and paved areas that are adjacent to, or down gradient from, roofs or
pavement. These are potential facility locations. If there are any such locations, continue to the
next step. Note that the project area boundaries may be, but are not required to be, expanded
to include potential green infrastructure facilities.
Step 2: Preliminary Sizing and Drainage Analysis
Beginning with the potential LID facility locations that seem most feasible, identify possible
pathways to direct drainage from roofs and/or pavement to potential LID facility locations—by
sheet flow, valley gutters, trench drains, or (where gradients are steeper) via pipes, based on
existing grades and drainage patterns. Where existing grades constrain natural drainage to
potential facilities, the use of pumps may be considered (as a less preferable option).
Delineate (roughly) the drainage area tributary to each potential LID facility location. Typically,
this requires site reconnaissance, which may or may not include the use of a level to measure
relative elevations.
Use the following preliminary sizing factor (facility area/tributary area) for the potential facility
location and determine which of the following could be constructed within the existing right-of-
way or adjacent vacant land. Note that these sizing factors are guidelines (not strict rules, but
targets):
Sizing factor ≥ 0.5 for dispersal to landscape or pervious pavement 2 (i.e., a maximum
2:1 ratio of impervious area to pervious area)
Sizing factor ≥ 0.04 for bioretention
Sizing factor ≥ 0.004 (or less) for tree-box-type biofilters
For bioretention facilities requiring underdrains and tree-box-type biofilters, note if there are
potential connections from the underdrain to the storm drain system (typically 2.0 feet below
soil surface for bioretention facilities, and 3.5 feet below surface for tree-box-type biofilters).
2 Note that pervious pavement systems are typically designed to infiltrate only the rain falling on the
pervious pavement itself, with the allowance for small quantities of runoff from adjacent impervious
areas. If significant runoff from adjacent areas is anticipated, preliminary sizing considerations should
include evaluation of the depth of drain rock layer needed based on permeability of site soils.
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If, in this step, you have confirmed there may be feasible potential facility locations, continue to
the next step.
Step 3: Barriers and Conflicts
Note that barriers and conflicts do not necessarily mean implementation is infeasible; however,
they need to be identified and taken into account in future decision-making, as they may affect
cost or public acceptance of the project.
Note issues such as:
Confirmed or potential conflicts with subsurface utilities
Known or unknown issues with property ownership, or need for acquisition or
easements
Availability of water supply for irrigation, or lack thereof
Extent to which green infrastructure is an “add on” vs. integrated with the rest of the
project
Step 4: Project Budget and Schedule
Consider sources of funding that may be available for green infrastructure. It is recognized that
lack of budget may be a serious constraint for the addition of green infrastructure in public
projects. For example, acquisition of additional right-of-way or easements for roadway projects
is not always possible. Short and long term maintenance costs also need to be considered, and
jurisdictions may not have a funding source for landscape maintenance, especially along
roadways. The objective of this process is to identify opportunities for green infrastructure, so
that if and when funding becomes available, implementation may be possible.
Note any constraints on the project schedule, such as a regulatory mandate to complete the
project by a specific date, grant requirements, etc., that could complicate aligning a separate
funding stream for the green infrastructure element. Consider whether cost savings could be
achieved by integrating the project with other planned projects, such as pedestrian or bicycle
safety improvement projects, street beautification, etc., if the schedule allows.
Step 5: Assessment—Does the Project Have Green Infrastructure Potential?
Consider the ancillary benefits of green infrastructure, including opportunities for improving
the quality of public spaces, providing parks and play areas, providing habitat, urban forestry,
mitigating heat island effects, aesthetics, and other valuable enhancements to quality of life.
Based on the information above, would it make sense to include green infrastructure into this
project—if funding were available for the potential incremental costs of including green
infrastructure in the project? Identify any additional conditions that would have to be met for
green infrastructure elements to be constructed consequent with the project.
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Attachment 1
Examples of Projects with No Potential for Green Infrastructure
Projects with no exterior work (e.g., interior remodels)
Projects involving exterior building upgrades or equipment (e.g., HVAC, solar panels,
window replacement, roof repairs and maintenance)
Projects related to development and/or continued funding of municipal programs or
related organizations
Projects related to technical studies, mapping, aerial photography, surveying, database
development/upgrades, monitoring, training, or update of standard specs and details
Construction of new streetlights, traffic signals or communication facilities
Minor bridge and culvert repairs/replacement
Non-stormwater utility projects (e.g., sewer or water main repairs/replacement, utility
undergrounding, treatment plant upgrades)
Equipment purchase or maintenance (including vehicles, street or park furniture,
equipment for sports fields and golf courses, etc.)
Irrigation system installation, upgrades or repairs
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Attachment 2
Excerpts from the C.3 Section of the FY 15-16 Annual Report Template:
Tables for Reporting C.3-Regulated Projects and Green Infrastructure Projects
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C.3.b.iv.(2) ►Regulated Projects Reporting Table (part 1) –
Projects Approved During the Fiscal Year Reporting Period
Project
Name
Project
No.
Project
Location 9,
Street
Address
Name of
Developer
Project
Phase
No.10
Project Type
&
Description11
Project
Watershed 12
Total
Site
Area
(Acres)
Total
Area of
Land
Disturbed
(Acres)
Total New
Impervious
Surface
Area (ft2)13
Total Replaced
Impervious
Surface Area
(ft2)14
Total Pre-
Project
Impervious
Surface
Area 15(ft2)
Total Post-
Project
Impervious
Surface
Area 16(ft2)
Private
Projects
Public
Projects
Comments:
Guidance: If necessary, provide any additional details or clarifications needed about listed projects in this box. Do not leave any cells blank.
9Include cross streets
10If a project is being constructed in phases, indicate the phase number and use a separate row entry for each phase. If not, enter “NA”.
11Project Type is the type of development (i.e., new and/or redevelopment). Example descriptions of development are: 5-story office building, residential with 160 single-family homes with five 4-story
buildings to contain 200 condominiums, 100 unit 2-story shopping mall, mixed use retail and residential development (apartments), industrial warehouse.
12State the watershed(s) in which the Regulated Project is located. Downstream watershed(s) may be included, but this is optional.
13All impervious surfaces added to any area of the site that was previously existing pervious surface.
14All impervious surfaces added to any area of the site that was previously existing impervious surface.
15For redevelopment projects, state the pre-project impervious surface area.
16For redevelopment projects, state the post-project impervious surface area.
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C.3.b.iv.(2) ►Regulated Projects Reporting Table (part 2) – Projects Approved During the Fiscal Year
Reporting Period (public projects)
Project
Name
Project
No.
Approval
Date 29
Date
Construction
Scheduled to
Begin
Source
Control
Measures30
Site Design
Measures 31
Treatment
Systems
Approved32
Operation &
Maintenance
Responsibility
Mechanism 33
Hydraulic
Sizing
Criteria 34
Alternative
Compliance
Measures35/36
Alternative
Certification 37
HM
Controls 38/39
Public Projects
Comments:
Guidance: If necessary, provide any additional details or clarifications needed about listed projects in this box. Note that MRP Provision C.3.c. contains specific
requirements for LID site design and source control measures, as well as treatment measures, for all Regulated Projects. Entries in these columns should not be
“None” or “NA”. Do not leave any cells blank.
29For public projects, enter the plans and specifications approval date.
30List source control measures approved for the project. Examples include: properly designed trash storage areas; storm drain stenciling or signage; efficient landscape irrigation systems; etc.
31List site design measures approved for the project. Examples include: minimize impervious surfaces; conserve natural areas, including existing trees or other vegetation, and soils; construct
sidewalks, walkways, and/or patios with permeable surfaces, etc.
32List all approved stormwater treatment system(s) to be installed onsite or at a joint stormwater treatment facility (e.g., flow through planter, bioretention facility, infiltration basin, etc.).
33List the legal mechanism(s) (e.g., maintenance plan for O&M by public entity, etc…) that have been or will be used to assign responsibility for the maintenance of the post-construction stormwater
treatment systems.
34See Provision C.3.d.i. “Num eric Sizing Criteria for Stormwater Treatment Systems” for list of hydraulic sizing design criteria. Enter the corresponding provision number of the appropriate criterion
(i.e., 1.a., 1.b., 2.a., 2.b., 2.c., or 3).
35For Alternative Compliance at an offsite location in accordance with Provision C.3.e.i.(1), on a separate page, give a discussion of the alternative compliance site including the information specified
in Provision C.3.b.v.(1)(m)(i) for the offsite project.
36For Alternative Compliance by paying in-lieu fees in accordance with Provision C.3.e.i.(2), on a separate page, provide the information specified in Provision C.3.b.v.(1)(m)(ii) for the Regional
Project.
37Note whether a third party was used to certify the project design complies with Provision C.3.d.
38If HM control is not required, state why not.
39If HM control is required, state control method used (e.g., method to design and size device(s) or method(s) used to meet the HM Standard, and description of device(s) or method(s) used, such as
detention basin(s), biodetention unit(s), regional detention basin, or in-stream control).
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C.3.j.ii.(2) ► Table A - Public Projects Reviewed for Green Infrastructure
Project Name and
Location 43
Project Description Status 44 GI
Included?45
Description of GI Measures
Considered and/or Proposed
or Why GI is Impracticable to Implement 46
EXAMPLE: Storm drain
retrofit, Stockton and Taylor
Installation of new storm
drain to accommodate the
10-yr storm event
Beginning planning
and design phase
TBD Bioretention cells (i.e., linear bulb-outs) will be
considered when street modification designs
are incorporated
C.3.j.ii.(2) ► Table B - Planned Green Infrastructure Projects
Project Name and
Location 47
Project Description Planning or
Implementation Status
Green Infrastructure Measures Included
EXAMPLE: Martha Gardens
Green Alleys Project
Retrofit of degraded
pavement in urban
alleyways lacking good
drainage
Construction completed
October 17, 2015
The project drains replaced concrete pavement and
existing adjacent structures to a center strip of
pervious pavement and underlying infiltration trench.
43 List each public project that is going through your agency’s process for identifying projects with green infrastructure potential.
44 Indicate status of project, such as: beginning design, under design (or X% design), projected completion date, completed final design date, etc.
45 Enter “Yes” if project will include GI measures, “No” if GI measures are impracticable to implement, or “TBD” if this has not yet been determined.
46 Provide a summary of how each public infrastructure project with green infrastructure potential will include green infrastructure measures to the maximum extent practicable during
the permit term. If review of the project indicates that implementation of green infrastructure measures is not practicable, provide the reasons why green infrastructure measures
are impracticable to implement.
47 List each planned (and expected to be funded) public and private green infrastructure project that is not also a Regulated Project as defined in Provision C.3.b.ii. Note that funding
for green infrastructure components may be anticipated but is not guaranteed to be available or sufficient.
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City of Cupertino
Green Infrastructure Plan Framework
Approved on: April 18, 2017
Approved by: City of Cupertino City Council
Submitted by:
PUBLIC WORKS DEPARTMENT
Environmental Programs
Cheri Donnelly, Environmental Programs Manager
10300 TORRE AVENUE ~ CUPERTINO, CA 95014
(408) 777-3354 ~ (408) 777-3242
In compliance with Provision C.3.j.i.(1) of Order R2-2015-0049
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TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................................. III
LIST OF TABLES ..................................................................................................................... III
LIST APPENDICES................................................................................................................... III
APPENDIX A. STAFF REPORT TO CITY COUNCIL ADOPTING GI PLAN FRAMEWORK ............................... III
ABBREVIATIONS .................................................................................................................... IV
1.0 INTRODUCTION .......................................................................................................... 1
1.1 WHAT IS GREEN INFRASTRUCTURE? ........................................................................................................ 1
1.2 STORMWATER QUALITY REGULATORY REQUIREMENTS ............................................................................... 1
1.3 PURPOSE OF GREEN INFRASTRUCTURE PLAN AND FRAMEWORK ................................................................... 2
1.4 CITY OF CUPERTINO DESCRIPTION AND BACKGROUND ................................................................................ 3
1.5 CITY OF CUPERTINO GOALS AND OVERALL APPROACH ................................................................................ 7
2.0 GREEN INFRASTRUCTURE PLAN ELEMENTS & APPROACH ......................................... 10
2.1 SUMMARY OF REQUIRED ELEMENTS ...................................................................................................... 10
2.2 APPROACH TO COMPLETION OF REQUIRED ELEMENTS .............................................................................. 11
2.2.1 Outreach and Education ...................................................................................................................... 11
2.2.2 Project Identification and Prioritization ............................................................................................... 13
2.2.3 Prioritized Project Locations and Timeframes ..................................................................................... 14
2.2.4 Completed Project Tracking System ..................................................................................................... 14
2.2.5 Guidelines and Specifications ............................................................................................................... 14
2.2.6 Integration with Other Municipal Plans ............................................................................................... 14
2.2.7 Evaluation of Funding Options ............................................................................................................. 15
2.2.8 Adoption of Policies, Ordinances, and Other Legal Mechanisms ......................................................... 16
2.2.9 Completion and Adoption of the GI Plan ............................................................................................. 17
3.0 GREEN INFRASTRUCTURE PLAN DEVELOPMENT SCHEDULE ....................................... 19
This section describes the time frames for completion of the tasks presented in Section 2 to
develop and adopt the City of Cupertino’s GI Plan. ................................................................ 19
LIST OF TABLES
Table 1. Cupertino’s Land Use Percentages ................................................................................... 4
Table 2. Schedule for Municipal Plan Updates for GI ................................................................... 15
Table 3. Schedule for Municipal Policy and Ordinance Updates ................................................. 16
Table 4. Schedule for Completion and Adoption of GI Plan ............................................................... 17
Table 5. Green Infrastructure Plan Development Schedule ...................................................... ...19
LIST APPENDICES
APPENDIX A. STAFF REPORT TO CITY COUNCIL ADOPTING GI PLAN FRAMEWORK
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ABBREVIATIONS
BASMAA Bay Area Stormwater Management Agencies Association
Caltrans California Department of Transportation
CASQA California Stormwater Quality Association
CEQA California Environmental Quality Act
CIP Capital Improvement Program
COA Condition of Approval
EPA Environmental Protection Agency
FY Fiscal Year
GI Green Infrastructure
GIS Geographic Information System
GSI Green Stormwater Infrastructure
Hg Mercury
LID Low Impact Development
LUS Watershed Management Initiative Land Use Subgroup
MC Management Committee
MEP Maximum Extent Practicable
MRP Municipal Regional Stormwater NPDES Permit
MS4 Municipal Separate Storm Sewer System
NGO Non-Governmental Organization
NPDES National Pollutant Discharge Elimination System
O&M Operation and Maintenance
PCBs Polychlorinated Biphenyls
PIP Public Information and Participation
POC Pollutant of Concern
Program Santa Clara Valley Urban Runoff Pollution Prevention Program
RFP Request for Proposal
ROW Right of Way
RWQCB San Francisco Bay Regional Water Quality Control Board
SCBWMI Santa Clara Basin Watershed Management Initiative
SCVURPPP Santa Clara Valley Urban Runoff Pollution Prevention Program
SCVWD Santa Clara Valley Water District
SFEI San Francisco Estuary Institute
SFEP San Francisco Estuary Partnership
State Board State Water Resource Control Board
SWRP Storm Water Resource Plan
SWRCB State Water Resource Control Board
TMDL Total Maximum Daily Load
Water Board San Francisco Bay Regional Water Quality Control Board
Water District Santa Clara Valley Water District
WDR Waste Discharge Requirements
WMI Watershed Management Initiative
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PREFACE
This Green Infrastructure Framework (workplan) is a commitment by the City of
Cupertino’s decision makers to direct staff in several departments to develop and
submit Cupertino’s Green Infrastructure Plan by Sept 30, 2019 in compliance with
Provision C.3.j.i.(2) of Order R2-2015-0049 (the MRP). The dates and specific activities are
intended to guide the preparation of a complete and effective Plan over the next two
years. The Framework is intended to be flexible regarding details and timeframes which
may change as the Plan’s development process evolves.
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1.0 INTRODUCTION
1.1 What is Green Infrastructure?
“Green Infrastructure” (GI), also known as “Green Stormwater Infrastructure” (GSI), is
infrastructure that uses vegetation, soils, and natural processes to manage water and
create healthier urban environments. At the scale of a city or county, green
infrastructure refers to the patchwork of natural areas that provides habitat, flood
protection, cleaner air, and cleaner water. At the scale of a neighborhood or project
site, green infrastructure refers to stormwater management systems that mimic nature
by soaking up and storing water.
Examples of GI include resilient, sustainable systems that slow, filter, harvest, infiltrate
and/or evapotranspirate runoff such as: landscape-based stormwater “biotreatment”
using soil and plants ranging in size from grasses to trees; pervious paving systems (e.g.,
interlocking concrete pavers, porous asphalt, and pervious concrete); rainwater
harvesting systems (e.g., cisterns and rain barrels); and other methods to capture and
treat stormwater. These practices are also known as Low Impact Development (LID) site
design and treatment measures.
GI roadway projects are typically called “Green Streets”. Another term of art related to
street design is “Complete Streets”. This term comes from the transportation field and
deals with the designing of streets that incorporate all modes of travel equally - in
particular to increase safety and access for cyclists and pedestrians. The integration of
the goals of both Complete Streets and Green Streets has coined several new terms
such as “Living Streets”, “Better Streets” and “Sustainable Streets”. This movement
recognizes that environmentally and holistically designed streets achieve many
benefits: increased multi-modal travel and safety; clean water and air; climate change
resilience and mitigation; placemaking and community cohesion; habitat and energy
savings; and higher property values.
1.2 Stormwater Quality Regulatory Requirements
The City of Cupertino is subject to the requirements of the recently reissued Municipal
Regional Stormwater National Pollutant Discharge Elimination System (NPDES) Permit for
Phase I municipalities and agencies in the San Francisco Bay area (Order R2-2015-0049),
also known as the Municipal Regional Permit (MRP), which became effective on
January 1, 2016. The MRP applies to 76 large, medium and small municipalities (cities,
towns and counties) and flood control agencies that discharge stormwater to San
Francisco Bay, collectively referred to as Permittees.
Over the last 13 years, under the MRP and previous permits, new development and
redevelopment projects on private and public property that exceed certain size
thresholds (“Regulated Projects”) have been required to mitigate impacts on water
quality by incorporating site design, pollutant source control, stormwater treatment and
flow control measures as appropriate. LID treatment measures, such as rainwater
harvesting and use, infiltration, and biotreatment, have been required on most
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Regulated Projects since December 2011. Construction of new roads is covered by
these requirements, but projects related to existing roads and adjoining sidewalks and
bike lanes are not regulated unless they include creation of an additional travel lane.
A new section of the MRP requires Permittees to develop and implement long-term
Green Infrastructure (GI) Plans for the inclusion of LID measures in storm drain
infrastructure on public and private lands, including streets, roads, storm drains, parking
lots, building roofs, and other elements. The GI Plan must be completed by September
30, 2019. As part of the GI planning process, the MRP requires Permittees to adopt a
Green Infrastructure Plan Framework (Framework) by June 30, 2017 and submit it to the
Regional Water Quality Control Board (Water Board) by September 30, 2017. The
Framework, a work plan for completing the GI Plan, must at a minimum include a
statement of purpose, tasks and timeframes to complete the required elements of the
GI Plan.
Other sections of the MRP include requirements for municipalities to control pollutants of
concern to water quality in stormwater discharges, including polychlorinated biphenyls
(PCBs), mercury, trash and pesticides. LID measures incorporated into green
infrastructure can help remove these pollutants from stormwater runoff. For this reason,
the MRP establishes a new linkage between public infrastructure retrofits and required
reductions in discharges of certain pollutants, specifically PCBs and mercury. Over the
next few decades, Permittees must reduce the loads of PCBs and mercury in
stormwater discharges through various means, with a portion of these load reductions
achieved through the installation of GI systems. Permittees in Santa Clara County,
collectively, must implement GI on public and private property to reduce mercury
loading by 16 grams/year and PCB loading by 37 grams/year by 2020. The load
reductions will continue in future permits. Therefore, these efforts will be integrated and
coordinated countywide for the most effective program. Other pollutants, including
trash and pesticides, should also be coordinated with the GI program since, when
properly designed, constructed and maintained, biotreatment systems may also be
credited towards trash and pesticide reduction goals.
A key part of the GI definition in the MRP is the inclusion of both private and public
property locations for GI systems. This has been done in order to plan, analyze,
implement and credit GI systems for pollutant load reductions on a watershed scale, as
well as recognize all GI accomplishments within a municipality. However, the focus of
the GI Plan and Framework is the integration of GI systems into public rights-of-way. The
GI Plan is not intended to impose retrofit requirements on private property, outside the
standard development application review process for projects already regulated by
the MRP, but may provide incentives or opportunities for private property owners to add
or contribute towards GI elements if desired.
1.3 Purpose of Green Infrastructure Plan and Framework
The purpose of the City of Cupertino’s GI Plan is to describe how the City will gradually
transform its urban landscape and storm drainage systems from “gray” to “green”; that
is, shift from traditional storm drain infrastructure, where stormwater runoff flows directly
from impervious surfaces into storm drains and receiving waters, to a more resilient,
sustainable system that reduces and slows runoff by dispersing it to vegetated areas,
promotes infiltration and evapotranspiration, collects runoff for nonpotable uses, and
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treats runoff using biotreatment and other green infrastructure practices. The GI Plan will
also be used to demonstrate the City’s long-term commitment to implementation of
green infrastructure to help reduce loads of pollutants of concern, particularly mercury
and PCBs, discharged in stormwater to local waterways. The GI Plan will be
coordinated with other City plans, such as the General Plan, the Climate Action Plan,
the Bicycle Transportation Plan, the Pedestrian Transporation Plan, and specific master
plans, to achieve multiple potential benefits to the community, including improved
water and air quality, reduced flooding, increased water supply, traffic calming, safer
pedestrian and bicycle facilities, climate resiliency, improved wildlife habitat, and a
more pleasant urban environment.
The purposes of this Framework are to:
1. Provide some background on the MRP requirements for GI Planning;
2. Describe the purpose, goals, and tasks to develop the City’s GI Plan; and,
3. Outline the time frames for the creation of the City’s GI Plan and other GI
tasks required in the MRP.
This Framework was reviewed and approved for submittal to the Water Board by the
City Council of the City of Cupertino. The City’s Staff Report is attached as Appendix A.
This Framework is submitted by the City in compliance with MRP Provision C.3.j.i.(1).
1.4 City of Cupertino Description and Background
Incorporated in 1955, the City of Cupertino is located in Santa Clara County, and has a
jurisdictional area of 7,206.4 acres. (11.26 square miles) According to the 2010 Census,
the City had a population of 58,302, with a population density of 5,179 people per
square mile and average household size of 2.87.
According to the General Plan, “Community Vision 2040”, Cupertino’s population grew
from 3,664 in 1960 to over 50,500 in 2000. Most of the population growth was from tract
development during the 1970s and 1980s and annexation of unincorporated County
land. Between 2000 and 2010 the City of Cupertino’s population increased by 15.3
percent, from 50,546 (18,204 households) to 58,302 persons (20,181 households). A
portion of this population growth can be attributed to the City’s annexation of 168
acres of land between 2000 and 2008. The Census Bureau estimated that Cupertino’s
population would be 60,572 by July 1, 2015, approximately a 3.7% increase from 2010.
Cupertino’s population was 58,302 at the time of the April 1, 2010 Census. The City’s
population is projected to grow to 66,110 by 2040 (Plan Bay Area, 2013), approximately
a 12% increase over 30 years.
The City of Cupertino is best known as the home of Apple’s corporate headquarters
and the site of its new 176-acre campus, officially called Apple Park. The first employees
will begin occupying their new offices in April 2017. Apple announced that it will take
more than six months to move 12,000 employees, and some construction will continue
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over the summer as employees move in. Upon completion, it is estimated that more
than 23,400 Apple employees will be based in Cupertino.
Other companies located in Cupertino include Seagate Technology, Panasonic,
Amazon Lab126, SugarCRM (customer resource management), A Carrot Inc.
(computer systems and software). Though Cupertino is associated with technology
companies, very little manufacturing takes place in the City. Cupertino’s office parks
are primarily dedicated to management and design functions.
Two quarries within the city’s sphere of influence, Stevens Creek and Permanente
(Lehigh Cement), are located in the unincorporated area outside city limits, and
therefore, Santa Clara County has regulatory jurisdiction. There are no industrial sites or
facilities within the jurisdictional boundaries of the City of Cupertino that are subject to
the State’s Industrial General Permit for discharges associated with industrial activities
or any other individual industrial National Pollutant Discharge Elimination System
(NPDES) permit.
A description of the the City of Cupertino’s characteristics is provided below:
• Cupertino’s land use pattern was largely built on a conventional suburban
model, with predominantly single-family residential subdivisions and distinct
commercial and employment centers.
• Percentages of the City of Cupertino's jurisdictional area within the seven (7)
land use classes identified by ABAG (2005) are shown in the table below.
Table 1. Cupertino’s Land Use Percentages
Land Use Category
Jurisdictional
Area
(Acres)
% of
Jurisdictional
Area
Residential 3,938.2 57.2%
Commercial and Services 483.2 7.0%
Retail 303.6 4.4%
Industrial 278.1 4.0%
K-12 Schools 243.7 3.6%
Urban Parks 101.9 1.5%
Other 1 1,531.8 22.3%
Total 6,880.50 100%
• With the Completion of Apple’s new headquarters, 176 acres of the City’s
industrial area (in the table above) will have been redeveloped, incorporating
green infrastructure and LID features, such as reduction of impervious surfaces,
1 “Other” includes open space and vacant land
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underground parking with green roof style, landscape covering. The site is
designed to be ~ 80% green space with 7,000 trees.
• Cupertino is defined by its four major roadways: Homestead Road, Wolfe Road,
De Anza Boulevard and Stevens Creek Boulevard. These major mixed-use
corridors have been the center of retail, commercial, office and multi-family
housing in Cupertino for decades. In order to support local and regional
commercial, office and housing needs, each of these corridors must be
improved. They should be enhanced with more pedestrian, bicycle and transit
facilities in order to meet the current and future needs of the community.
• There are nine Special Areas within Cupertino. Each Special Area is located
along one of the four major mixed-use corridors in the city, which represent key
areas within Cupertino where future development and reinvestment will be
focused. Goals for these areas include more bicycle and pedestrian friendly
streets and improved walkable, bikable connectivity to adjacent areas and
services.
• Cupertino has approximately 400 acres of streets and roads.
• Common residential street widths range from 20 feet (for streets with no street
parking) to 36 feet (for those with parking on both sides). Developers are typically
required to install curb, gutters, and sidewalks. The City prefers detached
sidewalks with a landscaped buffer in between the street and the pedestrian
walk to enhance community aesthetics and improve pedestrian safety.
• The City has approximately 1.5 miles of rural road in the residential hillside area of
Regnart Road.
• Cupertino’s hillside provide important habitat for plants and wildlife; watershed
capacity to prevent flooding in downstream areas; a wide vegetative belt that
cleanses the air of pollutants; and a natural environment that provides a contrast
to the built environment.
• The City is currently updating its Storm Drainage Master Plan. While efforts in early
years focused on expanding storm drain capacity and wastewater treatment,
the approach today is to reduce and filter runoff through project design and
management. Cupertino’s storm drain system currently operates adequately,
with some targeted upgrades or improvements likely over the next 25 years.
• Two state highways traverse Cupertino. The City is linked to the cities of San
Francisco and San José by Interstate Freeway 280 which runs along most of the
its northern border. State Route 85, which runs from Mountain View to South San
José, cuts diagonally across the City at its northwest boundary to its southeast
boundary. All state highways (and freeways) are owned and maintained by the
California Department of Transportation (Caltrans). Cupertino is defined by its
four major roadways: Homestead Road, Wolfe Road, De Anza Boulevard and
Stevens Creek Boulevard. These major mixed-use corridors have acted as the
“spines” of the community for decades.
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• Significant water bodies and water sources are;
• Stevens Creek
• Permanente Creek
• Regnart Creek
• Heney Creek
• Calabazas Creek
• The McDonald-Dorsa quarry, which used to operate south of the Deep Cliff Golf
Course and Linda Vista Park, was closed in the 1970s and is not a current source
of minerals. The site has since been designated as residential, while the portion
that is now Linda Vista Park is designated for parks and open space. However,
since it was closed prior to the Surface Mining and Reclamatin Act of 1975
(SMARA), redevelopment in the area should address soils stabilization and
reclamation issues.
• Two expansive projects within the City, occurred between 2009 and 2017,
incorporating green infrastructure design concepts and benefits that the City will
consider applying toward its pollutant load reduction credit. The first was the 18-
acre Stevens Creek Corridor Park and Restoration CIP project, phase 1
(completed in 2009) and phase 2 (completed in July 2014). The second green
infrastructure project, which is expected to be complete in 2017, is owned by
Apple. The project redeveloped 176 acres of private old industrial land which,
according to Apple VP of Environmental Initiatives, Lisa Jackson, will be 80
percent green space. Green infrastructure amenities incorporated in these
projects are described below.
Planned or Completed GI projects in Cupertino from 2009 - 2017
Phase 1 of the Stevens Creek Corridor and Creek Restoration project at Blackberry Farm
in Cupertino restored a portion of Stevens Creek, enhanced natural hydrologic
processes, and improved wildlife and habitat values. Impervious cover was reduced by
3.4 acres, including an asphalt driveway and parking lot, and concrete surfaces in the
creek corridor. The former parking lot, which drained directly into the creek, was
replaced by a smaller green parking area, set back from the creek and made entirely
of permeable material. Drive aisles are made of porous concrete that is colored to
reduce heat gain. Vegetated parking bays were planted with turf rings to support
vehicle weight and dozens of native trees were planted. The design aimed to use all
rain and storm flows to water native plantings. The project site is located within a flood
plain. It was designed to accommodate being submerged during unusually high creek
flows without damage to new infrastructure, water quality or wildlife and to retain
stormwater onsite. The design enables the site’s ability to attenuate flooding, and
naturally filter and return rainfall and runoff from the site to groundwater.
Phase 2 of the Stevens Creek Corridor project included four new bioswales and an
infiltration area installed on the adjacent golf course to capture and infiltrate runoff
from the golf course, buildings, and the parking lot that previously flowed directly into
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the creek. Additionally, an all-weather trail was installed using pervious concrete. The
trail material is compatible with floodplain standards & protects the fishery & wildlife.
“Apple Park”, the 176-acre site that replaced the former Hewlett Packard industrial
campus, now includes several green infrastructure features, such as LID measures that
will retain stormwater onsite, underground parking, the removal of a section of
Pruneridge Avenue, the addition of orchards (a total of 7,000 trees), and sustainable
landscaping. The former HP campus was previously covered in buildings, concrete
parking lots and non-indigenous decorative trees ill-suited to the specific Pacific
climate. The strongest of the trees are being replanted and augmented with sturdy
species that will flourish to create large open expanses of greenery. The car park (with
14,200 spaces) is completely buried below the landscape. Due to its underground
location, this will triple the amount of green area in the new Apple campus. One
thousand bikes will be kept on the site and available to staff to get around the campus.
The new campus will reportedly use recycled water and will use 13,300 feet of pipeline
to share the supply between it and Cupertino.
1.5 City of Cupertino Goals and Overall Approach
The following principles, goals, strategies and visions are from the City of Cupertino’s
General Plan, Community Vision 2040.
Cupertino Guiding Principle #10 - Preserve Cupertino’s environment by enhancing or
restoring creeks and hillsides to their natural state, limiting urban uses to existing
urbanized areas, encouraging environmental protection, promoting sustainable design
concepts, improving sustainable municipal operations, adapting to climate change,
conserving energy resources and minimizing waste.
General Plan Environmental Resources and Sustainability Element:
Strategy ES-2.1.5: Urban Forest. Encourage the inclusion of additional shade trees,
vegetated stormwater treatment and landscaping to reduce the “heat island effect” in
development projects. Page ES-17; Goal ES-2: Promote Conservation of Energy
Resources, Policy ES-2.1: Conservation and Efficient Use of Energy Resources
Strategy ES-5.1.1: Urban Forest. Ensure that the City’s tree planting, landscaping and
open space policies enhance the urban ecosystem by encouraging medians,
pedestrian crossing and curb-extensions planting that is native, drought tolerant, treats
stormwater and enhances urban plant, aquatic and animal resources. Page ES-22;
Goal ES-5: Protect the City’s Urban and Rural Ecosystems, Policy ES-5.1: Urban
Ecosystem
Strategy ES-5.1.2: Built Environment. Ensure that sustainable landscaping design is
incorporated in the development of City facilities, parks and private projects with the
inclusion of measures such as tree protection, stormwater treatment and planting of
native, drought tolerant landscaping that is beneficial to the environment. Page ES-
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22; Goal ES-5: Protect the City’s Urban and Rural Ecosystems, Policy ES-5.1: Urban
Ecosystem
Strategy ES-7.2.1: Lot Coverage. Consider updating lot coverage requirements to
include paved surfaces such as driveways and on-grade impervious patios to
incentivize the construction of pervious surfaces. Page ES-25; Goal ES-7: Ensure
Protection and Efficient Use of Water Resources, Policy ES-7.2: Reduction of Impervious
Surfaces
Strategy ES-7.2.2: Pervious Walkways and Driveways. Encourage the use of pervious
materials for walkways and driveways. If used on public or quasi-public property,
mobility and access for the disabled should take precedence. Page ES-25; Goal ES-7:
Ensure Protection and Efficient Use of Water Resources, Policy ES-7.2: Reduction of
Impervious Surfaces
Strategy ES-7.2.3: Maximize Infiltration. Minimize impervious surface areas, and maximize
on-site filtration and the use of on-site retention facilities. Page ES-25; Goal ES-7: Ensure
Protection and Efficient Use of Water Resources, Policy ES-7.2: Reduction of Impervious
Surfaces
Strategy ES-7.3.1: Development Review. Require LID designs such as vegetated
stormwater treatment systems and green infrastructure to mitigate pollutant loads and
flows. Page ES-26; Goal ES-7: Ensure Protection and Efficient Use of Water Resources,
Policy ES-7.3: Pollution and Flow Impacts
Strategy ES-7.4.1: Storm Drainage Master Plan. Develop and maintain a Storm Drainage
Master Plan which identifies facilities needed to prevent “10-year” event street flooding
and “100-year” event structure flooding and integrate green infrastructure to meet
water quality protection needs in a cost effective manner. Page ES-26; Goal ES-7:
Ensure Protection and Efficient Use of Water Resources, Policy ES-7.4: Watershed Based
Planning
Strategy ES-7.11.7: Green Business Certification and Water Conservation. Continue to
support the City’s Green Business Certification goals of long-term water conservation
within City facilities, vegetated stormwater infiltration systems, parks and medians,
including installation of low-flow toilets and showers, parks, installation of automatic
shut-off valves in lavatories and sinks and water efficient outdoor irrigation. Page ES-
26; Goal ES-7: Ensure Protection and Efficient Use of Water Resources, Policy ES-7.4:
Watershed Based Planning.
In the last 20 years, the City has made strides towards improving walkability and
bikeability by retrofitting existing streets to include bike lanes; creating sidewalks lined
with trees along major boulevards; and encouraging development to provide a more
pedestrian-oriented frontage with active uses, gathering places and entries lining the
street.
Cupertino has already preserved an 18-acre site and restored creek habitat (Stevens
Creek Corridor and Restoration Project) in the City to maintain biodiversity and
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ecological integrity of local natural systems. The City is now looking at opportunities in
the built and natural environment to sustain and enhance biodiversity.
As the City seeks to implement sustainability and community health objectives, future
growth and retrofitting of existing infrastructure will create mixed-use, commercial,
employment and neighborhood centers; pedestrian-oriented and walkable spaces for
the community to gather; and distinct and connected neighborhoods with easy
walkable and bikeable access to services, including schools, parks and shopping.
The City will look towards focusing future change within Special Areas that are located
on Cupertino’s major mixed-use corridors. These areas already have a mix of
commercial, office, hotel and residential uses, and are located along roadways that
will be enhanced with “Complete Streets” features, improved landscaping and
expanded public spaces (e.g., parks and plazas).
Cupertino has an abundance of natural resources, including hillsides, creek corridors,
and sensitive animal and plant habitats along the foothills. Much of this land is
preserved in low-intensity residential and agricultural uses or open space. As
redevelopment occurs, the City will strive to preserve these natural areas through land
use and building design decisions.
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2.0 GREEN INFRASTRUCTURE PLAN ELEMENTS & APPROACH
2.1 Summary of Required Elements
To meet MRP requirements, the City of Cupertino’s Green Infrastructure (GI) Plan will
need to contain certain mandatory elements:
• Project Identification and Prioritization Mechanism: The GI Plan must describe the
mechanism by which the City of Cupertino will identify, prioritize and map
potential and planned projects that incorporate green infrastructure
components in different drainage areas within the City of Cupertino. These
include public and private projects that may be implemented over the long
term, with milestones for implementation by 2020, 2030, and 2040. The
mechanism must include the criteria for prioritization and outputs that can be
incorporated into the City of Cupertino’s long-term planning and capital
improvement processes.
• Prioritized Project Locations and Timeframes: The GI Plan must contain the
outputs resulting from the identification and prioritization mechanism described
above, such as lists and maps of prioritized projects and timeframes for
implementation. The outputs must also include “targets” or estimates of how
much impervious surface within the City of Cupertino will be converted or
“retrofit” to drain to a green infrastructure feature, such as a vegetated area or
stormwater capture or treatment facility, by the 2020, 2030, and 2040 milestones.
• Completed Project Tracking System: The GI Plan must describe the City of
Cupertino’s process for tracking and mapping completed public and private
projects and making the information available to the public.
• Guidelines and Specifications: The GI Plan must include general design and
construction guidelines, standard specifications and details (or references to
those documents) for incorporating green infrastructure components into
projects within the City of Cupertino. These guidelines and specifications should
address the different street and project types within the City of Cupertino as
defined by its land use and transportation characteristics, and allow projects to
provide a range of functions and benefits, such as stormwater management,
bicycle and pedestrian mobility and safety, public green space, urban forestry,
etc.
• Integration with Other Plans: The GI Plan must describe its relationship to other
planning documents and efforts within the City of Cupertino and how those
planning documents have been updated or modified, if needed, to support and
incorporate the green infrastructure requirements. If any necessary updates or
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modifications have not been accomplished by the completion of the GI Plan,
the GI Plan must include a work plan and schedule to complete them.
• Evaluation of Funding Options: The GI Plan must include an evaluation of funding
options for design, construction, and long-term maintenance of prioritized green
infrastructure projects, considering local, state and federal funding sources.
In addition, the City of Cupertino must adopt policies, ordinances, and/or other
appropriate legal mechanisms to allow implementation of the GI Plan. The City must
also conduct outreach and education to elected officials, department managers and
staffs, developers and design professionals, and the general public as part of
development and implementation of the GI Plan and implementation of specific
projects within the GI Plan.
2.2 Approach to Completion of Required Elements
The City of Cupertino is committed to working within its Public Works, Community
Development, Sustainability, GIS, and Recreation & Community Services departments,
and with the Santa Clara Valley Water District and SCVURPPP to complete the required
GI Plan elements described in Section 2.1. This section describes the City of Cupertino’s
approach to each required element.
2.2.1 Outreach and Education
One of the first and most important steps in the development of the GI Plan is
educating a municipality’s department staff, managers, and elected officials about the
purposes and goals of green infrastructure, the required elements of the GI Plan, and
steps needed to develop and implement the GI Plan, and get their support and
commitment to the Plan and this new approach to urban infrastructure. Another
important first step is local community and stakeholder outreach to gain public support.
The City of Cupertino began this process in FY 15-16 and FY 16-17 by completing the
following tasks:
• Convened 3-4 interdepartmental meetings in 2016 with with Public Works, GIS,
CIP and Environmental staff and management to discuss GI requirements and
assigned tasks.
• Discussed with appropriate department staff the MRP requirements to analyze
proposed capital projects for opportunities to incorporate GI, and completed
the first list of planned and potential GI projects.
• Provided training to department staff on GI requirements and strategies with
presentations by SCVURPPP’s Assistant Program Manager on February 27th and
March 6th 2017 at City Hall. Invited staff to attend SCVURPP;s Green Infrastructure
workshop on April 19. 2017. Six (6) planning and public works staff participated in
SCVURPPP’s 2016 Green Infrastructure workshop.
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• Invited elected officials to a Green Infrastructure presentation given by the
SCVURPPP’s Assitant Manager on March 6, 2017 in Community Hall to raise
awareness of the goals and requirements in the MRP and the concepts, intent
and multiple benefits of GI.
• At the suggestion of the Vice Mayor, on March 16, 2017, the Sustainability
Commission invited guest speaker, Robin Grossinger, a scientist from San
Francisco Estuary Institute (SFEI), to give his presentation on the vision for a
resilient Silicon Valley landscape. SFEI’s recommendations for a more sustainable
South Bay looks at what we can be doing to integrate resilient landscape within
the reality of new and re-development. From a practical perspective, we can
consider what we can be doing over the course of next generations to improve
the ecology of the area and how we can work with larger developments to
incorporate these types of principles in our planning. Cupertino has a couple of
opportunities that have been discussed in the last couple of years that could
potentially integrate these types of principals.
• Coordinated with SCVURPPP and the Watershed Education and Outreach
(WEO) subgroup on a comprehensive outreach and education program. Key
audiences include: the general public (countywide, and in the neighborhood or
municipality where GI projects are located); the development community (e.g.,
developers, engineers, landscape architects, and contractors); and elected
officials.
• Public Works Environmental staff participated in the Green Infrastructure
Leadership Conversation in Oakland on December 9 2016 and the Regional
Roundtable on Sustainable Streets held in Oakland on March 28 2017.
The City of Cupertino will conduct or continue to conduct the following education and
outreach activities as part of development of the GI Plan:
• Continue to hold inter-department meetings to collect input for the GI Plan.
• Continue to conduct internal training as needed, and encourage staff to attend
SCVURPPP GI trainings.
• Continue to provide outreach to the general public and developers in
coordination with SCVURPPP.
• Continue to keep elected officials updated on GI Plan development and
schedule for adoption.
• Schedule a Council Study Session in 2019, prior to City Council’s consideration of
the final Plan at a regularly scheduled meeting to inform Council and the public
of the features in the draft GI Plan.
• Provide outreach to Sustainability Commission, the Bike and Pedestrian
Commission, the local community, and other stakeholders to get input and
support for the GI Plan.
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• Continue to engage with San Francisco Estuary Institute (SFEI) and/or other
potential partners that offer a regional perspective for enhancing sustainable
natural landscaping with multi-faceted benefits.
2.2.2 Project Identification and Prioritization
The City of Cupertino will use the following approaches to identify, prioritize and map
potential and planned projects that incorporate green infrastructure components in
different drainage areas within the City.
a. Coordination with the Santa Clara Basin Stormwater Resource Plan (SWRP): The
Santa Clara Valley Water District (District) and SCVURPPP obtained a Proposition
1 Stormwater Grant Program planning grant to develop a Stormwater Resource
Plan (SWRP) for the Santa Clara Basin. The SWRP will support the development
and implementation of GI Plans within the Basin (including the City of Cupertino’s
GI Plan) through identification of local and regional opportunities for GI projects
and development of modeling tools for estimating pollutant load reductions over
future timeframes (2020, 2030 and 2040). The resulting maps and tools will be
available for local use by participating municipalities.
The Stormwater Resource Plan will also produce a list of prioritized GI projects
eligible for future State implementation grant funds. Building on existing
documents that describe the characteristics and water quality and quantity
issues within the Santa Clara Basin, the SWRP will identify and prioritize multi-
benefit GI projects throughout the Basin, using a metrics-based approach for
quantifying project benefits such as volume of stormwater infiltrated and/or
treated and quantity of pollutants removed. The metrics-based analysis will be
conducted using hydrologic/hydraulic and water quality models coupled with
GIS resources and other tools. The products of these analyses will be a map of
opportunity areas for GI projects throughout the watershed, an initial prioritized
list of potential projects and strategies for implementation of these and future
projects. The list of potential projects within the City of Cupertino will then be
incorporated into the City’s list for its GI Plan.
The draft SWRP will be completed by May 2018, and the final SWRP (after public
input) completed by December 2018. Earlier stages of the process will provide
input to GI Plan development, such as the identification of projects in fall 2017
and quantification of project benefits in early 2018.
b. Review of Capital Improvement Program Projects for Green Infrastructure
Opportunities: As required by the MRP, the the City of Cupertino has begun and
maintains a list of public and private GI projects that are planned for
implementation during the permit term (2015-2020), and public projects that
have potential for GI measures. The first such list was submitted with the FY 15-16
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Annual Report. These lists will be used to provide potential projects for inclusion in
the SWRP development and incorporation into the GI Plan.
The GI Plan will also describe the tools and approaches used, the criteria for
prioritization, and the outputs that can be incorporated into the Cupertino’s long-term
planning and capital improvement processes.
2.2.3 Prioritized Project Locations and Timeframes
The GI Plan will include the prioritized list of projects and map of locations within the the
City’s jurisdiction resulting from Task 2.2.2 above, as well as timeframes for
implementation. The outputs will also include “targets” or estimates of how much
impervious surface within the City of Cupertino will be converted or “retrofit” to drain to
a green infrastructure feature, such as a vegetated area or stormwater treatment
facility, or converted to pervious surfaces, by the 2020, 2030, and 2040 milestones.
2.2.4 Completed Project Tracking System
This section of the GI Plan must describe the the City of Cupertino’s process for tracking
and mapping completed public and private projects and making the information
available to the public. The City will work with SCVURPPP to develop a consistent
countywide approach to tracking and mapping completed projects and estimating
expected PCB and mercury load reductions resulting from these projects.
2.2.5 Guidelines and Specifications
The City of Cupertino will support and participate in the SCVURPPP process to develop
and adopt GI Design Guidelines and Specifications for streetscapes and other public
infrastructure. A set of model Guidelines and Specifications will be developed at the
countywide level which will be used as a reference by the City. The City of Cupertino
will evaluate the model Guidelines and Specifications for consistency with its own local
standards, and revise existing guidelines, standard specifications, design details, and
department procedures as needed.
The Guidelines and Specifications will also include the results of the regional analysis of
alternative approaches to sizing GI facilties where project constraints (e.g., limited
space in public right-of-way, utility conflicts, etc.) preclude fully meeting the permit-
required sizing criteria for such facilities.
2.2.6 Integration with Other Municipal Plans
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The City of Cupertino has reviewed its existing municipal planning documents and
Identified which documents need to be updated or modified to support and/or be
consistent with the GI Plan, and the timing for those updates or modifications. A
summary of the results of the municipal plan review and the schedule for updates or
modifications is presented in Table 2 below. If any necessary updates or modifications
have not been accomplished by the completion of the GI Plan, the GI Plan will include
a work plan and schedule to complete them.
Table 2. Schedule for Municipal Plan Updates for GI
Name of Plan
Last
Updated
Next
Projected
Update
Includes
Language
to Support
GI?
If No,
Date to
Complete
GI Update
General Plan – Element 6 2015 2040 Yes N/A
Climate Action Plan 2015 Yes N/A
Pedestrian Transportation Plan 2002 2017 Yes, will
include GI
Sep 2019
Bicycle Transportation Plan 2016 2021 TBD Sep 2019
Storm Drain Master Plan 1992 2018 Yes, will
include GI
Sep 2019
Urban Forestry Plan (Included in GP) 2015 2023 Yes N/A
Citywide Parks & Recreation System
Master Plan
N/A 2018 Yes, will
include GI
N/A
2.2.7 Evaluation of Funding Options
The City of Cupertino currently uses a combination the City’s General Fund and federal,
State, and other applicable grants to fund construction of projects in its capital
improvement program (CIP) and other projects. The General Fund, and when
applicable, CalRecycle grants, are used for public street, parking lot and building
maintenance; maintenance of stormwater control measures installed at public
projects; and maintenance of other landscaped areas (e.g., parks, medians, public
plazas, etc.)
The City of Cupertino will analyze possible funding options to raise additional revenue
for the projects that will eventually be included in the City’s GI Plan, including capital
and operation and maintenance (O&M) costs of these projects. Options for capital
project funding include the State Proposition 1 Stormwater Grant Program
implementation grants, Prop 1 IRWMP grants, and California Urban Rivers Grants.
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Additional funding options that will be explored by Cupertino include:
• Treatment at an Offsite Location – An alternative compliance option in which a
private Regulated Project (one required to treat runoff from created and
replaced impervious surface on the project) would instead treat runoff from an
equivalent amount of impervious surface offsite, potentially in the public right-of-
way, in LID treatment facilities it would pay to construct (and/or maintain). That
is, the private developer would fund and oversee construction of a potential
green infrastructure project identified by the City of Cupertino.
• Payment of In-Lieu Fees – An alternative compliance option in which the
developer of a private Regulated Project, in lieu of constructing LID treatment
facilities on-site, would pay equivalent in-lieu fees for construction and
maintenance of a regional or municipal stormwater treatment (green
infrastructure) facility.
• Public-Private Partnerships – An option in which green infrastructure facilities are
jointly funded by the municipality and a private organization or land owner for
the benefit of both parties.
2.2.8 Adoption of Policies, Ordinances, and Other Legal Mechanisms
The City of Cupertino will review its existing policies, ordinances, and other legal
mechanisms related to current planning procedures and implementation of stormwater
NPDES permit requirements to Identify which documents may need to be updated or
modified to help implement the GI Plan. A summary of the results of the policy,
ordinance, and legal mechanisms review and the schedule for actions is presented in
Table 3 below. All needed updates, modifications, or new mechanism(s) will be
completed and adopted (if necessary) by September 30, 2019.
Table 3. Schedule for Municipal Policy and Ordinance Updates
Policy/Ordinance/Legal
Mechanism Description
Update
Needed?
Update
Schedule
Municipal Code Chapter
9.18 Stormwater Pollution &
Watershed Protection
Municipal Code: remove
outdated language; add
requirements for GI in
private development
TBD Sept 2019
Environmental
Programs/Public Works
Conditions of Approval for
Private Development
Projects
If needed, update to
require consideration of
G.I. whenever feasible
TBD Sept 2019
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In the 2019 Annual Report or earlier annual reports, the City of Cupertino will describe
any updates to ordinances, policies, plans or programs that were needed to implement
the GI Plan and associated programs, or state that existing mechanisms are sufficient to
implement the GI Plan.
2.2.9 Completion and Adoption of the GI Plan
The City of Cupertino will draft its GI Plan to contain all of the elements described
above, obtain reviews and approvals by various departments, governing bodies, and
the public as needed, and submit the GI Plan to the Water Board by September 30,
2019. Internal deadlines to complete and adopt the GI Plan are presented in Table 4
below.
Table 4. Schedule for Completion and Adoption of GI Plan
Task Department/Group Deadline
Prepare draft GI Plan
Determine if a GI workgroup of municipal
staff or a consultant is needed to develop
the City’s Plan.
*(Input from SCVURPPP’s developing
Stormwater Resources Plan (SWRP) on the
identification of projects and quantification
of project benefits, will be available in fall
2017 and early 2018, respectively).
Public Works
Environmental Prgs Mgr,
Assistant Dirctor, Engineer,
and CIP Manager, with
input from Assistant
Comm. Dev Director, Sr.
Planner, and mapping
support from GIS Manager
Dec 2017 –
Apr 2018
Review draft GI Plan
*(SCVURPPP’s draft SWRP to be developed
by May 2018)
Community Development;
Public Works; Sustainability,
Parks and Community
Services;
May - Jun
2018
Public input on draft GI Plan Sustainability Commission,
Bike/Ped Commission,
(possibly Planning
Commission)
July - Aug
2018
Update draft GI Plan Public Works Aug – Sept
2018
Approve draft GI Plan
* The final SCVURPPP Santa Clara Basin SWRP
(after public input) will be completed by
December 2018.
City Manager, Public
Works Director, Assistant
City Manager, Assist PW
Dir, Assist Comm Dev
Director and City Engineer
Sept – Dec
2018
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Review/consider draft GI Plan
* The final SCVURPPP Santa Clara Basin SWRP
(after public input) will be completed by
December 2018.
Council Study Session/
Public Input
Jan-Mar
2019
Incorporate Study Session comments Public Works/City
Manager
Mar-Apr
2019
Approve final GI Plan City Council May-Aug
2019
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3.0 GREEN INFRASTRUCTURE PLAN DEVELOPMENT SCHEDULE
This section describes the time frames for completion of the tasks presented in Section 2
to develop and adopt the City of Cupertino’s GI Plan.
Table 5. Green Infrastructure Plan Development Schedule
Task
No. Green Infrastructure Plan Development Task
Responsible
Organization(s)/
Department(s)
Estimated
Completion
Date
2.1 Required Elements: All required elements of
the Plan will be completed by September
2019.
Public Works
Environmental
Programs
Sept 2019
2.2 Approach to Completion of Required
Elements
Public Works
Environmental
Programs
2.2.1 Outreach and Education; As development of
the GI Plan evolves identify opportunities for
public input. Provide draft plan to
Sustainability Commission, Bike and
Pedestrian Commission and Planning
Commission.
Public Works,
Environmental,
and
Sustainability
Aug 2019
2.2.2 Project Identification and Prioritization:
Working with SCVURPPP, identify projects
using outputs from prioritization tools, the
City’s planned CIP list, the Storm Drainage
Master Plan and the Santa Clara Basin SWRP.
Map and prioritize projects on a drainage-
area-specific basis for implementation by
2020, 2030, and 2040 with targets for the
amount of impervious surface to be
retrofitted for those years. Identify projects
that may be candidates for grant funding
under Round 2 of the Prop 1 Stormwater
Grant Program.
Public Works,
Environmental,
Engineering and
Traffic, with
support from GIS
for mapping
Apr 2018
2.2.3 Prioritized Project Locations and Timeframes;
Add list of prioritized projects identified from
the findings in step 2.2.2. to GI Plan.
Public Works and
Community
Development
Mar 2019
2.2.4 Completed Project Tracking System: The City
will work with SCVURPPP to develop a
consistent countywide approach to tracking
and mapping completed public and private
projects and estimating expected PCB and
mercury load reductions resulting from these
projects. ( integrate w/ inspections)
Public Works
Environmental
and Engineering
Sept 2019
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2.2.5 The Guidelines and Specifications: Will be
developed collaboratively at the
Countywide level through participation in
SCVURPPP and fine tuned by City staff to
align with City policies
Public Works
Environmnental
Programs &
Engineering
April 2018
2.2.6 Integration with Other Municipal Plans: The
City’s General Plan, Vision 2040 and its
Climate Action Plan already support the
expansion of green infrastructure. The City’s
2016 Bicycle Transportation Plan, 2017
Pedestrian Transportation Plan, and 2018
Storm Drainage Master Plan. There are
potential opportunities for integrating green
infrastructure into new bike lanes, pedestrian
routes and stormdrain repairs or upgrades.
Staff will review these plans to verify
compatibility with the City’s 2019 Green
Infrastructure Plan.
Public Works;
Community
Development;
Recreations &
Community
Services
July 2018
2.2.7 Evaluation of Funding Options: Resources to
develop the Green Infrastructure Plan will
include additional staff time for meetings to
discuss feasibility and prioritization of projects
within the Plan. Plan develoopment may
require a municipal GI Plan work group. If
additional funding is needed for Plan
development it will be requested for the FY
18-19 budget. Costs to implement the City’s
GI Plan (2020 – 2040) cannot be estimated
prior to identifying locations and scopes of
potential green infrastructure projects.
SCVURPPP will prepare guidance for
completing the analysis of funding options
during FY 16-17. The City will pursue
recommended funding options for GI
projects and complete its initial funding
analysis prior to the City’s FY 19-20 budget
approval process, and for each budget
process thereafter through FY 2039-2040.
Public Works and
City Manager’s
Office
First
evaluation
by
February
2019
2.2.8 Adoption of Policies or Ordinances, and
Other Legal Mechanisms: The Watershed
Protection Ordinance (Ch. 9.18) and PW
Engineering/Environmental COAs support GI
practices. Fine tuning might be needed after
the final Plan has been adopted and the City
begins to implement the Plan.
Public Works By Sept
2019
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2.2.9 Completion and Adoption of the GI Plan: Put
on City Council agenda for approval by
August 2019.
City Council/
presentation by
Public Works
By Aug
2019
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RESOLUTION NO. ________
A RESOLUTION OF THE CUPERTINO CITY COUNCIL
FOR ADOPTING A GREEN STORMWATER INFRASTRUCTURE PLAN IN
ACCORDANCE WITH PROVISION C.3.J OF THE MUNICIPAL REGIONAL
PERMIT
WHEREAS, the City of Cupertino is a permittee under the San Francisco
Bay Regional Water Quality Control Board’s Municipal Regional Permit (MRP)
that regulates stormwater discharges from municipal storm drain systems
throughout Santa Clara Valley; and
WHEREAS, the City of Cupertino is a member of the Santa Clara Valley
Urban Runoff Pollution Prevention Program (SCVURPPP), and implements the
MRP in collaboration with other members of the SCVURPPP; and
WHEREAS, Provision C.3.j of the MRP requires each permittee to develop
a Green Stormwater Infrastructure Plan that demonstrates how permittees will
gradually shift from traditional “gray” storm drain infrastructure to a more
resilient and sustainable storm drain system comprised of “green” infrastructure,
which captures, stores and treats stormwater using natural processes; and
WHEREAS, all permittees under the MRP are required to submit by
September 30, 2019 a Green Stormwater Infrastructure Plan to the Regional Water
Quality Control Board; and
WHEREAS, the Cupertino Green Stormwater Infrastructure Plan guides
the identification, implementation, tracking, and reporting of green stormwater
infrastructure projects within the City of Cupertino over the long term; and
WHEREAS, the City of Cupertino is committed to complying with
requirements of the MRP and implementing sustainable approaches and practices
within the City.
NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby
adopt and intends to support implementation of the City of Cupertino Green
Stormwater Infrastructure Plan to achieve a more sustainable stormwater
management system that provides multiple benefits to the community.
BE IT FURTHER RESOLVED that this Resolution is not a project under the
requirements of the California Quality Act of 1970, together with related State
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CEQA Guidelines (collectively, “CEQA”) because it has no potential for resulting
in physical change in the environment. In the event that this Plan is found to be a
project under CEQA, it is subject to the CEQA exemption contained in CEQA
Guidelines section 15061(b)(3) because it can be seen with certainty to have no
possibility of a significant effect on the environment. CEQA applies only to
projects which have the potential of causing a significant effect on t he
environment. Where it can be seen with certainty that there is no possibility that
the activity in question may have a significant effect on the environment, the
activity is not subject to CEQA. In this circumstance, the adoption of a Green
Stormwater Infrastructure Plan would have no or only a de minimis impact on the
environment. The foregoing determination is made by the City Council in its
independent judgment.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this 3rd day of September, 2019, by the following vote:
Members of the City Council
AYES:
NOES:
ABSENT:
ABSTAIN:
SIGNED:
________
Steven Scharf, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Grace Schmidt, City Clerk
________________________
Date
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CITY COUNCIL STAFF REPORT
Meeting: September 3, 2019
Subject
2019 Speed Table Installation Project No. 2019-112 contract award
Recommended Action
Authorize the City Manager to award a contract to G. Bortolotto & Company, Inc.
in the amount of $246,100 and approve a construction contingency of $24,000 for a
total of $270,000.
Discussion
On August 20, 2019, the City received bids for the 2019 Speed Table Installation
Project. This project provides a total of twelve speed tables on N Portal Avenue,
Merritt Drive, Meteor Drive, and Greenleaf Drive. Included in this project are
striping enhancements originally included in the Bike Boulevards Phase 1 Project
(which were rejected due to bids exceeding the project estimate). Speed tables will
be installed shortly after paving of Portal Avenue in September 2019. Bike
Boulevard Phase 1 and 2 interim improvements will follow in October.
A total of five bids were received. The following is a summary of bids deemed
complete:
Bidder Bid Amount
Engineer’s Estimate $240,000
G. Bortolotto & Co., Inc. $246,100
O’Grady Paving, Inc. $306,000
Redgewick Construction $329,460
Lewis & Tibbitts, Inc. $368,760
Alaniz Construction $425,290
The engineer’s estimate for this project was based upon the competitively bid unit
costs of a similar project completed and current market trends.
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Sustainability Impact
Installation of new speed tables and shared road markings will reduce vehicle
travel speeds, thereby increasing safety for pedestrians and bicyclists. This may
also reduce the number of vehicle trips within the neighborhoods.
Fiscal Impact
Award of the project will result in a fiscal impact of up to $270,000. Sufficient funds
were budgeted and are available from account #420-99-036-900-905 STO30.
_____________________________________
Prepared by: Jo Anne Johnson, Public Works Project Manager
Reviewed by: Roger Lee, Director of Public Works
Approved for Submission by: Deborah Feng, City Manager
Attachments:
A – Contract Documents
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Contract
This public works contract (“Contract”) is entered into by and between the City of Cupertino
(“City”), a municipal corporation, and G. Bortolotto & Company, Inc.
(“Contractor”), for work on the 2019 Speed Table Installation Project (“Project”).
The parties agree as follows:
1.Award of Contract. In response to the Notice Inviting Bids, Contractor has submitted a Bid
Proposal and accompanying Bid Schedule, a copy of which is attached for convenience as
Exhibit A, to perform the Work to construct the Project. On September 3, 2019, City
authorized award of this Contract to Contractor for the amount set forth in Section 4 below.
2.Contract Documents. The Contract Documents incorporated into this Contract include and
are comprised of all of the documents listed below. The definitions provided in Article 1 of
the General Conditions apply to all of the Contract Documents, including this Contract:
2.1 Notice Inviting Bids;
2.2 Instructions to Bidders;
2.3 Addenda, if any;
2.4 Bid Proposal and attachments thereto;
2.5 Contract;
2.6 Payment Bond, and Performance Bond;
2.7 General Conditions;
2.8 Special Conditions;
2.9 Project Plans and Specifications;
2.10 Change Orders, if any;
2.11 Notice of Award;
2.12 Notice to Proceed;
2.13 City of Cupertino Standard Details; and
2.14 The following: Location Map
3.Contractor’s Obligations. Contractor will perform all of the Work required for the Project,
as specified in the Contract Documents. Contractor must provide, furnish, and supply all
things necessary and incidental for the timely performance and completion of the Work,
including all necessary labor, materials, supplies, tools, equipment, transportation, onsite
facilities and utilities, unless otherwise specified in the Contract Documents. Contractor
must use its best efforts to diligently prosecute and complete the Work in a professional
and expeditious manner and to meet or exceed the performance standards required by the
Contract Documents.
4.Payment. As full and complete compensation for Contractor’s timely performance and
completion of the Work in strict accordance with the terms and conditions of the Contract
Documents, City will pay Contractor $___________________ (“Contract Price”) for all of
Contractor’s direct and indirect costs to perform the Work, including all labor, materials,
supplies, equipment, taxes, insurance, bonds and all overhead costs, in accordance with
the payment provisions in the General Conditions.
5.Time for Completion. Contractor will fully complete the Work for the Project within 30
calendar or working <Chose one> days from the commencement date given in the Notice
to Proceed (“Contract Time”). By signing below, Contractor expressly waives any claim for
delayed early completion.
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6.Liquidated Damages. If Contractor fails to complete the Work within the Contract Time,
City will assess liquidated damages in the amount of $ 500 per day for each day of
unexcused delay in completion, and such liquidated damages may be deducted from City’s
payments due or to become due to Contractor under this Contract.
7.Labor Code Compliance.
7.1 General. This Contract is subject to all applicable requirements of Chapter 1 of
Part 7 of Division 2 of the Labor Code, including requirements pertaining to wages,
working hours and workers’ compensation insurance, as further specified in Article
9 of the General Conditions.
7.2 Prevailing Wages. This Project is subject to the prevailing wage requirements
applicable to the locality in which the Work is to be performed for each craft,
classification or type of worker needed to perform the Work, including employer
payments for health and welfare, pension, vacation, apprenticeship and similar
purposes. Copies of these prevailing rates are available online at
http://www.dir.ca.gov/DLSR.
7.3 DIR Registration. City may not enter into the Contract with a bidder without proof
that the bidder and its Subcontractors are registered with the California Department
of Industrial Relations to perform public work pursuant to Labor Code section
1725.5, subject to limited legal exceptions.
8.Workers’ Compensation Certification. Pursuant to Labor Code section 1861, by signing
this Contract, Contractor certifies as follows: “I am aware of the provisions of Labor Code
section 3700 which require every employer to be insured against liability for workers’
compensation or to undertake self-insurance in accordance with the provisions of that
code, and I will comply with such provisions before commencing the performance of the
Work on this Contract.”
9.Conflicts of Interest. Contractor, its employees, Subcontractors and agents, may not
have, maintain or acquire a conflict of interest in relation to this Contract in violation of any
City ordinance or requirement or in violation of any California law, including Government
Code section 1090 et seq., or the Political Reform Act, as set forth in Government Code
section 81000 et seq. and its accompanying regulations. No officer, official, employee,
consultant, or other agent of the City (“City Representative”) may have, maintain, or acquire
a “financial interest” in the Contract, as that term is defined under the Political Reform Act
(Government Code section 81000, et seq., and regulations promulgated thereunder); or
under Government Code section 1090, et seq.; or in violation of any City ordinance or
requirement while serving as a City Representative or for one year thereafter. Any violation
of this Section constitutes a material breach of the Contract.
10.Independent Contractor. Contractor is an independent contractor under this Contract and
will have control of the Work and the means and methods by which it is performed. Contractor
and its Subcontractors are not employees of City and are not entitled to participate in any health,
retirement, or any other employee benefits from City.
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11.Notice. Any notice, billing, or payment required by or pursuant to the Contract Documents
must be made in writing, signed, dated and sent to the other party by personal delivery,
U.S. Mail, a reliable overnight delivery service, or by email as a PDF file. Notice is deemed
effective upon delivery, except that service by U.S. Mail is deemed effective on the second
working day after deposit for delivery.. Notice for each party must be given as follows:
City:
Name: City of Cupertino
Address: 10300 Torre Avenue
City/State/Zip: Cupertino, CA 95014
Phone: 408-777-3354
Attn: Jo Anne Johnson
Email: joannej@cupertino.org
Copy to: pwinvoices@cupertino.org
Contractor:
Name:_____________________________________
Address:___________________________________
City/State/Zip:_______________________________
Phone:_____________________________________
Attn:_______________________________________
Email:______________________________________
Copy to:____________________________________
12.General Provisions.
12.1 Assignment and Successors. Contractor may not assign its rights or obligations
under this Contract, in part or in whole, without City’s written consent. This
Contract is binding on Contractor’s and City’s lawful heirs, successors and
permitted assigns.
12.2 Third Party Beneficiaries. There are no intended third party beneficiaries to this
Contract.
12.3 Governing Law and Venue. This Contract will be governed by California law and
venue will be in the Santa Clara County Superior Court, and no other place.
Contractor waives any right it may have pursuant to Code of Civil Procedures
Section 394, to file a motion to transfer any action arising from or relating to this
Contract to a venue outside Santa Clara County, California.
12.4 Amendment. No amendment or modification of this Contract will be binding
unless it is in a writing duly authorized and signed by the parties to this Contract.
12.5 Integration. This Contract and the Contract Documents incorporated herein,
including authorized amendments or Change Orders thereto, constitute the final,
complete, and exclusive terms of the agreement between City and Contractor.
12.6 Severability. If any provision of the Contract Documents, or portion of a provision,
is determined to be illegal, invalid, or unenforceable, the remaining provisions of
the Contract Documents will remain in full force and effect.
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12.7 Iran Contracting Act. If the Contract Price exceeds $1,000,000, Contractor
certifies, by signing below, that it is not identified on a list created under the Iran
Contracting Act, Public Contract Code § 2200 et seq. (the “Act”), as a person
engaging in investment activities in Iran, as defined in the Act, or is otherwise
expressly exempt under the Act.
12.8 Authorization. Each individual signing below warrants that he or she is authorized
to do so by the party that he or she represents, and that this Contract is legally
binding on that party. If Contractor is a corporation, signatures from two officers of
the corporation are required pursuant to California Corporation Code section 313.
[Signatures are on the following page.]
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The parties agree to this Contract as witnessed by the signatures below:
CONTRACTOR
______________________________ CITY OF CUPERTINO
<insert full name of Contractor above> A Municipal Corporation
By
Name_______________________
Title
Date _______________________
By
Name_______________________
Title
Date _______________________
By ___________________________
Roger Lee
Director of Public Works
Date ________________________
APPROVED AS TO FORM:
By ____________________________
Name__________________________
City Attorney
Date___________________________
ATTEST:
_____________________________
Grace Schmidt
City Clerk
Date____________________________
Contract Amount: $246,100
P.O. No. ________________________
Account No. 420-99-036-900-905 STO30
END OF CONTRACT
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CITY COUNCIL STAFF REPORT
Meeting: September 3, 2019
Subject
2018-2019 Civil Grand Jury of Santa Clara County Report Entitled, “Inquiry into Governance of
the Valley Transportation Authority”
Recommended Actions
Approval of response to the 2018-2019 Civil Grand Jury of Santa Clara County Report Entitled,
“Inquiry into Governance of the Valley Transportation Authority”.
Background
On June 19, 2019 the Civil Grand Jury of Santa Clara County released a report on the operation
and governance of the Santa Clara County Valley Transportation Authority (VTA) as part of
VTA’s responsibility to assure the public interest of the people of San ta Clara County. Pursuant
to Penal Code Sections 933 and 933.05, the Grand Jury requested a response from the City of
Cupertino and all governing bodies represented by VTA by September 16, 2019. Specifically, the
City of Cupertino and 14 other governing bodies were asked to respond to finding #1 of the report
and report recommendations 1c, 1d & 1e. VTA was asked to respond to report recommendations
1a, 1f, 1g, 2, 3a, 3b, 5a & 5b and the County of Santa Clara was asked to respond to 1b, 1d & 1e.
The report is included as Exhibit A.
Discussion
The Grand Jury’s report includes three findings and ten recommendations. Finding #1 is most
relevant to the City of Cupertino, specifically 1a and those recommendations requested by the
Grand Jury (1c, 1d and 1e). Staff is recommending a response to Recommendation 1a due to a
conflict with VTA commissioning a study to evaluate their own governance. Finding #1 and
associated recommendations from the Grand Jury report are described below. Attachment A,
pages 43 through 46, includes all findings and recommendations.
Finding #1: The VTA Board, currently exclusively made up of elected officials from the Santa
Clara County Board of Supervisors, the City of San José and the other cities in the County,
suffers from:
A lack of experience, continuity and leadership
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Inadequate time for the Directors to devote to their duties to the VTA Board due to their
primary focus on the demands of their elected positions
A lack of engagement on the part of some Directors, fostered in part by the committee
system, resulting in VTA functioning largely as a staff-driven organization
Domination, in terms of numbers, seniority and influence, by representatives of the Santa
Clara County Board of Supervisors and the City of San José
Frequent tension between the Directors’ fiduciary duties to VTA and its regional role, on
the one hand, and the political demands of their local elected positions, on the other
Recommendation 1a: VTA should commission a study of the governance structures of successful
large city transportation agencies, focusing on elements such as: board size; term of service;
method of selection (directly elected, appointed or a combination); director qualifications;
inclusion of directors who are not elected officials; and methods of ensuring proportional
demographic representation. This study should be commissioned prior to December 31, 2019.
Recommendation 1b: As the appointing entity with an interest in the transit needs of all County
residents, the County of Santa Clara should commission its own study of transportation agency
governance structures, focusing on the elements listed in Recommendation 1a. This study should
be commissioned prior to December 31, 2019.
Recommendation 1c: As constituent agencies of VTA, each of the cities in the County should
prepare and deliver to VTA and the County Board of Supervisors a written report setting forth
its views regarding VTA governance, with specific reference to the elements listed in
Recommendation 1a. These reports should be completed and delivered prior to December 31,
2019.
Recommendation 1d: Within six months following completion of the studies and reports
specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of
VTA’s other constituent agencies, should propose enabling legislation. This legislation should
include appropriate amendments to Sections 100060 through 100063 of the California Public
Utilities Code, to improve the governance structure of VTA (which potentially could include an
increase in the Directors’ term of service, the addition of term limitations and the inclusion of
appointed Directors who are not currently serving elected officials).
Recommendation 1e: In order to provide increased continuity in the leadership of the VTA
Board, within six months following completion of the studies and reports specified in
Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other
constituent agencies, should propose enabling legislation amending Section 100061 of the
California Public Utilities code to provide that the Chairperson of the VTA Board shall be elected
for a term of two years rather than one.
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A draft response letter for the City Council to consider is attached as Exhibit B.
Sustainability Impact
None
Fiscal Impact
None
_____________________________________
Prepared by: David Stillman, Transportation Manager
Reviewed by: Roger Lee, Director of Public Works
Approved for Submission by: Deborah Feng, City Manager
Attachments:
A – Civil Grand Jury of Santa Clara County Report entitled, “Inquiry into Governance of the
Valley Transportation Authority”
B – Response letter to Civil Grand Jury of Santa Clara County
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June 18, 2019
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Table of Contents
GLOSSARY AND ABBREVIATIONS......................................................................................... 2
SUMMARY .................................................................................................................................... 4
METHODOLOGY ......................................................................................................................... 6
DISCUSSION ................................................................................................................................. 8
A Brief History of the VTA ...................................................................................................... 8
Structure of the VTA Board .................................................................................................... 9
The VTA Board in Action ...................................................................................................... 11
VTA’s Operating Performance ............................................................................................. 18
VTA’s Financial Management ............................................................................................... 22
The Extension of Light Rail Service to Eastridge ................................................................ 26
Designing a More Effective Structure for the VTA ............................................................. 35
CONCLUSIONS........................................................................................................................... 40
FINDINGS AND RECOMMENDATIONS................................................................................. 43
Finding 1 .................................................................................................................................. 43
Finding 2 .................................................................................................................................. 44
Finding 3 .................................................................................................................................. 45
Finding 4 .................................................................................................................................. 46
Finding 5 .................................................................................................................................. 46
REQUIRED RESPONSES ........................................................................................................... 47
APPENDIX A – The Guidelines for Member Agency Appointments to the VTA Board of
Directors ........................................................................................................................................ 48
APPENDIX B – VTA Operating Statistics and 2017 National Trends ........................................ 50
APPENDIX C – Peer Agency Comparisons ................................................................................ 53
REFERENCES ............................................................................................................................. 58
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GLOSSARY AND ABBREVIATIONS
AC Transit Alameda County Transit. A peer transit agency to VTA.
APTA American Public Transit Association. A national association of which VTA is
a member.
BART Bay Area Rapid Transit. A peer transit agency.
County County of Santa Clara
CPC Capital Program Committee. A standing committee of the VTA Board of
Directors.
DOT US Department of Transportation. A national transportation agency.
EBRC Eastridge-BART Regional Connector. Current nomenclature for the Eastridge
light rail extension (Phase 2).
Farebox
recovery ratio
Fares collected from passengers divided by operating expenses.
FTA Federal Transit Administration. A federal agency providing transit data (see
NTD) and services.
HMTA Houston Metro Transit Agency
HOV High Occupancy Vehicle
LRT Light rail transit [system]
MTC Metropolitan Transportation Commission. A Bay Area regional transportation
coordination and planning agency.
Next Network VTA's Next Network is a redesign of the transit network and is one
component of an agency-wide effort to make public transit faster, more
frequent and more useful for Santa Clara County travelers.
NTD National Transportation Database. Database of statistics and metrics
maintained by FTA.
PUC California Public Utilities Code
SCCTD Santa Clara County Transit District
SCVWD Santa Clara Valley Water District
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VTA Santa Clara Valley Transportation Authority
VRH Vehicle Revenue Hours
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SUMMARY
The Santa Clara Valley Transportation Authority (VTA) is an independent special district created
by the California legislature in 1972. Initially, the Santa Clara County (County) Board of
Supervisors provided direct oversight of VTA and acted as its Board of Directors. Effective
January 1, 1995, pursuant to further legislation, VTA began operating under a separate Board of
Directors (VTA Board) composed of elected officials from throughout the County appointed to
serve by the County Board of Supervisors and the governing authorities of VTA’s constituent
municipalities, with the allocation of VTA Board representation generally based on population.
For many years, VTA has been plagued by declining operating performance and recurring budget
gaps between projected revenues and expenses (referred to as structural financial deficits) –
notwithstanding significant population growth and, in recent years, increased employment levels
throughout much of Silicon Valley.
The 2003-2004 Santa Clara County Civil Grand Jury conducted an “Inquiry into the Board
Structure and Financial Management of the Valley Transportation Authority”1 which found,
among other things, that:
The operating performance of VTA compared unfavorably to its peer organizations;
The VTA Board had not effectively managed the finances of VTA, resulting in a substantial
structural financial deficit that was projected to increase in the following year; and
A root cause of VTA’s poor performance was the governance structure of the VTA Board,
which was “too large, too political, too dependent on staff, too inexperienced in some cases,
and too removed from the financial and operational performance of VTA.”
To address these issues and attempt to make the VTA Board more responsive, the 2003-2004
Grand Jury proposed various changes to the Board’s structure. Although responses filed by seven
of VTA’s constituent municipalities were supportive of some or all the recommended changes,
VTA’s response defended the status quo, and most of the other municipalities adopted VTA’s
position. Accordingly, the recommended changes were not made.
The 2008-2009 Grand Jury again examined the governance of VTA and reiterated some of the
same concerns noted in the earlier report, although the focus of the 2008-2009 report was primarily
on the role and functioning of the VTA Board’s appointed advisory committees.
1 http://www.scscourt.org/court_divisions/civil/cgj/2004/BoardStructureFinancialMgmtVTA.pdf
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The 2018-2019 Civil Grand Jury (Grand Jury) revisited the subject of VTA’s governance and the
work of the earlier grand juries and found that:
VTA’s operating performance has continued to deteriorate over the last 10 years, relative
to both its own historical performance and the performance of its peers, across a wide
variety of metrics;
The VTA Board has consistently failed to adequately monitor VTA’s financial
performance and has taken action, albeit less than fully effective action, only in the face of
imminent financial crises; and
Despite the serious ongoing structural financial deficit, the VTA Board has been unwilling
to review and reconsider decisions made years or even decades ago regarding large capital
projects (and their attendant operating costs) that are no longer technologically sound or
financially viable, based on their costs and projected ridership.
The Grand Jury concluded that today, more so than in 2004 or 2009, the VTA Board is in need of
structural change to enable it to better protect the interests of the County’s taxpayers and address
the many complex challenges presented by emerging trends in transportation, rapidly evolving
technology and the changing needs of Silicon Valley residents. The Grand Jury recommends
several changes to the governance structure and operations of the VTA Board which will improve
the Board’s ability to effectively perform its important oversight and strategic decision-making
functions. The Grand Jury further recommends that the VTA Board consider deferral of Phase 2
of the Eastridge light rail extension project pending a full review of the future role of light rail in
VTA’s transit system. Such a review should study alternative ways to meet the needs of the
residents of East San Jose for modern, efficient public transportation without extending a costly
and outdated light rail system and worsening VTA’s already precarious financial condition.
In January 2019, the incoming Chairperson of the VTA Board issued a summary of her “2019
Perspectives and Priorities”2 for VTA (see Board of Director’s Meeting, January 7, 2019, section
8.2). Among the goals articulated by the Chairperson was improved board governance. The
Chairperson announced that she would “convene a board working group to look at a range of board
governance practices,” with a view to improving “board engagement and effectiveness.” The
Grand Jury commends the Chairperson for focusing on the important subject of governance. This
report may aid the Chairperson and the rest of the Board in that endeavor.
2 http://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=12&ID=2133&Inline=True
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METHODOLOGY
The 2018-2019 Civil Grand Jury began this investigation of VTA on August 15, 2018 and
concluded its work on May 29, 2019. The investigation primarily followed from issues highlighted
in the report of the 2003-2004 Grand Jury and focused on the structure of the VTA Board of
Directors, the effectiveness of its oversight of VTA’s operating and financial performance, its
handling of the agency’s persistent structural financial deficit and its ability to address the many
complex challenges facing VTA as it confronts the future of transportation in Silicon Valley. The
Grand Jury employed a broad range of data gathering and investigative methods, including:
Site visits were made to VTA headquarters, one of the VTA bus yards, VTA’s downtown
customer service center, and bus and light rail stops and stations.
The transit system was used, including the purchase of Clipper Cards, riding buses and
light rail trains during peak and off-peak hours, stops at and transit through Diridon Station,
Eastridge, downtown and North County rail and bus facilities, and assessing access to
transit stops by walking to stations and stops and using VTA parking sites.
Interviews were conducted with 37 individuals (some more than once) over more than 50
hours. Interviewees included a substantial number of individuals who served as members
of the VTA Board and its committees during 2018 and 2019, senior and mid-level VTA
staff personnel, city and county government officials, and representatives of various
community stakeholder groups.
Governing documents were reviewed, including: (i) provisions of the California Public
Utilities Code (PUC), which established VTA, particularly PUC Sections 100060 through
100063, which set forth the governance structure of the VTA Board; (ii) provisions of the
VTA Administrative Code, adopted by the VTA Board to supplement the provisions of the
PUC; and (iii) agreements among members of city groups who share representation on the
VTA Board regarding the process for rotating their representation on the Board and
collectively choosing their appointees. In addition, data regarding attendance records for
VTA Board and committee meetings, directors’ terms in office and voting records were
examined.
Reports specific to VTA were reviewed, including: (i) the 2003-2004 and 2008-2009 Civil
Grand Jury reports and the responses thereto; (ii) a 2007 report entitled “Santa Clara Valley
Transportation Authority Organizational and Financial Assessment,” by the Hay Group
(Hay Report); (iii) a 2008 report on VTA by the California State Auditor; (iv) a 2010 thesis
entitled “Assessing Transit Performance: Recommended Performance Standards for the
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Santa Clara Valley Transit Authority,” authored by a San Jose State University master
degree candidate; (v) a 2016 report entitled “Transit Choices Report,” prepared for VTA
by the consulting firm Jarrett Walker +Associates; and (vi) numerous public documents
published by VTA and/or available on its website. These and other documents referred to
in this report are listed in the Reference Section.
Comparisons were made of VTA’s performance in various operating and financial
categories to the performance of other transit organizations utilizing data compiled by the
American Public Transportation Association (APTA), the United States Department of
Transportation (DOT), The Business Insider, the Federal Transit Administration (FTA)
published in the National Transit Database (NTD), the Public Transit Factbook and other
federal and industry indices and metrics. Industry and “think tank” reports and articles
discussing and comparing transit agency performance, including, among others, the Cato
Institute, the Heritage Foundation and the Hudson Institute, were also reviewed. For
purposes of comparison, operating data from peer agencies serving the metropolitan areas
of Portland, Minneapolis, Houston, Dallas, Salt Lake City, Denver, San Francisco,
Sacramento and San Diego were reviewed. In connection with a comparison of governance
structures, other agencies, including those serving Los Angeles, Seattle, Vancouver B.C.,
Austin, Chicago, New York, the District of Columbia and Phoenix, were considered.
Attendance at regularly scheduled meetings of the VTA Board and its committees,
including the Administration and Finance Committee, Capital Program Committee (CPC),
Governance and Audit Committee, and Ad Hoc Financial Stability Committee between
October 2018 and May 2019, as well as Board workshops on the Future of Transportation
in Silicon Valley and the proposed biennial budget for fiscal years 2020 and 2021. Audio
and video recordings of some of the meetings noted above, as well as other meetings of the
VTA Board and certain committees conducted from January 2018 forward were reviewed.
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DISCUSSION
A Brief History of the VTA
Santa Clara County Transit District (SCCTD) was created by the County’s voters in June 1972
and took over operations of three financially strapped private bus companies. SCCTD was initially
managed by the County’s Department of Public Works, but in 1974 became a separate agency
governed directly by the County Board of Supervisors.
SCCTD initially focused on upgrading and replacing its inherited fleet of buses. Assisted by
federal funding and a voter approved half-cent sales tax in 1976, SCCTD began to acquire diesel
buses and build repair facilities.
In the 1980s, SCCTD embarked upon the construction of its light rail transit system, utilizing
funding received from the federal government and the proceeds of additional voter-approved sales
taxes. The first segment of the light rail system opened for service in late 1987, and the entire
initial 21-mile system was completed in 1991. Four extensions of the system were completed by
2005, and additional extensions are currently in the planning stages.
SCCTD completed a two-part reorganization, in early 1995. SCCTD was designated the
Congestion Management Agency for the County under a joint powers agreement among the
County and its 15 cities. At the same time, legislation reconstituting the Board of Directors from
five directors, all of whom were County Supervisors, to 12 consisting of two County Supervisors,
five San José City Council members and five city council members representing the remaining 14
cities, selected on a rotating basis by the governing authorities of those cities. The name of the
agency was changed to the Santa Clara Valley Transportation Authority in 1996, from which the
acronym VTA was adopted.
Today, VTA is a complex, multi-billion-dollar enterprise that provides bus, light rail and
paratransit services within Santa Clara County. In addition, VTA participates in funding other
agencies that provide regional rail service, including Caltrain, the commuter rail line serving the
San Francisco Peninsula, the Capitol Corridor operating between Silicon Valley and the
Sacramento area, and the Altamont Corridor Express, connecting Stockton and San José. VTA
also is responsible for county-wide transportation planning, including congestion management, the
design and construction of highway, pedestrian and bicycle improvement projects, and the
promotion of transit-oriented development.
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Structure of the VTA Board
The present structure of the VTA Board was authorized by legislation effective January 1, 1995.
In the legislation proposed by the County Board of Supervisors, the VTA Board was to have been
composed of five directly elected members (corresponding to the five county supervisorial
districts) and 11 appointed members of various elected bodies in the county. As ultimately
adopted, the enabling legislation eliminated the directly elected directors. Instead, PUC Section
100060 provided for a Board consisting of 12 voting members and alternates, all of whom are
elected public officials, with the allocation of Board representation generally based on population.
Under the formula outlined in PUC Section 100060, and further spelled out in Section 2-13 of the
VTA Administrative Code, the VTA Board is composed of:
Two voting members and one alternate who are members of the Santa Clara County Board
of Supervisors;
Five voting members and one alternate representing the City of San José;
One voting member and one alternate representing the cities of Los Altos, Los Altos Hills,
Mountain View and Palo Alto;
One voting member and one alternate representing the cities of Campbell, Cupertino, Los
Gatos, Monte Sereno and Saratoga;
One voting member and one alternate representing the cities of Gilroy and Morgan Hill;
and
Two voting members and one alternate representing the cities of Milpitas, Santa Clara and
Sunnyvale.
All the voting members and alternates, other than the County supervisors, must be currently
serving as mayors or city council members of the city they represent. Each of the four groups of
smaller cities may collectively determine their representative, and each group has adopted an
agreement specifying, in varying degrees of detail, the manner in which the group’s appointed
representatives will rotate among the member cities and how individual representatives are to be
selected.
PUC Section 100060(c) provides, importantly, that “[t]o the extent possible, the appointing powers
shall appoint individuals to the VTA Board who have expertise, experience, or knowledge relative
to transportation issues.” The VTA Administrative Code and the inter-city agreements contain
similar directives.
In 2015, the Governance and Audit Committee of the VTA Board adopted a set of Guidelines for
Member Agency Appointments to the VTA Board of Directors (Guidelines). The Guidelines
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contain several recommendations emphasizing, among other things, the value of a candidate’s
expertise and prior experience on the VTA Board or its Policy Advisory Committee. The
Guidelines also express the expectation that VTA Board members “[h]ave a fiduciary
responsibility to vote for the best interests of the region, not those of their city/county group or
appointing jurisdiction,” and “should be able to attend Board and standing committee meetings
regularly.” A full copy of the Guidelines is attached as Appendix A.
In addition to the voting members and alternates, the VTA Administrative Code provides that
members of the Metropolitan Transportation Commission (MTC) who reside in Santa Clara
County, and who are not voting members or alternates, shall be invited to serve as ex-officio, non-
voting members of the Board3. The VTA Board currently has one such ex-officio member.
VTA Board members serve for a term of two years 4. The VTA Administrative Code “strongly
encourages” appointing authorities to reappoint representatives to successive terms, and some
members do serve multiple terms5. One director who recently left the VTA Board had served as
a director or alternate representing San José and the County for a total of 13 years, but missed eight
Board meetings in his last two years of service. The two voting directors currently representing
the County have served as directors or alternates for a total of 14.5 and 12.5 years. The current
Mayor of San José has served as a director for 11.5 years. However, many directors who serve on
a rotating basis as representatives of the smaller city groups do not serve successive terms, and
directors’ two-year terms are frequently cut short when they are not re-elected, term out or
otherwise cease to serve in their elected position.
PUC Section 100061 requires the VTA Board to elect its Chairperson and Vice Chairperson
annually. Both officers serve for terms of one calendar year, straddling two fiscal years of the
VTA (July 1 to June 30). By informal convention, the Vice Chairperson one year becomes
Chairperson the following year.
3 VTA Administrative Code Section 2-15
4 PUC Section 100060.2
5 VTA Administrative Code Section 2-14
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The VTA Board in Action
As noted above, the VTA Board consists of a rotating group of elected public officials appointed
by the County Board of Supervisors, the City of San José and the four groups of smaller cities.
Although the PUC, the VTA Administrative Code and the Guidelines all admonish the appointing
authorities to appoint VTA Board members who have appropriate expertise, experience and
knowledge, as a practical matter, appointments are often made based more on political
considerations than on the candidate’s qualifications. From the candidate’s point of view,
appointment to the VTA Board, one of the largest agencies in the County, is generally considered
a plus for his or her political advancement. Candidates often express an interest in serving on the
VTA Board largely because they see service on the Board as a “resume builder.” As a result,
appointees to the VTA Board often have no previous experience with transportation, finance or
leadership of a commercial enterprise, let alone one with annual revenues of over a half billion
dollars and assets of $5 billion. New directors often know little about VTA’s operations or
finances, or the organization and functioning of the Board. In our interviews, the Grand Jury
learned that one director was unclear about how directors were chosen or even how many directors
there are. Another, representing one of the smaller city groups, was unfamiliar with the provisions
of the inter-city agreement governing appointments to the Board and considers appointments as
simply the political prerogative of the mayor of the city whose turn it is to make the appointment.
Because new directors often have little or no experience with transportation agency operations or
transit policy, they face a steep learning curve to even begin to become effective Board members.
There is no “boot camp” for new directors. The orientation program provided by the VTA staff is
brief and presents only a high-level overview of VTA and basic information regarding Board
procedures. When speaking with the Grand Jury, some directors couldn’t recall going through any
orientation at all.
Workshops are conducted by the VTA staff, generally about twice a year, to provide background
information to the directors, often focusing on a specific issue. These workshops are relatively
short, sometimes poorly attended and often cancelled. For example, both director workshops
scheduled to be held in 2018 were cancelled. A workshop held on February 22, 2019, ambitiously
addressed the important and complex topic of “The Future of Transportation in Silicon Valley.”
The workshop was attended by eight of the 12 voting members of the VTA Board, three of the six
alternates and the ex officio member and lasted a little over three hours. Needless to say, the
workshop merely scratched the surface of the topic. A few Board members have attended
transportation-related, third party-sponsored programs and seminars on their own initiative to
enhance their knowledge on issues of transportation management and policy. There is no formal
policy requiring or encouraging attendance at external training programs or conferences or other
forms of continuing education.
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Influence on the VTA Board
The City of San José dominates the VTA Board with the ability to appoint five of the 12 directors,
which should not be unexpected given San José’s share of the County’s population. Although the
San José directors technically are appointed by the San José City Council, the Mayor recommends
those appointments. Thus, the Mayor effectively controls the initial selection of the San José
directors as well as their tenure on the Board and, therefore, has the ability to exercise considerable
influence over a substantial portion of the VTA Board. Since some members of the County Board
of Supervisors who have served on the VTA Board previously served on the San José City Council
or represented supervisorial districts within San José, these relationships may further enhance San
José’s dominance on the VTA Board.
Given that representatives of the City of San José and the County Board of Supervisors are often
able to serve multiple terms on the VTA Board, they gain experience and the ability to add value.
However, representatives of the smaller city groups are subject to the rotational provisions of their
inter-city agreements, limiting their ability to serve consecutive terms. Accordingly, the San José
and County representatives often dominate the Board in terms of experience and influence as well
as numbers. Current voting members of the VTA Board representing San José and the County
have served an average of 4.3 years and 10.5 years, respectively, including non-concurrent terms
but excluding service by some of them as alternates. However, the current voting members
representing the smaller cities have served an average of only 1.9 years.
Board Member Preparation
All of the members of the VTA Board are primarily focused on their other duties as local elected
officials; their position on the VTA Board is clearly of secondary importance to most, if not all,
directors and, as noted above, viewed by some principally as a “resume builder” and a one day a
month job. Directors confront their other duties as elected officials and, in the case of smaller city
directors, private employment or business interests, which themselves may be demanding and
time-consuming.
Directors often find it difficult to digest the massive amounts of information provided to them by
the VTA staff to help them fulfill their responsibilities and prepare for meaningful participation in
Board meetings. For example, meeting materials for VTA Board meetings typically run more than
300 pages, and committee meeting packages can be as voluminous. Here too the representatives
of the smaller city groups are at a disadvantage. While members of the County Board of
Supervisors and the San José City Council have dedicated staffs that can help them review and
distill VTA-supplied materials and analyze issues, the representatives of the smaller city groups
have little or no staff support. Although members of the VTA staff make themselves available to
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meet with directors to discuss VTA business, particularly in advance of monthly meetings, the
Grand Jury learned that some directors take little or no advantage of these opportunities.
VTA Committees
Like many complex organizations — both governmental and private — the VTA Board maintains
a system of standing committees. These include the Administration and Finance Committee, the
CPC, and the Governance and Audit Committee, among others. The Board also has a number of
advisory committees and occasionally appoints ad hoc committees to deal with specific matters.
For example, the Ad Hoc Financial Stability Committee (which will be discussed further in this
report) was formed in January 2018 and was active throughout 2018.
The Board’s committee structure is both a benefit and a detriment. Because Board members have
other public and private commitments, it is challenging to deal with all the complex issues affecting
VTA; thus, delegation of certain responsibilities is necessary.
On the other hand, the committee structure tends to create a certain level of disengagement. Board
members are assigned by the Chairperson to serve on standing committees. Several interviewees
expressed the opinion that committee assignments are often made with little or no input from the
affected Board members, and some committee members only learn of their appointment when they
see their name on a list. Because of their various time commitments, Board members often are
unfamiliar with or just defer to and trust the staff and their fellow directors regarding issues passed
upon initially by committees of which they are not members. When those issues come before the
full Board, often by way of its consent calendar, there is little or no discussion or debate. In some
cases, matters of some significance are also placed on the consent calendar at the committee level,
with the result that only the staff conducts any significant review of the matter. This system works
well for some topics, like the approval of construction contracts, but can leave many directors
uninformed about important topics to which the full Board should be attentive. Topics like
monitoring VTA’s financial affairs and structural financial deficit (which is principally left to the
Administration and Finance Committee) and major ongoing capital programs, which are
monitored by the CPC demand full engagement by all directors. At the October 2018 Board
meeting, in reference to a report on the consent calendar, one of the directors stated, “Instead of
going to committee, this type of report should go to the full Board…We should have [Board]
workshops on several of these reports.”
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Alternate VTA Board Members
Like the use of committees, the system of alternate Board members has both advantages and
disadvantages. Alternate members cannot vote at meetings except when they are attending in place
of a voting member. Accordingly, alternate members often do not attend Board or committee
meetings. If they attend meetings at all, they typically sit in the audience and do not participate.
The existence of alternate Board members is useful in securing a quorum at Board and committee
meetings when a voting member is absent. However, the availability of an alternate can serve as
justification for voting members to make meetings a lower priority. Additionally, because
alternate members frequently are called upon at the last minute, they may be even less prepared
than voting members with the agenda and meeting materials. The alternate faces the decision to
vote on matters in accordance with his or her own beliefs and opinions, or to vote the way he or
she believes the voting member being replaced would have voted. This type of voting “by proxy”
is inconsistent with good governance practices and would not be permitted by members of a
corporate board of directors.
VTA Board Meetings
The VTA Board meets once a month in the evening. Board committees meet between three and
11 times a year. Attendance at Board and committee meetings varies greatly. Data compiled by
the Grand Jury show that during 2017, 2018 and the first four months of 2019, attendance by voting
members at Board meetings and workshops averaged approximately 87%. Individual attendance
ranged from 61 to 92%. During the same period, attendance by voting members at committee
meetings averaged approximately 86%. Often, directors arrive at meetings late, step away from
the meeting, or leave early, but their partial participation is not always reflected in the attendance
records. The conduct of Board meetings observed by the Grand Jury is characterized by limited
debate and discussion, typically with active participation by only a few directors and some
directors not participating at all.
The Board does very little on an ongoing basis to monitor and assess directors’ performance. The
Grand Jury learned from our interviews that guidelines were developed to aid the Board in
measuring its effectiveness, but no action has been taken to implement these guidelines. Board
members receive a self-assessment questionnaire at the end of the year, but, according to several
interviewees, many are not completed or returned, and no action is taken to follow up or seek
feedback.
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VTA Board Effectiveness
In short, the VTA Board suffers from:
a lack of experience and continuity by many directors;
dominance, in terms of numbers, seniority and influence, by representatives of San José
and the County;
inadequate time for the directors to devote to the Board’s oversight and policy-making
functions;
a lack of engagement by some of the directors, fostered in part by the committee system,
resulting in VTA functioning largely as a staff-driven organization; and
conflicts of interest, which are often irresolvable, between the directors’ fiduciary duty to
VTA and its regional role, on the one hand, and the political demands of their local elected
positions, on the other.
In assessing the effectiveness of VTA, several preliminary observations are in order.
First, nothing in this report is meant to suggest that the members of the VTA Board are not
honorable and hard-working public servants who are doing their best to perform the duties of a
very difficult position under extremely difficult circumstances.
Similarly, the Grand Jury has found that the VTA senior management staff is a competent team of
professionals doing their best to run a very complex organization within the policy guidance
provided by the VTA Board. As one member of the Board stated at the February directors’
workshop, “the staff is like a racehorse that we are keeping in the starting gate.” For their part,
members of the senior staff are sometimes reluctant to draw the Board’s attention to matters of
concern where they realize there is political resistance on the part of some directors and feel that
raising an issue would be a waste of time. Some senior staff members are frustrated by what they
perceive as an unwillingness of the Board to support needed action or make important changes at
the policy level. Several staff members pointed to other transit districts, such as those in Portland,
Austin and San Diego, as agencies whose policymakers are prepared to make tough decisions and
take risks to improve public transit. According to some staff members and directors, this
frustration, in part, has resulted in a general decline in morale at the senior staff level. The process
used in the recent reorganization of senior staff responsibilities has contributed to additional
morale problems. Some key members of senior management have recently announced that they
will be leaving VTA.
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The Grand Jury also recognizes that many of the problems facing VTA are not unique to it as a
transit organization or to the specific geographic or demographic characteristics of the Silicon
Valley. Like many other transit organizations, VTA must deal with nationwide transportation
trends, including increasing congestion and competition from ride-hailing companies and
corporate-run employee bus services, as well as looming challenges posed by autonomous,
driverless vehicles. Moreover, operating a transit system in a largely suburban region presents
greater challenges than are typically faced in more densely populated urban areas, having
concentrated downtown business centers. It is because of the complex and evolving nature of the
problems facing VTA that active and enlightened Board oversight and strategic vision are more
essential than ever to the organization’s future success.
Having those observations in mind, the Grand Jury has noted that VTA and the VTA Board have
been subject to criticism over the years from various quarters. As described above, the 2003-2004
and 2008-2009 Grand Juries were critical of the Board and its governance structure. However,
criticism of the management and Board of VTA has not been limited to the Civil Grand Jury. A
number of investigations, studies and articles, including the Hay Report which was commissioned
by VTA itself, have criticized VTA’s operational and financial performance and the effectiveness
of VTA governance. In 2007, one writer referred to VTA as possibly “the nation’s worst managed
transit agency, at least among those serving big cities.”6 Even members of the VTA Board have
questioned the Board’s effectiveness. For example, at a meeting of the VTA Board in October
2018, one director made the comment, “we have to break the mold of ‘same ole, same ole’…Board,
we have to step up and change things.” Upon assuming her position in January 2019, the current
Chairperson of the VTA Board announced that she would “convene a board working group [later
designated the Ad Hoc Board Enhancement Committee] to look at a range of board governance
practices” with a view to improving “board engagement and effectiveness.”7 At the Board
workshop in February 2019, the participating directors, by a unanimous show of hands, agreed
that VTA needs to make “radical changes” to address its many challenges. As one director put it,
“We just had a workshop where we had a long conversation and we pretty much had a consensus
where we have to do things differently and think outside the box.” The Ad Hoc Board
Enhancement Committee held its first meeting on May 29, 2019.
A complete review and assessment of the operations and management of VTA is far beyond the
means of the Grand Jury or the scope of this report. Accordingly, the Grand Jury has chosen to
focus its attention on the consideration of the effectiveness of the VTA Board’s oversight and
policymaking, as exemplified by three areas of concern:
VTA’s poor and continually deteriorating operating performance;
6 “The Nation's Worst Transit Agency", The Antiplanner, March 26, 2007
7 http://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=12&ID=2133&Inline=True . See section 8.2 of
Minutes for the January 9, 2019 Board of Directors meeting.
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the VTA Board’s inadequate oversight of the agency’s financial performance and its
structural financial deficit; and
the VTA Board’s unwillingness, to date, to reconsider the merits of significant pending
capital projects that may be indicative of its general ability to guide the organization
strategically.
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VTA’s Operating Performance
VTA Operating Trends
The 2003-2004 Grand Jury reviewed VTA’s operations and found that its operating performance
compared unfavorably to its own benchmarks as well as the performance of peer agencies. Among
other things, its report noted that:
VTA’s operating costs had risen substantially faster than the rate of inflation; and
Fares collected from VTA’s passengers divided by VTA’s operating expenses (referred to
as the farebox recovery ratio) for the previous two years had been 11.6% and 12%,
compared to the national average of more than 20%, meaning that the taxpayers of Santa
Clara County were providing a much greater than average subsidy of transit operations.
The 2018-2019 Grand Jury again examined VTA’s operating statistics and found that VTA’s
performance has continued to deteriorate over the past 10 years, relative to both its historical
performance and the performance of its peers, across a wide variety of metrics, including
continuing increases in operating costs and further reductions in farebox recovery.
Since the 2008-2009 recession, the population of Santa Clara County has increased by
approximately 10.6%. During that 10-year period, bus and light rail vehicle revenue hours (VRH)
,which measures the amount of service VTA offers, increased by 6.4% while operations employee
headcount (i.e., operators and maintenance personnel) grew by 8.9%. Total operations expense
rose by 63.2% between 2009 and 2018, including a one-year increase of 17.1% between 2017 and
2018 alone. As operations expense increased, overall farebox recovery declined from 13.5% in
2009 to 9.3% in 2017 – substantially worse than the ratios that the 2003-2004 Grand Jury cited as
unacceptably low back in 2004.
Meanwhile, despite increases in employment and income levels in Silicon Valley, the public’s
actual use of VTA’s services (as measured by passenger trips on buses and light rail) dropped by
19.2% between 2009 and 2018 and by 14.8% in the last two years alone. According to U.S. Census
Bureau data, in 2017 (the last year for which such data is available), public transit was used as a
means of transportation to work by only 4.8% of Santa Clara County’s commuters, little more than
the combined percentage of those who walked or biked to work and fewer than the 5.3% who
worked at home. Despite the declining use of transit during the last ten years, VTA continued to
increase its employee headcount (both operations employees and administrative staff) and add to
its fleet of buses and train cars, further increasing operating expense.
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As a result of the dramatic increases in operations expense and the concurrent decline in ridership,
VTA’s cost per passenger trip for buses and light rail combined increased from $5.61 in 2009 to
$9.30 in 2017, 90.5% of which was covered by taxpayer subsidies.
Detailed data regarding VTA’s operations are shown in Appendix B, and the trends discussed
above are depicted in Figure 1 below.
Figure 1 - VTA Operations Trends since 2009
Peer Agency Comparison
The FTA issues an annual NTD report summarizing nationwide data and trends for transit agencies
throughout the United States. In its most recent survey, for 2017, the FTA reported that for transit
agencies serving populations of more than one million people:
Operating cost per passenger trip for buses and light rail ranged from a low of $3.27 to a
high of $9.31 with VTA’s cost per trip of $9.28 nearly the highest in the nation;
Operating expense per revenue hour ranged from a low of $84.82 to a median of $123.20
and a high of $249.83 with VTA’s operating expense per revenue hour of $199.79 at about
the top 10th percentile in the nation; and
-25
0
25
50
75
1 2 3 4 5 6 7 8 9 10Change since 2009 (%)Year
Chart Title
County Population Full-time Ops Employees Vehicle Revenue Hours (VRH)
Passenger (Bus+LR) Trips Ops Expense
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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Farebox recovery for light rail systems (combined bus and light rail data was not available)
ranged from 7.6% to 47.2% with VTA’s light rail system farebox recovery of 7.6%, the
lowest in the nation, requiring taxpayers to subsidize 92.4% of the cost of light rail service.
Since the FTA surveys contain data for more than 800 transit agencies, including many with
operating environments that differ significantly from VTA’s, the Grand Jury selected a cohort of
ten peer agencies for further review using the following guidelines:
Only agencies operating both buses and light rail systems were included;
Only agencies serving urbanized communities with population and service areas generally
comparable to VTA’s were included; and
Agencies identified as VTA’s peers by interviewees or transit experts were also considered
for inclusion.
Based on these guidelines, public transit agencies serving the metropolitan areas of Portland,
Minneapolis, Houston, Dallas, Salt Lake City, Denver, San Francisco (SF), Sacramento and San
Diego were chosen for comparison.
Comparisons of FTA operating data for the 10 peer agencies from 2009 through 2017 are shown
in Appendix C. In summary, comparative data for three key metrics show the following:
Operating Cost per Trip: VTA’s operating cost per trip was the highest of all 10 peer
agencies in each of the nine years. In addition, VTA’s cost per trip increased by 65% over
the period, second only to Sacramento’s increase of 86%.
Passenger Trips per Revenue Hour: The effectiveness of VTA’s service, as measured
by the number of passenger trips per revenue hour, was consistently among the lowest of
the peer group, and second lowest in 2017 and 2018. San Diego, with a lower population
density than VTA’s, achieved almost twice the ridership per hour as VTA in the last five
years. Not surprisingly, San Francisco, with its significantly greater population density,
consistently recorded the highest number of trips per hour.
Farebox Recovery: VTA had the lowest farebox recovery in the peer group for its total
operations since 2012. 2012.
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Table 1 below summarizes VTA’s operating performance in 2017 relative to the peer group.
Table 1 - VTA Operating Performance Versus Peer Group in 2017
Performance Measure
10-Peer
Average Best Worst
VTA
Rating
Service
Effectiveness
Passenger Trips
per Revenue
Hour
34.0
63.8
(SF Muni)
23.4
(Dallas)
24.3
(2nd to last)
Service
Efficiency
Operating Cost
per Passenger
Trip
$5.30
$3.00
(San Diego)
$9.30
(VTA)
$9.30
(Last)
Farebox
Recovery Ratio
21.5%
34.7%
(San Diego)
9.3%
(VTA)
9.3%
(Last)
In short, while all VTA’s peer agencies suffered declines in ridership over the last decade, all but
one of the other agencies were more successful than VTA at controlling increases in costs.
It is important to note that, despite the continuing decline in key operating metrics, between 2016
and 2019, VTA’s operations management has successfully improved performance in a number of
significant areas, including: a 20% improvement in miles between major mechanical schedule loss;
a 24% reduction in passenger concerns (complaints); a 3% improvement in light rail miles between
chargeable accidents; and a 7% improvement in light rail on-time performance. In addition, the
Grand Jury had direct experience utilizing VTA transportation services during our investigation
and observed vehicles that were clean, performance that was generally on-time, and operators who
were friendly and resourceful.
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VTA’s Financial Management
VTA is highly dependent on sales tax for its operating revenue. Currently, sales tax receipts
provide approximately 80% of VTA’s revenue, while farebox revenue provides about 7%.
Remarkably, in an environment of robust population and economic growth, VTA’s farebox
receipts have decreased from $36.2 million in 2009 to $34.5 million in 2018, a decline of 5%.
Over that same period, operating expenses have increased by a staggering 51%. Adding further
pressure to VTA’s revenue stream is the steadily decreasing contribution of federal operating
grants, which peaked at $59 million in 2010 and fell to $3.8 million in 2018.
To address its revenue shortfall, VTA has begun to tap Measure A and Measure B sales tax
receipts, originally earmarked for capital improvements, to help fund transit operations. For 2018
and 2019, the VTA Board approved the transfer of $44 million and $14 million, respectively, of
these funds to supplement VTA’s operating revenue. To further address the shortfall, VTA has
drawn down its reserves to help fund operating deficits.
Given its history of low fare collections, declining ridership and uncertain governmental
assistance, the answer would seem to be increased attention to cost management, with an emphasis
on labor costs, by far the largest component of VTA’s operating expense. However, VTA’s
combined operations and administrative headcount continues to rise each year despite the decline
in ridership. The Grand Jury found the VTA Board has not vigorously addressed these issues
through its budget process by embracing the type of comprehensive cost management strategy that
is called for by the environment of limited resources in which VTA is currently operating.
The 2018-2019 Budget Process
VTA operates on a biennial budget cycle with a budget for the following two fiscal years adopted
in June of each odd-numbered year. The proposed budget is reviewed by the Administration and
Finance Committee and forwarded to the full VTA Board with the Committee’s recommendation.
The proposed 2018-2019 budget, as recommended by a three-to-one vote of the Administration
and Finance Committee in May 2017, showed projected operating deficits of $20 million and $26
million for fiscal years 2018 and 2019, respectively, and similar deficits for subsequent years.
Taking into account the annual need for local funds on the order of $30 million to support VTA’s
capital programs, the total gap between projected revenues and expenses (referred to as a structural
financial deficit) contemplated by the budget was between $50 and $60 million. Compounding the
widening budget gap was the fact that, over the preceding six years, operating expenses had grown
twice as fast as revenues, and VTA had consistently failed to meet its ridership and farebox
recovery projections. For example, in fiscal years 2016 and 2017, VTA’s farebox recovery had
fallen short of budget projections by 7.3% and 18.9%, respectively.
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Nevertheless, rather than undertaking a thorough review of the proposed budget and making hard
decisions regarding meaningful reductions in operating and capital expenses, or even sending the
budget back to the Committee for further study, the VTA Board adopted the budget on June 1,
2017, by a vote of eleven to one, thereby assuring operating deficits for the following two years.
To no one’s surprise, the projected operating deficits materialized and were largely funded by
drawing down VTA’s reserves. Capital reserves, which had stood at $49.5 million at June 30,
2017, had been depleted to $5 million by the middle of the following year.
Ad Hoc Financial Stability Committee
In January 2018, the incoming Chairperson of the VTA Board recognized that some action had to
be taken to address the structural deficit problem, which had become critical. Rather than engaging
the full Board, for example by convening an all-day workshop, to address the problem that the
Board and the Administration and Finance Committee should have been actively monitoring all
along, the Chairperson chose to create an Ad Hoc Financial Stability Committee. The Committee
was chaired by an ex officio member of the Board and included only two actual voting directors.
The Committee then invited a group of approximately 12 “stakeholders” to participate.
Stakeholders included employees, representatives of organized labor and several individuals from
community organizations – each with their own agenda, but none with the fiduciary duty to make
tough policy decisions solely in the best interests of VTA and County taxpayers. As the 2003-2004
Grand Jury report noted, “[i]t is the fiduciary responsibility of the Board, not a committee, a
business lobbying group, or business community leaders, to provide oversight and direction”
regarding VTA’s operations and financial management.
The use of an ad hoc committee was hardly a new concept for the VTA Board. The Board had
historically followed a pattern of waiting for a financial crisis to arise and then appointing an ad
hoc committee. That committee would attempt to deal with the crisis and come up with a fix. In
most cases, the fix would last a few years, relying primarily on new sources of revenue that would
hopefully emerge. However, in any event, the composition of the Board — and responsibility for
dealing with the problem — would have changed. The Board would then realize that another
financial crisis was taking place, and the process would be repeated. Most recently, Ad Hoc
Financial Stability Committees had been formed to deal with financial crises in 2001 and 2010.
The Ad Hoc Financial Stability Committee met sporadically between March and December 2018
to discuss the structural deficit, its implications and potential cost-saving measures. Three of the
nine scheduled meetings were cancelled. At a meeting of the Committee in August 2018, in
response to a question, VTA’s Chief Financial Officer underscored the urgency of VTA’s financial
situation by stating that VTA could continue its operations for no more than 18 to 24 months before
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going “off a cliff.” On June 20, 2018, the Committee held a three-hour workshop to discuss
strategies and solutions to address the budget and structural deficit. During the workshop, the
stakeholders broke out into working groups to consider possible solutions. Although no consensus
was reached, a wide variety of suggestions were made, which were reviewed by the VTA staff and
discussed at subsequent meetings. These recommendations included, among other things,
substantial fare increases, implementation of wage cuts, a hiring freeze, a reduction of fleet size,
and a delay of further capital expenditures on light rail expansion.
At its final meeting in December 2018, the Ad Hoc Financial Stability Committee concluded that
the defeat in November of a ballot measure to repeal fuel taxes and vehicle fees (California
Proposition 6) and the collection of sales tax on out-of-state sales beginning at some unspecified
point in the future (later determined to be April 2019) would infuse additional revenues into the
budget. The fuel and vehicle monies would result in an additional $23 to $27 million per year in
annual revenues. The sales tax would, when implemented, increase revenues by $5.5 million per
year. After these painless fixes, the Committee then addressed the annual structural deficit of
approximately $25 million that still remained by proposing three initiatives:
reducing the proposed increase in bus and rail service hours – not from their actual fiscal
2018 levels, but from the even higher levels originally budgeted for fiscal year 2019 as a
part of VTA’s Next Network program – saving approximately $15 million annually;
a fare increase indexed to inflation, saving approximately $2 million annually (which was
subsequently deferred until 2021); and
a voluntary early-retirement program projected to save another $1 million annually.
After six meetings over a nine-month period (including the three-hour workshop) involving three
directors and a dozen stakeholders, as well as untold hours of VTA staff support time, the Ad Hoc
Financial Stability Committee recommended a total of only $18 million in projected cost savings
to address the remaining $25 million deficit target, leaving a $7 million gap unaddressed. Several
serious cost-cutting measures brought forward at the workshop were not actively considered. At
its meeting, on December 6, 2018, the VTA Board unanimously accepted the recommendations of
the Committee, and the Committee stood down.
By any measure, the VTA Board’s oversight of the agency’s financial affairs, as exemplified by
its adoption of the 2018-2019 budget and the handling of the built-in structural financial deficit,
has been weak and ineffective. The inability of the VTA Board to meaningfully address the deficit
can be attributed, in part, to the lack of financial expertise on the Board, a lack of preparation and
engagement on the part of some directors — exacerbated by the delegation of the problem to the
Ad Hoc Financial Stability Committee — and the VTA Board’s inability or unwillingness to deal
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with controversial and politically-charged topics such as labor costs and expensive capital
programs.
The 2020-2021 Budget Process
The VTA Board will consider VTA’s proposed biennial budget for fiscal years 2020 and 2021 at
its meeting on June 6, 2019. The proposed budget shows net surpluses of approximately $2 million
in 2020 and $4 million in 2021. However, the proposed budget does not take into account the
outcome of pending labor negotiations with the Amalgamated Transit Union (ATU) that have been
ongoing since August 2018. VTA has reported that its current proposal to the ATU, if accepted,
would result in a total additional cost of $30.9 million over the next three years. Since the VTA's
proposal is the best possible outcome of the negotiations, the budget understates expenses and
virtually assures continuing deficits. Other risks acknowledged in the budget could further increase
these deficits.
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The Extension of Light Rail Service to Eastridge
Light Rail in the United States
Light rail transports people using electric motive power and light-weight rails (hence the name).
Light rail transit (LRT) systems, originally called trams or trolleys, evolved in the early 1900s to
move employees to businesses and industries located in downtown or central business districts.
They were less expensive to build than traditional heavy railway systems, and the cars were
likewise less expensive to build and operate.
In the late 1960s, private transportation companies, including those that operated LRT systems,
began to struggle financially and subsequently were transitioned to public ownership with the
expectation that better public transport could be achieved using a mix of city, state and federal
funding.
LRT systems in the United States have not met the original expectations of transit planners or the
public. Coupled with the downward trend of public transit ridership and expanding infrastructure
regulations, LRT systems have experienced ever-increasing installation and operations costs. Due
in part to its high costs and fixed routes, light rail is now viewed by many industry experts as a
technology whose time has passed. In October 2017, Randal O’Toole, a senior fellow with the
Cato Institute and a recognized expert in light rail policy analysis, recommended the following: 8
“First, transit agencies should stop building rail transit. Buses made most rail transit
obsolete nearly 90 years ago. Buses can move more people faster, more safely, and for far
less money than light rail, meaning light rail was obsolete even before San Diego built the
nation’s first modern light-rail line in 1981.” …
“Second, as existing rail lines wear out, transit agencies should replace them with buses.
The costs of rehabilitating lines that have suffered from years of deferred maintenance is
nearly as great as (if not greater than) the cost of building them in the first place.”
Cities whose densities and post-automobile development sprawl aren’t particularly suitable for
efficient light rail service have begun to reexamine the viability of constructing, operating and
maintaining expensive light rail systems. For example, in March of this year, the Phoenix City
Council voted to delay and likely kill an ambitious expansion of its existing light rail system.
Calling it a “train to nowhere,” city leaders determined that the reallocation of capital funds from
light rail to an expansion of a flexible bus system and the repair of a deteriorating road system
would be a better use of the taxpayers’ money and have a more positive impact on transit
8 “The Coming Transit Apocalypse”, Randal O’Toole, Cato Institute, October 2017
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effectiveness.9 A Phoenix Arizona initiative measure that will be on the ballot in August 2019
proposes to halt six additional light rail extension projects that were previously approved by the
Phoenix voters in 2015 and forbid the city from funding any other future light rail extensions.10
VTA’s Light Rail System
Santa Clara County’s LRT system, first proposed in the early 1980s, was conceived as a loop
connecting to a future integration of Bay Area Rapid Transit (BART) and the San José Airport
with transfer points throughout the County with feeder lines to support access to and from the loop
to business and residential areas. The intent was to transport large numbers of residents quickly
— at upwards of 55 mph — and cost-efficiently to and from jobs, entertainment and shopping,
and to link San José and Santa Clara County with the entire BART system. As funding issues
arose and interest group views emerged, the loop concept was abandoned in favor of direct spoke-
like connections between downtown centers (e.g., San José) and various residential and business
areas.
VTA’s LRT began service in December 1987 with a 6.8-mile corridor between Santa Clara and
downtown San José. An additional 14.3 miles were added by 1991 in 5 separate extensions (under
the auspices of the SCCTD). VTA then followed with 4 more extensions: into Mountain View
(1999), Milpitas (2001), East San José (2004) and the last corridor, Diridon to Winchester,
completed in October 2005. The ultimate construction cost of this system was almost $2 billion.
Today, VTA operates a 3-line LRT system consisting of 42 route miles, 61 stations and 21 park-
n-ride lots. Due to unprecedented declines in revenues beginning in 2008, the implementation
plan for further light rail expansion was modified to provide for construction of additional
extensions in phases. Two significant extensions, to Eastridge and Vasona Junction, remain under
consideration by VTA.
Overly optimistic ridership projections justified the construction of the $2 billion light rail system
in an environment that did not have the trip densities necessary to support this mode of transit. The
federal government had its own doubts and initially did not approve funding, thereby creating the
necessity of funding the project, in part, with local tax measures.
As suggested above, the design and layout of the VTA LRT system deviated from the initial
concepts, largely driven by political and financial considerations rather than strategic decisions.
Despite the high capital costs of the system, the airport remains inaccessible directly via light rail,
there is uneven access to jobs, entertainment and shopping, and operating speeds are far below
9 “Phoenix Votes to Delay, Likely Kill, West Phoenix Light-Rail Line", Jessica Boehm, Arizona Republic, March 21,
2019
10 “Phoenix Voters Could Kill Light Rail to These 6 Neighborhoods”, Jessica Boehm, Arizona Republic, April 15,
2019
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those expected or technically feasible. VTA LRT has been in operation for over 30 years but
continues to underperform in effectiveness and ridership.
VTA LRT Operational and Financial Challenges
Since its inception, VTA’s light rail system has struggled with operational and financial
inefficiencies caused by low ridership and high operating costs. Despite a vibrant local economy
with burgeoning job growth and population expansion, the public’s interest in and utilization of
light rail has deteriorated. Over the past ten years, light rail ridership has declined by 21% and,
currently, fewer than 1% of Santa Clara County residents regularly utilize light rail. During the
same period, the farebox recovery ratio for light rail has declined 36%. In just the past five years,
light rail ridership has declined 15% while operating expenses have increased 54%. Meanwhile,
VTA has continued to increase capacity without a corresponding demand for its product, resulting
in higher operating costs of which less than 8% is covered by fare revenue. Put more bluntly, the
taxpayers pay for more than 92% of the LRT system’s operating costs. VTA has failed to
accurately estimate the ongoing operating and capital costs of maintaining the light rail system, a
fact that has led, in part, to its recurring financial deficits.
Table 2 below outlines metrics comparing operations of VTA’s light rail system versus its peers
(using 2017 NTD data) that reveal its poor performance, including:
Cost per Passenger: Highest among peers ($11.61)
Subsidy per Passenger Trip: Highest among peers ($10.73)
Operating Cost per Hour: Highest among peers ($487.58)
Farebox Recovery Ratio: Lowest among peers (7.6%)
Passenger Trips: Lowest among peers (9.1 million miles)
Passengers Boarded per Hour: Second lowest among peers (42)
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Table 2 - VTA Light Rail Peer Statistics (2017)
Legend: Ms = value in millions
Worst in peer group
2nd worst in peer group
In light of the VTA LRT system’s intrinsic design issues, unacceptably slow speeds in portions of
its routes, extremely high operating costs and the lack of ridership and revenue to support those
costs, a case can be made for dismantling or phasing out the light rail system altogether. At a
meeting of the CPC on March 28, 2019, a member of the VTA staff responded to a question from
a Board member by confirming that operating costs could be cut in half and farebox recovery
doubled if a bus-only system were deployed. In fact, light rail operating expenses are closer to
three times the cost of bus operations, but the point remains that a large reduction in the taxpayer
subsidy of VTA operations could be achieved by focusing future investment in transit solutions
other than light rail, as Phoenix has decided to do. One director noted at the March 28, 2019 CPC
Peer Agency
Name
Service
Area
Population
Route
Miles
Fare
Revenue
Earned
($Ms)
Total
Operating
Costs
($Ms)
Farebox
Recovery
Ratio
Operating
Cost per
Hour
Boardings
per Hour
Passenger
Trips
(Ms)
Cost per
Passenger
Revenue
per
Passenger
Subsidy
per
Passenger
Santa Clara
VTA 1,664,496 42.2 $8.06 $106.0
7.6%
$487.58
42
9.1
$11.61 $0.88
$10.73
Sacramento
Regional
Transit
District 1,723,634 42.9 $14.80 $67.8 21.8% $272.55 46 11.4 $5.93 $1.29 $3.64
Dallas Area
Rapid Transit 5,121,892 93 $27.71 $175.2 15.8% $356.20 61 29.9 $5.84 $0.92
$4.92
Denver
Regional
Transportation
District 2,374,203 58.5 $38.16 $115.2 33.1% $145.09 31 24.6 $4.67 $1.55
$3.12
San Francisco
Municipal
Railway 3,281,212 36.8 $39.22 $213.8 18.4% $368.95 88 50.9 $4.19 $0.77
$3.42
Houston
Metropolitan
Transit
Authority 4,944,332 22.7 $5.97 $65.2 9.2% $227.04 63 18.3 $3.56 $0.33
$3.23
Portland Tri-
County
Metropolitan
Transportation
District 1,849,898 60 $49.38 $138.8 35.6% $222.51 63 39.7 $3.49 $1.24
$2.25
Salt Lake City
Utah Transit
Authority 1,021,243 44.8 $17.97 $64.7 27.8% $180.35 52 18.8 $3.44 $0.95
$2.49
Minneapolis
Metro Transit 2,650,890 23 $24.14 $70.9 34.0% $166.23 55 23.8 $2.98 $1.01
$1.97
San Diego
Metropolitan
Transit
System 2,956,746 53.5 $38.97 $82.5 47.3% $168.24 76 37.6 $2.19 $1.04
$1.15
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meeting, “We have to really broaden our thought process with regard to light rail. The worst
position that VTA can get into is being the last transit agency to be deploying an old technology.”
The Eastridge LRT Extension
Although operating statistics demonstrate the high cost and inefficiency of light rail as a mode of
transportation, the VTA Board has continued to consider construction of two additional light rail
extensions that would require additional capital outlays in the hundreds of millions of dollars.
These two extension projects, to Vasona Junction and the Eastridge Transit Center, have been in
the planning stage for years, have been the subject of countless VTA staff studies and reports and
have been considered by the Board and its committees, particularly the CPC, at numerous
meetings. Finally, at its meeting on March 28, 2019, the CPC approved placing the Vasona project
on an indefinite hold, based on its capital costs, high operating costs and projected ridership that
failed to meet VTA’s minimum criteria for a new project. However, the Eastridge project remains
alive.
The proposed Eastridge light rail extension is part of a two-phase project. Phase 1 of the project,
which included conceptual design, pedestrian and bus improvements, and improvements of the
Eastridge Transit Center, has been completed. Phase 2, which is now referred to as the Eastridge-
BART Regional Connection, or EBRC, would add a 2.4-mile rail line and related infrastructure
connecting the Alum Rock Station and the Eastridge Transit Center. In the original design, most
of the rail extension was to have been constructed at street level on Capitol Expressway. The
design was subsequently changed to an elevated track above the roadway for the entire 2.4 miles
at an estimated additional cost of $75 million, which would enable the trains to run at higher
speeds. The total cost of the project, which was originally estimated at $377 million, is now
projected to be $599 million, of which $146 million has been spent on Phase 1, and $453 million
would be spent on Phase 2 ($13 million has been spent to date on design and other preparatory
work). If Phase 2 is continued, work is currently estimated to be completed in 2025.
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Table 3 below outlines the cost and status of the Eastridge project*:
Table 3 - Eastridge (EBRC) Phases, Costs and Status
Project Cost Sub-total
Cost
Status Notes
Concept $11M Completed
Original Construction $56M Completed
Phase 1 – pedestrian improvements $19M Completed
Phase 1 – bus improvements $60M Completed Eastridge Transit Center
Phase 1 sub-total - $146M
Phase 2 – EBRC various
studies/design
$13M Initial design
work
completed
Phase 2 – EBRC completion
(2023-25)
$440M Under
review
Does not meet minimum
operations criteria until well after
2025
Phase 2 sub-total - $453M Plus $2-3M per year in new
operational costs
Project total - $599M Costs almost $250 million/mile
*Data from VTA CPC Agenda Packet item #7, pages 36 and 37, dated March 28, 2019 and updates presented in the
Board of Directors meeting on April 4, 2019.
The VTA Board has considered various aspects of the Eastridge project more than 20 times since
2000. Each time, the Board has made a decision that allowed work on the project to continue,
often kicking the ultimate decision on the fate of the project down the road by noting that its current
decision was not the final word on the project and that there would be opportunity for further
consideration of the project and final approval at a future date.
For example, at its meeting on May 3, 2018, the Board considered the viability of the light rail
extension to Eastridge. After a lengthy discussion, the Board approved a funding strategy for
proceeding with the project, but the Chairperson noted that there would be still more decision
points at which the project could again be considered by both the CPC and the full Board. At the
same time, the Board approved a resolution authorizing a staff study of alternatives to light rail for
the Eastridge extension. VTA staff has confirmed that, a year later, this study still has not been
completed.
At the March 28, 2019 meeting of the CPC (at which the Committee agreed that the Vasona
Junction extension should be put on hold), Phase 2 of the Eastridge project was again considered.
At the meeting, the Mayor of San José, serving as Chairperson of the Committee, asked the
following question, “Is the current light rail system one we want to continue to invest in? Our
ridership is challenged. Our cost-effectiveness system-wide is 10% on farebox return [it is actually
less than 10%]. That 10% is already among the very lowest in the nation in terms of farebox
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return, and light rail actually hurts us. The question is: what does the process look like for us to
be re-evaluating the entire system to see if we want to start thinking differently about the entire
light rail system? I hate to think we are doubling down on a failed system.” Another committee
member echoed that sentiment, noting, “We have to choose our transportation modes in a cost-
effective and efficient manner. I support to do additional evaluation of what is needed for that
corridor. The train has not left the station on Eastridge.” Yet, after a lengthy discussion about
an overall re-evaluation of light rail before proceeding with the Eastridge extension, no concrete
action was taken in that direction, and both of these directors joined with a third to support a motion
to move forward with the project and kick the ultimate decision down the road yet again. The vote
was three to two in favor of the motion, but it failed for lack of the required four aye votes needed
to pass.
The fate of the Eastridge extension project is now once again in the hands of the VTA Board, and
its final resolution will be a test of the Board’s leadership. The issue will be considered by the
Board again at its meeting on June 6, 2019. Although the subject of the extension was not on the
agenda at the Board’s May meeting, the Mayor of San José signaled his intentions. Despite the
comments he made at the March CPC meeting, the Mayor stated, “I will vote to proceed
immediately with the construction of the Eastridge transit project when it comes before the VTA
Board in June. I expect we will move forward without delay.” The investigation of the Grand Jury
report was completed on May 29, 2019, and this report does not reflect any actions taken at the
June 6, 2019 meeting.
As pointed out above, the remaining capital cost to complete the 2.4-mile extension is currently
estimated at $453 million, or almost $189 million per mile. According to most recent staff
projections included in the May 2019 EBRC Supplemental Environmental Impact Report (SEIR),
the new light rail extension would attract approximately 611 11 new riders (net of a reduction in bus
ridership on the existing bus lines that run parallel to the proposed rail extension) by 2025.
Therefore, the additional capital cost would be equal to approximately $720,000 for each new rider
in the first year of service. Once completed, the Eastridge extension would become part of an
outmoded light rail system that is one of the most expensive and heavily subsidized LRT systems
in the country, with declining ridership and operating costs more than double the cost of bus
operations. The extension, upon completion, is projected to have a miniscule impact on transit
usage in the East San José/Milpitas corridor over the next 24 years (i.e., an increase of only 0.07%
by 2043 and just over half that when service begins).12 Moreover, the current design permanently
removes two existing high occupancy vehicle (HOV) lanes from the Capitol Expressway, without
any foreseeable commensurate reduction in automobile traffic, a fact that may not be widely
11 EBRC SEIR, May 2019, page 71, Table 5.1-11. http://vtaorgcontent.s3-us-west-
1.amazonaws.com/Site_Content/EBRC_Vol1_FSEIR-2%20(1).pdf
12 EBRC SEIR, May 2019, page 72
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understood in the East San José community. As noted in the SEIR, “[t]he proposed removal of the
HOV lanes would result in higher average automobile delays and higher automobile travel times
on Capitol Expressway.”13 Further, despite claims that the Eastridge Transit Center is among the
busiest in the VTA system, there is an average of only seven riders per bus trip into and out of that
center.
Based on our interviews, the Grand Jury has found virtually no support for the project among the
VTA staff, although they continue to move the project forward in compliance with incremental
policy decisions made by the VTA Board.
The argument supporting the Eastridge extension is essentially political. The extension was one
of 13 transportation improvement projects envisioned by Measure A and passed by the voters in
2000. For various reasons, most related to budget challenges brought about by the dot com
“bubble” in the early 2000s and the later economic recession, the implementation of the Eastridge
project has been delayed, along with some of the other Measure A projects. In the interim, the
once-promising LRT system has become technically outmoded and increasingly expensive.
Yet, proponents of the extension, including powerful political forces, contend that the periodic,
incremental approvals of the project by the VTA Board that have kept the project alive over the
years have reinforced a “promise” to complete it, even though the VTA Board has both the right
and the duty to re-evaluate capital projects when they are no longer viable. Proponents also
contend that completion of the project is a matter of “economic equity,” balancing the needs of a
relatively low-income, transit-dependent area of Santa Clara County with the type of transit
services provided elsewhere in the County (although, as noted above, the Vasona Junction project
that was to have served the Los Gatos area was recently put on hold).
The challenge to the VTA Board, in the exercise of its fiduciary duties to the taxpayers and transit
users of the County, is to address such questions as:
Can any further investment in VTA’s present LRT system be justified, much less one that
will cost $720,000 for each prospective new rider?
Does the proposed Eastridge extension meet VTA’s standards for new transit projects,
including minimum projected ridership criteria?
Before proceeding with the project, should the Board undertake a thorough review of the
light rail system and its future as a mode of transportation in Silicon Valley, as suggested
by members of the CPC?
13 Ibid, page 72
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Can the recognized needs of the residents of East San José for modern, efficient public
transportation be better served by an alternative to the proposed Eastridge light rail
extension?
VTA should aspire to take an industry-leading role in the future of public transportation,
commensurate with the role of Silicon Valley as a worldwide leader in technology and innovation.
Whether the VTA Board is able to put aside local political considerations and answer these
questions based on the interests of all the taxpayers and residents of Silicon Valley will say much
about its effectiveness as a policy-making body and whether VTA will be able to achieve such
leadership aspirations.
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Designing a More Effective Structure for the VTA
There are countless variations in models for governing a regional transit agency, and there is no
perfect structure that fits all situations. Even when transit agencies set out to reorganize their own
governance structure in response to acknowledged defects, they realize they must choose among
alternative structures having both advantages and disadvantages.
Virtually all the individuals interviewed by the Grand Jury, including directors and senior staff,
agreed that VTA could benefit from a more knowledgeable and engaged Board of Directors that
is more sharply focused on VTA’s role as a regional transit agency and less on local political
interests. However, there is less consensus on how best to achieve that goal. Nevertheless, it is
useful to examine some of the variable features of alternative governance structures, how they
have been implemented by other transit agencies and how changes to the structure of VTA’s
governance might result in a more effective Board.
Number of Directors
The VTA Board has 12 voting members. As pointed out in the 2003-2004 Grand Jury’s report,
the VTA Board is larger than the boards of many regional transit agencies. Alameda County
Transit (AC Transit) and BART, for example, have boards of seven and nine members,
respectively, while two other transit agencies in California have five-person boards. However,
transit agency boards across the country range widely in size, from as few as five to more than 20.
The agency serving Dallas/Fort Worth, for example, has a 15-person board, while the Phoenix and
Salt Lake City transit agencies each has a 16-member board. The 2003-2004 Grand Jury Report
concluded that a smaller Board, of five to seven members, “would be more involved in and
accountable for the financial and operational management of VTA.” Some current members of the
VTA Board agree that a smaller Board would be preferable, although others disagree. While the
current Grand Jury agrees that reducing the size of the Board might result in more focused
decision-making, a reduction in Board size, in and of itself, would not address fundamental issues
of lack of experience, inadequate continuity, competing time commitments and conflicts of interest
between VTA and local priorities. Accordingly, a reduction in the size of the VTA Board should
only be considered in conjunction with other structural changes that directly address these key
issues.
Term of Service
VTA directors serve for terms of two years. Although some directors serve more than one term
(often consecutive), directors whose positions rotate among groups of smaller cities generally do
not serve consecutive terms. Furthermore, a director’s term can be cut short if the director ceases
to serve in his or her elected position.
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The term of service for directors of regional transit agencies in California and other larger
metropolitan areas generally ranges between two and four years, with three and four-year terms
being common. In California, for example, directors of BART, AC Transit and transit agencies
serving Santa Barbara, Stockton and Bakersfield serve four-year terms. Directors of agencies
serving Austin and Vancouver, B.C. serve for three years. In an independent review of the agency
serving Vancouver, a Governance Review Panel concluded that “longer-term decision-making
requires a minimum of three-year terms,” although the panel also recommended that members not
be allowed to serve more than six consecutive years in order to vary the “mix of management,
finance, legal and other skills to match [the agency’s] changing needs over time.”14
Among the individuals interviewed, there was substantial support for longer terms to provide
additional time for directors to become knowledgeable about VTA’s operations and transit issues,
to participate in more than one budget cycle and to participate more effectively in the Board’s
long-term planning function. In addition, lengthening the term of service would mitigate the
advantage currently enjoyed by representatives of San José and Santa Clara County, who typically
serve substantially longer terms than the representatives of the smaller city groups and dominate
the Board, in part, as a result of their greater experience. Not all interviewees agreed, however.
One made the point that, if a director is unqualified in the first place, a four-year term would just
mean that the Board would be burdened with an unqualified member for twice as long.
Additionally, since under the current structure a director’s term ends when he or she leaves elected
office, a four-year term is more likely than a two-year term to be cut short, lessening to some
degree the impact of a change to a longer term. Nevertheless, extending the term of VTA directors
to four years would increase the average term of Board service and, accordingly, would provide
some valuable experience and continuity to the Board and enhance the influence of the smaller
cities. Likewise, establishing term limits or limits on total years of service would mitigate the
dominance of San José and the County and allow the Board to evolve over time to meet its
changing needs.
As described above, the PUC specifies the annual election of the Board’s Chairperson and Vice
Chairperson. The VTA Administrative Code provides that the election of the two officers shall be
conducted at the last meeting of the calendar year, when practical, and that they shall serve for the
ensuing calendar year.15 The Administrative Code also specifies that the two positions shall be
rotated annually, according to a fixed schedule, among representatives of San José, Santa Clara
County and the smaller city groups16.
There was considerable support among the persons interviewed for extending the Chairperson’s
term from one to two years. As pointed out above, because VTA operates on a June 30 fiscal year,
14 “TransLink Governance Review", TransLinK Governance Review Panel, January 26, 2007, page 22
15 VTA Administrative Code Section 2-26
16 Ibid
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the Chairperson’s calendar year term of service straddles two fiscal years, disconnecting the
Chairperson from the budget process and accountability for operating and financial results. He or
she inherits one annual budget in mid-stream and serves only halfway through another.
Lengthening the Chairperson’s term would help address this problem by allowing the Chairperson
to oversee VTA’s financial performance for at least one full fiscal year. Coordinating the term of
the Chairperson with the agency’s June 30 fiscal year would further connect the Chairperson with
VTA’s budget process and the oversight of its financial performance. Similarly, reviewing the
VTA General Manager’s performance on a fiscal year rather than a calendar year basis would also
improve direct accountability for the organization’s performance to budget.
Direct Election of Directors
Under the current governance structure, members of the VTA Board are appointed to serve by the
jurisdictions they represent, either through direct appointment by a mayor or city council or, in the
case of the groups of smaller cities, by arrangement among the cities. As pointed out above, as
originally proposed by the County Board of Supervisors, the VTA Board would have been
composed of a combination of five directly elected members and 11 appointed members.
Although the direct election of directors of transit agencies is not common in California, there are
exceptions, including BART and AC Transit, both of which have directly elected directors serving
four-year terms. Other regional public bodies use a direct election model for some or all their
directors. The Santa Clara Valley Water District (SCVWD), for example, has a board of seven
directors, directly elected by supervisorial district.
Benefits of an elected board include direct accountability to the public and the directors’ increased
focus on the affairs of the agency as their primary, rather than secondary, public service
responsibility. Direct election would also eliminate the possibility of directors’ terms being
shortened when they cease to serve in their elected position. In theory at least, candidates who
serve on an elected board also would be more likely to have an interest in and commitment to
public transportation issues than would appointed directors. On the other hand, directly elected
VTA Board members, like other elected officials, may tend to have a parochial view if they are
elected to represent specific districts or municipalities, so the goal of encouraging a regional view
of strategic planning responsibilities might not be fully realized.
Some interviewees supported changing to a direct election model for the VTA Board, based on the
potential benefits noted above. Others, however, did not favor such a change. Several pointed out
what they perceived to be a lack of effectiveness of the BART Board of Directors as evidence that
the change would not be worthwhile. Others noted that moving to a direct election model would
be complicated, politically difficult and costly – again, not justifying the change. One interviewee
observed that, at the end of the day, voters pay very little attention to the direct election of directors
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of governmental agencies, noting that many voters do not even know that an agency like SCVWD,
for example, even exists, much less who its directors are.
Appointed Directors Who Are Not Elected Officials
Like VTA, many regional transit districts have boards consisting exclusively of elected officials
representing the constituent communities making up the district. In at least three California transit
agencies (those serving Santa Barbara, San Francisco and Stockton), the appointed boards of
directors include interested citizens who are not currently serving as elected officials, and the
enabling legislation of another transit district, serving the Bakersfield area, specifically provides
that elected officials are not eligible for appointment as members of the Board. Transit agencies
whose directors are not current elected officials are not uncommon in other parts of the country.
Examples of transit agencies with appointed boards that do not include elected public officials are
those serving Houston, Austin, Vancouver, B.C. and Toronto.
The flexibility to appoint non-politicians to serve on the board of a transit agency allows the
appointing authority to select directors having a wide range of business, financial and
transportation-related experience with a mandate to serve non-politically and make evidence-
driven policy decisions based on demonstrated need and financial feasibility. The Houston
Metropolitan Transit Authority (HMTA), for example, has a board of nine members, five of whom
are appointed by the Mayor of Houston, two by the Harris County Commissioners Court and two
by the mayors of other cities in its service area. The Board of the HMTA currently includes a
retired lawyer, a certified public accountant, a banker, executives of large companies and experts
on infrastructure, construction and budget management.
Partially offsetting the benefits of removing elected public officials from a transit agency’s
governance structure are concerns of accountability. The level of commitment of non-elected
directors to their local communities’ views on transit policy and priorities, including land use and
development, is uncertain. However, some senior VTA staff and directors feel that the staff gets
little support from VTA Board members in connection with VTA’s dealings with city governments
on these issues.
Some transit districts have chosen to balance the benefits of a predominantly non-political
governing board with some participation by elected officials. For example, the board structure of
the transit agency serving the Austin area was revised in 2011 from 100% elected officials to a
mix of two elected officials and five non-politicians, with the City of Austin, the largest participant
and underwriter of the system, having a predominant say in the appointments. The enabling
legislation went a step further and specified that one appointed member of the board must have at
least 10 years of experience as a financial or accounting professional and another must have at
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least 10 years of experience in an executive-level position in a public or private organization.17 As
one commentator noted at the time the legislation was proposed, “What the board would lose in
elected officials, it would presumably gain in knowledge.”18
In 2011, the Legislative Auditor of the State of Minnesota issued an evaluation report that analyzed
various governance structures for the agency principally responsible for the Twin Cities’ transit
system, as potential alternatives to the existing structure under which all members of the governing
council are appointed by the governor. After analyzing and comparing various structures,
including the existing appointment system and the direct election of council members, the Auditor
concluded that the optimal model would be a combination of appointed and elected officials that
“would provide the Council with an effective mix of regional and local perspectives.”19
Silicon Valley offers an unparalleled pool of talented individuals, including entrepreneurs who
have introduced cutting-edge technologies, products and services, as well as countless experts with
leadership experience in finance and executive management of large organizations. Current and
retired leaders of Silicon Valley companies and organizations have made numerous contributions
in support of a wide range of community activities, including the arts, healthcare, education and
other civic and charitable endeavors. Surely, appointing authorities could identify qualified public
sector leaders who would be willing to serve on the VTA Board, and VTA would benefit from
their knowledge and experience.
17 Texas Transportation Code Section 451.5021(b)
18 "What's Wrong With Cap Metro...and What's Right", Lee Nichols, Austin Chronicle, April 24, 2009
19 "Governance of Transit in the Twin Cities Region", Office of the Legislative Auditor, January 2011, page 44
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CONCLUSIONS
VTA is a complex, multi-billion-dollar enterprise. In addition to operating a large transit system,
VTA has responsibility for county-wide transportation planning, including congestion
management, the design and development of highway, pedestrian and bicycle improvement
projects and the promotion of transit-oriented development.
VTA is governed by a part-time Board of Directors composed solely of elected public officials,
each of whom is burdened by the obligations of his or her office and subject to local political
interests. A few of the directors have served for many years, but others have served for less than
two. Appointees to the VTA Board often have little or no previous experience with transportation,
finance or leadership of a large organization, let alone one the size of VTA.
Today, VTA faces a series of challenges which, taken together, can be fairly characterized as a
crisis. The following challenges, among others, must be addressed by the VTA Board:
Year after year, VTA operates one of the most expensive and least efficient transit systems
in the country. Empty or near-empty buses and light rail trains clog the County’s streets
but are used regularly by fewer than 5% of the County’s commuters. Operating costs
increase continuously, and taxpayers subsidize 90% of these costs, to the tune of about
$5.50 per rider for each bus trip and $10.75 per rider for each light rail trip.
VTA veers from one financial crisis to another. In June 2017, the VTA Board adopted the
2018-2019 biennial budget and consciously approved a built-in structural financial deficit
of $50 to $60 million per year. In January 2018, an ad hoc committee of the VTA Board
was formed to deal with the crisis caused by the budget deficit. In August 2018, VTA’s
Chief Financial Officer advised the committee that the agency was 18 to 24 months away
from going “off a cliff.” At the end of 2018, the ad hoc committee made weak and only
partially effective recommendations to address VTA’s structural financial deficit and
didn’t seriously consider such important but politically sensitive topics as reductions in
employee headcount or the scrapping or deferral of large capital projects.
Light rail ridership is declining steadily throughout the country. Experts have pronounced
the early twentieth century concept of light rail transit obsolete, and other regional transit
agencies are contemplating abandoning light rail system extensions. VTA, however,
continues to move forward with an extension of its light rail system — one that currently
has among the highest operating costs and lowest ridership in the country. The remaining
capital cost of the proposed 2.4-mile Eastridge extension project is currently estimated at
$440 million, representing approximately $720,000 for each new rider that the staff
estimates will actually use the extension during the first year of its operation. The project
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makes no financial sense and survives only because powerful political forces continue to
support it. VTA needs to carefully consider whether the recognized needs of the residents
of East San José for modern, efficient public transportation can be met without “doubling
down on a failed system,” as one director put it, and worsening VTA’s precarious financial
condition.
Although a detailed review of the long-pending BART to Silicon Valley project was
beyond the scope of the Grand Jury’s inquiry, a number of our interviewees, including
senior VTA staff and members of the VTA Board, noted its importance to the future of
VTA. VTA’s proposed fiscal years 2020-2021 capital budget calls for a staggering $713.5
million in Measure A and Measure B tax funds for the BART Phase 2 project. The
operating agreement between VTA and BART remains in negotiation, and several of our
interviewees expressed concern that important issues regarding the sharing of system-wide
capital and operating costs remain unresolved and that such costs could fall
disproportionately on VTA. One director expressed the opinion that BART-related cost
control issues are more significant for VTA than those related to the Eastridge light rail
extension. A senior staff member stated unequivocally that “BART is going to bankrupt
VTA.” An interested stakeholder similarly predicted that BART “will be the demise of
VTA.” Whether or not these assessments are accurate, it is clear that the financial health
of VTA is dependent on the success of BART in the South Bay Area. That success is
dependent, in turn, on VTA effectively implementing BART Phase 2 and meeting its
ridership and revenue goals.
VTA’s operating territory is the Silicon Valley – the world’s leading center of innovation and
cutting-edge technology. Several of VTA’s key staff members have noted that they had joined
VTA in the hope that VTA would take an industry-leading role in the future of transportation,
commensurate with the role that companies and other institutions in the Silicon Valley have taken
in the introduction of all manner of new products, technologies and services. Yet, little such
innovation has been evident at VTA in recent years. In fact, as noted above, VTA seems to be
“doubling down” on old technology. At the Board’s recent workshop on “The Future of
Transportation in Silicon Valley,” the directors present (two-thirds of the voting members and half
of the alternates) seemed to recognize this problem and unanimously agreed that VTA needs to
make “radical changes” in the way it provides its services.
If VTA is going to meet the many challenges it faces, the VTA Board will have to make good on
its commitment to radical change. So, the question becomes, is the Board capable of making the
policy decisions and providing the strategic oversight necessary to accomplish such change? The
Grand Jury has concluded that, as presently structured and operated, that level of capability does
not appear to be present. Accordingly, the Grand Jury recommends a number of changes in the
structure of the VTA Board and in the way directors are selected, trained and evaluated that it
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believes will assist VTA in addressing its many challenges and achieving its aspiration of
becoming a leader in the transportation industry.
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FINDINGS AND RECOMMENDATIONS
Finding 1
The VTA Board, currently made up exclusively of elected officials from the Santa Clara County,
Board of Supervisors, the City of San José and the other smaller cities in the County, suffers from:
A lack of experience, continuity and leadership;
Inadequate time for the directors to devote to their duties to the VTA Board due to their
primary focus on the demands of their elected positions;
A lack of engagement on the part of some directors, fostered in part by the committee
system, resulting in VTA functioning largely as a staff-driven organization;
Domination, in terms of numbers, seniority and influence, by representatives of the Santa
Clara County Board of Supervisors and the City of San José; and
Frequent tension between the director’s fiduciary duties to VTA and its regional role, on
the one hand, and the political demands of their local elected positions, on the other.
Recommendation 1a
VTA should commission a study of the governance structures of successful large city
transportation agencies, focusing on such elements as: board size; term of service; method of
selection (directly elected, appointed or a combination); director qualifications; inclusion of
directors who are not elected officials; and methods of ensuring proportional demographic
representation. This study should be commissioned prior to December 31, 2019.
Recommendation 1b
As the appointing entity with an interest in the transit needs of all County residents, the County
of Santa Clara should commission its own study of transportation agency governance structures,
focusing on the elements listed in Recommendation 1a. This study should be commissioned prior
to December 31, 2019.
Recommendation 1c
As constituent agencies of VTA, each of the cities in the County should prepare and deliver to
VTA and the County Board of Supervisors a written report setting forth its views regarding VTA
governance, with specific reference to the elements listed in Recommendation 1a. These reports
should be completed and delivered prior to December 31, 2019.
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Recommendation 1d
Within six months following the completion of the studies and reports specified in
Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other
constituent agencies, should propose enabling legislation, including appropriate amendments to
Sections 100060 through 100063 of the California Public Utilities Code, to improve the
governance structure of VTA (which potentially could include an increase in the directors’ term
of service, the addition of term limitations and the inclusion of appointed directors who are not
currently serving elected officials).
Recommendation 1e
In order to provide more continuity in the leadership of the VTA Board, within six months
following the completion of the studies and reports specified in Recommendations 1a, 1b and 1c,
the County of Santa Clara and/or one or more of VTA’s other constituent agencies, should propose
enabling legislation amending Section 100061 of the California Public Utilities code to provide
that the Chairperson of the VTA Board shall be elected for a term of two years rather than one.
Recommendation 1f
Prior to December 31, 2019 and pending changes contemplated by Recommendation 1e, VTA
should adopt a policy of routinely reappointing an incumbent Chairperson for a second one-year
term at the end of his or her initial term, absent unusual circumstances.
Recommendation 1g
In order to better connect the Chairperson with the budget process and accountability for operating
and financial results, prior to December 31, 2019, VTA should amend Section 2-26 of the VTA
Administrative Code to provide that the Chairperson and Vice Chairperson shall serve terms
coinciding with VTA’s fiscal year ending June 30, rather than the calendar year.
Finding 2
The California Public Utilities Code, the VTA Administrative Code and the Guidelines for
Member Agency Appointments to the VTA Board of Directors adopted by the Governance and
Audit Committee of the Board (Guidelines) all contain provisions requiring that, to the extent
possible, the appointing agencies shall appoint individuals to the VTA Board who have expertise,
experience or knowledge relative to transportation issues. Nevertheless, appointees to the VTA
Board often lack a basic understanding of VTA’s operations and transportation issues, generally.
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Recommendation 2
In order to help assure that individuals appointed to serve on the VTA Board have the appropriate
qualifications, prior to December 31, 2019, VTA should take vigorous action to enforce
compliance by appointing agencies with the qualification and suitability requirements of: (i)
Section 100060(c) of the California Public Utilities Code; (ii) Section 2-14 of the VTA
Administrative Code; and (iii) the Guidelines.
Finding 3
The VTA Board lacks effective policies designed to assure productive participation by members
of the VTA Board.
Recommendation 3a
In order to help make directors become and remain productive members of the VTA Board, prior
to December 31,2019, VTA should: (i) implement and enforce attendance at an intensive, multi-
session onboarding bootcamp for incoming directors that would provide detailed information
regarding VTA’s operations, financial affairs and currently pending large-scale projects as well as
the organization and operations of the Board and directors’ duties and obligations; (ii) prepare and
provide to each director a detailed handbook of directors’ duties, similar to the “Transit Board
Member Handbook” published by the American Public Transportation Association; (iii) enforce
attendance at Board and committee meetings by providing Board attendance records to appointing
agencies and removing directors from committees for repeated non-attendance; and (iv) implement
a robust director evaluation process, with the participation of an experienced board consultant, that
would include mandatory completion by each director of an annual self- evaluation questionnaire
and Board review of a composite report summarizing the questionnaire responses.
Recommendation 3b
In order to further enhance the effectiveness of the directors, prior to December 31,2019, VTA
should develop a program to encourage continuing education of the Board members by: (i)
scheduling and enforcing attendance at more frequent and intensive Board workshops on important
issues regarding transit policy, developments in transportation technology, major capital projects
and VTA’s financial management; and (ii) requiring directors to attend, at VTA’s expense, third-
party sponsored industry conferences and educational seminars.
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Finding 4
The Grand Jury commends the Chairperson of the VTA Board for recognizing the need to improve
Board engagement and effectiveness by convening the Ad Hoc Board Enhancement Committee to
review the Board’s governance structure and practices.
Recommendation 4
None.
Finding 5
VTA continues to consider an extension of VTA’s light rail system to the Eastridge Transit Center,
at an additional capital cost of over $450 million, although VTA’s light rail system is one of the
most expensive, heavily subsidized and least used light rail systems in the country, many transit
experts consider light rail obsolete, and VTA is suffering from chronic structural deficits that
would be exacerbated by the continuation of the project as currently defined.
Recommendation 5a
VTA should consider following recommendations made by several directors that it undertake a
thorough review of VTA’s light rail system and its future role as a mode of transportation in Silicon
Valley before proceeding with the Eastridge extension project. This review, as it pertains
specifically to the analysis of the viability of the Eastridge extension, should be undertaken with
the participation of an independent consultant and should consider such issues as projected
ridership estimates, project cost estimates including future operating and capital costs, and the
projected impact on traffic congestion on Capitol Expressway with the removal of two HOV lanes.
Recommendation 5b
VTA should consider whether the recognized needs of the residents of East San José for modern,
efficient public transportation can be better served by an alternative to the proposed light rail
extension.
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REQUIRED RESPONSES
Pursuant to Penal Code sections 933 and 933.05, the Grand Gury requests responses as
follows:
From the following governing bodies:
Responding Agency Finding Recommendation
Santa Clara Valley Transportation Authority 1, 2, 3, 4 and 5 1a, 1f, 1g, 2, 3a, 3b, 5a and 5b
County of Santa Clara 1 1b, 1d and 1e
City of Campbell 1 1c, 1d and 1e
City of Cupertino 1 1c, 1d and 1e
City of Gilroy 1 1c, 1d and 1e
City of Los Altos 1 1c, 1d and 1e
City of Milpitas 1 1c, 1d and 1e
City of Monte Sereno 1 1c, 1d and 1e
City of Morgan Hill 1 1c, 1d and 1e
City of Mountain View 1 1c, 1d and 1e
City of Palo Alto 1 1c, 1d and 1e
City of Santa Clara 1 1c, 1d and 1e
City of San José 1 1c, 1d and 1e
City of Saratoga 1 1c, 1d and 1e
City of Sunnyvale 1 1c, 1d and 1e
Town of Los Altos Hills 1 1c, 1d and 1e
Town of Los Gatos 1 1c, 1d and 1e
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APPENDIX A – The Guidelines for Member Agency Appointments to
the VTA Board of Directors
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APPENDIX B – VTA Operating Statistics and 2017 National Trends
This appendix presents operational metrics comparing VTA against national trends using an FTA
annual summary.
Table B1 VTA Operating Statistics 2009 - 2018
Year
County
Popula-
tion1
(millions)
Bus
Ridership1
Light Rail
Ridership1
VTA
Operations
Full-Time
Employees1
Fleet
Size1& 2
VTA
Operations
Expense ($)1
Vehicle
Revenue
Hours3&4
Total
Unlinked
Passenger
Trips3&4
2009 1.77 34,510,273 10,754,161 1649 547 254,285,943 1,487,469 45,264,434
2010 1.79 31,983,494 9,749,882 1588 523 257,953,581 1,406,463 41,733,376
2011 1.814 31,395,126 10,014,504 1576 593 263,322,297 1,357,169 41,409,630
2012 1.841 32,053,755 10,373,042 1599 544 278,532,013 1,383,007 42,426,797
2013 1.87 32,432,354 10,742,292 1614 542 293,447,169 1,411,180 43,174,646
2014 1.894 32,475,527 10,952,965 1687 542 311,287,342 1,464,798 43,428,492
2015 1.92 32,623,599 11,320,497 1724 639 319,978,046 1,524,011 43,944,096
2016 1.934 32,195,504 10,722,932 1758 599 335,140,300 1,555,226 42,918,436
2017 1.946 29,057,047 9,132,084 1761 559 354,494,193 1,569,744 38,189,131
2018 1.957 28,048,405 8,507,095 1795 571 414,975,000 1,582,146 36,555,500
Notes:
1. From VTA report "Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2018" listed in
References, item number 15, and State Department of Finance
http://www.dof.ca.gov/Forecasting/Demographics/Estimates/E-2/documents/PressReleaseJul2018.pdf
2. Fleet size includes the total number of buses and light rail cars
3. Vehicle Revenue Hours (VHR) and Unlinked Passenger Trips (UPT) data from FTA NTD
https://www.transit.dot.gov/ntd/data-product/ts22-service-data-and-operating-expenses-time-series-system-0
4. Operating expense, UPTs and VHRs include only directly operated bus and light rail vehicles
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For the charts below, the Grand Jury used data from the 'National Transit Summaries & Trends
2017”20, “Santa Clara Valley Transit Authority Annual Agency Profile 2017”21, and “Service
Data and Operating Expenses Time-Series by System”22 to examine VTA’s operations and
performance in the national arena.
20 2017 National Transit Summaries and Trends
https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/ntd/130636/2017-national-transit-summaries-and-trends.pdf
21 Santa Clara Valley Transit Authority Annual Agency Profile 2017
https://www.transit.dot.gov/ntd/transit-agency-profiles/santa-clara-valley-transportation-authority
22 Service Data and Operating Expenses Time-Series by System
https://www.transit.dot.gov/ntd/data-product/ts22-service-data-and-operating-expenses-time-series-system-0
0
1
2
3
4
5
6
7
8
9
10
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Operating Cost ($) Percentile
2017 Operating Cost ($) per Passenger Trip
2017 Operating Cost per Passenger Trip Data National Distribution ($)
2017 Operating Cost per Passenger Trip Data VTA ($)
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0
50
100
150
200
250
300
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Operating Cost ($) Percentile
2017 Operating Cost ($) per Revenue Hour
2017 Operating Cost per Revenue Hour Data National Distribution ($)
2017 Operating Cost per Revenue Hour Data VTA ($)
0
5
10
15
20
25
30
35
40
45
50
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Fare Recovery Ratio %Percentile
2017 Fare Recovery Ratio
2017 Fare Recovery Ratio National Data (%)2017 Fare Recovery Ratio VTA (%)
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APPENDIX C – Peer Agency Comparisons
This appendix presents various operational metrics for VTA and nine peer agencies. Generally,
VTA under-performs all or most of these agencies as noted.
Source of data: https://www.transit.dot.gov/sites/fta.dot.gov/files/February%202019%20Adjusted%20Database.xlsx
20
30
40
50
60
70
80
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Trip per HourYear
Passenger Trips per Revenue Hour (Bus & Light Rail )
Portland Minneapolis Houston Dallas
Utah Denver VTA SF Muni
Sacramento San Diego
VTA competes for
lowest
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Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series-
mode-2
100
120
140
160
180
200
220
240
260
2009 2010 2011 2012 2013 2014 2015 2016 2017Operating Costs $ per HourYear
Operating Expense per Revenue Hour (Bus & Light Rail)
Portland ($)Minneapolis ($)Houston ($)
Dallas ($)Utah ($)Denver ($)
VTA ($)SF Muni ($)Sacramento ($)
San Diego ($)
VTA now trending
highest
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Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series-
mode-2
2
3
4
5
6
7
8
9
10
2009 2010 2011 2012 2013 2014 2015 2016 2017Operating Costs $ per TripYear
Operating Expense per Passenger Trip (Bus & Light Rail)
Portland ($)Minneapolis ($)Houston ($)
Dallas ($)Utah ($)Denver ($)
VTA ($)SF Muni ($)Sacramento ($)
San Diego ($)
VTA is highest
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Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series-
mode-2
0
10
20
30
40
50
60
2009 2010 2011 2012 2013 2014 2015 2016 2017Farebox Recovery Ratio %Year
Farebox Recovery Ratio (Bus & Light Rail)
Portland Minneapolis Houston Dallas
Utah Denver VTA SF Muni
Sacramento San Diego
VTA competes for
lowest
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Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series-
mode-2
0
5
10
15
20
25
30
35
40
45
2009 2010 2011 2012 2013 2014 2015 2016 2017Farebox Recovery %Year
Farebox Recovery Ratio (All Operations)
Portland Minneapolis Houston Dallas
Utah Denver VTA SF Muni
Sacramento San Diego
VTA is lowest
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REFERENCES
1. VTA Ad Hoc Financial Stability Committee Archives for 2018, http://www.vta.org/Get-
Involved/Ad-Hoc-Financial-Stability-Committee
2. The Coming Transit Apocalypse, O’Toole, October 24, 2017
https://www.cato.org/publications/policy-analysis/coming-transit-apocalypse
3. Santa Clara Valley Transportation Authority Ad Hoc Financial Recovery Committee
February 10, 2010
http://www.vta.org/sfc/servlet.shepherd/version/download/068A0000001Fbgu
4. California Public Utilities Code (PUC), Sections 100060 through 100063.
https://codes.findlaw.com/ca/public-utilities-code/puc-sect-2870.html
5. Measure A Transit Improvement Program. See VTA.org Live Website.
http://www.vta.org/projects-and-programs/programs/2000-measure-a-transit-improvement-
program
6. Santa Clara Valley Transportation Authority Administration Code, w/ Amendments
through June 7, 2018. http://vtaorgcontent.s3-us-west-
1.amazonaws.com/Site_Content/admin_code.pdf
7. American Public Transportation Association (APTA), Quantifying Reporting Transit
Sustainability Metrics. June 2012
8. Business Insider, These North American cities have the best public transit systems.
November 4, 2017. https://www.businessinsider.com/best-subway-public-transit-north-america-
2017-10#3-vancouver-13
9. The Best Cities for Public Transportation, SmartAsset Publication. September 20, 2018.
https://smartasset.com/mortgage/best-cities-for-public-transportation
10. Assessing Transit Service Improvement, May 3, 2010, San José State University, Urban
Planning, Honors Report, Tyree.
http://www.sjsu.edu/urbanplanning/docs/URBP298Docs/urbp298_HonorsReport_Tyree.pdf
11. Hay Group, VTA Organizational and Financial Assessment, March 2007.
http://www.vta.org/sfc/servlet.shepherd/version/download/068A0000001FbYn
12. Santa Clara Valley Transportation Authority. Transit Choices Report, Jarrett Walker
Associates, February 3, 2016. https://vtaorgcontent.s3-us-west-
1.amazonaws.com/Site_Content/Transit_Choices_Report_Full.pdf
13. Transit Services Guidelines, VTA January 2019. http://www.vta.org/News-and-
Media/Connect-with-VTA/Community-Engagement-to-Begin-on-2019-New-Transit-Service-
Plan#.XMXYsbdKjIU
14. Jarrett Walker, Randal O’Toole, CATO Institute, October 2, 2018, The Future of Public
Transit. https://www.cato.org/events/the-future-of-public-transit
15. VTA Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2018.
http://vtaorgcontent.s3-us-west-1.amazonaws.com/Site_Content/CAFR_FY_2018.pdf
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16. Long Range Transportation Plan for Santa Clara County. VTP2040 undated.
http://vtaorgcontent.s3-us-west-
1.amazonaws.com/Site_Content/VTP2040_final_hi%20res_030315.pdf
17. Why We Need to Stop Subsidizing Public Transit, CATO Institute, Randal O’Toole, May
2018. https://www.cato.org/publications/commentary/why-we-need-stop-subsidizing-public-
transit
18. California State Auditor, Santa Clara County Transportation Authority, July 2008, Report
2007-129 SUMMARY. https://www.bsa.ca.gov/reports/summary/2007-129
19. National Transit Database. October 20, 2018. https://www.transit.dot.gov/ntd
20. The Great Transit Rip-Off: Joel Kotkin and Wendell Cox, August 25, 2017.
https://www.dailynews.com/2017/08/25/the-great-transit-rip-off-joel-kotkin-and-wendell-cox/
21. Silicon Valley Can’t Get Transit Right, Eric Jaffee, January 11, 2013.
https://www.citylab.com/transportation/2013/01/silicon-valley-cant-get-transit-right/4374/
22. Paying for Silicon Valley’s Transit Upgrade. The Hudson Institute, Walter Russell Mead,
April 24, 2017. https://www.hudson.org/research/13566-paying-for-silicon-valley-s-transit-
upgrade
23. Charting Public Transit’s Decline, CATO Institute, Randal O’Toole, November 8, 2018.
https://www.cato.org/publications/policy-analysis/charting-public-transits-decline
24. America Needs a Rational Transit Policy, Wendell Cox, Heritage Foundation, March 24,
2015. https://www.heritage.org/transportation/report/america-needs-rational-transit-policy
25. American Public Transportation Association: Transit Board Member Handbook. July
2014
26. It’s Never Too Late to Stop a Transportation Megafolly, Randal O’Toole, CATO, March
5, 2019. https://www.cato.org/publications/commentary/its-never-too-late-stop-transportation-
megafolly
27. Getting to the Route of It. The Role of Governance in Regional Transit. The Transit
Center. EnoTrans, Washington D.C. October 1, 2014. https://www.enotrans.org/wp-
content/uploads/Transit-Governance.pdf
28. New York City MTA Board Leadership. From Live Website.
https://new.mta.info/transparency/leadership/board-members
29. Governance of Regional Transit Systems. Washington D.C., New York, Toronto. Wilson
Center. Canada Institute, June 2014.
https://www.scribd.com/document/233493152/Governance-of-Regional-Transit-Systems-
Washington-New-York-and-Toronto
30. Houston Metro Board Leadership. From Live Website
https://www.ridemetro.org/pages/boardofdirectors.aspx
31. Austin Texas Metro Board Leadership. From Live Website
https://www.capmetro.org/board/
Note: All links verified June 9, 2019
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September 3, 2019
Honorable ____
Presiding Judge
Santa Clara County Superior Court
191 North First Street
San Jose, CA 95113
Re: Civil Grand Jury Report – Inquiry into Governance of the Valley Transportation
Authority (June 18, 2019)
The City of Cupertino expresses our appreciation for the effort and commitment
demonstrated by the June 18, 2019 Santa Clara County Civil Grand Jury’s report, entitled
Inquiry into Governance of the Valley Transportation Authority. This letter represents the
City’s response to Finding # 1 and on recommendations 1a, 1c, 1d and 1e consistent with
California Penal Code §§ 933(c) & 933.05 (a) & (b).
Finding # 1: The City agrees with this finding and provides clarifying comments as contained in
our response to recommendations 1a, 1c, 1d and 1e.
Recommendation 1a: VTA should commission a study of the governance structures of
successful large city transportation agencies, focusing on such elements as: board size; term of
service; method of selection (directly elected, appointed or a combination); director
qualifications; inclusion of directors who are not elected officials; and methods of ensuring
proportional demographic representation. This study should be commissioned prior to
December 31, 2019.
Response: The City of Cupertino requests that an independent agent, such as the Cities
Association of Santa Clara County, commission the recommended study with funding provided
by VTA. Furthermore, for the study to be effective, this comment letter and others received by the
Presiding Judge, should be included and considered by the study. To increase the competency of
the Board and promote greater accountability, the City of Cupertino suggests that the study
include consideration of:
Directly elected, full-time VTA Board Members
5 Board Members corresponding to Santa Clara County Board of Supervisors districts
Reasonable Compensation of Board Members in consideration for their full-time service
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Once VTA funding is committed, at least 180 days will be needed to complete the study
and ensuing discussion and documentation of perspectives and recommendations by all
represented governing bodies to the VTA Board and County Board of Supervisors. This
study should be completed prior to June 30, 2020.
The City also requests that the charge be clarified to include not only “large city”
transportation agencies, but specifically metropolitan areas (such as Portland, Oregon)
where transit agency service areas span multiple municipalities.
Recommendation 1c: As constituent agencies of VTA, each of the cities in the County
should prepare and deliver to VTA and the County Board of Supervisors a written
report setting forth its views regarding VTA governance, with specific reference to the
elements listed in Recommendation 1a. These reports should be completed and
delivered prior to December 31, 2019.
Response: To expand on the response provided in Recommendation 1a, the City of Cupertino is
often not effective in directly and actively engaging in equitable governance of VTA under the
current structure of being represented by one rotating board member among the West Valley
cities of Campbell, Los Gatos, Monte Sereno and Saratoga. The composition of the Board, as
originally set in 1995, appears to have been based primarily on geographic proximity and/or
population instead of other significant transportation and regional economic factors. Much has
changed since 1995 and for the City of Cupertino equitable representation on the Board needs to
take into consideration other transportation need factors that include centers of employment, sales
tax generation, education centers, proximity to other similar cities (San Jose, Santa Clara,
Sunnyvale, Mountain View & Palo Alto) and access to major transit infrastructure such as
Highways 85, Interstate 280,Stevens Creek Boulevard and Caltrain.
VTA has been ineffective in bringing employees to most major employment centers, particularly
those in the West Valley and North County. Figure 1 shows the importance of effective transit
near job centers. Several years ago, a transportation specialist with a major employer pointed out
that there are some 42,000 jobs in north Sunnyvale, serviced by one ineffective (slow) light rail
line and one public bus. He compared that to 35,000 jobs in downtown San Jose serviced by
lavish transit resources. Rather than address transit demand with new VTA service in the North
County and West Valley over the past two decades, VTA suggested that cities impose aggressive
transportation demand management (TDM) plans, and that has become the status quo. Major
employers are now serving their own employees with extensive bus networks. This has taken
many cars off the road, however has become a disincentive to creating a transit solution for the
general public, urgently needed as an alternative to cars. Major employers report that while their
buses are often stuck in traffic, their employees are able to work on the bus. Corporate buses have
become an important tool in recruiting and retaining employees in our tight labor market, an
advantage they hold over smaller employers with which they compete for talent. Consequently,
large employers have no clear incentive to help change the status quo in the major employment
centers in the North County and West for the benefit of the general public; notably, none of the
major employers have publicly engaged at the VTA SR85 Policy Advisory Board meetings.
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Figure 1: Credit SPUR & Stanford Consulting Professor Stefan Heck
Further compounding the issue of a regional solution is public trust. Public confidence in
VTA has been damaged by longstanding but unfulfilled promises in the 1992 transit
plan, reinforced by Measure A 2000, that would have connected the North County, West
Valley and South San Jose along the SR 85 corridor and Cupertino, Santa Clara and
downtown San Jose on the Stevens Creek corridor. Cupertino is at the nexus of these
corridors with hours of stop-and-go traffic every morning and evening, but with no
effective transit for the general public.
Voters have become fatigued and distrustful of transportation measures due to
overpromising and underdelivering. Last year’s arguably regressive Regional Measure 3
(RM3) is an example of a promise to mitigate traffic congestion, but all of the transit
dollars coming to Santa Clara County were allocated to projects in San Jose: BART,
Eastridge and Diridon Station. Moreover, the process that created the allocation was
done with complete lack of transparency, behind closed doors with no participation of the
public or the majority of its representatives serving on VTA. According to Jim Beall, the
author of SB-595, the enabling legislation which set allocations, VTA’s allocation came
from Executive Director Nuria Fernandez. In July 2018, the allocations were introduced
into the bill and passed through committee. In August 2018, the allocation was presented
as a fait accompli to the VTA Policy Advisory Board and Board. As a result of such lack
of transparency and fairness, future measures to fund needed improvements will be more
difficult to achieve.
Per the Civil Grand Jury’s report, VTA has begun to expend Measure A and Measure B
sales tax receipts originally earmarked for capital improvements to help fund transit
operations. This is concerning to the City of Cupertino. Accordingly, and as outlined in
our response under Recommendation 1a, the City of Cupertino requests that VTA
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provide funding to an appropriate fiscal agent to provide the resources needed to complete
a commissioned study that would facilitate a thoughtful discussion of alternatives and
positions by cities without designated seats on the VTA Board.
Pending any change to the governance of the VTA Board, and as described in the Civil
Grand Jury’s report, cities without designated seats on the VTA Board need to be given
the time and resources necessary to consider a consensus position.
The City’s comments herein represent the City’s views regarding VTA governance
to implement this recommendation. The City may provide additional responses either in
future reports or in coordination with other governing bodies.
Recommendation 1d: Within six months following the completion of the studies and
reports specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or
one or more of VTA’s other constituent agencies, should propose enabling legislation,
including appropriate amendments to Sections 100060 through 100063 of the California
Public Utilities Code, to improve the governance structure of VTA (which potentially
could include an increase in the directors’ term of service, the addition of term
limitations and the inclusion of appointed directors who are not currently serving
elected officials).
Response: Per the response comments provided for Recommendation 1c, the City of
Cupertino is open to participating in the development of such legislation, assuming it
addresses the significant factors that lead to ineffective governance and poor decisions.
Thus, the recommendation requires further analysis and the City will coordinate with
other governing bodies over the next six months.
Recommendation 1e: In order to provide more continuity in the leadership of the VTA
Board, within six months following the completion of the studies and reports specified
in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of
VTA’s other constituent agencies, should propose enabling legislation amending Section
100061 of the California Public Utilities code to provide that the Chairperson of the VTA
Board shall be elected for a term of two years rather than one.
Response: The City of Cupertino agrees that extending the Chairperson’s term may be
advantageous for continuity and experience – especially if the two-year term were to
coincide in time with the fiscal year. However, the advantage is dependent upon the
qualifications of the person and, in the case of City of Cupertino, the assurance that the
opportunity is equitably available to cities without designated seats on the VTA Board.
The City of Cupertino would prefer to hold this recommendation in abeyance in order to
allow time for overall recommendations to be developed and our response to
Recommendation 1a considered.
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Should you have any questions or concerns regarding this response, please feel free to
contact City Manager Deborah Feng at deborahf@cupertino.org.
Sincerely,
Steven Scharf, Mayor
cc: Valley Transportation Authority Board
City of Cupertino City Council
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CITY COUNCIL STAFF REPORT
Meeting: September 3, 2019
Subject
Amendment to existing voluntary collection agreement with Airbnb regarding transient
occupancy taxes to allow certain short-term rental hosts to remit taxes directly to the
City.
Recommended Action
Authorize the City Manager to enter into Amendment No. 1 to the voluntary collection
agreement with Airbnb and to enter into other minor amendments to the voluntary
collection agreement in the future.
Background
People or “transients” occupying short-term rentals for 30 days or less are subject to a
12% Transient Occupancy Tax (TOT) on the rent charged. In June 2018, the City entered
into a voluntary collection agreement (VCA) with Airbnb under which Airbnb agreed to
collect and remit transient occupancy tax (TOT) on behalf of short-term rental hosts
using their platform. Due to this agreement, the City received about $400,000 in TOT
from Airbnb in FY 2018-19. For additional information regarding the VCA, please see
the staff report for the original agreement in Attachment B.
Discussion
Airbnb has requested an amendment to the VCA (Attachment A) that allows certain
short-term rental hosts to register and opt-in to receive TOT directly. Once the TOT is
provided to the host, it then becomes the host’s responsibility to ultimately remit the
TOT to the City. Airbnb has developed this opt-in program with the intention to meet
the needs of hosts in the traditional hospitality industry, such as hotels and other
professionals, which enables such hosts to control the collection and remittance of TOT
to the City. Traditional hospitality hosts such as hotels often already have a practice in
place to remit TOT to the City, and Airbnb’s remittance on the host’s behalf can distort
their records. Other platforms already offer this capability and Airbnb has an interest in
maintaining services comparable to their competitors.
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Airbnb requires that hosts that opt-in to this program must:
Provide their tax identification or registration number;
Provide their business identification number; and
Acknowledge their obligation to collect, remit, and report taxes owed to the City.
Once every twelve months, Airbnb will provide documentation regarding these hosts
with information including gross receipts and taxable receipts from Airbnb short-term
rentals in Cupertino. This information would allow the City to identify any hosts that
were abusing the program and not appropriately remitting TOT. While Airbnb has not
determined what actions they would take to address bad actors, they intend to develop
a workable solution to discourage hosts from failing to pay all TOT owed to the City.
If hosts that opt-in to this program fail to remit TOT appropriately, TOT revenue may
decrease. However, only a subset of hosts would opt-in to this program. In addition,
Airbnb has expressed that while they are hopeful that we can continue our agreement, it
will be difficult for them to continue operating under the VCA if the amendment is not
approved. If Airbnb terminates the VCA, the City would no longer receive any TOT
through Airbnb.
Sustainability Impact
No sustainability impact.
Fiscal Impact
In FY 2018-19, Airbnb remitted about $400,000 in TOT to the City on behalf of its users.
With this proposed amendment to the VCA, it is possible for the City to receive less TOT
if hosts who opt-in fail to remit TOT to the City. However, Airbnb has expressed that it
would be difficult to continue operating under the VCA if the amendment is not
approved.
_____________________________________
Prepared by: Katy Nomura, Assistant to the City Manager
Reviewed by: Dianne Thompson, Interim Assistant City Manager
Approved for Submission by: Deborah Feng, City Manager
Attachments:
A – Draft Amendment to VCA
B – VCA Staff Report 6.19.18
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AMENDMENT NO. 1 TO
VOLUNTARY COLLECTION AGREEMENT
FOR
CITY OF CUPERTINO, CALIFORNIA, TRANSIENT OCCUPANCY TAX
This, Amendment No. 1 to the Voluntary Collection Agreement dated June 29, 2018, by
and between AIRBNB, INC., a Delaware corporation (“Airbnb”), and the CITY OF
CUPERTINO, CALIFORNIA (the “TAXING JURISDICTION”), is entered into this
[DATE] (“Amendment No. 1”).
RECITALS:
WHEREAS, Airbnb represents that it provides an Internet-based platform (the
“Platform”) through which third parties offering accommodations (“Hosts”) and third parties
booking such accommodations (“Guests”) may communicate, negotiate, and consummate a direct
booking transaction for accommodations to which Airbnb is not a party (“Booking Transaction”);
WHEREAS, Airbnb has implemented an optional software feature designed to meet the
needs of hosts in the traditional hospitality industry and other professionals, which enables such
Hosts to control the collection and remittance of applicable municipal accommodation taxes and
applicable sales taxes (“Taxes”) to the Taxing Jurisdiction;
WHEREAS, Airbnb may expand the types of transactions in Cupertino, California, that
may be offered by third parties through its Platform to third parties seeking to book such
transactions;
WHEREAS, the Taxing Jurisdiction and Airbnb previously entered into a Voluntary
Collection Agreement (“VCA”) on June 29, 2018, in order to facilitate the reporting, collection,
and remittance of applicable Taxes from Hosts and Guests, resulting from Booking Transactions
completed by Hosts and Guests on the Platform for occupancy of accommodations located in
Cupertino, California; and
WHEREAS, the parties now desire to amend the VCA to identify the optional alternative
tax remittance feature for certain Hosts, and to expand the scope of transactions which may be
completed by Hosts and Guests on the Platform.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. The section entitled “REGISTERED HOSTS” shall be added to the VCA as
follows:
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REGISTERED HOSTS
(C-1) Airbnb reserves the right to implement a software feature on the
Platform whereby Airbnb collects Taxes based on tax information supplied by the
Host, and remits such Taxes to Hosts for ultimate reporting and remittance by the
Host to the Taxing Jurisdiction. In such cases, a Host must provide to Airbnb its
(i) applicable Tax identification or registration number; (ii) applicable business
identification number; and (iii) acknowledgement of its obligation to collect all
Taxes owed on a Host’s Taxable Booking Transactions and to remit and report
any Taxes collected directly to the Taxing Jurisdiction (a “Registered Host”).
Upon request from the Taxing Jurisdiction, and not more than once per
consecutive twelve-month period, Airbnb may provide the Taxing Jurisdiction
with copies of documentation related to Registered Hosts.
(C-2) Airbnb satisfies its obligations of the VCA by remitting the full
amount of Taxes collected on behalf of Hosts to the Taxing Jurisdiction, and in the
case of Registered Hosts only, by remitting the Taxes collected on a Registered
Host’s Taxable Booking Transactions directly to the Registered Host.
2. Paragraph (D) is hereby deleted in its entirety and replaced with the following:
(D) Pursuant to the terms of this Agreement, Airbnb agrees contractually
to assume liability for any failure to report, collect and/or remit the correct
amount of Taxes, including, but not limited to, penalties and interest, lawfully and
properly imposed in compliance with the Code. Nothing contained herein nor any
action taken pursuant to this Agreement shall impair, restrict or prevent Airbnb
from asserting that any Taxes and/or penalties, interest, fines or other amounts
assessed against it were not due or are the subject of a claim for refund under
applicable law, or otherwise bar it from enforcing any rights accorded by law.
Notwithstanding the above and solely with respect to Registered Hosts, Airbnb
does not assume any liability for the failure of a Registered Host to comply with
any applicable collection, reporting or remittance obligations related to Taxable
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Booking Transactions. Further, Airbnb does not assume any liability for
collection based on information supplied by the Registered Host.
3. Paragraph (H) is hereby deleted in its entirety and replaced with the following:
(H) During any period in which this Agreement is effective and provided
Airbnb is in compliance with its obligations herein, Hosts shall be relieved of any
obligation to collect and remit Taxes on Taxable Booking Transactions, and shall
be permitted but not required to register individually with the Taxing Jurisdiction
to collect, remit and/or report Taxes. Notwithstanding the above, Registered
Hosts will be solely responsible for directly remitting Taxes collected on Taxable
Booking Transactions to the Taxing Jurisdiction. Nothing in this Agreement shall
relieve Guests or Hosts from any responsibilities with respect to Taxes for
transactions completed other than on the Platform, or restrict the Taxing
Jurisdiction from investigating or enforcing any provision of applicable law
against such users for such transactions.
4. The following paragraph shall be added to the VCA as follows:
(K-1) If Airbnb expands the types of transactions that may be completed
by Hosts and Guests on the Platform to include additional taxable services or
products located in Cupertino, California, and Airbnb decides in its sole discretion
to collect and remit any applicable taxes with respect to such transactions on
behalf of Hosts and/or Guests, Airbnb agrees to provide reasonable notice to the
Taxing Jurisdiction regarding the collection and remittance of such taxes.
5. Except as modified herein, the terms of the VCA shall remain in full force and
effect. This Amendment No. 1 may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall constitute
one instrument.
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IN WITNESS WHEREOF, Airbnb and the Taxing Jurisdiction have executed this Amendment
No. 1 effective on the date set forth in the introductory clause above.
AIRBNB, INC., a Delaware corporation
By: _______________________________________
Signature of Authorized Representative
Mirei Yasumatsu, Global Tax Director
Name and Title of Authorized Representative
CITY OF CUPERTINO, CALIFORNIA
By: _______________________________________
Deborah Feng
City Manager
APPROVED AS TO FORM:
_______________________________________
Heather Minner
City Attorney
ATTEST:
_______________________________________
Grace Schmidt
City Clerk
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OFFICE OF THE CITY MANAGER
CITY HALL
10 10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
TELEPHONE: (408) 777-3212 www.cupertino.org
TELEPHONE: (408) 777-7603 www.cupertino.org
CITY COUNCIL STAFF REPORT
Meeting: June 19, 2018
Subject
Agreement with Airbnb to collect transient occupancy taxes from its platform users who
operate short-term rentals in Cupertino.
Recommended Action
Authorize the City Manager to enter into a voluntary collection agreement with Airbnb
to collect transient occupancy taxes owed to City from short-term rental operators in
Cupertino using the Airbnb platform.
Background
Short-term rentals (STRs) fall under the definition of “hotel” under Cupertino’s Transient
Occupancy Tax (TOT) regulations (Section 3.12.020 of Chapter 3.12, Transient Occupancy
Tax). People or “transients” occupying these short-term rentals are subject to a 12% TOT
on the rent charged during the first 30 days of occupancy. Proprietors or “operators” of
these short-term rentals are required to register and obtain a Transient Occupancy
Registration Certificate from the City within 30 days of commencing business as well as
collect TOT from renters. To date, the City has not received any TOT remittances from
short-term rental operators in the City.
As reported to Council in February, there are roughly 300 STRs available within City
limits. However, the City does not have the data or resources required to proactively
enforce TOT requirements at this time. Enforcement of STRs has been complaint -based
and focused on zoning requirements.
A study session was held on February 5, 2018 in which Council directed staff to pursue a
voluntary collection agreement (VCA) with STR platforms like Airbnb. In addition,
Council expressed interest in creating a regulatory program for STRs.
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Discussion
Based on data we gathered from STR compliance vendors, the majority of STR operators
in Cupertino utilize the Airbnb platform. In addition to marketing STRs, Airbnb acts as a
collection agent for STR operators. While Airbnb is not an STR operator and is therefore
not responsible for collecting TOT, it has agreed to voluntarily collect TOT on behalf of
its users and remit the revenue to cities that sign a voluntary collection agreement (VCA).
Under the terms of the VCA, Airbnb agrees to assume the duties to collect the TOT
completed on its hosting platform and remit it to the City on a monthly basis pursuant to
our TOT code.
Airbnb represents that it achieves 100% compliance with TOT collection through the
VCA. It achieves this compliance by programming its hosting platform to automatically
collect the TOT from transients who rent short-term rental units from Airbnb hosts. Once
collected, Airbnb remits the TOT directly to the City as required by the City’s code. While
the hosts are responsible for remitting the tax, Airbnb voluntarily collects and remits the
tax on the hosts’ behalf.
According to the League of California cities, Airbnb has signed VCAs with nearly half of
California cities. Neighboring cities such as Palo Alto, Santa Clara, and San Jose have
already signed agreements, while Sunnyvale and Mountain View are considering it.
Cities are signing on because the arrangement facilitates the collection of TOT and STR
operators. There are, however, some important caveats the City will need to consider:
Confidentiality for Hosts and Guests. Airbnb will not provide the City with
personally identifiable information regarding its hosts or guests, unless it is part
of a binding legal process. Without this data, it is difficult to ensure compliance
with other parts of the City’s municipal code, including zoning regulations.
Limits on Audits. The agreement limits the City’s ability to audit transactions to a
consecutive 12 month period within a three-year period.
Airbnb was reluctant to negotiate the terms of their voluntary collection agreement as it
is trying to maintain consistency in administering the voluntary collection program .
Confidentiality for hosts and guests is a non-negotiable term for them. The City of San
Francisco was successful in forcing platforms such as Airbnb and Homeaway to require
hosts to register with the City by enacting laws requiring qualified website companies to
comply with certain data requirements, which prompted litigation and a lengthy
mediation process. San Francisco had leverage as one of the largest markets for STRs with
over 11,000 listings.
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While it would be ideal for Airbnb to share host data with the City, the alternatives are
also not ideal. The City could attempt to pro-actively enforce the City’s TOT regulations
but this would require a significant investment in enforcement resources to identify,
notify, and cite TOT violators. Identifying STR operators would be very time consuming
as rental platforms do not provide basic information like an operator’s full name, exact
address, or occupancy rates for their listings. If identified, hosts are likely to have been
unaware of the City’s regulations requiring them to collect TOT. Therefore, staff is
concerned that attempting to collect TOT would result in little to no net revenues to the
City.
The City could also enact regulations similar to San Francisco, which require hosting
platforms to collect TOT, require host registration with the City, and require hosting
platforms to make available transaction data. However, this could invite costly legal
action against the City as in the case of San Francisco but with far fewer benefits given
the relatively small number of STRs actively operating in Cupertino. Enforcement would
also remain a time-consuming and costly issue.
Staff recommends that the City enter into the VCA with Airbnb and begin to collect TOT
revenues as of August 1, 2018. The VCA will simplify the remittance process for STR
operators using the Airbnb platform and enable the City to receive 100% of the TOT
associated with taxable rental bookings completed on Airbnb.
Cupertino stands to generate an additional $350,000 in TOT revenue annually with little
to no effort from City staff. This estimate is based on activity from 2017 showing 190
active rentals in Cupertino and transactions totaling $3.4 million. All TOT is credited to
the General Fund and can be used for general purposes.
Nothing in this VCA prevents the City from enacting a regulatory program that restricts
how STRs operate in the City. Based on Council direction, staff is drafting amendments
to its zoning code to provide more flexibility to STR operators while ensuring these STRs
do not take away opportunities for long-term rentals. The program will also create a
process for addressing nuisance issues. Staff does not anticipate that draft regulations
will conflict with the VCA and expects to bring a draft to Council on July 3.
Staff also reached out to Homeaway but was informed that the platform is not entering
into VCAs at this time.
Sustainability Impact
No impact.
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Fiscal Impact
Based on estimates from Airbnb, the City could generate an additional $350,000 in annual
TOT revenue.
Prepared by: Jaqui Guzmán, Deputy City Manager
Approved for Submission by: David Brandt, City Manager
Attachments:
A – Draft Voluntary Collection Agreement
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CITY COUNCIL STAFF REPORT
Meeting: September 3, 2019
Subject
Library Commission Fiscal Year (FY) 2019-20 Work Program
Recommended Action
Approve the Library Commission FY 2019-20 Work Program
Discussion
The Library Commission serves as a liaison for the City to the Cupertino Library, Poet
Laureate, Cupertino Library Foundation, Santa Clara County Library District, and
Friends of the Library, and advises the City Council on matters related to the Cupertino
Library. The monthly meetings also provide an opportunity for library patrons and
Cupertino residents to voice concerns or suggestions to both City and Library staff. At
the regular meeting of the Library Commission on August 7, 2019 the Commission
proposed the following FY 2019-20 Work Program:
Community Livability
1. Solve Programming and Library Space Issues
2. Address Library Parking Space Shortage and Safety Issues Affecting Library
Patron Drop-off and Pick-up
Public Engagement and Transparency
3. Promote Partnership Opportunities with Community-based Organizations to
Bring Programs to Cupertino Library Patrons
4. Support Data Collection, Analysis of Results, and Policy Recommendations
Associated with the Tri-annual Library Patron Survey
Operational Efficiency
5. Collaborate with the Parks and Department and the Current Poet Laureate to
Select the 2020-2021 Poet Laureate. Promote Poet Laureate Events Throughout
the Year.
Public and Private Partnerships
6. Solve Programming and Library Space Issues (also under Community Livability)
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The Commission is supported in its work by the staff liaison, Recreation Supervisor of
Parks and Recreation. Approximately 5% of the staff liaison’s time or 90 hours per year
are spent providing this support.
Commission meetings are held at the Cupertino Library, 2nd Floor ThinkTank,
approximately 11 months each year (no July meeting in 2019) at 7:00 p.m.
The Commission will begin working on their FY 2020/2021 work program in November
2019, in order to provide input into the City Work Program discussion in early 2020.
Many of the items on the current work program are expected to carry over to next year,
due to this year’s transition to align the Commissions’ Work Programs with the City’s
Work Program, budget process, and to maintain consistency across commissions.
Staff and the Library Commission recommend that City Council approve the Library
Commission FY 2019-20 Work Plan.
Sustainability Impact
No sustainability impact.
Fiscal Impact
No fiscal impact.
_____________________________________
Prepared by: Kim Calame, Recreation Supervisor
Reviewed by: Jeff Milkes, Director of Parks and Recreation
Approved for Submission by: Deborah Feng, City Manager
Attachments:
A – Draft Library FY 2019-20 Work Program
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A. Consult with the City Council, the City staff and the Santa Clara County Library Joint Powers Authority and staff regarding the functioning of the
physical facilities of the Cupertino Library and shall make recommendations from time to time for improvement or modification thereof;
C. Consult with and act as liaison with private community groups supportive of the library program;
D. Consult with the architect and the City Council in the planning of any main or branch library building facilities, including locations, building
layout, architecture, landscaping and furnishings;
FY 2019-2020 Work Program, Library Commission
Community Livability
Library Commission Work Program Items
Solve Programming and Library Space Issues. Support the efforts of Council and community-based organizations to address
space constraints affecting programming, meeting, and study uses of the library. Duration: ongoing, as needed. See also: Public and
Private Partnerships.
Address Library Parking Space Shortage and Safety Issues Affecting Library Patron Drop-off and Pick-up. This item is related
to the Library Community Room Addition, but some aspects can be addressed independent of new construction. For example, explore
opportunities for off-site parking during peak evening and weekend hours. Duration: ongoing, as needed.
Related Council Work Program Item
Merged Columns
Merged 9-13, Refer to
Columns 4-5 Council’s Proposed
Project Next Steps, Current End FY 2019-2020 Work
Project Title Objective Progress to Date Timeline Status Goal Date Program
Library
Community
Room Addition
Create
additional
programming
space
-Preferred alternative was adopted
by City Council in 2015.
-Funding was pledged by Irvine
Company in development
agreement for Hamptons
development pending issuance of
building permits.
-Irvine Company (Hamptons Appts)
has stated project is currently on
hold.
- In February 2019, Council
authorized $311k of annual funding
offset for FY 2019-20 & FY 2020-21
from County for building addition
design services.
-Proceeding with FY 2019-20 design
funding request in Capital
Improvement Program (CIP).
Initiate
architectural
design.
Authority to
begin design
will be
presented in
FY 2019-2020
CIP budget.
Authority to
begin
construction
will occur in
future, pending
Council
Direction.
In Progress Meet
programming
needs of the
library
June
2021
Budget: TDB
Expenses to Date:
N/A
Est Staff Hours:
2000
Staff Lead:
Roger Lee
Dept:
Public Works
Related Municipal Code Items (Library Commission, 2.68.070 Duties–Powers–Responsibilities)
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C. Consult with and act as liaison with private community groups supportive of the library program;
Public Engagement and Transparency
Library Commission Work Program Item
Promote Partnership Opportunities with Community-based Organizations to Bring Programs to Cupertino Library Patrons.
Partner organizations can include but are not limited to: sibling city commissions, local school districts, the Cupertino Library
Foundation, and Friends of the Cupertino Library. Commissioners will connect with potential partner organizations to strengthen
connections, identify common goals, and support shared initiatives. Possible initiatives could include organizing workshops about
parenting styles or stress management, supporting efforts to bring library services to Cupertino schools, or other items of interest to
the community. Duration: ongoing.
Related Council Work Program Item
Merged Columns
Merged 9-13, Refer to
Columns 4-5 Council’s Proposed
Project Next Steps, Current End FY 2019-2020 Work
Project Title Objective Progress to Date Timeline Status Goal Date Program
Review
Current
Commissions
...Consider
having a
meeting
where like
commissions
from other
jurisdictions
can come
together to
share ideas
and
experiences.
- Research on best practices
conducted.
- Restructured commission work
program process and introduced
process to all commissions.
- Survey conducted
for commissioner feedback.
1) Report back
to Council
regarding
commission
feedback,
Spring 2019
2) Plan and
execute
implementation
of commission
process
changes
according to
Council
direction and
decision,
Summer/Fall
2019
In Progress 1) Provide an
opportunity for
every
commissioner
to provide
feedback.
2) Provide
options for
Council to
consider
regarding
commission
process
changes.
Spring
2020
Budget: $3,000
Expenses to Date:
N/A
Est Staff Hours: 500
Staff Lead:
Katy Nomura
Grace Schmidt
Dept:
City Manager’s
Office/City Clerk
Related Municipal Code Item (Library Commission, 2.68.070 Duties–Powers–Responsibilities)
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B. Consult with the City Council, the City staff and the Santa Clara County Library Joint Powers Authority and staff regarding the Cupertino Library
programs and services to the community and shall make recommendations from time to time for improvements or modifications thereof;
Public Engagement and Transparency
Library Commission Work Program Item
Support Data Collection, Analysis of Results, and Policy Recommendations Associated with the Tri-annual Library Patron
Survey. Support the efforts of the Santa Clara County Library District to engage with the community to gather data regarding library
patrons’ needs and interests. Analyze the survey data to identify opportunities to improve library services and programming for patrons.
Duration: data collection, Spring 2019. Analysis of results and policy recommendations, ongoing thereafter.
Related Council Work Program Item (Complementary Project)
Merged Columns
Merged 9-13, Refer to
Columns 4-5 Council’s Proposed
Project Next Steps, Current End FY 2019-2020 Work
Project Title Objective Progress to Date Timeline Status Goal Date Program
Neighborhood
Engagement*Priority
Setting Item*
Increase
membership in,
and
Currently we have more than
300 members in the Block
Leader Program
1) Work with
Block Leaders
and
Neighborhood
Watch
volunteers, as
well as
neighborhood
groups to be
neighborhood
representatives
and
stakeholders
related to City
relations. 2)
Continue
outreach to
areas in
Cupertino that
do not currently
have Block
Leader and
Neighborhood
Watch
membership. June 2020
In Progress Increase
Block Leader
and
Neighborhood
Watch
membership.
June
2020
Budget: $2,000
Estimate hour:
500
Staff Lead:
Brian Babcock
Dept:
City Manager’s
Office/Block
Leader/Neighborhood
Watch
engagement
with,
neighborhood
groups and
members.
Provide support
for
Councilmembers
who want to
conduct town
hall/office hour
meetings with
residents.
Related Municipal Code Item (Library Commission, 2.68.070 Duties–Powers–Responsibilities)
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Collaborate with the Recreation and Community Services Department and the Current Poet Laureate to Select the 2020-2021
Poet Laureate. Promote Poet Laureate Events Throughout the Year. Support the effort to select the next Poet Laureate in whatever
capacity is needed or required. Promote and attend Poet Laureate Events whenever possible.
B. Consult with the City Council, the City staff and the Santa Clara County Library Joint Powers Authority and staff regarding the Cupertino Library
programs and services to the community and shall make recommendations from time to time for improvements or modifications thereof;
C. Consult with and act as liaison with private community groups supportive of the library program;
Operational Efficiency
Related Council Work Program Item
Merged Columns
9-13, Refer to
Council’s Proposed
Project Merged Columns 4-5 Current End FY 2019-2020 Work
Project Title Objective Progress to Date Next Steps, Timeline Status Goal Date Program
Recreation and
Community
Services
Marketing Plan
and Program
Review
Create
additional
programming
space
Contract was
awarded in 2018
Provide background
information and data
to LERN, the
contractor who will be
completing the
process in November
2019, Fall 2019
In Progress To create a
marketing
plan that
includes an
analysis of
programs to
offer, fees to
Winter
2019
Budget: $20,000
Expenses to Date:
$4,000
Est Staff Hours: 150
Staff Lead:
Christine Hanel
Dept:
charge and Recreation and
evaluation of Community Services
the
department
program
brochure.
Related Municipal Code Item (Library Commission, 2.68.070 Duties–Powers–Responsibilities)
Library Commission Work Program Item
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Solve Programming and Library Space Issues. Support the efforts of Council and community-based organizations to address space
constraints affecting programming, meeting, and study uses of the library. Duration: ongoing, as needed. See also: Community
Livability.
B. Consult with the City Council, the City staff and the Santa Clara County Library Joint Powers Authority and staff regarding the Cupertino Library
programs and services to the community and shall make recommendations from time to time for improvements or modifications thereof;
C. Consult with and act as liaison with private community groups supportive of the library program;
Public and Private Partnerships
Related Council Work Program Item
Project Title
Project
Objective
Progress to Date
Merged Columns 4-5
Next Steps, Timeline
Current
Status
Goal
End
Date
Merged Columns
9-13, Refer to Council’s
Proposed FY 2019-
2020 Work Program
Library Lease Sign a new
lease with the
Library JPA
for use of the
City’s Library
facility.
Staff has begun
meeting with Library
staff to discuss
terms of the new
lease.
1) Begin negotiation of
new lease/MOU, ongoing
2) Coordinate lease terms
with Council, May 2019
3) Final lease agreement,
August 2019
4) Develop license
agreement with Library
addressing program
opportunities and
Community Hall
In Progress Complete
updated lease
agreement
Sept
2019
Budget: N/A
Expenses to Date:
N/A
Est Staff Hours: 280
Staff Lead:
Chad Mosley
Heather Minner
Jeff Milkes
Roger Lee
Dept:
Public Works
City Attorney’s Office
Recreation &
Community Services
Related Municipal Code Item (Library Commission, 2.68.070 Duties–Powers–Responsibilities)
Library Commission Work Program Item
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CITY COUNCIL STAFF REPORT
Meeting: September 3, 2019
Subject
Second reading of Ordinance Nos. 19-2187 and 19-2188 adopting Zoning Text and Map
Amendments related to the Vallco Shopping District Special Area. (Application No(s).:
MCA-2019-02, Z-2019-01 (EA-2013-03); Applicant(s): City of Cupertino; Location: 10101
to 101333 North Wolfe Road APN#s:316-20-080, 316-20-081, 316-20-103, 316-20-107, 316-
20-101, 316-20-105, 316-20-106, 316-20-104, 316-20-088, 316-20-092, 316-20-094, 316-20-
099, 316-20-100, 316-20-095)
Recommended Actions
Conduct the second reading and enact:
1. Ordinance No. 19-2187 (MCA-2019-01), an ordinance eliminating references in the
Municipal Code to the Vallco Town Center Specific Plan and adding language
establishing development standards for a new Mixed Use Planned Development with
Multifamily (R3) Residential and General Commercial zoning designation (P(R3,CG))
(Attachment A); and
2. Ordinance No. 19-2188 (Z-2019-01), an ordinance amending the zoning map to rezone
13.1 acres within the Vallco Shopping District Special Area to Mixed Use Planned
Development with Multifamily (R3) Residential zoning P(R3,CG) and General
Commercial uses and the remainder of the Special Area to General Commercial (CG)
(Attachment B).
Discussion
On August 20, 2019 the City Council introduced and conducted the first reading of
Ordinance Nos. 19-2187 and 19-2188. The motions passed on a 3-0-1 vote (No – Sinks,
Recuse – Chao). The City Council motion for Ordinance No. 19-2187 included
incorporation of amendments shown on dais materials provided to Council. The Council
also identified the portion of the site to be zoned P(R3, CG) (see Attachment C).
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Environmental Review
Pursuant to the requirements of the California Environmental Quality Act (CEQA), a
Second Addendum to the Final Environmental Impact Report (EIR) for the General Plan
Amendment, Housing Element Update, and Associated Rezoning Project (State
Clearinghouse No. 2014032007), a program EIR prepared in compliance with California
Environmental Quality Act (CEQA) Guidelines Section 15168, was prepared. As
demonstrated in the Second Addendum and response to comments, the record includes
substantial evidence in support of the conclusion that no subsequent environmental
review is required because none of the conditions that would require preparation of a
subsequent EIR pursuant to Public Resources Code Section 21166 and CEQA Guidelines
Section 15162 have occurred.
Fiscal Impact
None
Next Steps
These zoning ordinances will not take effect unless and until General Plan Amendment
GPA-2019-02, re-designating the site, becomes effective.
Prepared by: Gian Paolo Martire, Senior Planner
Reviewed by: Piu Ghosh, Planning Manager
Benjamin Fu, Director of Community Development
Approved for Submission by: Deborah Feng, City Manager
ATTACHMENTS:
A – Ordinance No. 19-2187
B – Ordinance No. 19-2188
C – Area to be zoned P(R3, CG)
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ORDINANCE NO. 19-2187
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
ELIMINATING REFERENCES IN THE MUNICIPAL CODE TO THE VALLCO
TOWN CENTER SPECIFIC PLAN AND ADDING LANGUAGE
ESTABLISHING DEVELOPMENT STANDARDS FOR A NEW MIXED USE
PLANNED DEVELOPMENT WITH MULTIFAMILY (R3) RESIDENTIAL AND
GENERAL COMMERCIAL ZONING DESIGNATION (P(R3,CG))
SECTION I: PROJECT DESCRIPTION
Application No: MCA-2019-01
Applicant: City of Cupertino
Location: 10101 to 10333 N Wolfe Rd
APN#s: 316-20-080, 316-20-081, 316-20-088, 316-20-092, 316-20-094, 316-20-
095, 316-20-099, 316-20-100, 316-20-101, 316-20-103, 316-20-104, 316-
20-105, 316-20-106, 316-20-107
SECTION II: RECITALS
WHEREAS, Strategy 1 in the Housing Element of the Cupertino General Plan identifies
the Vallco Shopping District Special Area as being appropriate to accommodate at least
389 dwelling units at a minimum density of 20 units per acre and a maximum density of
35 units per acre and provides that if a specific plan is not adopted by May 31, 2018, the
City will consider removing the Special Area as a Priority Housing Site; and
WHEREAS, as required by Housing Element Strategy 1, at a study session on June 18,
2019 the City Council considered removing the Vallco Shopping District Special Area as
a Priority Housing Site; and
WHEREAS, after consideration of its options at the June 18, 2019 study session, the City
Council provided direction to staff to retain the Vallco Shopping District Special Area as
a Priority Housing Site, and City Council directed staff to prepare a General Plan
Amendment for its consideration to permit 389 residential units by right within the Vallco
Shopping District Special Area to accommodate the City's Regional Housing Need
Allocation (RHNA) consistent with the Housing Element and Government Code Section
65863; and
WHEREAS, following a duly noticed public hearing on August 20, 2019, and prior to
the Council’s consideration of the Municipal Code amendments, the Council adopted
Resolution No. 19-109, approving a General Plan Amendment to remove office uses as
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a permitted land use within the Vallco Shopping District Special Area and remove the
associated office development allocation, and Resolution No. 19-110, approving a
General Plan Amendment to establish height limits and enact development standards
for residential uses within the Vallco Shopping District Special Area; and
WHEREAS, the Ordinance amends the City's Municipal Code to add a new zoning
category, Mixed Use Planned Development with Multifamily (R3) Residential and
General Commercial zoning designation (P(R3,CG)), to the text of the Municipal Code
that includes development standards enabling the mixed use or residential-only
development contemplated for the Vallco Shopping District Special Area; and
WHEREAS, the Ordinance is consistent with the City's General Plan and the public
health, safety, convenience, and general welfare, and the amendments herein are
necessary to implement the Housing Element of the General Plan as adopted; and
WHEREAS, the City has prepared a Second Addendum (“Second Addendum”) to the
Final Environmental Impact Report (“Final EIR”) for the General Plan Amendment,
Housing Element Update, and Associated Rezoning Project (State Clearinghouse No.
2014032007) for modifications to the General Plan and zoning affecting the Vallco
Shopping District Special Area in compliance with the California Environmental
Quality Act (Public Resources Code Section 21000 et seq.) (“CEQA”) together with the
State CEQA Guidelines (California Code of Regulations, Title 14, Section 15000 et seq.)
(hereinafter, “CEQA Guidelines”); and
WHEREAS, following necessary public notices given as required by the procedural
ordinances of the City of Cupertino and the Government Code, the Planning
Commission held a public hearing on July 30, 2019 to consider the Ordinance; and
WHEREAS, on July 30, 2019, the Second Addendum was presented to the Planning
Commission; and
WHEREAS, on July 30, 2019, by Resolution 6884, the Planning Commission
recommended on a 4-0 vote (Commissioner Moore recused) that the City Council adopt
a General Plan Amendment solely to impose height limitations within the Vallco
Shopping District Special Area subject to certain conditions and recommended that the
City Council adopt the Second Addendum for modifications to the Project (as defined
in Resolution No. 19-108) affecting the Vallco Shopping District Special Area; and
WHEREAS, on August 20, 2019 and _______________, upon due notice, the City Council
has held at least two public hearings to consider the Municipal Code Amendment; and
WHEREAS, on August 20, 2019, by Resolution No. 19-108, the City Council adopted the
Second Addendum to the Final EIR (EA-2013-03); and
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WHEREAS, the City Council of the City of Cupertino is the decision-making body for
this Ordinance; and
WHEREAS, prior to taking action on this Ordinance, the City Council has exercised its
independent judgment and reviewed and considered the information in the Second
Addendum, which concludes that no further environmental review is required for the
Municipal Code Amendments included in the Ordinance.
SECTION III
NOW, THEREFORE, BE IT ORDAINED:
After careful consideration of the, maps, facts, exhibits, testimony and other evidence
submitted in this matter, the City Council hereby adopts the Municipal Code amendments
based on the findings described above, the public hearing record, subject to the conditions
specified below:
Section 1. The recitals set forth above are true and correct, and are hereby
incorporated herein by this reference as if fully set forth in their entirety.
Section 2. The City Council finds the following as set forth by Municipal Code
19.152.020.C:
1. That the proposed zoning is in accord with Title 19 of the Municipal Code and
the City's Comprehensive General Plan (Community Vision 2040) and the proposed
amendments are internally consistent with Title 19 of the Municipal Code.
The Housing Element of the General Plan calls for the City to permit at least 389 dwelling units
in the Vallco Shopping District Special Area. The General Plan Amendments (adopted at the
August 20, 2019 City Council meeting with Resolution Nos. 19-109 and 19-110) modify the
Land Use Element of the General Plan to remove office as a permitted use within the Vallco
Shopping District Special Area and define development standards that will allow residential
development by right on 13.1 acres at a maximum density of 35 dwelling un its per acre. The
proposed municipal code amendments would rezone the properties within the Vallco Shopping
District Special Area for consistency with the General Plan, as amended by General Plan
Amendments GPA-2019-01 and GPA-2019-02, and other relevant portions of the Municipal
Code.
2. The proposed zoning is in compliance with the provisions of the California
Environmental Quality Act (CEQA).
The City has prepared a Second Addendum Final EIR for the General Plan Amendment, Housing
Element Update, and Associated Rezoning Project that analyzes the potential environmental
effects of the proposed zoning amendments. The City Council has exercised its independent
judgment and reviewed and considered the information in the Second Addendum, which
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concludes that no further environmental review is required for the proposed zoning amendments
to comply with CEQA.
3. The site is physically suitable (including, but not limited to, access, provision of
utilities, compatibility with adjoining land uses, and absence of physical constraints) for
the requested zoning designation(s) and anticipated land use development(s).
The sites being rezoned have access to utilities and are compatible with adjoining land uses. To
the extent that there are deficient utilities, the City has adopted mitigation measures to ensure
that any future development would need to provide the appropriate utilities to accommodate the
development. The proposed zoning would implement the Housing Element and the Land Use
Element of the General Plan, as amended by General Plan Amendments GPA-2019-01 and GPA-
2019-02, which include development standards to permit at least 389 residential units and
complementary commercial uses on the site, which are compatible with anticipated land use
development in the area.
4. The proposed zoning will promote orderly development of the City.
The sites being rezoned will promote orderly development in the City by allowing a critical mass
of development to be proposed along the City’s Priority Development Area (PDA) in which
future development is anticipated without exceeding the vision for housing and complementary
commercial development required in the Housing Element and Land Use Element of the General
Plan, as amended by General Plan Amendments GPA-2019-01 and GPA-2019-02.
5. That the proposed zoning is not detrimental to the health, safety, peace, morals
and general welfare of persons residing or working in the neighborhood of subject
parcels.
The proposed zoning is not detrimental to the health, safety, peace, morals and general welfare
since these are conforming changes that are necessary to implement the Housing Element and
Land Use Element of the City's General Plan, as amended by General Plan Amendments GPA-
2019-01 and GPA-2019-02. Additionally, where health or safety impacts have been identified in
the Final EIR, mitigation measures have been identified which would be applicable to any
development on these sites.
Section 3. The City Council approves the Amendments to the Municipal Code
(Application No. MCA-2019-01) as shown in Exhibit A and authorizes the staff to make
grammatical, typographical, numbering, and formatting changes necessary to assist in
production of the final published Municipal Code.
Section 4. If any portion of this Ordinance or its application is for any reason
held to be invalid, unenforceable or unconstitutional, by a court of competent
jurisdiction, that portion shall be deemed severable, and such invalidity,
unenforceability or unconstitutionality shall not affect the validity or enforceability of
the remaining portions of the Ordinance, or its application to any other person or
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circumstance. The City Council hereby declares that it would have adopted each section,
sentence, clause or phrase of this Ordinance, irrespective of the fact that any one or more
other sections, sentences, clauses or phrases of the Ordinance be declared invalid,
unenforceable or unconstitutional.
Section 5. The City Council directs the Director of Community Developme nt
to file a Notice of Determination with the Santa Clara County Recorder in accordance
with CEQA and the CEQA guidelines.
Section 6 This Ordinance shall not take effect unless and until General Plan
Amendment GPA-2019-02 becomes effective.
INTRODUCED at a regular meeting of the City Council of the City of Cupertino
the 20th day of August, 2019 and ENACTED at a regular meeting of the City Council of
the City of Cupertino the ____day of ___________, 2019 by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
SIGNED:
__________________
Steven Scharf, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Grace Schmidt, City Clerk
________________________
Date
APPROVED AS TO FORM:
__________________________
Heather Minner, City Attorney
________________________
Date
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Exhibit A
19.12.030 Approval Authority.
Table 19.12.030 shows the approval authority, Noticing Radius, Expiration Date and
Extension Dates for different types of Permits.
Table 19.12.030 - Approval Authority
Type of
Permit or
Decision A, B
Administrat
ive Review
Desig
n
Revie
w
Comm
ittee
Plannin
g
Commi
ssion
City
Coun
cil
Public
Hearing/
Public
Meeting/
Commen
t Period
C
Noticing/
Noticing
Radius D
Post
ed
Site
Noti
ce
Expirati
on Date
E
Chapter/
Findings
General Plan Amendment
Major F - - R F PH CA.
Govt.
Code
65350-
65362
Yes - CA.
Govt.
Code
65350-
65362 Minor G - - R F PH Yes -
Zoning Map Amendments
Major F - - R F PH CA.
Govt.
Code
65853-
65857
Yes - 19.152.0
20
Minor G - - R F PH Yes -
Zoning Text
Amendments
- - R F PH
CA.
Govt.
Code
65853-
65857
- - 19.152.0
30
Specific
Plans
- - R F PH
CA.
Govt.
Code
65350-
65362
- - 20.04.03
0
Development
Agreements
- - R F PH
CA.
Govt.
Code
65867
Yes - 19.144.1
20
Development Permits
Major F, H - - F/R A1/F PM 19.12.11
0/300'
Yes 2 years 19.156.0
50
Minor G F - A1 A2 PM Yes 2 years
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Table 19.12.030 - Approval Authority
Type of
Permit or
Decision A, B
Administrat
ive Review
Desig
n
Revie
w
Comm
ittee
Plannin
g
Commi
ssion
City
Coun
cil
Public
Hearing/
Public
Meeting/
Commen
t Period
C
Noticing/
Noticing
Radius D
Post
ed
Site
Noti
ce
Expirati
on Date
E
Chapter/
Findings
Conditional Use Permits
Major F, H, I F - A1/F/R A1/
A2/F PH CA.
Govt.
Code
65905
Yes 2 years
19.156.0
50
Minor G, I F - A1/F/R A1/
A2/F PH Yes 2 years
Temporary F - A1 A2 - None No 1 year
None
19.160.0
30
Density
Bonus
(Residential)
R F
Based on
concurre
nt
applicatio
n
19.52
Adult-
Oriented
Commercial
Activity
(CUP)
- R F PH
CA.
Govt.
Code
65905/30
0'
Yes 2 years
19.128.0
30 &
19.128.0
40
Architectural and Site Approval
Major J F - A1 A2 PM 19.12.11
0/
Yes 2 years 19.168.0
30
Minor K F - A1 A2 PM Yes 2 years
Amendment
Major F, H - - F A1 Varies L Depends
on permit
being
amended
L
Yes 2 years 19.44,
19.144,
19.156,
19.164 Minor G F - A1 A2 Varies L Yes 2 years
Minor
Modification
F - A1 A2 - None No 2 years 19.164
Hillside
Exception/
Height
Exception/
- - F A1 PH 19.12.11
0/300' Yes 2 years
19.40.08
0,
19.24.07
0,
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Table 19.12.030 - Approval Authority
Type of
Permit or
Decision A, B
Administrat
ive Review
Desig
n
Revie
w
Comm
ittee
Plannin
g
Commi
ssion
City
Coun
cil
Public
Hearing/
Public
Meeting/
Commen
t Period
C
Noticing/
Noticing
Radius D
Post
ed
Site
Noti
ce
Expirati
on Date
E
Chapter/
Findings
Heart of the
City
Exception I
19.136.0
90
Variance F - A1 A2 PH
CA.
Govt.
Code
65905
Yes 2 years 19.156.0
60
Status of
non-
conforming
Use
- - F A1 PH 19.12.11
0/300' Yes - 19.140.1
10
Wireless
Antennas I
F - F/ A1 A2 Varies I
Depends
on
applicatio
n type
Yes 2 years 19.136.0
90
Signs
Permits F - A1 A2 - None No 1 year 19.104
Neon,
Reader board
& Freeway
Oriented
Signs I
- F F A1 M PM 19.12.11
0/300' No 1 year 19.104
Programs F - A1 A2 - None No 1 year 19.104
Exceptions I - F - A1 M PM
19.12.11
0/
Adjacent
Yes 1 year 19.104.2
90
Parking
Exceptions I
F F A1 A1 M
/A2 Varies N
19.12.11
0/
Adjacent/
300' O
Yes 1 year 19.124.0
50
Fence
Exceptions
- F - A1 L PM
19.12.11
0/
Adjacent
Yes 1 year 19.48.06
0
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Table 19.12.030 - Approval Authority
Type of
Permit or
Decision A, B
Administrat
ive Review
Desig
n
Revie
w
Comm
ittee
Plannin
g
Commi
ssion
City
Coun
cil
Public
Hearing/
Public
Meeting/
Commen
t Period
C
Noticing/
Noticing
Radius D
Post
ed
Site
Noti
ce
Expirati
on Date
E
Chapter/
Findings
Front Yard
Interpretation
F - A1 A2 PM
19.12.11
0/
Adjacent
Yes 1 year 19.08
R-1 Ordinance Permits
Two-story I F F F/A1 A1 L
/A2 Varies I
19.12.11
0/
Adjacent
Yes 1 year 19.28.14
0
Minor
Residential
F - A1 A2 CP No 1 year
Exceptions I - F - A1 M PM Yes 1 year
Protected Trees
Tree
Removal
F - A1 A2 CP
Adjacent
unless
exempt
Yes 1 year 14.18.18
0
Heritage Tree
Designation
& Removal
- - F A1 PM
19.12.11
0/
300'
Yes - 14.18
Tree
Management
Plan
F - A1 A2 - None No - 14.18
Retroactive
Tree
Removal
F - A1 A2 - None No - 14.18
Reasonable
Accommodati
on
F - A1 A2 - None No 1 year 19.52.05
0
Extensions P
Parking,
Fence & Sign
Exceptions &
Front Yard
Interpretation
s
F - A1 A2 - None No 1 year
Neon,
Reader board
F A1 A2 - None No 1 year
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Table 19.12.030 - Approval Authority
Type of
Permit or
Decision A, B
Administrat
ive Review
Desig
n
Revie
w
Comm
ittee
Plannin
g
Commi
ssion
City
Coun
cil
Public
Hearing/
Public
Meeting/
Commen
t Period
C
Noticing/
Noticing
Radius D
Post
ed
Site
Noti
ce
Expirati
on Date
E
Chapter/
Findings
& Freeway
Oriented
Signs
Two Story
Permits,
Minor
Residential
Permits and
Exceptions
F A1 A2 - None No 1 year
Tree
Removals
F - A1 A2 - - No 1 year
All other
projects
F - A1 A2 -
19.12.11
0/
None
No 2 years
For permits within the Vallco Town Center Zone - see Vallco Town Center Specific Plan
KEY:
R—Review and recommendation body F—Final decision-making body unless appealed
A1—Appeal Body on first appeal A2—Appeal body on second appeal
PH—Public Hearing PM—Public Meeting
CP—Comment Period
Notes:
A. Permits can be processed concurrently with other applications, at the discretion of the Director of
Community Development.
B. Projects with combined applications shall be processed at the highest level of approval in
conformance with Section 19.04.090.
C. Public Hearing: Projects types that need noticing pursuant to the CA Government Code; Public
Meeting: Project types that need only a mailed notice and no newspaper notices; Comment Period:
Project types that need only a mailed notice and do not need a public hearing or public meeting.
D. Noticing Radius of an application in a combined application shall c orrespond to the maximum noticing
radius required for any one of the applications.
E. Expiration date of an application in a combined application shall correspond to the maximum
expiration date allowed for any one of the development applications (not including Subdivision Map Act
applications, General Plan Amendments and Zoning Map or Text Amendments.)
F. Major General Plan Amendment, Conditional Use Permit, Development Permit application - for more
than ten thousand square feet of commercial and/or industrial and/or office and/or other non-residential
use, or greater than six residential units.
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G. Minor General Plan Amendment, Conditional Use Permit, Development Permit application - for ten
thousand square feet or less of commercial and/or industrial and/or office and/or other non-residential
use, or six or less residential units.
H. City Council review for applications with new development greater than fifty thousand square feet of
commercial, and/or greater than one hundred thousand square feet of industrial and/or office and/or other
non-residential use, and/or greater than fifty residential units.
Planning Commission review for all other applications.
I. Please see specific zoning district regulations or chapters in this title that apply to the subject property
or project for approval authority.
J. Major Architectural and Site Approval application - architectural and site approval for all projects that
are not a Minor Architectural and Site Approval application.
K. Minor Architectural and Site Approval application - single family home in a planned development
zoning district, minor building architectural modifications, landscaping, signs and lighting for new
development, redevelopment or modification in such zones where review is requir ed and minor
modifications of duplex and multi-family buildings.
L. Meeting type and noticing are dependent on the underlying permit being modified.
M. Appeals of Design Review Committee decisions shall be heard by the City Council.
N. Parking Exceptions approved by the Director of Community Development need a comment period.
Parking Exceptions approved by the Design Review Committee need a public meeting.
O. Parking Exceptions in Single-family residential (R1) zones and Duplex (R2) zones need adjacent
noticing.
All other Parking Exceptions need notices within three hundred feet of the exterior boundary of the
subject property.
P. Application must be filed prior to expiration date of permit. Permit is extended until decision of the
Approval Body on the extension.
****
19.16.010 Zoning Districts Designated.
****
B. In addition to the zones identified in Table 19.16.010A, the City may establish
separate zoning districts in individual specific plans adopted to promote the orderly
development of the plan area. These zoning districts are identified in Table 19.16.010B
below:
Table 19.16.010B - Specific Plan Districts
Zoning Map Designation Specific Plan Name
Heart of the City Heart of the City
VTC Vallco Town Center Vallco Town Center
Land uses and development standards within a specific plan zone shall be as
prescribed in the specific plan.
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****
19.16.030 Zoning Map and District Boundaries.
A. The boundaries of districts established by this title shall be shown upon the zoning
map. The zoning map, and all amendments, changes, and extensions thereof, and all
legends, symbols, notations, references, and other matters shown thereon shall be a
part of this title.
B. The zoning map, as currently effective, and a record of all amendments, changes
and extensions thereof, shall be maintained as a public record in the office of the
Director of Community Development.
C. The boundaries of each district as shown upon the zoning map, or amendments
thereto, are adopted by the ordinance codified in this title, and the specific regulations
established by this title for each general district and all other regulations applicable
therein as set forth in this title are established and declared to be in effect upon all
portions of lands included within the boundaries of each and every district as shown
upon the zoning map.
****
19.16.060 Application of Regulation to Sites Divided by Zone Boundaries.
Whenever it is found, pursuant to Section 19.28.050, that a lot or site is divided by a
boundary between districts, the provisions of the zoning regulations applicable within
each district shall apply only to each the portion of this site situated in each a separate
district.
****
19.80.030 Establishment of Districts–Permitted and Conditional Uses and
Development Standards.
A. Planned development zoning districts may be established, modified or removed
from the zoning map, and the regulations applicable to any planned development district
may be established, modified or deleted in accord with the procedures described in this
chapter.
B. All P districts shall be identified on the zoning map with the letter coding "P"
followed by a specific reference to the general type of use allowed in the particular
planning development zoning district. For example, a planned development zoning
district in which the uses are to be general commercial in nature, would be designated
"P(CG)." A planned development zoning district in which the uses are intended to be a
mix of general commercial and residential would be designated "P(CG/Res)."
C. Permitted uses in a P zoning district shall consist of all uses which are permitted
in the zoning district which constitutes the designation following the letter coding
"P." For example, the permitted uses in a P(CG) zoning district are the same uses
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which are permitted in a CG zoning district for sties with a mixed-use residential
designation, Section 19.80.030F shall apply.
D. Conditional uses in a P zoning district shall consist of all uses which require the
issuance of a conditional use permit in the zoning district which constitutes the
designation following the letter coding "P." For example, the conditional uses in a
P(CG) zoning district are the same uses which require a conditional use permit in CG
zoning district. Each conditional use in a P zoning district requires a separate
conditional use permit for sites with a mixed-use residential designation,
Section 19.80.030F shall apply.
E. The general category of uses in a P zone shall be defined at the time of the
conceptual plan, and shall be consistent with the adopted General Plan relative to the
property in the application. The development standards and regulations of the
permitted and conditional uses shall be established in conjunction with the approval of
the conceptual and definitive plans, unless specifically identified in Section 19.80.030F
below. Developments which are not subject to discretionary approval by the City must
comply with the development standards of the underlying zoning district.
F. For sites with a mixed-use residential designation the following shall apply:
1. For sites in the Monta Vista Village Special Area, residential shall be a permitted
use.
2. If a site is listed as a Priority Housing Site in the City’s adopted Housing Element
of the General Plan, then residential development that does not exceed the number of
units designated for the site in the Housing Element shall be a permitted use.
3. Residential development on sites not designated as Priority Housing Sites in the
City’s adopted Housing Element of the General Plan and residential development on a
Priority Housing Site that exceeds the number of units designated for that Priority
Housing Site shall be a conditional use.
4. Priority Housing Sites shall be shown on the City’s zoning map.
5. For sites zoned P(R3, CG), no conceptual or definitive plans shall be required to
establish permitted and conditional uses. Multifamily residential use is the primary
permitted use. Commercial uses may be incorporated into the development on the
ground floor but shall not be the primary permitted use.
G. For sites which require a specific plan prior to development approval, the
permitted and conditional uses and all development regulations shall be as shown in the
specific plan.
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ORDINANCE NO. 19-2188
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
AMENDING THE ZONING MAP TO REZONE 13.1 ACRES WITHIN THE
VALLCO SHOPPING DISTRICT SPECIAL AREA TO MIXED USE PLANNED
DEVELOPMENT WITH MULTIFAMILY (R3) RESIDENTIAL ZONING
P(R3,CG) AND GENERAL COMMERCIAL USES AND THE REMAINDER OF
THE SPECIAL AREA TO GENERAL COMMERCIAL (CG)
SECTION I: PROJECT DESCRIPTION
Application No: Z-2019-01
Applicant: City of Cupertino
Location: 10101 to 10333 N Wolfe Rd
APN#s: 316-20-080, 316-20-081, 316-20-088, 316-20-092, 316-20-094, 316-20-
095, 316-20-099, 316-20-100, 316-20-101, 316-20-103, 316-20-104, 316-
20-105, 316-20-106, 316-20-107
SECTION II: RECITALS
WHEREAS, Strategy 1 in the Housing Element of the Cupertino General Plan identifies
the Vallco Shopping District Special Area as being appropriate to accommodate at least
389 dwelling units at a minimum density of 20 units per acre and a maximum density of
35 units per acre and provides that if a specific plan is not adopted by May 31, 2018, the
City will consider removing the Special Area as a Priority Housing Site; and
WHEREAS, as required by Housing Element Strategy 1, at a study session on June 18,
2019 the City Council considered removing the Vallco Shopping District Special Area as
a Priority Housing Site; and
WHEREAS, after consideration of its options at the June 18, 2019 study session, the City
Council provided direction to staff to retain the Vallco Shopping District Special Area as
a Priority Housing Site, and City Council directed staff to prepare a General Plan
Amendment for its consideration to permit 389 residential units by right within the Vallco
Shopping District Special Area to accommodate the City's Regional Housing Need
Allocation (RHNA) consistent with the Housing Element and Government Code Section
65863; and
WHEREAS, following a duly noticed public hearing on August 20, 2019, and prior to
the Council’s consideration of the Master Zoning Map amendments, the Council
adopted Resolution No. 19-109, approving a General Plan Amendment to remove office
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uses as a permitted land use within the Vallco Shopping District Special Area and
remove the associated office development allocation, and Resolution No. 19-110,
approving a General Plan Amendment to establish height limits and enact development
standards for residential uses within the Vallco Shopping District Special Area; and
WHEREAS, the Ordinance amends the City's Master Zoning Map apply the new Mixed
Use Planned Development with Multifamily (R3) Residential and General Commercial
zoning designation (P(R3,CG)) created in MCA-2019-01 to the Vallco Shopping District
Special Area; and
WHEREAS, the Ordinance is consistent with the City's General Plan and the public
health, safety, convenience, and general welfare, and the amendments herein are
necessary to implement the Housing Element of the General Plan as adopted; and
WHEREAS, the City has prepared a Second Addendum (“Second Addendum”) to the
Final Environmental Impact Report (“Final EIR”) for the General Plan Amendment,
Housing Element Update, and Associated Rezoning Project (State Clearinghouse No.
2014032007) for modifications to the General Plan and zoning affecting the Vallco
Shopping District Special Area in compliance with the California Environmental
Quality Act (Public Resources Code Section 21000 et seq.) (“CEQA”) together with the
State CEQA Guidelines (California Code of Regulations, Title 14, Section 15000 et seq.)
(hereinafter, “CEQA Guidelines”); and
WHEREAS, following necessary public notices given as required by the procedural
ordinances of the City of Cupertino and the Government Code, the Planning
Commission held a public hearing on July 30, 2019 to consider the Ordinance; and
WHEREAS, on July 30, 2019, the Second Addendum was presented to the Planning
Commission; and
WHEREAS, on July 30, 2019, by Resolution 6884, the Planning Commission
recommended on a 4-0 vote (Commissioner Moore recused) that the City Council adopt
a General Plan Amendment solely to impose height limitations within the Vallco
Shopping District Special Area subject to certain conditions and recommended that the
City Council adopt the Second Addendum for modifications to the Project (as defined
in Resolution No. 19-108) affecting the Vallco Shopping District Special Area; and
WHEREAS, on August 20, 2019 and _______________, upon due notice, the City Council
has held at least two public hearings to consider the Master Zoning Map Amendment;
and
WHEREAS, on August 20, 2019, by Resolution No. 19-108, the City Council adopted the
Second Addendum to the Final EIR (EA-2013-03); and
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WHEREAS, the City Council of the City of Cupertino is the decision-making body for
this Ordinance; and
WHEREAS, prior to taking action on this Ordinance, the City Council has exercised its
independent judgment and reviewed and considered the information in the Second
Addendum, which concludes that no further environmental review is required for the
Master Zoning Map amendments included in the Ordinance.
SECTION III
NOW, THEREFORE, BE IT ORDAINED:
After careful consideration of the, maps, facts, exhibits, testimony and other evidence
submitted in this matter, the City Council hereby adopts the Master Zoning Map
amendments based on the findings described above, the public hearing record, subject to
the conditions specified below:
Section 1. The recitals set forth above are true and correct, and are hereby
incorporated herein by this reference as if fully set forth in their entirety.
Section 2. The City Council finds the following as set forth by Municipal Code
19.152.020.C:
1. That the proposed zoning is in accord with Title 19 of the Municipal Code and
the City's Comprehensive General Plan (Community Vision 2040) and the proposed
amendments are internally consistent with Title 19 of the Municipal Code.
The Housing Element of the General Plan calls for the City to permit at least 389 dwelling units
in the Vallco Shopping District Special Area. The General Plan Amendments (adopted at the
August 20, 2019 City Council meeting with Resolution Nos. 19-109 and 19-110) modify the
Land Use Element of the General Plan to remove office as a permitted use within the Vallco
Shopping District Special Area and define development standards that will allow residential
development by right on 13.1 acres at a maximum density of 35 dwelling units per acre. The
proposed municipal code amendments would rezone the properties within the Vallco Shopping
District Special Area for consistency with the General Plan, as amended by General Plan
Amendments GPA-2019-01 and GPA-2019-02, and other relevant portions of the Municipal
Code.
2. The proposed zoning is in compliance with the provisions of the California
Environmental Quality Act (CEQA).
The City has prepared a Second Addendum Final EIR for the General Plan Amendment, Housing
Element Update, and Associated Rezoning Project that analyzes the potential environmental
effects of the proposed zoning amendments. The City Council has exercised its independent
judgment and reviewed and considered the information in the Second Addendum, which
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concludes that no further environmental review is required for the proposed zoning amendments
to comply with CEQA.
3. The site is physically suitable (including, but not limited to, access, provision of
utilities, compatibility with adjoining land uses, and absence of physical constraints) for
the requested zoning designation(s) and anticipated land use development(s).
The sites being rezoned have access to utilities and are compatible with adjoining land uses. To
the extent that there are deficient utilities, the City has adopted mitigation measures to ensure
that any future development would need to provide the appropriate utilities to accommodate the
development. The proposed zoning would implement the Housing Element and the Land Use
Element of the General Plan, as amended by General Plan Amendments GPA-2019-01 and GPA-
2019-02, which include development standards to permit at least 389 residential units and
complementary commercial uses on the site, which are compatible with anticipated land use
development in the area.
4. The proposed zoning will promote orderly development of the City.
The sites being rezoned will promote orderly development in the City by allowing a critical mass
of development to be proposed along the City’s Priority Development Area (PDA) in which
future development is anticipated without exceeding the vision for housing and complementary
commercial development required in the Housing Element and Land Use Element of the General
Plan, as amended by General Plan Amendments GPA-2019-01 and GPA-2019-02.
5. That the proposed zoning is not detrimental to the health, safety, peace, morals
and general welfare of persons residing or working in the neighborhood of subject
parcels.
The proposed zoning is not detrimental to the health, safety, peace, morals and general welfare
since these are conforming changes that are necessary to implement the Housing Element and
Land Use Element of the City's General Plan, as amended by General Plan Amendments GPA-
2019-01 and GPA-2019-02. Additionally, where health or safety impacts have been identified in
the Final EIR, mitigation measures have been identified which would be applicable to any
development on these sites.
Section 3. The City Council approves amendments to the Master Zoning Map
as shown in Exhibit A.
Section 4. If any portion of this Ordinance or its application is for any reason
held to be invalid, unenforceable or unconstitutional, by a court of competent
jurisdiction, that portion shall be deemed severable, and such invalidity,
unenforceability or unconstitutionality shall not affect the validity or enforceability of
the remaining portions of the Ordinance, or its application to any other person or
circumstance. The City Council hereby declares that it would have adopted each section,
sentence, clause or phrase of this Ordinance, irrespective of the fact that any one or more
09/03/19
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other sections, sentences, clauses or phrases of the Ordinance be declared invalid,
unenforceable or unconstitutional.
Section 5. The City Council directs the Director of Community Development
to file a Notice of Determination with the Santa Clara County Recorder in accordance
with CEQA and the CEQA guidelines.
Section 6 This Ordinance shall not take effect unless and until General Plan
Amendment GPA-2019-02 becomes effective.
INTRODUCED at a regular meeting of the City Council of the City of Cupertino
the 20th day of August, 2019 and ENACTED at a regular meeting of the City Council of
the City of Cupertino the ____day of ___________, 2019 by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
SIGNED:
__________________
Steven Scharf, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Grace Schmidt, City Clerk
________________________
Date
APPROVED AS TO FORM:
__________________________
Heather Minner, City Attorney
________________________
Date
09/03/19
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09/03/19
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1 The zoning on assessors’ parcels in the table below was amended in September 2018 (Ord. Z-2018-2178) in
connection with the City’s approval of the Vallco Specific Plan. The adoption of that Zoning Ordinance has been
challenged and thus the validity of the zoning code amendments therein is uncertain. See, e.g., Midway Orchards
v. County of Butte (1990) 220 Cal.App.3d 765. The table shows the zoning as adopted in September 2018, and the
parcels’ zoning as existing before that date.
APN
Zoning Prior to
Ord. Z-2018-2178
Adoption
Zoning Proposed by
Ord. Z-2018-2178 1 New Zoning
316-20-080 P(CG) Vallco Town Center CG
316-20-081 P(CG) Vallco Town Center CG
316-20-088 P(Regional
Shopping) Vallco Town Center CG
316-20-092 P(Regional
Shopping) Vallco Town Center CG
316-20-094 P(Regional
Shopping) Vallco Town Center CG and P(R3, CG) as
indicated on map above
316-20-095 P(Regional
Shopping) Vallco Town Center P(R3, CG)
316-20-099 P(Regional
Shopping) Vallco Town Center CG and P(R3, CG) as
indicated on map above
316-20-100 P(Regional
Shopping) Vallco Town Center CG and P(R3, CG) as
indicated on map above
316-20-101 P(Regional
Shopping) Vallco Town Center CG
316-20-104 P(Regional
Shopping) Vallco Town Center CG
316-20-105 P(Regional
Shopping) Vallco Town Center CG
316-20-106 P(Regional
Shopping) Vallco Town Center CG
316-20-107 P(Regional
Shopping) Vallco Town Center CG
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Potential Location D: East of Wolfe Road and North of Vallco Parkway N. Wolfe Road
Vallco Pkway
N
±13.1 ac.
Stevens Creek Blvd
Attachment C09/03/19
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CITY COUNCIL STAFF REPORT
Meeting: September 3, 2019
Subject
Application and Review Procedures for Projects Proposed Pursuant to Senate Bill
35 (Application No(s): CP-2019-04; Applicant(s): City of Cupertino; Location:
Citywide)
Recommended Action
That the City Council find adoption of the proposed Resolution exempt from
CEQA, adopt the Resolution for Application and Review Procedures for Projects
proposed pursuant to Senate Bill 35 (Attachment A), and review and provide any
input on the Draft Senate Bill 35 Application Package (Attachment B).
Discussion
I. Background
The Planning Commission considered a draft of the Resolution for Application and
Review Procedures for Projects proposed pursuant to Senate Bill 35 (Review
Procedures) and a draft of the Senate Bill 35 Application Package (Application
Package) at a July 30, 2019 Study Session and provided comments to the City Council.
The City Council considered a revised Draft Review Procedures and Application
Package at an August 6, 2019 Study Session. The staff report and supplemental staff
report for the City Council study session are attached as Attachments C and D. They
include information on the background of SB 35, the Department of Housing and
Community Development’s SB 35 Guidelines, and recent amendments to the
Government Code section enacting SB 35. The attached staff reports also summarize
the draft Review Procedures to be used when the City processes SB 35 applications in
the future and discuss the proposed Application Package, which will be maintained
by the City’s Department of Community Development. Attachments E and F contain
the text of SB 35, as amended, and the Department of Housing and Community
Development’s Guidelines, respectively. The Planning Commission and the City
Council’s comments are summarized in Attachment G.
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This staff report focuses on changes made to the Review Procedures and Application
Package since the Council’s study session. Changes made to the Review Procedures since
the City Council Study Session are shown in redlines in Attachment H. Changes made to
the Application Package since the City Council Study Session are shown in redlines in
Attachment I. Direction from Council and edits as a result of comments from the public
are incorporated in the proposed Resolution to the extent possible under current law.
II. Analysis:
The Review Procedures are proposed to be adopted by resolution. The Review
Procedures include an eligibility checklist based on SB 35, the Guidelines, and the City’s
laws and policy, that specify the requirements for a project to be eligible for streamlined
approval under SB 35. The Application Package is presented for Council’s review and
will be maintained by the Community Development Department.
A. Changes Made to Resolution: Following direction from Council, the proposed
resolution has been amended adding language that reflects the history and policy
consequences of AB 101. Language has also been added to note that if in the future it
becomes possible to calculate the two-thirds residential requirement excluding
density bonus additions per the Guidelines prior to the amendments enacted by AB
101, the City intends to do so.
B. Changes Made to Review Procedures and Eligibility Checklist: With input from
Council, the proposed Procedures have been amended to allow a second meeting to
be convened, if possible, given the timelines and review process to allow additional
oversight regarding the 2/3 residential requirement prior to determining eligibility of
a project for streamlining. Other minor changes have been made to ensure
compatibility with the current law and in response to comments, including language
making clear that requirements for an application will not be added to the checklist
when an application has been submitted. Staff also amended language referring to the
Application Checklist to clarify that the checklist in fact includes detailed
requirements that ensure sufficient information will be provided to determine
whether the development is consistent with the required objective planning
standards.
C. Changes Made to Application Package:
With input from the Council, the Application Package has been updated to require
items that may be required under the current General Plan and Municipal Code and
applicable items that were requested in the City’s 90-day letter regarding the Vallco
SB 35 Project Application. It has also been updated to require that applicants provide
additional information that allows the City to determine compliance with the
eligibility criteria related to a project’s location on certain sites that would otherwise
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be ineligible for SB 35. Other minor changes have been made to ensure compatibility
with current law and in response to comments from the public. One item requested
by the Council related to exhibits demonstrating how to calculate square footage of
projects. Draft exhibits will be provided to Council as desk items at the meeting on
September 3rd. The final exhibits will be incorporated into the application package
prior to uploading on the City’s website and distribution to applicants.
D. Changes Made in Response to Comments from the Public
Two members of the public spoke at the City Council Study Session on August 6 th.
Planning Commissioner Kitty Moore spoke in her individual capacity and submitted
written comments regarding the SB 35 Procedures and Application Package. Council
directed staff to respond to her comments. Staff reviewed her comments and made
changes to the Eligibility Checklist, specifically the Affordability and the Location
sections. The Affordability Section reflects the City’s BMR requirements and further
explains how the BMR standards will apply to the project. The Location section has
been amended to more closely match the language of the Guidelines. Ms. Moore’s
comments regarding the City’s BMR standards in the Application Checklist have been
included to the extent possible in the Eligibility Checklist’s Affordability Section.
In addition, Ms. Moore suggested including references to specific plans and requiring
completion of specific plans prior to accepting applications for sites where there is a
pending specific plan. Recent Council actions have largely addressed this issue by
removing the specific plan requirement for the residential portion of the Vallco site
and adding residential development standards. There are no other properties in the
City that are designated for residential or residential mixed use that require
preparation of a Specific Plan. Moreover, SB 35 Guidelines section 300(b)(2) provide
that general plan or zoning ordinance requirements for preparation of a specific plan
or another discretionary permit do not necessarily constitute objective zoning
standards. Ms. Moore made several additional suggestions in her written comments
to the questions and standards related to hazardous waste sites and easements that
staff have determined are not appropriate until the law has been further clarified by
the courts. Once the law has been clarified, the Review Procedures may be updated
by Council, and the Application Package can be updated by the Department of
Community Development to reflect any changes.
Ms. Moore also suggested adding a section allowing appeals of CEQA exemption
determinations, and referenced CEQA Guidelines sections 15061 and 15062. Both of
these sections only apply to “projects” subject to CEQA. SB 35 expressly provides that
“[t]he determination of whether an application for a development is subject to the
streamlined ministerial approval process . . . is not a ‘project’ as defined in” CEQA.
Gov. Code § 65913.4(k) (emphasis added). Therefore, the City’s procedures do not
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include an appeal procedure pursuant to CEQA Guidelines section 15061 for SB 35
determinations.
E. Environmental Impacts
The adoption of the Resolution is not a project under the requirements of the
California Environmental Quality Act of 1970, together with related State CEQA
Guidelines (collectively, “CEQA”) because it has no potential for resulting in physical
change in the environment. Even if the Resolution is found to be a project under
CEQA, it is subject to the CEQA exemption contained in CEQA Guidelines section
15061(b)(3) because it can be seen with certainty to have no possibility of a significant
effect on the environment. In this instance, the City’s Process for Applying for and
Receiving Ministerial Approval Under Senate Bill 35 would have no effect on the
environment because it only lays out the City’s procedures for implementing state
law and would not cause any physical change in the environment.
Next Steps
The City Council’s decision will be in effect immediately upon adoption of the resolution.
Upon the Council’s decision, the application package will be updated to ensure
consistency with the adopted Procedures and published on the City’s website and will be
available at the public counter for applicants.
Prepared by: Caitlin Brown, City Attorney’s Office
Reviewed by: Benjamin Fu, Director of Community Development
Heather Minner, City Attorney
Approved by: Deborah Feng, City Manager
Attachments:
A. Resolution Adopting the Process for Applying and Receiving
Ministerial Approval Under Senate Bill 35, clean copy
B. Draft SB 35 Application Package, clean copy
C. Staff Report re Study Session regarding Application and Review Procedures for
Projects Proposed Pursuant to Senate Bill 35, August 6, 2019, without attachments
D. Supplemental Staff Report re Study Session regarding Application and Review
Procedures for Projects Proposed Pursuant to Senate Bill 35, August 6, 2019,
without attachments
E. SB 35 Statute, as Amended
F. HCD Guidelines – Streamlined Ministerial Approval Process
G. Comments from Planning Commission and City Council Study Sessions
H. Resolution Adopting the Process for Applying and Receiving
Ministerial Approval Under Senate Bill 35 with redlines
I. Draft SB 35 Application Package with redlines
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RESOLUTION NO. ________
A RESOLUTION OF THE CUPERTINO CITY COUNCIL
ADOPTING THE PROCESS FOR APPLYING FOR AND RECEIVING
MINISTERIAL APPROVAL UNDER SENATE BILL 35
WHEREAS, Senate Bill 35 added Government Code Section 65913.4 providing for
the ministerial approval of infill affordable housing projects.
WHEREAS, the California Division of Housing Development issued Guidelines
for implementing SB 35, Streamlined Ministerial Approval Process Guidelines
(“Guidelines”) on November 29, 2018.
WHEREAS, Assembly Bill 101, among its numerous other provisions, amended
Government Code Section 65913.4 to provide that the law’s minimum two-thirds
residential square footage requirement for qualifying projects is calculated including
additional density, floor area, and units, and any other concession, incentive, or waiver
of development standards granted pursuant to the Density Bonus Law. AB 101 was a
budget trailer bill and as such was adopted through a highly abbreviated process that
allowed for very limited review or public input. Its amendment to the residential square-
footage calculation reverses the guidance adopted by the Department of Housing and
Community Development last year and will allow projects with a larger amount of non-
residential development and fewer housing units to qualify for streamlined approval.
WHEREAS, the City Council, with the intention of requiring SB 35 projects to
provide as much housing as possible, will calculate the two-thirds residential
requirement excluding density bonus additions if in the future the law is further
amended and it becomes possible to do so.
WHEREAS, the Guidelines direct local jurisdictions to provide information about
their process for applying and receiving ministerial approval.
WHEREAS, the City Council now provides that information about its process by
this resolution.
NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby adopt
the following:
Process for Applying for and Receiving Ministerial Approval
Under Senate Bill 35
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SECTION 1. Overview. Senate Bill 35 (SB 35) enacted Government Code section
65913.4, which requires certain cities and counties to use a streamlined ministerial
review process for qualifying multifamily housing developments that comply with the
jurisdiction’s objective planning standards, provide specified levels of affordable
housing, and meet other specific requirements. Government Code section 65913.4 has
been twice amended, most recently on July 31, 2019, and the City’s process reflects
these amendments. The California Department of Housing and Community
Development (HCD) determined that Cupertino is subject to SB 35.1 The HCD issued
guidelines for implementing SB 35, Streamlined Ministerial Approval Process Guidelines
(Guidelines), on November 29, 2018, which took effect on January 1, 2019. These
Guidelines direct a local jurisdiction to provide information about its process for
applying and receiving ministerial approval under SB 35. Guidelines § 300(a).
Under SB 35, the City is required to review qualifying projects using a ministerial
review process, which means that the City cannot require an applicant to obtain
discretionary permits that would typically be required (e.g., development permit or
conditional use permit). Guidelines § 301(a)(1). Instead, the City is required to process
applications within the timeframes specified in Government Code section 65913.4 ,
applying only those objective standards contained the City’s General Plan, municipal
code, and other adopted land use plans in effect at the time the project application was
submitted. Guidelines § 300. The review process is also to be streamlined because the
project is not subject to environmental review under the California Environmental
Quality Act (CEQA). Guidelines § 301(a)(6).
This Resolution establishes the City of Cupertino’s SB 35 application and review
processes. It is not intended to supersede or waive any requirements from SB 35 or the
Guidelines not explicitly discussed in this document. This Resolution shall be
interpreted to incorporate and be consistent with Government Code section 65913.4
and the Guidelines, as they be amended from time to time.
SECTION 2. Eligibility Criteria. To be eligible for a streamlined review process, an
application must meet the objective planning standards required by SB 35, including
all applicable City objective land use standards, as described in Exhibit 1, the SB 35
Eligibility Checklist. These eligibility criteria are collectively referred to as the required
“objective planning standards.”
1 As of January 31, 2018, HCD determined that Cupertino is subject to SB 35 streamlining for eligible
projects. Cupertino remained subject to SB 35 streamlining under HCD’s December 2018 Statewide
Determination Summary.
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SECTION 3. Procedures for processing SB 35 Applications. To apply for a project
that qualifies under SB 35, an applicant must follow the procedures below:
1. Submit an SB 35 Application and a Certification of Compliance with Eligibility
Requirements on forms provided by the Community Development Director to
the Planning Division. The application must be submitted along with all of the
material identified in an SB 35 Application Checklist provided by the
Community Development Director. The SB 35 Application Checklist requires
sufficient information for a reasonable person to determine whether the
development is consistent with the required objective planning standards.
SB 35 applications will be subject to a Staff Hourly Rate fee for applicable staff
time and materials to process the project application, based on the rates set in the
adopted Fee Schedule.
2. The City shall post all application materials on the City’s webpage within two
business days after the application has been submitted, and keep the project
webpage updated including posting any additional submittals from the
applicant, initial and final City consistency determinations, and any project
approval or denial.
SECTION 4. Completeness Determination. Once the application is submitted, staff
will determine within seven business days whether the application is complete.
Applications shall be complete if they contain all documents and other information
required by the City, as specified in the SB 35 Application Checklist provided by the
Department of Community Development. See Guidelines § 301(b)(1). All of the
information in the SB 35 Application Checklist is necessary to determine whether the
development is consistent, compliant, or in conformity with the objective planning
standards. If the application is incomplete, staff will deny the project, unless doing so
would be an invalid basis to deny the project under the Guidelines. See Guidelines
§ 301(b)(1). An applicant may submit a revised application for a previously denied
project at any time. The City will process the revised application as a new application
under these procedures and the timeframes for consistency determinations and project
approval shall commence on the date of resubmittal. Guidelines § 301(a)(4).
SECTION 5.
(a) Timeframe for Consistency Determination. If the application is complete, within
60 days of the initial application submittal for a project with 150 or fewer units, and
within 90 days for a project more than 150 units, the City will determine whether the
project conflicts with any of the required objective planning standards. Guidelines §
301(b).
(b) Initial Determination. The Department of Community Development will make an
initial written determination of the proposed project’s consistency with applicable
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objective planning standards. The application may be routed to other City department
staff for review, if deemed necessary. The Community Development Director shall
submit the department’s initial consistency determination to the Planning Commission
and the City Council for consideration at the Oversight and Consistency Review
Meeting.
(c) Oversight and Consistency Review Meeting. When the initial determination is
complete or at least five business days before a final consistency determination is
made, the Planning Commission and the City Council shall hold a joint oversight
meeting to assess the proposed project’s compliance with required objective planning
standards. The Community Development Director may, on a case by case basis,
schedule this meeting earlier than five business days before the final consistency
determination for projects with more than 150 housing units, if necessary, and the
timing of initial review allows.
The Community Development Director may, on a case by case basis, schedule one
additional oversight meeting to assess a mixed-use project’s compliance with the two-
thirds residential requirement in Government Code § 65913.4(a)(2)(C) prior to the
oversight and consistency review meeting discussed above . This additional meeting
would be held within 45 days after the application is submitted, if possible.
If the project includes an application for a tentative or parcel map, this application will
also be considered during the joint oversight meeting, and the Council and Planning
Commission will assess the application’s consistency with objective subdivision
standards. Gov. Code § 65913.4(c)(2). If the project includes an application for a density
bonus, this application will also be considered during the joint oversight meeting, and
the Council and Planning Commission will assess the application’s consistency with
objective density bonus ordinance standards. Gov. Code § 65913.4(a)(5).
The Planning Commission and City Council’s oversight shall be objective, involving
little or no personal judgement as to the wisdom or manner of carrying out the project,
and be strictly focused on compliance with required objective planning standards. See
Guidelines § 102(n), 301(a)(2). The oversight shall not in any way inhibit, chill, stall,
delay, or preclude the ministerial approval. Guidelines § 300(a)(2).
The Oversight Meeting shall be a noticed, open, and public meeting in compliance with
the Ralph M. Brown Act. The applicant and members of the public shall have an
opportunity to speak as they would at other Planning Commission and City Council
meetings.
In addition, the noticing requirements of Municipal Code section 19.12.110A for
Development Permits shall apply to the Oversight and Consistency Review Meeting.
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(d) City Manager action following Oversight and Consistency Review Meeting.
Following the Council and Planning Commission’s Oversight and Consistency Review
Meeting and before the expiration of the timeframe for a consistency determination,
the City Manager will send the applicant either (1) a letter documenting which
standard or standards the development conflicts with and an explanation for the
reason or reasons the development conflicts with that standard or standards , or (2) a
letter stating that the project is consistent with all required objective planning
standards and an explanation for reasons the development is consistent with those
standards. See Guidelines § 301(a)(3).
SECTION 6. Procedure if project is consistent with all objective planning standards.
If the proposed development is consistent with all required objective planning
standards, the City Manager will prepare final approval documents and standard
conditions of approval. See Guidelines § 301(a)(5). Within 90 days from the initial
project application’s submittal for a project with 150 or fewer units, and within 180
days for a project with more than 150 units, the City Manager will provide the project
applicant with the final approval documents and standard conditions of approval.
Guidelines § 301(b)(3).
SECTION 7. Procedure if application is ineligible for streamlined review. If the City
determines that a project conflicts with any required objective planning standard, it
will deny the application for streamlined processing under SB 35. The City will not
continue to process the application while allowing the applicant to correct any
deficiencies. The denial of an application for streamlined processing does not preclude
the applicant from correcting any deficiencies and resubmitting a new application for
streamlined review or for review under standard City procedures. If the applicant
submits a corrected or revised application, the timeframes specified in these
procedures shall commence on the date of resubmittal. Guidelines § 301(a).
SECTION 8. Exhibit. The Exhibit to this document may be updated periodically by
Planning Division staff in order to respond to changes to the Cupertino Municipal
Code or to state law. Staff shall not weaken or remove any requirements unless
required to do so by changes in the law.
BE IT FURTHER RESOLVED that this Resolution is not a project under the
requirements of the California Environmental Quality Act of 1970, together with
related State CEQA Guidelines (collectively, “CEQA”) because it has no potential for
resulting in physical change in the environment. In the event that this Resolution is
found to be a project under CEQA, it is subject to the CEQA exemption contained in
CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have no
possibility of a significant effect on the environment. CEQA applies only to actions
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which have the potential for resulting in a significant effect on the environment. Where
it can be seen with certainty that there is no possibility that the activity in question may
have a significant effect on the environment, the activity is not subject to CEQA. In
this circumstance, the City’s Process for Applying for and Receiving Ministerial
Approval Under Senate Bill 35 would have no effect on the environment because it
only lays out the City’s procedures for implementing state law and would not cause
any physical change in the environment. The foregoing determination is made by the
City Council in its independent judgment.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this _ _ day of _______, by the following vote:
Members of the City Council
AYES:
NOES:
ABSENT:
ABSTAIN:
SIGNED:
________
Steven Scharf, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Grace Schmidt, City Clerk
________________________
Date
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Exhibit 1:
Senate Bill 35 Eligibility Checklist
To be eligible for a streamlined review process under SB 35, an application must meet the
objective planning standards required by SB 35, including all applicable City objective land
use standards, in effect at the time the application is submitted, as described below.
1. NUMBER AND DENSITY OF UNITS. The project must comply with the minimum
and maximum residential density range permitted for the site, plus any applicable
density bonus. Guidelines § 300(c)(1). If the zoning code’s density designation for the
site conflicts with the density allowed in the general plan’s land use designation, the
density in the general plan’s land use designation prevails. Gov. Code § 65913.4(a)(5).
The project, if eligible, may request a density bonus and/or waivers and/or concessions
under the Density Bonus Law (Gov. Code § 65915). Guidelines § 300(b)(3). Any increase
in density granted under the Density Bonus Law is considered consistent with
maximum allowable densities. Guidelines § 300(b)(3).
In addition:
(a) The project must propose at least two multifamily residential units. Guidelines
§§ 102(o), 400(a).
(b) If the project is mixed-use, at least two-thirds of the proposed development’s square
footage must be designated for residential use. Guidelines § 400(b).
i. The two-thirds calculation is based upon the proportion of gross square footage
of residential space and related facilities to gross development building square
footage for an unrelated use, such as commercial or office uses. Structures
utilized by both residential and non-residential uses shall be credited
proportionally to intended use. Guidelines § 400(b).
ii. Related residential facilities are defined as any manager’s units and any and all
common area spaces that are included within the physical boundaries of the
housing development, including, but not limited to, common area space,
walkways, balconies, patios, clubhouse space, meeting rooms, laundry facilities,
and parking areas that are exclusively available to residential users, except any
portions of the overall development that are specifically commercial space.
Guidelines § 102(u).
iii. Additional density, floor area, and units, and any other concession, incentive,
or waiver of development standards granted pursuant to Density Bonus Law
are included in the square footage calculation. Gov. Code § 65913.4(a)(2)(C).
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(c) If the development project qualifies for a density bonus under Government Code
section 65915, the applicant must submit detailed plans clearly showing location
and the square footage of:
i. Affordable units that qualify the project for a density bonus,
ii. Additional density, floor area, or units granted pursuant to Density Bonus law
The plans must be of sufficient detail to verify the square footage of the residential
units and additional bonus units, floor area, or density granted pursuant to
Density Bonus Law. The applicant must comply with all objective standards
relating to density bonus found in CMC Chapter 19.56. Guidelines § 300(b)(5).
(d) Both residential and non-residential components of a qualified mixed-use
development are eligible for the streamlined approval process. Guidelines §
400(b)(2). Additional or subsequent permitting requirements pertaining to the
individual businesses located in the commercial component (e.g. late night activity,
live music or child care use permits) are subject to the City ’s General Plan and
Development Code requirements. Guidelines § 400(b)(3).
2. AFFORDABILITY. The project must provide affordable housing as specified under
Government Code section 65913.4(a)(3)(A) and (a)(4)(B) and under Cupertino’s Below
Market Rate Housing Program inclusionary zoning ordinance specifically:
(a) SB 35 projects must reserve at least 50% of their total units as affordable to
households making below 80 percent of the area median income in Santa Clara
County.2 Guidelines § 402(a)(2); see § 402(e).
(b) Cupertino’s inclusionary zoning ordinance provides objective affordability
standards for its inclusionary BMR units in a project as follows:
i. For developments that offer rental housing: very low-income and low-income
households at a 60:40 ratio. Because SB 35 requires rental units be made
available to households making below 80 percent of the area median income, if
the project applicant wants to take credit for both SB 35 units and the City BMR
Program, then the most restrictive requirement would apply and these rental
units must be made available to households at the ratio required by the City’s
BMR Program.
ii. For developments that offer ownership housing: median and moderate income
households at a 50:50 ratio. Because SB 35 requires ownership units be made
2 When jurisdictions have insufficient progress toward their Lower income RHNA (Very Low and Low income)
but have had sufficient progress toward their Above Moderate income RHNA, they are subject to the
streamlined ministerial approval process for proposed developments with at least 50 percent affordability.
Gov. Code § 65913.4(a)(4)(B)(ii). Cupertino has had sufficient progress toward the Above Moderate income
RHNA, but not toward the Lower income RHNA, and is therefore subject to streamlining of projects o ffering at
least 50 percent affordability under SB 35 according to the most recent SB 35 Determination Summary, available
at http://www.hcd.ca.gov/community-development/housing-
element/docs/SB35_StatewideDeterminationSummary.pdf .
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available to households making below 80 percent of the area median income, if
the project applicant wants to take credit for both SB 35 units and the BMR
Program, then the most restrictive requirement would apply and these
ownership units must be made available to households making below 80
percent of the area median income rather than median and moderate income
households.
iii. The objective standards in Cupertino’s inclusionary zoning ordinance shall
apply to the project. Guidelines § 402(e).
iv. As provided in the City’s BMR Program, applicants for projects proposing up
to six residential units may pay the Affordable Housing Mitigation Fee in-lieu
of providing on-site affordable units subject to the City’s BMR Ordinance.
Payment of the fee does not change or override any of SB 35’s affordability
requirements.
(c) The applicant must record a land use restriction or covenant providing that the
lower income housing units shall remain available at affordable housing costs or
rent to persons and families of lower-income (or very low income, as applicable) for
no less than the following periods of time, as applicable:
i. For the units subject to Cupertino’s inclusionary zoning ordinance:
99 years or
55 years (if a project financed with low-income housing tax credits (LIHTC))
(d) An affordable housing and/or regulatory agreement concerning all affordable units
shall be recorded against the property prior to the issuance of the first building
permit. The agreement(s) shall ensure compliance with all applicable laws and
regulations and be consistent with the City’s BMR Housing Mitigation Program
Procedural Manual, except to the extent the Manual conflicts with SB 35’s
requirements.
3. URBAN INFILL. The project must be located on a legal parcel or parcels within the
incorporated City limits. Guidelines § 401(a). At least 75 percent of the perimeter of the
site must adjoin parcels that are developed with urban uses. Guidelines §§ 102(j), 400(a).
For purposes of SB 35, “urban uses” means any current or former residential,
commercial, public institutional, transit or transportation passenger facility, or retail
use, or any combination of those uses. Guidelines § 102(z). Parcels that are only
separated by a street or highway shall be considered adjoined. Guidelines § 102(j).
4. ZONED OR PLANNED RESIDENTIAL USES. The project must be located on a site
that is either zoned or has a General Plan designation for residential or residential
mixed-use development, including sites where residential uses are permitted as a
conditional use. Guidelines § 401(a).
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5. CONSISTENT WITH OBJECTIVE STANDARDS. The project must meet all objective
general plan, zoning, design review, and other objective land use standards in effect at
the time the application is submitted. Gov. Code § 65913.4(a)(5).
(a) If the project is consistent with the minimum and maximum density range allowed
within the General Plan land use designation, it is consistent with housing density
standards. Guidelines § 300(c).
(b) Modifications to otherwise-applicable standards under density bonus law do not
affect a project’s ability to qualify for SB 35. Guidelines § 300(c)(3).
(c) Objective standards are those that require no personal or subjective judgment and
must be verifiable by reference to an external and uniform source available prior to
submittal. Guidelines § 102(p). Sources of objective standards include, without
limitation:
i. General Plan.
ii. Municipal Code, including, without limitation, the Zoning, Subdivisions, and
Building Codes
iii. Heart of the City Specific Plan
iv. Monta Vista Design Guidelines
v. North De Anza Conceptual Zoning Plan
vi. South De Anza Conceptual Plan
vii. Saratoga-Sunnyvale Conceptual Plan
viii. BMR Housing Mitigation Procedural Manual
6. PARKING. The project must provide at least one parking space per unit; however, no
parking is required if the project meets any of the following criteria. Guidelines § 300(d):
(a) The project is located within one-half mile of public transit.
(b) The project is located within an architecturally and historically significant historic
district.
(c) On-street parking permits are required but not offered to the occupants of the project.
(d) The project is located within one block of a car share vehicle station.
However, if any parking is provided, it must meet the City’s objective standards from
Chapter 19.124 of the Municipal Code and Public Works Standards. Guidelines §
300(d)(2).
7. LOCATION.
(a) The project must not be located on a legal parcel(s) that is any of the following (see
Guidelines § 401(b)):
i. Either prime farmland or farmland of statewide importance, as defined pursuant
to United States Department of Agriculture land inventory and monitoring criteria,
as modified for California, and designated on the maps prepared by the Farmland
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Mapping and Monitoring Program of the Department of Conservation, or land
zoned or designated for agricultural protection or preservation by a local ballot
measure that was approved by Cupertino’s voters.3
ii. Wetlands, as defined in the United States Fish and Wildlife Service Manual, Part
660 FW 2 (June 21, 1993).
iii. Within a very high fire hazard severity zone, as determined by the Department of
Forestry and Fire Protection pursuant to Section 51178, or within a high or very
high fire hazard severity zone as indicated on maps adopted by the Department of
Forestry and Fire Protection pursuant to Section 4202 of the Public Resources Code.
This does not apply to sites excluded from the specified hazard zones by the City,
pursuant to subdivision (b) of Section 51179, or sites that have adopted fire hazard
mitigation measures pursuant to existing building standards or state fire mitigation
measures applicable to the development.
iv. A hazardous waste site that is listed pursuant to Section 65962.5 or a hazardous
waste site designated by the Department of Toxic Substances Control pursuant to
Section 25356 of the Health and Safety Code, unless the State Department of Public
Health, State Water Resources Control Board, or Department of Toxic Substances
Control has cleared the site for residential use or residential mixed uses.
v. Within a delineated earthquake fault zone as determined by the State Geologist in
any official maps published by the State Geologist, unless the development
complies with applicable seismic protection building code standards adopted by
the California Building Standards Commission under the California Building
Standards Law (Part 2.5 (commencing with Section 18901) of Division 13 of the
Health and Safety Code), and by any local building department under Chapter 12.2
(commencing with Section 8875) of Division 1 of Title 2.
vi. Within a special flood hazard area subject to inundation by the 1 percent annual
chance flood (100-year flood) as determined by the Federal Emergency
Management Agency in any official maps published by the Federal Emergency
Management Agency. This restriction does not apply if the site has been subject to
a Letter of Map Revision prepared by the Federal Emergency Management Agency
and issued to the City or if the applicant can demonstrate that the site will be able
to meet the minimum flood plain management criteria of the National Flood
Insurance Program.
3 As of July 1, 2019, no properties in Cupertino fall within this category. Prior to submitting an application
for streamlined review, applicants should confirm with the Planning Division if the listed exclusion is
applicable.
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vii. Within a regulatory floodway as determined by the Federal Emergency
Management Agency in any official maps published by the Federal Emergency
Management Agency, unless the development has received a no-rise certification
in accordance with Section 60.3(d)(3) of Title 44 of the Code of Federal Regulations.
viii. Lands identified for conservation in an adopted natural community conservation
plan pursuant to the Natural Community Conservation Planning Act (Chapter 10
(commencing with Section 2800) of Division 3 of the Fish and Game Code), habitat
conservation plan pursuant to the federal Endangered Species Act of 1973 (16
U.S.C. Sec. 1531 et seq.), or other adopted natural resource protection plan.
ix. Habitat for protected species identified as candidate, sensitive, or species of special
status by state or federal agencies, fully protected species, or species protected by
the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), the
California Endangered Species Act (Chapter 1.5 (commencing with Section 2050)
of Division 3 of the Fish and Game Code), or the Native Plant Protection Act
(Chapter 10 (commencing with Section 1900) of Division 2 of the Fish and Game
Code).
x. Lands under conservation easement.
(b) In addition, the project must not be located on a site where any of the following apply:
i. A site that would require demolition of housing that is:
1. Subject to recorded restrictions or law that limits rent to levels affordable to
moderate, low, or very-low income households.
2. Subject to rent control.
3. Or has been occupied by tenants within the past 10 years.
ii. A site that previously contained housing occupied by tenants that was demolished
within the past 10 years.
iii. A property that contains housing units that are occupied by tenants, and units at
the property are, or were, subsequently offered for sale to the general public by the
subdivider or subsequent owner of the property.
iv. A parcel of land or site governed by the Mobilehome Residency Law, the
Recreational Vehicle Park Occupancy Law, the Mobilehome Parks Act, or the
Special Occupancy Parks Act.4
v. A site that would require demolition of an historic structure that is on a local, state,
or federal register.
4 As of June 2019, no properties in Cupertino fall within this category. Prior to submitting an application for
streamlined review, applicants should confirm with the Planning Division if the listed exclusion is applicable.
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8. SUBDIVISIONS. The project does not involve an application to create separately
transferable parcels under the Subdivision Map Act. Guidelines § 401(d). However, a
subdivision is permitted if the development is consistent with all objective subdivision
standards in the subdivision ordinance, and either of the following apply (Guidelines §
401(d)):
(a) The project is financed with low-income housing tax credits (LIHTC) and satisfies the
prevailing wage requirements identified in item 9 of this Eligibility Checklist.
(b) The project satisfies the prevailing wage and skilled and trained workforce
requirements identified in items 9 and 10 of this Eligibility Checklis t.
9. PREVAILING WAGE. The project proponent must certify that at least one of the
following is true (Guidelines § 403):
(a) The entirety of the project is a public work as defined in Government Code section
65913.4(8)(A)(i).
(b) The project is not in its entirety a public work and all construction workers
employed in the execution of the development will be paid at least the general
prevailing rate of per diem wages for the type of work and geographic area.
(c) The project includes 10 or fewer units AND is not a public work AND does not
require subdivision.
10. SKILLED AND TRAINED WORKFORCE. If the project consists of 75 or more units
that are not 100 percent subsidized affordable housing, the project proponent must
certify that it will use a skilled and trained workforce, as defined in Government Code
section 65913.4(8)(B)(ii).5 Guidelines § 403.
5 Beginning January 1, 2022, the skilled and trained workforce requirement is reduced to apply to projects of 50
units or more that are not 100 percent subsidized affordable housing.
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DRAFT SENATE BILL 35 APPLICATION FORM
SUBMITTAL REQUIREMENTS. The following information and materials listed on the
attached SB 35 Application Checklist, at the time the application is submitted, are
required for a complete application in order to determine if a project qualifies under
Senate Bill 35. Please review this checklist with City’s Planning Division staff to confirm
specific requirements and to determine if other applications are required.
Project Information to be filled in by Applicant and/or Property Owner:
Applicant’s Contact Information: Property Owner’s Contact Information:
Name:
Address:
City, State: ZIP:
Email:
Phone:
Name:
Address:
City, State: ZIP:
Email:
Phone:
Project Site / Address(es):
Assessor’s Parcel Number(s):
General Plan and Zoning Designations:
Proposed Unit Count with Density Bonus
Units, if applicable:
Proposed Non-Residential
Square Footage:
Proposed Unit Count without Density
Bonus Units, if applicable:
Proposed Residential Square
Footage:
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YES NO N/A
1. Type of Multifamily Housing Development Proposed:
a. Multifamily rental; residential only with no proposed
subdivision.
b. Multifamily residential with proposed subdivision
(must qualify for exception to subdivision exclusion)
c. Mixed-use: at least 2/3 of gross square footage
(including additional density, floor area, and units, and
any other concession, incentive, or waiver of
development standards granted pursuant to Density
Bonus Law) must be designated for residential use. If a
subdivision is included, the development must qualify
for exception to subdivision exclusion.
2. Number of Parking Spaces Proposed: -
_______________________
a. Is the site within one-half mile of public transit?
b. Is the site within an architecturally and historically
significant historic district?
c. Are on-street parking permits required but not offered
to the occupants of the project?
d. Is the site within one block of a car share vehicle station?
3. Does the project propose 2 or more residential units?
a. Has the applicant certified compliance with
affordability requirements?
4. Does the project include more than 10 units?
5. Is the project a public work?
a. If it is a public work, has the applicant certified to the
City that the entirety of the development is a public
work?
b. If it is not a public work, has the applicant certified
compliance with prevailing wage requirements?
6. Does the project propose 75 units or more?
a. Has the applicant certified compliance with skilled and
trained workforce requirements?
7. Does the project involve a subdivision of land?
a. Is the development consistent with all objective
standards in the subdivision ordinance?
b. Is the project financed with low-income housing tax
credits?
c. Has the applicant certified compliance with prevailing
wage requirements?
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YES NO N/A
d. Has the applicant certified compliance with skilled and
trained workforce requirements?
8. Would the development require demolition of any of the
following types of housing?
a. Housing subject to a recorded covenant, ordinance or
law that restricts rents to levels affordable to persons
and families of moderate, low, or very low income.
b. Housing that is subject to any form or rent or price
control.
c. Housing that has been occupied by tenants within the
past 10 years.
9. Was the site previously used for housing that was
occupied by tenants that was demolished within 10 years
before the application was submitted?
10. Does the property contain housing units that are occupied
by tenants, and units at the property are, or were,
subsequently offered for sale to the general public by the
subdivider or subsequent owner of the property?
11. Would the development require demolition of a historic
structure that was placed on a national, state, or local
historic register?
12. Is the project site within a very high fire hazard severity
zone?
a. If yes, are there adopted fire hazard mitigation measures
applicable to the development?
13. Is the project site a hazardous waste site that is listed
pursuant to Government Code section 65962.5 or a
hazardous waste site designated by the Department of
Toxic Substances Control pursuant to Health and Safety
Code section 25356 of the Health and Safety Code?
a. If the site has been so listed or designated, has the
applicant provided evidence that the site has received
the required clearance from the State Department of
Public Health, State Water Resources Control Board, or
Department of Toxic Substances Control for
development as a residential use or residential mixed-
use?
14. Is the project site within a delineated earthquake fault
zone?
a. If yes, does the development comply with applicable
seismic protection building code standards?
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YES NO N/A
15. Is the project site habitat for protected species, identified
in an adopted natural community conservation plan, or
under a conservation easement?
16. Does the project site contain wetlands?
17. Is the project site within a special flood hazard area?
a. If yes, has the site been subject to a Letter of Map Revision
or does the site meet Federal Emergency Management
Agency requirements necessary to meet minimum flood
plain management criteria?
18. Is the project site within a regulatory floodway?
a. If yes, has the project received a no-rise certification?
19. Is the project site located on lands under a conservation
easement?
20. Is the project seeking a density bonus and/or any
incentive, concession, waiver, or reduction of parking
standards under state Density Bonus Law?
a. If yes, does the project proponent demonstrate how the
requested concession, waiver or reduction of standards
is the least amount necessary to develop the proposed
affordable housing?
21. Are the project’s affordable units distributed throughout
the development and of comparable size, both in terms of
the square footage and the number of bedrooms, and
quality to the market rate units with access to the same
common areas and amenities?
X_____________________________________________________________________________
Property Owner Signature(s) Print Property Owner’s Name Date
FOR STAFF USE ONLY:
Application accepted on _________________ by ___________________________
Application Type: _________________________________
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Certification of Compliance with Eligibility Requirements
I, __________________, do hereby certify and declare as follows:
(a) The subject property is located at:
Address(es) Assessor’s Parcel Number(s)
(b) I am a duly authorized officer or owner of the subject property.
(c) The property owner agrees to comply with the applicable affordable housing
dedication requirements established under Government Code section
65913.4(a)(4).
(d) That one of the following is true pursuant to Government Code section
65913.4(a)(8)(A) (check one that applies):
⃞ The entirety of the development is a public work under Government Code
section 65913.4(a)(8)(A)(i).
⃞ The property owner agrees to comply with the applicable prevailing wage
requirements established under Government Code section
65913.4(a)(8)(A)(ii).
(e) The property owner agrees to comply with the applicable skilled and trained
workforce requirements established under Government Code section
65913.4(a)(8)(B).
(f) The property owner certifies that the project site has not contained any housing
occupied by tenants within 10 years prior to the date written above.
I declare under penalty of perjury under the laws of the State of California that the
foregoing and all submitted material is true and correct.
Executed on this day in:
Location Date
Signature Name (Print), Title
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SENATE BILL 35 APPLICATION CHECKLIST
SUBMITTAL REQUIREMENTS. The following materials are required for a
complete application in order for the City to determine eligibility for streamlining
under SB 35. Please review this checklist with City of Cupertino Planning and Public
Works Divisions.
1. APPLICATION FORM. Include signature and contact information for the legal
property owner, applicant or authorized agent and contact information for the
Civil Engineer, Architect, Landscape Architect, and all other consultants
involved with the application on another sheet if necessary.
2. FILING FEE. (See the City’s Fee Schedule for current year. Note: Depending on
the project, it could be subject to the City’s hourly staff rate and the cost of
contracts plus any administrative charges).
3. CERTIFICATION OF COMPLIANCE WITH ELIGIBILITY REQUIREMENTS.
The property owner or the owner’s authorized agent must certify under penalty
of perjury that certain threshold eligibility criteria are satisfied.
4. POWER OF ATTORNEY. Provide evidence of power of attorney, if the
application is being by a person other than the property owner.
5. TITLE REPORT. Prepared within the past three months (three copies). The title
report must include a legal description of the property and a listing of all
easements, rights-of-way, and owners shall be supplied.
6. ARBORIST REPORT. Prepared within the last year by an ISA Certified Arborist
for the removal or disturbance of any Protected Tree on the site or on an adjacent
property which could be impacted by the proposed development. Describe the
condition of all Protected trees to be removed/disturbed and provide a statement
of specific reasons for the proposed removal. Provide three copies.
7. ENVIRONMENTAL SITE ASSESSMENT (ESA) REPORTS. A Phase 1 ESA
report shall be provided with the application. If the Phase 1 ESA report indicates
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that a Phase 2 ESA report or additional assessment is recommended, a Phase 2
ESA report must accompany the application.
8. FISCAL IMPACT ANALYSIS. Provide a fiscal impact analysis, in compliance
with General Plan Strategy LU-8.2.1.
9. PRELIMINARY TRASH MANAGEMENT PLAN. Provide a preliminary trash
management plan. Chapters 6.24, 9.16 and 9.18 of the Municipal Code relate to
Garbage, Recycling and Organic Waste Collection. Contact the Environmental
Services Division for coordination with Recology, the City’s waste collection
company.
10. PROJECT DESCRIPTION. A narrative project description that summarizes the
proposed project and its purpose must be provided. Please include a discussion
of the project site context, including what existing uses, if any, adjoin the project
site and whether the location is eligible for Streamlined Housing Development
processing.
11. AFFORDABLE HOUSING PLAN. Provide an Affordable Housing Plan
describing how a development project will comply with the City’s Below Market
Rate (BMR) Program requirements set forth in the BMR Housing Mitigation
Program Procedural Manual.
12. STATEMENT OF CONSISTENCY WITH OBJECTIVE STANDARDS. Explain
how the proposed project is consistent with all objective zoning, subdivision (if
applicable), and design review standards applicable to the project site, including
those standards included in the General Plan, Cupertino Municipal Code, Heart
of the City Specific Plan, Monta Vista Design Guidelines, North De Anza
Boulevard Conceptual Plan, South De Anza Conceptual Plan, Saratoga-
Sunnyvale Conceptual Zoning Plan, and other applicable City documents.
Particular details shall be provided to define how the project complies with use
requirements, floor area standards, density, setbacks, height standards, lot
coverage ratios, landscaping standards, creek setbacks, tree preservation and
protection standards, water efficient landscaping requirements, stormwater
requirements, and common open space, private useable open space, and public
open space requirements.
13. STATEMENT OF DESIGN INTENT. Describe the design program, the
designer’s approach, and how the architectural, landscape and other elements
have been integrated in compliance with the City’s objective standards. The
relationship of the project to adjacent properties and to the adjacent streets
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should be expressed in design terms. Define the site, building design, and
landscape concepts in terms of site design goals and objectives, pedestrian
circulation, outdoor-use areas, visual screening and enhancements, conservation
of natural resources, mitigation of negative site characteristics, and off-site
influences.
14. DEVELOPMENT PLAN SETS. The following plans shall comprise the
development plan set:
15. TITLE SHEET Including project name, location, assessor’s parcel numbers, prior
development approvals, and table of contents listing all the plan sheets with
content, page numbers, and date prepared. Include a vicinity map showing north
arrow, the location and boundary of the project, major cross streets and the
existing street pattern in the vicinity with the following information: General
Plan and Zoning designations.
16. DEVELOPMENT PROGRAM. The development plans shall clearly include the
following in a tabular format:
a. Size of property including gross and net lot area (square feet and acres).
b. For mixed use projects, total square footage of residential space and
related residential facilities (as defined in the City’s Eligibility Checklist),
square footage of non-residential uses, and square footage utilized by both
REQUIREMENTS FOR ALL DEVELOPMENT PLANS. If the application is
filed in conjunction with other applications, submittal requirements from all
applicable checklists shall be incorporated into one set of plans. All plans shall:
Be prepared, signed and stamped by licensed professionals.
Include the date of preparation and dates of each revision.
Be fully dimensioned and drawn to scale on the same size sheets, with a
consistent scale (as noted) throughout all plan sheets.
Be submitted in collated sets and folded to 8-1/2" x 11".
Be numbered in proper sequence.
A set of plans shall be submitted on a CD or USB flash drive in pdf format and
the following numbers of plan sets are required:
8 sets full size 24" x 36"
15 sets reduced to 11" x 17"
Additional plan sets may be requested if necessary.
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residential and non-residential uses. A calculation of how the project
meets the eligibility criteria to qualify for streamlined and ministerial
review pursuant to SB 35. Detailed breakdowns, to scale, with dimensions,
shall be shown on Floor Plan submittals as indicated below. Exhibits
showing how to calculate the 2/3 residential requirement are included
below.
c. For residential development, include the floor area for each unit type, the
number of bedrooms, the number of units by type, the number of units
per building, the total number of units, and net density. Include the
amount of private open space provided for each unit. Identify unit type,
size, number of bedrooms, number of units in each building and total
number of units by affordability level and tenure (rental or ownership).
d. For commercial development, total floor area in each building (including
basements, mezzanines, interior balconies, and upper stories or levels in a
multistory building) and total building area, including non-residential
garages.
e. Percent lot coverage, percent of net lot area covered by buildings (total
ground floor area of all buildings divided by net lot area).
f. Percentage of net lot area devoted to landscaping, common open space
and private useable open space.
g. Parking requirements under Government Code section 65913.4(d) and
tabulation of the number of parking spaces proposed by type (universal
and ADA compliant) and proposed parking ratios.
h. Bicycle parking (required and proposed) under City of Cupertino
Municipal Code Chapter 19.124.040.
17. SITE PLAN. Prepared by a licensed Civil Engineer, drawn at 1”= 20’ scale, with
scale noted, a graphic bar scale, and north arrow. The plan shall include the
following:
a. Existing and proposed property lines with dimensions, bearings, radii and
arc lengths, easements, and net & gross lot area for existing and proposed
parcels. Benchmark based on USGS NAVD 88 vertical.
b. Location and dimensions of all existing and proposed structures
extending beyond the property as required for other, non-SB 35, projects.
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If adjacent to a street, show the entire width of street to the next property
line, including driveways. Clearly identify all existing and proposed
structures such as fencing, walls, all building features including decks and
porches, all accessory structures including garages and sheds, mailboxes,
and trash enclosures. Label all structures and indicate the structures to
remain and the structures to be removed.
c. Dimensions of setbacks from property lines and between structures.
d. Location, dimension and purpose (i.e. water, sewer, access, etc.) of all
easements including sufficient recording data to identify the conveyance
(book and page of official records).
e. Location and dimensions for all adjacent streets (public and private) and
proposed streets showing both sides of streets, street names, street width,
striping, centerlines, centerline radii of all curves, median and landscape
strips, bike lanes, pedestrian ways, trails, bridges, curb, gutters, sidewalks,
driveways, and edge of right-of-way including any proposed or required
right-of-way dedication. Show all existing and proposed improvements
including traffic signal poles and traffic signs. Show line of sight for all
intersections and driveways based on current City of Cupertino
standards.
f. Existing topography and proposed grading extending 50 feet beyond the
property at 2 foot contour intervals for slopes up to 10% and less than 5
feet in height; and contour intervals of 5 feet for slopes over 10% or greater
than 5 feet in height. Include spot elevations, pad elevations, and show all
retaining walls with TOW/BOW elevations.
g. Drainage information showing spot elevations, pad elevations, existing
catch basins, and direction of proposed drainage, including approximate
street grade and existing and proposed storm drain locations.
h. Location and dimensions of existing and proposed utilities including
water supply system, sanitary sewers and laterals, drainage facilities,
wells, septic tanks, underground and overhead electrical lines, utility
poles, utility vaults, cabinets and meters, transformers, electroliers, street
lights, lighting fixtures, underground irrigation and drainage lines,
backflow prevention and reduced pressure devices, traffic signal poles,
underground conduit for signals and interconnect, and traffic signal pull
boxes, signal cabinets, service cabinets, and other related facilities.
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i. Location and dimensions of parking spaces, back-up, safe pedestrian
paths to building entrances, loading areas, and circulation patterns.
j. Survey of all existing trees on the site and adjacent to the site, at 1”=20’
scale, indicating species, diameter at breast height (DBH) as defined in
Chapter 14.18 of the Cupertino Municipal Code, and base elevation. Trunk
locations and the drip line shall be accurately plotted. Identify all
protected trees as defined in Chapter 14.18 of the Cupertino Municipal
Code.
k. Tentative locations for public artwork in compliance with Section
19.148.050(B) of the Municipal Code.
l. Location of all natural features such as creeks, ponds, drainage swales,
wetlands (as defined in the United States Fish and Wildlife Service
Manual, Part 660 FW 2 (June 21, 1993)), etc., extending 50 feet beyond the
property line to show the relationship with the proposed development.
m. Location on the site of any prime farmland or farmland of statewide
importance, as defined pursuant to United States Department of
Agriculture land inventory and monitoring criteria, as modified for
California, and designated on the maps prepared by the Farmland
Mapping and Monitoring Program of the Department of Conservation, or
land zoned or designated for agricultural protection or preservation by a
local ballot measure that was approved by Cupertino’s voters.
n. If any parcel is within a FEMA defined 100-year floodplain or floodway:
i. Identify the floodplain or floodway on all plan sheets depicting the
existing and proposed site, with the base flood elevation (BFE) and
flood zone type clearly labeled. In addition, show the existing site
topography and finish floor elevations for all existing and proposed
structures. If FEMA has not defined a BFE, a site specific hydraulic
analysis will be required to determine the BFE prior to deeming the
application complete (CMC Sec. 34-32.b2).
ii. Flood zone boundaries and floodwater surface elevation. If the
property proposed to be developed is within or adjacent to the 100
year flood zone (Zone A or AE) or the National Flood Insurance
Program, Flood Insurance Rate Map, the extent of Zone A or AE
shall be clearly drawn on the tentative map and the 100 year flood
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water surface elevation shall be shown. The map shall show the
approximate location of the Floodway Boundary as shown on the
latest edition of the “Flood Boundary and Floodway Map”
published by the Federal Emergency Management Agency.
18. CONTEXTUAL PLAN. Use topographic or aerial map as base. Show the
relationship of the project to the building and site features within 50 feet of the
property line. The plan shall include:
a. Building footprints, pad elevations and building height. Land use and
zoning designation on all lots.
b. Property lines and dimensions of the subject site and adjacent properties
showing all easements.
c. Location of streets, medians, curb cuts, sidewalks, driveways, and parking
areas.
d. Location of all creeks, waterways and trees.
e. Vicinity map indicating site in relation to major streets.
19. DENSITY BONUS. In addition to the other submittal requirements, projects
requesting a density bonus or concessions are required to submit a density bonus
application pursuant to CMC Chapter 19.56, including plans for the project that
clearly indicate the location and square footage of:
a. Affordable units that qualify the project for a density bonus,
b. Additional density, floor area, or units granted pursuant to Density Bonus
law,
c. which units are the density bonus units.
20. BUILDING ELEVATIONS. Plans shall be drawn by a licensed Architect at 1/8”=
1’ minimum scale; dimensioned vertically and horizontally with sample
representations at ¼”= 1’ scale for detail areas. Elevations should not include
superimposed landscaping and trees that hide the buildings. Height is measured
from natural grade established at subdivision. The plans shall include:
a. Fully dimensioned elevations for buildings identifying materials, details
and features include visible plumbing, electrical meters and method of
concealment.
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b. All four sides of all buildings.
c. Vertical dimensions from all points above natural, existing and finished
grade on all elevations.
d. Topography with natural, existing, and proposed grades accurately
represented to show building height to show the relationship of the
building to the site and adjacent properties.
e. Location, height and design of rooftop mechanical equipment and
proposed screening. Provide a section detail showing height of equipment
in relation to the height of the proposed screen structure.
f. Elevations and dimensions for existing structures to remain. Location and
type of building mounted exterior lighting.
g. Detailed building sections showing depth of reveals, projections, recesses,
etc.
h. Details of vents, gutters, downspouts, scuppers, external air conditioning
equipment, etc.
i. Details including materials and dimensions of door and window
treatments, railings, stairways, handicap ramps, trim, fascia, soffits,
columns, fences, and other elements which affect the building. Provide
wall sections at ½”=1’ scale to clarify detailing as appropriate.
21. FLOOR PLANS. Plan shall be drawn by a licensed Architect at 1/8”= 1’ or larger
scale.
a. Floor area diagrams must be provided with dimensions and tabulations of
each area of each floor.
b. Floor plans shall clearly indicate areas attributed to residential, non-
residential, and shared use and should show garages, parking areas, and
amenity spaces.
c. Floor plans shall include the square footage of residential space and
related residential facilities, non-residential uses, and structures uses by
both residential and non-residential uses.
d. Floor plans shall clearly identify affordable units (City BMR and SB 35
units)
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e. If structured parking is provided, identify compliance with requirements
of Chapter 19.124 of the Municipal Code and clearly identify required
pedestrian paths pursuant to General Plan Policy M-3.6.
22. ROOF PLAN. Plan shall be drawn by a licensed Architect at 1/8”= 1’ or larger
scale. The plan shall include property lines, outline of building footprint,
ridgelines, valleys, flat roof areas, roof pitch and rooftop mechanical equipment,
and screening. Plans shall show existing roof forms and roof forms to be added
or changed.
23. TRUE CROSS-SECTIONS. A minimum of two cross-sections (more as needed
to showing varying site conditions) drawn at 1:1 scale (same scale used for both
vertical and horizontal axis), 1”=20’ minimum scale, with scale noted, and a
graphic bar scale, through critical portions of the site extending 50 feet beyond
the property line onto adjacent properties or to the property lines on the opposite
side of adjacent streets. Sections shall include existing topography, slope lines,
final grades, location and height of existing and proposed structures, fences,
walls, roadways, parking areas, landscaping, trees, and property lines. Section
locations shall be identified on the Site Plan.
24. COLOR AND MATERIALS BOARD. Samples of materials and color palette
representative of actual materials/colors for all buildings and structures. Identify
the name of manufacturer, product, style, identification numbers and other
pertinent information on the display. Displays should be no larger than 24” by
36”, except where actual material samples are presented.
25. LANDSCAPE PLANS. Plan shall be drawn at 1” = 20’ or larger scale by a
licensed Landscape Architect. The plan shall incorporate the proposed Grading
and Utility Plan, showing the location of existing and proposed utility lines and
utility structures screened back, but legible, and shall include the following:
a. Final planting plan showing proposed trees, shrubs and shrub groupings,
lawn, and groundcover areas, existing trees to be saved, stormwater
treatment areas, special paving, hardscape, and site furnishings. Include a
landscape legend with a list of proposed plant materials (indicate both
Latin and common name), including size, spacing, total quantities,
ultimate height, and spread of materials.
b. Size, species, trunk location, and canopy of all existing trees (6” in
diameter or larger) on-site and on abutting property that could be affected
by the project. Identify which trees will remain and trees to be removed.
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Any tree proposed as mitigation for the removal of a protected tree shall
be identified as a replacement tree. Replacement trees shall comply with
the requirements of Chapter 14.15 of the Cupertino Municipal Code.
c. Show accurate representation of plant materials within three years.
d. Identify the location and screening of all above ground utilities and bio-
swales or other stormwater treatment areas with 1:10 scale cross sections
showing the planting within the bio-swales and screening of the utilities.
e. Provide enlarged details (minimum of 1:10 scale) for focal points and
accent areas.
f. Location and details and/or manufacturers catalogue cuts of walls, fences,
paving, decorative planters, trellises, arbors, and other related site
improvements.
g. Landscape plans with more than two sheets shall show the plant legend
with symbols for each species on every sheet.
h. Statement indicating that a fully automatic irrigation system will be
provided.
i. Color and materials submittal for all special paving, hardscape treatment,
walls, landscape lighting, and site furnishings.
j. The Landscape plan shall be coordinated and consistent with the
Stormwater Plan.
k. Note signed and dated by project Landscape Architect that plans are in
compliance with all City standards.
l. Provide information on landscaping used as screening for utility
equipment.
26. TREE SURVEY. Prepared by an ISA Certified Arborist, drawn at 1”=20’ scale,
showing accurate trunk location and drip line for all existing trees on the site and
adjacent to the site. For each tree, specify the species, diameter breast height
(DBH) as defined in Chapter 14.18.020, and base elevation and clearly indicate if
it is to be preserved or to be removed. Identify all Protected Trees as defined in
Chapter 14.18.020. Identify existing trees or plant materials on abutting
properties that could influence site design or be impacted by the project.
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27. FENCE PLAN. Drawn at 1”=20’ scale showing the location, height and type of all
fences and walls.
28. LIGHTING PLAN. Location and type of exterior lighting, both fixed to the
building and freestanding, any and all lights for circulation, security,
landscaping, building accent or other purpose.
29. PHOTOMETRIC PLAN. Indicate compliance with no lighting glare.
Photometric plan must indicate that lighting levels do not spill into adjacent
properties.
30. PHOTO-SIMULATIONS. Digital photo-simulations of the site with and without
the project, taken from various points off-site with the best visibility of the
project. Include a key map showing the location where each photo was taken.
31. GRADING PLAN. Use the grading plans approved with any past subdivision to
indicate the natural grade and how the proposed project meets height
requirements based on this. If a new subdivision is proposed, please indicate the
new proposed natural grade. Grading shall comply with requirements of
Chapters 16.08 and 18.52 of the Cupertino Municipal Code, as applicable. Show
the relationship of the project to the building and site features within 50 feet. The
plan shall include:
a. Proposed building footprints, pad elevations and building height
b. Existing and proposed contours which can be easily differentiated (2ft
intervals if slope is 10% or less, 5 ft intervals for slopes greater than 10%)
c. Spot elevations of survey points
d. Source and date of the contour and spot elevation information
e. Limits of cut and fill
f. Grading Quantities (Cut and Fill Cubic Yards)
g. Cross-sections of the areas of greatest cut and greatest fill to scale
h. Topography and elevation of adjoining parcels (for a minimum of 50’)
i. Slope ratio
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j. Show all existing and proposed retaining walls with TOW/BOW
elevations.
32. SUBDIVISION PLAN. Provide a subdivision plan, if applicable. Please indicate
compliance with the objective zoning and subdivision development standards.
The plan shall comply with the City’s subdivision ordinance and shall include:
a. Existing Assessor’s Parcel Numbers
b. A title which shall contain the subdivision number, name and type of
subdivision.
c. Name and address of legal owner, subdivider and person preparing the
map (include professional license number)
d. Date, north arrow, scale and contour interval
e. Land Use (existing and proposed)
f. Vicinity Map showing roads, adjoining subdivisions, Cities, creeks,
railroads, and other data sufficient to locate the proposed subdivision and
show its relation to the community.
g. Existing Trees, type, diameter at breast height (DBH) and indicate drip
line/canopy. Any trees proposed to be removed shall be clearly indicated.
h. Existing structures, approximate location and outline identified by type.
Buildings to be removed shall be clearly indicated.
i. Lot area with density per gross acre for each parcel (net square footage)
j. Existing and proposed lot line dimensions (bearings and distances)
k. Exhibits indicating compliance with objective zoning standards (e.g.
minimum lot sizes, lot widths etc.)
l. Areas subject to inundation or storm water overflow. Width and direction
of flow for each water course should be shown with approximate location.
m. Existing easements with widths, locations, type and sufficient recording
data to identify the conveyance (book and page of official records).
n. New and amended easements with width, locations, type and purpose.
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o. Proposed infrastructure including utilities and surface/street
improvements (both private and public). Show location and size of
utilities. Show proposed slopes and elevations of utilities and surface
hardscape improvements.
p. Accompanying data and reports to be supplied with Subdivision Plan:
i. Geologic and Geotechnical Report – A preliminary geotechnical
report is required by Section 16.12 of the Cupertino Municipal
Code and shall verify if there is a presence of critically expansive
soils or other soil problems, which, if not corrected, would lead to
structural defects or differential settlement of infrastructure, and
shall provide recommendations for necessary corrective action.
The report shall show all geological hazard zones identified in the
General Plan and which are known or portrayed in other geological
studies for the area. It shall also include descriptions and physical
characteristics on all geological formations, anomalies, and
earthquake characteristics. Mitigation measures shall be identified
for any geological hazard or concern.
33. UTILITY PLAN. Prepared by a licensed Civil Engineer and drawn at 1”= 20’
scale, with scale noted, showing the location and dimensions of existing and
proposed utilities including water supply system, sanitary sewers and laterals,
drainage facilities/storm drainage system, wells, septic tanks, underground and
overhead electrical lines, utility poles, utility vaults, cabinets and meters,
transformers, underground irrigation and drainage lines, backflow prevention
and reduced pressure devices, electroliers, lighting fixtures, street lights, traffic
signal poles, traffic signal pull boxes, signal cabinets. Provide details on
screening utility equipment. Indicate compliance with Chapter 14.24.
34. STORMWATER CONTROL PLAN. See Stormwater Control Plan Application
Checklist. All Stormwater Plans shall be coordinated and consistent with all Site,
Grading, Utility, and Landscape Plans. If the project creates or replaces more
than 10,000 sq. ft. of impervious area, a Stormwater Control Plan is required, and
shall meet the standards and regulations established for the Municipal Regional
Stormwater NPDES Permit. Provide the following information to determine if
the project meets this threshold:
a. Site size in sq. ft.
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b. Existing impervious surface area (all land covered by buildings, sheds,
patios, parking lots, streets, paved walkways, driveways, etc.) in sq. ft.
c. Impervious surface area created, added or replaced in sq. ft. Total
impervious surface area in sq. ft.
d. Percent increase/replacement of impervious surface area (new impervious
surface area in sq. ft./existing impervious surface area in sq. ft. multiplied
by 100).
e. Estimated area in sq. ft. of land disturbance during construction
(including clearing, grading or excavating.
35. ADDITIONAL INFORMATION TO DETERMINE COMPLIANCE WITH
ELIGIBILITY CRITERIA. Provide the following information if applicable:
a. If the project is located on a hazardous waste site that is listed pursuant to
Government Code Section 65962.5 or a hazardous waste site designated
by the Department of Toxic Substances Control pursuant to Health and
Safety Code Section 25356, submit a signed Hazardous Waste and
Substances Statement as required by Government Code Section 65962.5(f)
and information showing that the State Department of Public Health, State
Water Resources Control Board, or Department of Toxic Substances
Control has cleared the site for residential use or residential mixed uses.
b. If the project is located within a special flood hazard area defined by
Government Code Section 65913.4(a)(6)(G), explain why development is
allowed under the exceptions explained in Government Code Section
65913.4(a)(6)(G).
c. If the project is located within a regulatory floodway defined by
Government Code Section 65913.4(a)(6)(H), submit the development’s no-
rise certification in accordance with Section 60.3(d)(3) of Title 44 of the
Code of Federal Regulations.
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CITY COUNCIL STAFF REPORT
Meeting: August 6, 2019
Subject
Study Session regarding Application and Review Procedures for Projects
Proposed Pursuant to Senate Bill 35 (Application No(s): CP-2019-04; Applicant(s):
City of Cupertino; Location: Citywide)
Recommended Action
That the City Council conduct the study session, receive this report and provide
direction regarding the proposed Application and Review Procedures
(Attachment A) and draft Application Package (Attachment B) for Projects
Proposed Pursuant to Senate Bill 35.
Discussion
I. Background
Senate Bill 35 (SB 35) became effective on January 1, 2018. It enacted Government
Code section 65913.4 which requires cities and counties to use a streamlined
ministerial review process for qualifying multifamily housing developments that
comply with the jurisdiction's objective planning standards, provide specified
levels of affordable housing, and meet other specific requirements. Note that there
were amendments made to SB 35 in 2018. (The text of SB 35, as amended is
included as Attachment C). In addition, the California Department of Housing and
Community Development (HCD) issued Guidelines for implementing SB 35,
Streamlined Ministerial Approval Process Guidelines (“Guidelines”), on
November 29, 2018, which took effect on January 1, 2019. These Guidelines direct
a local jurisdiction to provide information about its process for applying and
receiving ministerial approval under SB 35. Guidelines § 300(a). (see Attachment
D.) The Draft Resolution and draft application materials are being prepared to
specify the City’s procedures and requirements for processing and approving SB
35 applications. This also implements an item on the City’s Fiscal Year 2019/2020
Work Program to “develop procedures for mandated streamlined project
approvals.”
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It should be noted that the City received an SB 35 application for a multifamily housing
development encompassing 50.82 acres within the Vallco Shopping District Special Area
on March 27, 2018. This was processed within the timelines allowed pursuant to SB 35
and approved on September 21, 2018. The project is currently the subject of a lawsuit. The
Guidelines were not in effect at the time the City approved the project and, additionally,
the Legislature has made amendments to SB 35 since that time. The proposed City
Procedures would not apply to the approved Vallco SB 35 project.
Planning Commission Study Session
The Planning Commission met at a special meeting on July 30, 2019 to consider the
proposed procedures and application package to provide input. Four members of the
public spoke at the meeting with comments ranging from concerns about the SB 35
statute, past approvals pursuant to SB 35, density bonus law, and concerns about
Commissioner Moore’s decision to recuse herself from discussions related to this subject.
The Planning Commission discussed both the proposed resolution and the draft
application package. Their comments are presented later in this report.
II. Analysis:
Under SB 35, the City is required to review qualifying projects using a ministerial review
process, which means that the City cannot require an applicant to obtain discretionary
permits that would typically be required (e.g., development permit). Instead, the City is
required to process applications within the timeframes specified in Government Code
section 65913.4(c),1 applying only those objective zoning and design review standards
contained the City’s general plan, municipal code, and other adopted land use plans in
effect at the time the project application was submitted and specific parking standards
identified in SB 35. The review process must also be streamlined because the project is
not subject to environmental review under the California Environmental Quality Act
(CEQA).
A. Processing Procedures: SB 35 allows a City’s Planning Commission or City Council to
conduct public oversight of the development application. It requires oversight
focused on assessing compliance with criteria required for streamlined projects,
which includes a local government’s objective land use standards, as well as any
reasonable objective design standards published before submission of an application.
The statute defines objective standards to mean “standards that involve no personal
1 Once an application is submitted, within 60 days for a project with 150 or fewer units, and within 90 days
for a project more than 150 units, the City must provide the development proponent wi th written
documentation (“Consistency Letter”) of any objective planning standard that the development conflicts
with, and an explanation for the reason or reasons the development conflicts with that standard. If the City
fails to provide that information within the time period, the development will be deemed consistent with
the objective planning standards.
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or subjective judgment by a public official and are uniformly verifiable by reference
to an external and uniform benchmark or criterion available and knowable by both
the development applicant or proponent and the public official before submittal.”
Public oversight must be completed within the timelines specified in the statute for
project approval (90 days for projects of 150 units or fewer and 180 days for larger
projects) and cannot inhibit, chill or preclude the ministerial approval provided for
by SB 35.
The Draft Review Procedures would be adopted by resolution and are included in
Attachment A. The Draft Review Procedures also include an eligibility checklist,
based on SB 35, the Guidelines, and the City’s laws and policy, that specify the
requirements for a project to be eligible for streamlined approval under SB 35. Initial
changes made to the Draft Review Procedures since publication of the Planning
Commission agenda packet and meeting are shown in redlines in Attachment A.
The Draft Procedures require a Joint Planning Commission and City Council meeting
for oversight and consistency review, prior to issuance of a Consistency Letter2 for
that project. This would be an open meeting, noticed to the public and neighbors in
advance, including an opportunity for public and applicant comments. The oversight
meeting is proposed to be held at least five business days prior to the consistency
determination for the project. For projects that include a Tentative Map or Parcel Map
application, this map application will be considered by the Planning Commission and
City Council during the oversight and consistency review meeting.
If after the Oversight and Consistency Meeting, a project is determined to be ineligible
for streamlined and ministerial review by the City Manager, the application will be
rejected and the applicant must make a new submittal which will be subject to the
timelines for new applications specified in SB 35. If after the Oversight and
Consistency Meeting, an application is determined to be eligible for SB 35 streamlined
and ministerial review by the City Manager, the final approval documents and
standard conditions of approval will be prepared and issued.
Planning Commission comments: The following is a summary of comments and
concerns from Planning Commissioners regarding the proposed Draft Review
Procedures :
Concerns that the Joint Oversight meeting may be perceived as an “approval”
meeting while the resolution is clear that the final determination is made by the
City Manager.
2 See Footnote no. 1
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Concerns about disapproving an incomplete application without an opportunity
for the applicant to correct minor deficiencies.
Concerns about whether five business days would be adequate time to determine
whether a project is complete.
Consider whether it would be possible to disallow applicants from applying for
concurrent review of a streamlined, ministerial project and a discretionary project.
Concerns that one joint Planning Commission and City Council meeting, prior to
determination of SB 35 eligibility of a project, would not be enough public
oversight.
Requiring plans that indicate density bonus baseline for the site when a density
bonus application is submitted – suggestion for a future update to the Municipal
Code.
B. Application Package: HCD Guidelines also direct local jurisdictions to provide
information about the materials required for an application. Attachment B, is a draft
application package, that would be provided to an applicant interested in making an
application for a streamlined project. Initial changes to the draft application package
since publication of the Planning Commission agenda packet and meeting are
indicated in redlines.
This package includes:
1. An application form;
2. A form certifying compliance with the eligibility requirements of SB 35 (based on
SB 35 requirements related to affordability, prevailing wages requirements,
skilled and trained workforce requirements etc.); and
3. An application checklist indicating all the items required for a complete
application (based on information necessary to determine the application’s
compliance with objective General Plan and Municipal Code standards)
Planning Commission comments: The following is a summary of comments and
concerns from Planning Commissioners regarding the draft application package:
Prefer not to use the word “listed” contaminants in item #13 of the Project
Checklist in the Application Form.
Recommend that plans include design specifications for density bonus units in
addition to BMR units to address item #20 of the Project Checklist in the
Application Form.
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Recommending that specifications for density bonus units not be required to be
included in the initial application and a request to research law to determine
whether this is lawful.
Two commissioners recommended that a public hearing be required on Density
Bonus incentives/benefits while another suggested that this could be done as part
of the Oversight and Consistency meeting if it is done objectively.
Next Steps
Staff and the City Attorney’s Office are still reviewing the Planning Commission’s
comments and expect additional changes to address those and the City Council’s study
session comments. The final draft resolution will be presented to Council to be considered
and adopted at a subsequent meeting. The City Council’s decision will be in effect
immediately upon adoption of the resolution. Upon the Council’s decision, the
application package will be updated to ensure consistency with the adopted Procedures
and published on the City’s website and will be available at the public counter for
applicants.
Prepared by: Caitlin Brown, City Attorney’s Office
Reviewed by: Benjamin Fu, Director of Community Development
Heather Minner, City Attorney
Approved by: Deborah Feng, City Manager
Attachments:
A. Draft Resolution Adopting the Process for Applying and Receiving
Ministerial Approval Under Senate Bill 35 with redlines
B. Draft SB 35 Application Package with redlines
C. SB 35 Statute, as Amended
D. HCD Guidelines – Streamlined Ministerial Approval Process
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SUPPLEMENTAL CITY COUNCIL STAFF REPORT
Meeting: August 6, 2019
Subject
Study Session regarding Application and Review Procedures for Projects Proposed
Pursuant to Senate Bill 35 (Application No(s): CP-2019-04; Applicant(s): City of
Cupertino; Location: Citywide)
Recommended Action
That the City Council conduct the study session, receive these reports and provide
direction regarding the proposed Application and Review Procedures (Attachment A)
and draft Application Package (Attachment B) for Projects Proposed Pursuant to Senate
Bill 35.
Discussion
This Supplemental Staff Report is posted in addition to the staff report made available on
July 31 to reflect subsequent amendments to SB 35. The following attachments are also
updated: the Draft Resolution Adopting the Process for Applying and Receiving
Ministerial Approval Under Senate Bill 35 and the Draft SB 35 Application Package. And
a new attachment, Excerpts of AB 101 re SB 35, is added.
On July 31, the Governor signed AB 101 (Housing development and financing), a budget
trailer bill that amended, among other laws, Government Code section 65913.4 (SB 35).
AB 101 amended only two subdivisions of Government Code section 65913.4, but both
changes are relevant to the Process and Application Package.
AB 101 modified the objective planning standards a proposed development must meet
in order to be eligible for the SB 35 streamlined, ministerial approval process.
First, AB 101 amended the subdivision providing that an eligible mixed-use project must
designate at least two-thirds of the square footage of the development for residential use,
Gov. Code § 65913.4(a)(2)(C), by adding the following underlined sentence: “A site that
is zoned for residential use or residential mixed-use development, or has a general plan
designation that allows residential use or a mix of residential and nonresiden tial uses,
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with at least two-thirds of the square footage of the development designated for
residential use. Additional density, floor area, and units, and any other concession,
incentive, or waiver of development standards granted pursuant to the Density Bonus
Law in Section 65915 shall be included in the square footage calculation.” This change to
how minimum residential square footage is calculated contradicts the guidance adopted
by the Department of Housing and Community Development in November of 2018,
which explicitly excluded additional density, floor area, or units granted under the
Density Bonus Law from the two-thirds calculation. Guidelines § 400(b)(1).
Second, AB 101 amended the subdivision relating to hazardous waste sites by adding the
following underlined text. A project located on a hazardous waste site may still be eligible
for SB 35 streamlining if “the State Department of Public Health, State Water Resources
Control Board, or Department of Toxic Substances Control has cleared the site for
residential use or residential mixed uses.“ Gov. Code § 65913.4(a)(6)(E).
Because of these statutory amendments, both the Draft Resolution’s Eligibility Checklist
and the Draft Application Package have been updated to reflect the current law. Updates
are shown in track changes in Attachments A and B.
Prepared by: Caitlin Brown, City Attorney’s Office
Reviewed by: Benjamin Fu, Director of Community Development
Heather Minner, City Attorney
Approved by: Deborah Feng, City Manager
Attachments:
A. Updated Draft Resolution Adopting the Process for Applying and Receiving
Ministerial Approval Under Senate Bill 35 with redlines
B. Updated Draft SB 35 Application Package with redlines
C. Excerpts of AB 101 re SB 35
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State of California
GOVERNMENT CODE
Section 65913.4
65913.4. (a) A development proponent may submit an application for a development
that is subject to the streamlined, ministerial approval process provided by subdivision
(b) and is not subject to a conditional use permit if the development satisfies all of
the following objective planning standards:
(1) The development is a multifamily housing development that contains two or
more residential units.
(2) The development is located on a site that satisfies all of the following:
(A) A site that is a legal parcel or parcels located in a city if, and only if, the city
boundaries include some portion of either an urbanized area or urban cluster, as
designated by the United States Census Bureau, or, for unincorporated areas, a legal
parcel or parcels wholly within the boundaries of an urbanized area or urban cluster,
as designated by the United States Census Bureau.
(B) A site in which at least 75 percent of the perimeter of the site adjoins parcels
that are developed with urban uses. For the purposes of this section, parcels that are
only separated by a street or highway shall be considered to be adjoined.
(C) A site that is zoned for residential use or residential mixed-use development,
or has a general plan designation that allows residential use or a mix of residential
and nonresidential uses, with at least two-thirds of the square footage of the
development designated for residential use. Additional density, floor area, and units,
and any other concession, incentive, or waiver of development standards granted
pursuant to the Density Bonus Law in Section 65915 shall be included in the square
footage calculation.
(3) (A) The development proponent has committed to record, prior to the issuance
of the first building permit, a land use restriction or covenant providing that any lower
income housing units required pursuant to subparagraph (B) of paragraph (4) shall
remain available at affordable housing costs or rent to persons and families of lower
income for no less than the following periods of time:
(i) Fifty-five years for units that are rented.
(ii) Forty-five years for units that are owned.
(B) The city or county shall require the recording of covenants or restrictions
implementing this paragraph for each parcel or unit of real property included in the
development.
(4) The development satisfies both of the following:
(A) Is located in a locality that the department has determined is subject to this
subparagraph on the basis that the number of units that have been issued building
permits is less than the locality’s share of the regional housing needs, by income
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category, for that reporting period. A locality shall remain eligible under this
subparagraph until the department’s determination for the next reporting period.
(B) The development is subject to a requirement mandating a minimum percentage
of below market rate housing based on one of the following:
(i) The locality did not submit its latest production report to the department by the
time period required by Section 65400, or that production report reflects that there
were fewer units of above moderate-income housing issued building permits than
were required for the regional housing needs assessment cycle for that reporting
period. In addition, if the project contains more than 10 units of housing, the project
seeking approval dedicates a minimum of 10 percent of the total number of units to
housing affordable to households making below 80 percent of the area median income.
If the locality has adopted a local ordinance that requires that greater than 10 percent
of the units be dedicated to housing affordable to households making below 80 percent
of the area median income, that local ordinance applies.
(ii) The locality’s latest production report reflects that there were fewer units of
housing issued building permits affordable to either very low income or low-income
households by income category than were required for the regional housing needs
assessment cycle for that reporting period, and the project seeking approval dedicates
50 percent of the total number of units to housing affordable to households making
below 80 percent of the area median income, unless the locality has adopted a local
ordinance that requires that greater than 50 percent of the units be dedicated to housing
affordable to households making below 80 percent of the area median income, in
which case that local ordinance applies.
(iii) The locality did not submit its latest production report to the department by
the time period required by Section 65400, or if the production report reflects that
there were fewer units of housing affordable to both income levels described in clauses
(i) and (ii) that were issued building permits than were required for the regional
housing needs assessment cycle for that reporting period, the project seeking approval
may choose between utilizing clause (i) or (ii).
(5) The development, excluding any additional density or any other concessions,
incentives, or waivers of development standards granted pursuant to the Density
Bonus Law in Section 65915, is consistent with objective zoning standards, objective
subdivision standards, and objective design review standards in effect at the time that
the development is submitted to the local government pursuant to this section. For
purposes of this paragraph, “objective zoning standards,” “objective subdivision
standards,” and “objective design review standards” mean standards that involve no
personal or subjective judgment by a public official and are uniformly verifiable by
reference to an external and uniform benchmark or criterion available and knowable
by both the development applicant or proponent and the public official before
submittal. These standards may be embodied in alternative objective land use
specifications adopted by a city or county, and may include, but are not limited to,
housing overlay zones, specific plans, inclusionary zoning ordinances, and density
bonus ordinances, subject to the following:
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(A) A development shall be deemed consistent with the objective zoning standards
related to housing density, as applicable, if the density proposed is compliant with
the maximum density allowed within that land use designation, notwithstanding any
specified maximum unit allocation that may result in fewer units of housing being
permitted.
(B) In the event that objective zoning, general plan, subdivision, or design review
standards are mutually inconsistent, a development shall be deemed consistent with
the objective zoning and subdivision standards pursuant to this subdivision if the
development is consistent with the standards set forth in the general plan.
(C) The amendments to this subdivision made by the act adding this subparagraph
do not constitute a change in, but are declaratory of, existing law.
(6) The development is not located on a site that is any of the following:
(A) A coastal zone, as defined in Division 20 (commencing with Section 30000)
of the Public Resources Code.
(B) Either prime farmland or farmland of statewide importance, as defined pursuant
to United States Department of Agriculture land inventory and monitoring criteria,
as modified for California, and designated on the maps prepared by the Farmland
Mapping and Monitoring Program of the Department of Conservation, or land zoned
or designated for agricultural protection or preservation by a local ballot measure that
was approved by the voters of that jurisdiction.
(C) Wetlands, as defined in the United States Fish and Wildlife Service Manual,
Part 660 FW 2 (June 21, 1993).
(D) Within a very high fire hazard severity zone, as determined by the Department
of Forestry and Fire Protection pursuant to Section 51178, or within a high or very
high fire hazard severity zone as indicated on maps adopted by the Department of
Forestry and Fire Protection pursuant to Section 4202 of the Public Resources Code.
This subparagraph does not apply to sites excluded from the specified hazard zones
by a local agency, pursuant to subdivision (b) of Section 51179, or sites that have
adopted fire hazard mitigation measures pursuant to existing building standards or
state fire mitigation measures applicable to the development.
(E) A hazardous waste site that is listed pursuant to Section 65962.5 or a hazardous
waste site designated by the Department of Toxic Substances Control pursuant to
Section 25356 of the Health and Safety Code, unless the State Department of Public
Health, State Water Resources Control Board, or Department of Toxic Substances
Control has cleared the site for residential use or residential mixed uses.
(F) Within a delineated earthquake fault zone as determined by the State Geologist
in any official maps published by the State Geologist, unless the development complies
with applicable seismic protection building code standards adopted by the California
Building Standards Commission under the California Building Standards Law (Part
2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code),
and by any local building department under Chapter 12.2 (commencing with Section
8875) of Division 1 of Title 2.
(G) Within a special flood hazard area subject to inundation by the 1 percent annual
chance flood (100-year flood) as determined by the Federal Emergency Management
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Agency in any official maps published by the Federal Emergency Management
Agency. If a development proponent is able to satisfy all applicable federal qualifying
criteria in order to provide that the site satisfies this subparagraph and is otherwise
eligible for streamlined approval under this section, a local government shall not deny
the application on the basis that the development proponent did not comply with any
additional permit requirement, standard, or action adopted by that local government
that is applicable to that site. A development may be located on a site described in
this subparagraph if either of the following are met:
(i) The site has been subject to a Letter of Map Revision prepared by the Federal
Emergency Management Agency and issued to the local jurisdiction.
(ii) The site meets Federal Emergency Management Agency requirements necessary
to meet minimum flood plain management criteria of the National Flood Insurance
Program pursuant to Part 59 (commencing with Section 59.1) and Part 60 (commencing
with Section 60.1) of Subchapter B of Chapter I of Title 44 of the Code of Federal
Regulations.
(H) Within a regulatory floodway as determined by the Federal Emergency
Management Agency in any official maps published by the Federal Emergency
Management Agency, unless the development has received a no-rise certification in
accordance with Section 60.3(d)(3) of Title 44 of the Code of Federal Regulations.
If a development proponent is able to satisfy all applicable federal qualifying criteria
in order to provide that the site satisfies this subparagraph and is otherwise eligible
for streamlined approval under this section, a local government shall not deny the
application on the basis that the development proponent did not comply with any
additional permit requirement, standard, or action adopted by that local government
that is applicable to that site.
(I) Lands identified for conservation in an adopted natural community conservation
plan pursuant to the Natural Community Conservation Planning Act (Chapter 10
(commencing with Section 2800) of Division 3 of the Fish and Game Code), habitat
conservation plan pursuant to the federal Endangered Species Act of 1973 (16 U.S.C.
Sec. 1531 et seq.), or other adopted natural resource protection plan.
(J) Habitat for protected species identified as candidate, sensitive, or species of
special status by state or federal agencies, fully protected species, or species protected
by the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), the
California Endangered Species Act (Chapter 1.5 (commencing with Section 2050)
of Division 3 of the Fish and Game Code), or the Native Plant Protection Act (Chapter
10 (commencing with Section 1900) of Division 2 of the Fish and Game Code).
(K) Lands under conservation easement.
(7) The development is not located on a site where any of the following apply:
(A) The development would require the demolition of the following types of
housing:
(i) Housing that is subject to a recorded covenant, ordinance, or law that restricts
rents to levels affordable to persons and families of moderate, low, or very low income.
(ii) Housing that is subject to any form of rent or price control through a public
entity’s valid exercise of its police power.
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(iii) Housing that has been occupied by tenants within the past 10 years.
(B) The site was previously used for housing that was occupied by tenants that
was demolished within 10 years before the development proponent submits an
application under this section.
(C) The development would require the demolition of a historic structure that was
placed on a national, state, or local historic register.
(D) The property contains housing units that are occupied by tenants, and units at
the property are, or were, subsequently offered for sale to the general public by the
subdivider or subsequent owner of the property.
(8) The development proponent has done both of the following, as applicable:
(A) Certified to the locality that either of the following is true, as applicable:
(i) The entirety of the development is a public work for purposes of Chapter 1
(commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.
(ii) If the development is not in its entirety a public work, that all construction
workers employed in the execution of the development will be paid at least the general
prevailing rate of per diem wages for the type of work and geographic area, as
determined by the Director of Industrial Relations pursuant to Sections 1773 and
1773.9 of the Labor Code, except that apprentices registered in programs approved
by the Chief of the Division of Apprenticeship Standards may be paid at least the
applicable apprentice prevailing rate. If the development is subject to this subparagraph,
then for those portions of the development that are not a public work all of the
following shall apply:
(I) The development proponent shall ensure that the prevailing wage requirement
is included in all contracts for the performance of the work.
(II) All contractors and subcontractors shall pay to all construction workers
employed in the execution of the work at least the general prevailing rate of per diem
wages, except that apprentices registered in programs approved by the Chief of the
Division of Apprenticeship Standards may be paid at least the applicable apprentice
prevailing rate.
(III) Except as provided in subclause (V), all contractors and subcontractors shall
maintain and verify payroll records pursuant to Section 1776 of the Labor Code and
make those records available for inspection and copying as provided therein.
(IV) Except as provided in subclause (V), the obligation of the contractors and
subcontractors to pay prevailing wages may be enforced by the Labor Commissioner
through the issuance of a civil wage and penalty assessment pursuant to Section 1741
of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor
Code, within 18 months after the completion of the development, by an underpaid
worker through an administrative complaint or civil action, or by a joint
labor-management committee though a civil action under Section 1771.2 of the Labor
Code. If a civil wage and penalty assessment is issued, the contractor, subcontractor,
and surety on a bond or bonds issued to secure the payment of wages covered by the
assessment shall be liable for liquidated damages pursuant to Section 1742.1 of the
Labor Code.
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(V) Subclauses (III) and (IV) shall not apply if all contractors and subcontractors
performing work on the development are subject to a project labor agreement that
requires the payment of prevailing wages to all construction workers employed in the
execution of the development and provides for enforcement of that obligation through
an arbitration procedure. For purposes of this clause, “project labor agreement” has
the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of
the Public Contract Code.
(VI) Notwithstanding subdivision (c) of Section 1773.1 of the Labor Code, the
requirement that employer payments not reduce the obligation to pay the hourly
straight time or overtime wages found to be prevailing shall not apply if otherwise
provided in a bona fide collective bargaining agreement covering the worker. The
requirement to pay at least the general prevailing rate of per diem wages does not
preclude use of an alternative workweek schedule adopted pursuant to Section 511
or 514 of the Labor Code.
(B) (i) For developments for which any of the following conditions apply, certified
that a skilled and trained workforce shall be used to complete the development if the
application is approved:
(I) On and after January 1, 2018, until December 31, 2021, the development consists
of 75 or more units with a residential component that is not 100 percent subsidized
affordable housing and will be located within a jurisdiction located in a coastal or
bay county with a population of 225,000 or more.
(II) On and after January 1, 2022, until December 31, 2025, the development
consists of 50 or more units with a residential component that is not 100 percent
subsidized affordable housing and will be located within a jurisdiction located in a
coastal or bay county with a population of 225,000 or more.
(III) On and after January 1, 2018, until December 31, 2019, the development
consists of 75 or more units with a residential component that is not 100 percent
subsidized affordable housing and will be located within a jurisdiction with a
population of fewer than 550,000 and that is not located in a coastal or bay county.
(IV) On and after January 1, 2020, until December 31, 2021, the development
consists of more than 50 units with a residential component that is not 100 percent
subsidized affordable housing and will be located within a jurisdiction with a
population of fewer than 550,000 and that is not located in a coastal or bay county.
(V) On and after January 1, 2022, until December 31, 2025, the development
consists of more than 25 units with a residential component that is not 100 percent
subsidized affordable housing and will be located within a jurisdiction with a
population of fewer than 550,000 and that is not located in a coastal or bay county.
(ii) For purposes of this section, “skilled and trained workforce” has the same
meaning as provided in Chapter 2.9 (commencing with Section 2600) of Part 1 of
Division 2 of the Public Contract Code.
(iii) If the development proponent has certified that a skilled and trained workforce
will be used to complete the development and the application is approved, the following
shall apply:
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(I) The applicant shall require in all contracts for the performance of work that
every contractor and subcontractor at every tier will individually use a skilled and
trained workforce to complete the development.
(II) Every contractor and subcontractor shall use a skilled and trained workforce
to complete the development.
(III) Except as provided in subclause (IV), the applicant shall provide to the locality,
on a monthly basis while the development or contract is being performed, a report
demonstrating compliance with Chapter 2.9 (commencing with Section 2600) of Part
1 of Division 2 of the Public Contract Code. A monthly report provided to the locality
pursuant to this subclause shall be a public record under the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1) and shall
be open to public inspection. An applicant that fails to provide a monthly report
demonstrating compliance with Chapter 2.9 (commencing with Section 2600) of Part
1 of Division 2 of the Public Contract Code shall be subject to a civil penalty of ten
thousand dollars ($10,000) per month for each month for which the report has not
been provided. Any contractor or subcontractor that fails to use a skilled and trained
workforce shall be subject to a civil penalty of two hundred dollars ($200) per day
for each worker employed in contravention of the skilled and trained workforce
requirement. Penalties may be assessed by the Labor Commissioner within 18 months
of completion of the development using the same procedures for issuance of civil
wage and penalty assessments pursuant to Section 1741 of the Labor Code, and may
be reviewed pursuant to the same procedures in Section 1742 of the Labor Code.
Penalties shall be paid to the State Public Works Enforcement Fund.
(IV) Subclause (III) shall not apply if all contractors and subcontractors performing
work on the development are subject to a project labor agreement that requires
compliance with the skilled and trained workforce requirement and provides for
enforcement of that obligation through an arbitration procedure. For purposes of this
subparagraph, “project labor agreement” has the same meaning as set forth in paragraph
(1) of subdivision (b) of Section 2500 of the Public Contract Code.
(C) Notwithstanding subparagraphs (A) and (B), a development that is subject to
approval pursuant to this section is exempt from any requirement to pay prevailing
wages or use a skilled and trained workforce if it meets both of the following:
(i) The project includes 10 or fewer units.
(ii) The project is not a public work for purposes of Chapter 1 (commencing with
Section 1720) of Part 7 of Division 2 of the Labor Code.
(9) The development did not or does not involve a subdivision of a parcel that is,
or, notwithstanding this section, would otherwise be, subject to the Subdivision Map
Act (Division 2 (commencing with Section 66410)) or any other applicable law
authorizing the subdivision of land, unless the development is consistent with all
objective subdivision standards in the local subdivision ordinance, and either of the
following apply:
(A) The development has received or will receive financing or funding by means
of a low-income housing tax credit and is subject to the requirement that prevailing
wages be paid pursuant to subparagraph (A) of paragraph (8).
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(B) The development is subject to the requirement that prevailing wages be paid,
and a skilled and trained workforce used, pursuant to paragraph (8).
(10) The development shall not be upon an existing parcel of land or site that is
governed under the Mobilehome Residency Law (Chapter 2.5 (commencing with
Section 798) of Title 2 of Part 2 of Division 2 of the Civil Code), the Recreational
Vehicle Park Occupancy Law (Chapter 2.6 (commencing with Section 799.20) of
Title 2 of Part 2 of Division 2 of the Civil Code), the Mobilehome Parks Act (Part
2.1 (commencing with Section 18200) of Division 13 of the Health and Safety Code),
or the Special Occupancy Parks Act (Part 2.3 (commencing with Section 18860) of
Division 13 of the Health and Safety Code).
(b) (1) If a local government determines that a development submitted pursuant
to this section is in conflict with any of the objective planning standards specified in
subdivision (a), it shall provide the development proponent written documentation
of which standard or standards the development conflicts with, and an explanation
for the reason or reasons the development conflicts with that standard or standards,
as follows:
(A) Within 60 days of submittal of the development to the local government
pursuant to this section if the development contains 150 or fewer housing units.
(B) Within 90 days of submittal of the development to the local government
pursuant to this section if the development contains more than 150 housing units.
(2) If the local government fails to provide the required documentation pursuant
to paragraph (1), the development shall be deemed to satisfy the objective planning
standards specified in subdivision (a).
(c) (1) Any design review or public oversight of the development may be conducted
by the local government’s planning commission or any equivalent board or commission
responsible for review and approval of development projects, or the city council or
board of supervisors, as appropriate. That design review or public oversight shall be
objective and be strictly focused on assessing compliance with criteria required for
streamlined projects, as well as any reasonable objective design standards published
and adopted by ordinance or resolution by a local jurisdiction before submission of
a development application, and shall be broadly applicable to development within
the jurisdiction. That design review or public oversight shall be completed as follows
and shall not in any way inhibit, chill, or preclude the ministerial approval provided
by this section or its effect, as applicable:
(A) Within 90 days of submittal of the development to the local government
pursuant to this section if the development contains 150 or fewer housing units.
(B) Within 180 days of submittal of the development to the local government
pursuant to this section if the development contains more than 150 housing units.
(2) If the development is consistent with the requirements of subparagraph (A) or
(B) of paragraph (9) of subdivision (a) and is consistent with all objective subdivision
standards in the local subdivision ordinance, an application for a subdivision pursuant
to the Subdivision Map Act (Division 2 (commencing with Section 66410)) shall be
exempt from the requirements of the California Environmental Quality Act (Division
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13 (commencing with Section 21000) of the Public Resources Code) and shall be
subject to the public oversight timelines set forth in paragraph (1).
(d) (1) Notwithstanding any other law, a local government, whether or not it has
adopted an ordinance governing automobile parking requirements in multifamily
developments, shall not impose automobile parking standards for a streamlined
development that was approved pursuant to this section in any of the following
instances:
(A) The development is located within one-half mile of public transit.
(B) The development is located within an architecturally and historically significant
historic district.
(C) When on-street parking permits are required but not offered to the occupants
of the development.
(D) When there is a car share vehicle located within one block of the development.
(2) If the development does not fall within any of the categories described in
paragraph (1), the local government shall not impose automobile parking requirements
for streamlined developments approved pursuant to this section that exceed one
parking space per unit.
(e) (1) If a local government approves a development pursuant to this section,
then, notwithstanding any other law, that approval shall not expire if the project
includes public investment in housing affordability, beyond tax credits, where 50
percent of the units are affordable to households making below 80 percent of the area
median income.
(2) If a local government approves a development pursuant to this section and the
project does not include 50 percent of the units affordable to households making
below 80 percent of the area median income, that approval shall automatically expire
after three years except that a project may receive a one-time, one-year extension if
the project proponent can provide documentation that there has been significant
progress toward getting the development construction ready, such as filing a building
permit application.
(3) If a local government approves a development pursuant to this section, that
approval shall remain valid for three years from the date of the final action establishing
that approval and shall remain valid thereafter for a project so long as vertical
construction of the development has begun and is in progress. Additionally, the
development proponent may request, and the local government shall have discretion
to grant, an additional one-year extension to the original three-year period. The local
government’s action and discretion in determining whether to grant the foregoing
extension shall be limited to considerations and process set forth in this section.
(f) A local government shall not adopt any requirement, including, but not limited
to, increased fees or inclusionary housing requirements, that applies to a project solely
or partially on the basis that the project is eligible to receive ministerial or streamlined
approval pursuant to this section.
(g) This section shall not affect a development proponent’s ability to use any
alternative streamlined by right permit processing adopted by a local government,
including the provisions of subdivision (i) of Section 65583.2.
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(h) The California Environmental Quality Act (Division 13 (commencing with
Section 21000) of the Public Resources Code) does not apply to actions taken by a
state agency or local government to lease, convey, or encumber land owned by the
local government or to facilitate the lease, conveyance, or encumbrance of land owned
by the local government, or to provide financial assistance to a development that
receives streamlined approval pursuant to this section that is to be used for housing
for persons and families of very low, low, or moderate income, as defined in Section
50093 of the Health and Safety Code.
(i) For purposes of this section, the following terms have the following meanings:
(1) “Affordable housing cost” has the same meaning as set forth in Section 50052.5
of the Health and Safety Code.
(2) “Affordable rent” has the same meaning as set forth in Section 50053 of the
Health and Safety Code.
(3) “Department” means the Department of Housing and Community Development.
(4) “Development proponent” means the developer who submits an application
for streamlined approval pursuant to this section.
(5) “Completed entitlements” means a housing development which has received
all the required land use approvals or entitlements necessary for the issuance of a
building permit.
(6) “Locality” or “local government” means a city, including a charter city, a
county, including a charter county, or a city and county, including a charter city and
county.
(7) “Production report” means the information reported pursuant to subparagraph
(H) of paragraph (2) of subdivision (a) of Section 65400.
(8) “State agency” includes every state office, officer, department, division, bureau,
board, and commission, but does not include the California State University or the
University of California.
(9) “Subsidized” means units that are price or rent restricted such that the units
are permanently affordable to households meeting the definitions of very low and
lower income, as defined in Sections 50079.5 and 50105 of the Health and Safety
Code.
(10) “Reporting period” means either of the following:
(A) The first half of the regional housing needs assessment cycle.
(B) The last half of the regional housing needs assessment cycle.
(11) “Urban uses” means any current or former residential, commercial, public
institutional, transit or transportation passenger facility, or retail use, or any
combination of those uses.
(j) The department may review, adopt, amend, and repeal guidelines to implement
uniform standards or criteria that supplement or clarify the terms, references, or
standards set forth in this section. Any guidelines or terms adopted pursuant to this
subdivision shall not be subject to Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.
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(k) The determination of whether an application for a development is subject to
the streamlined ministerial approval process provided by subdivision (b) is not a
“project” as defined in Section 21065 of the Public Resources Code.
(l) It is the policy of the state that this section be interpreted and implemented in
a manner to afford the fullest possible weight to the interest of, and the approval and
provision of, increased housing supply.
(m) This section shall remain in effect only until January 1, 2026, and as of that
date is repealed.
(Amended by Stats. 2019, Ch. 159, Sec. 8. (AB 101) Effective July 31, 2019. Repealed as of January
1, 2026, by its own provisions. )
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Streamlined Ministerial
Approval Process
(Chapter 366, Statutes of 2017)
Guidelines
State of California
Governor Edmund G. Brown Jr.
Alexis Podesta, Secretary
Business, Consumer Services and Housing Agency
Ben Metcalf, Director
Department of Housing and Community Development
Zachary Olmstead, Deputy Director
Division of Housing Policy Development
Division of Housing Policy Development
2020 West El Camino Avenue, Suite 500
Sacramento, CA 95833
November 29, 2018
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The matters set forth herein are regulatory mandates, and are adopted in
accordance with the authorities set forth below:
Quasi-legislative regulations … have the dignity of statutes … [and]…
delegation of legislative authority includes the power to elaborate the meaning
of key statutory terms…
Ramirez v. Yosemite Water Co., 20 Cal. 4th 785, 800 (1999)
The Department may review, adopt, amend, and repeal guidelines to
implement uniform standards or criteria that supplement or clarify the terms,
references, or standards set forth in this section. Any guidelines or terms
adopted pursuant to this subdivision shall not be subject to Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code.
Government Code section 65913.4, subdivision (j)
Government Code section 65913.4 relates to the resolution of a statewide
concern and is narrowly tailored to limit any incursion into any legitimate
municipal interests, and therefore the provisions of Government Code section
65913.4, as supplemented and clarified by these Guidelines, are
constitutional in all respects and preempt any and all inconsistent laws,
ordinances, regulations, policies or other legal requirements imposed by any
locality.
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Streamlined Ministerial Approval Process
Development Approval Process
Program Guidelines
Table of Contents
Contents
INTRODUCTION ............................................................................................................... 1
ARTICLE I. GENERAL PROVISIONS ............................................................................... 2
Section 100. Purpose and Scope ................................................................................. 2
Section 101. Applicability .............................................................................................. 2
Section 102. Definitions ................................................................................................ 2
ARTICLE II. STREAMLINED MINISTERIAL APPROVAL PROCESS
DETERMINATION............................................................................................................. 5
Section 200. Methodology ............................................................................................ 5
Section 201. Timing and Publication Requirements ...................................................... 7
ARTICLE III. APPROVAL PROCESS ............................................................................... 7
Section 300. Local Government Responsibility ............................................................ 7
Section 301. Development Review and Approval ....................................................... 10
ARTICLE IV. DEVELOPMENT ELIGIBILITY ................................................................... 14
Section 400. Housing Type Requirements ................................................................. 14
Section 401. Site Requirements ................................................................................. 14
Section 402. Affordability Provisions ........................................................................... 19
Section 403. Labor Provisions .................................................................................... 21
Section 404. Additional Provisions.............................................................................. 25
ARTICLE V. REPORTING .............................................................................................. 25
Section 500. Reporting Requirements ........................................................................ 25
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INTRODUCTION
Chapter 366, Statutes of 2017 (SB 35, Wiener) was part of a 15 bill housing package aimed at
addressing the state’s housing shortage and high housing costs. Specifically, it requires the
availability of a Streamlined Ministerial Approval Process for developments in localities that
have not yet made sufficient progress towards their allocation of the regional housing need.
Eligible developments must include a specified level of affordability, be on an infill site, comply
with existing residential and mixed use general plan or zoning provisions, and comply with
other requirements such as locational and demolition restrictions. The intent of the legislation
is to facilitate and expedite the construction of housing. In addition, as part of the legislation,
the Legislature found ensuring access to affordable housing is a matter of statewide concern
and declared that the provisions of SB 35 would apply to all cities and counties, including a
charter city, a charter county, or a charter city and county. Please note, the Department of
Housing and Community Development (Department) may take action in cases where these
guidelines are not adhered to under its existing accountability and enforcement authority.
Guidelines for the Streamlined Ministerial Approval Process are organized into five Articles, as
follows:
Article I. General Provisions: This article includes information on the purpose of the guidelines,
applicability, and definitions used throughout the document.
Article II. Determination Methodology: This article describes the methodology for which the
Department shall determine which localities are subject to the Streamlined Ministerial Approval
Process.
Article III. Approval Process: This article describes the parameters of the approval process,
including local government responsibilities, approval processes, and general provisions.
1) Local Government Responsibility – This section specifies the types of requirements
localities can require a development to adhere to in order to determine consistency with
general plan and zoning standards, including objective standards, controlling planning
documents, and parking.
2) Development Review and Approval – This section details the types of hearings and review
allowed under the Streamlined Ministerial Approval Process, timing provisions for
processing and approving an application, denial requirements, and timeframes related to
the longevity of the approval.
Article IV. Development Eligibility: This article describes the requirements for developments in
order to apply for streamlining including type of housing, site requirements, affordability
provisions, and labor provisions.
Article V. Reporting: This article describes reporting requirements specific to the Streamlined
Ministerial Approval Process in the locality’s annual progress report on the general plan.
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ARTICLE I. GENERAL PROVISIONS
Section 100. Purpose and Scope
(a) These Guidelines (hereinafter “Guidelines”) implement, interpret, and make specific the
Chapter 366, Statutes of 2017 (SB 35, W iener), and subsequent amendments
(hereinafter “Streamlined Ministerial Approval Process”) as authorized by Government
Code section 65913.4.
(b) These Guidelines establish terms, conditions and procedures for a development
proponent to submit an application for a development to a locality that is subject to the
Streamlined Ministerial Approval Process provided by Government Code section 65913.4.
(c) It is the intent of the Legislature to provide reforms and incentives to facilitate and
expedite the construction of affordable housing. Therefore these Guidelines shall be
interpreted and implemented in a manner to afford the fullest possible weight to the
interest of increasing housing supply.
(d) These Guidelines shall remain in effect until January 1, 2026, and as of that date are
repealed.
NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65582.1 and 65913.4(l) and (m).
Section 101. Applicability
(a) The provisions of Government Code section 65913.4 are effective as of January 1, 2018.
(b) These Guidelines are applicable to applications submitted on or after January 1, 2019.
Nothing in these Guidelines may be used to invalidate or require a modification to a
development approved through the Streamlined Ministerial Approval Process prior to the
effective date.
(c) These Guidelines are applicable to both general law and charter cities, including a charter
city and county.
NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65913.4(i)(6).
Section 102. Definitions
All terms not defined below shall, unless their context suggests otherwise, be interpreted in
accordance with the meaning of terms described in Government Code section 65913.4
(a) “Annual Progress Report (APR)” means the housing element annual progress report
required by Government Code section 65400 and due to the Department April 1 of each
year reporting on the prior calendar year’s permitting activities and implementation of the
programs in a local government’s housing element.
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(b) “Application” means a submission containing such information necessary for the locality
to determine whether the development complies with the criteria outlined in Article IV of
these Guidelines. This may include a checklist or other application documents generated
by the local government pursuant to Section 300(a) that specifies in detail the information
required to be included in an application, provided that the information is only that
required to determine compliance with objective standards and criteria outlined in article
IV of these Guidelines.
(c) “Area Median Income (AMI)” means the median family income of a geographic area of the
state, as published annually by the Department within the State Income Limits:
http://www.hcd.ca.gov/grants-funding/income-limits/index.shtml.
(d) “Car share vehicle” is an automobile rental model where people rent cars from a car-
sharing network for roundtrip or one-way where vehicles are returned to a dedicated or
reserved parking location. An example of such a service is Zipcar.
(e) “Density Bonus” means the same as Government Code section 65915.
(f) “Department” means the Department of Housing and Community Development.
(g) “Determination” means the published identification, periodically updated, by the
Department of those local governments that are required to make the Streamlined
Ministerial Approval Process available per these Guidelines.
(h) “Development proponent or applicant” means the owner of the property, or person or
entity with the written authority of the owner, that submits an application for streamlined
approval..
(i) “Fifth housing element planning period” means the five- or eight-year time period between
the due date for the fifth revision of the housing element and the due date for the sixth
revision of the housing element pursuant to Government Code section 65588(f)..
(j) “Infill” means at least 75 percent of the linear measurement of the perimeter of the site
adjoins parcels that are developed with urban uses. For the purposes of this definition,
parcels that are only separated by a street or highway shall be considered to be adjoined.
(k) “Locality” or “local government” means a city, including a charter city, a county, including
a charter county, or a city and county, including a charter city and county.
(l) “Low-Income” means households earning 50 to 80 percent of AMI.
(m) “Lower-income” means households earning 80 percent or less of AMI pursuant to Health
and Safety Code section 50079.5.
(n) “Ministerial processing or approval” means a process for development approval involving
little or no personal judgment by the public official as to the wisdom or manner of carrying
out the project. The public official merely ensures that the proposed development meets
all the "objective zoning standards," "objective subdivision standards," and "objective
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design review standards" in effect at the time that the application is submitted to the local
government, but uses no special discretion or judgment in reaching a decision.
(o) “Multifamily” means a housing development with two or more attached residential units.
The definition does not include accessory dwelling units unless the project is for new
construction of a single-family home with an attached accessory dwelling units in a zone
that allows for multifamily. Please note, accessory dwelling units have a separate
permitting process pursuant to Government Code section 65852.2
(p) “Objective zoning standard”, “objective subdivision standard”, and “objective design
review standard” means standards that involve no personal or subjective judgment by a
public official and are uniformly verifiable by reference to an external and uniform
benchmark or criterion available and knowable by both the development applicant or
proponent and the public official prior to submittal. “Objective design review standards”
means only objective design standards published and adopted by ordinance or resolution
by a local jurisdiction before submission of a development application, which are broadly
applicable to development within the jurisdiction.
(q) “Project labor agreement” has the same meaning as set forth in paragraph (1) of
subdivision (b) of Section 2500 of the Public Contract Code.
(r) “Public transit” means a site containing an existing rail transit station (e.g. light rail, Metro,
or BART), a ferry terminal served by either a bus or rail transit service, or the intersection
of two or more major bus routes with a frequency of service interval of 15 minutes or less
during the morning and afternoon peak commute periods. For purposes of these
Guidelines, measurements for frequency of bus service can include multiple bus lines.
(s) “Public works project” means developments which meet the criteria of Chapter 1
(commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.
(t) “Regional housing need” means the local government’s share of the regional housing
need allocation as determined by Article 10.6 of the Government Code.
(u) "Related facilities" means any manager's units and any and all common area spaces that
are included within the physical boundaries of the housing development, including, but not
limited to, common area space, walkways, balconies, patios, clubhouse space, meeting
rooms, laundry facilities, and parking areas that are exclusively available to residential
users, except any portions of the overall development that are specifically commercial
space.
(v) “Reporting period” means the timeframe for which APRs are utilized to create the
determination for which a locality is subject to the Streamlined Ministerial Approval
Process. The timeframes are calculated in relationship to the planning period of the
housing element pursuant to Government Code section 65588 and are cumulative
through the most recent calendar year.
(w) “Skilled and trained workforce” has the same meaning as provided in Chapter 2.9
(commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code.
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(x) “Subsidized” means units that are price or rent restricted such that the units are
permanently affordable to households meeting the definitions of very low and lower
income, as defined in Sections 50079.5 and 50105 of the Health and Safety Code. For
the purposes of these Guidelines, the word “permanently” has the same meaning
described in Section 402(b).
(y) “Tenant” means a person who occupies land or property rented or leased for use as a
residence.
(z) “Urban uses” means any current or former residential, commercial, public institutional,
transit or transportation passenger facility, or retail use, or any combination of those uses.
(aa) “Very low-income” means households earning less than 50 percent or less of AMI
pursuant to Health and Safety Code section 50105.
NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65913.4.
ARTICLE II. STREAMLINED MINISTERIAL APPROVAL PROCESS DETERMINATION
Section 200. Methodology
(a) The Department will calculate the determination, as defined in Section 102(g), based on
permit data received through APRs at the mid-point of the housing element planning
period pursuant to Government Code section 65488 and at the end point of the planning
period.
(1) APRs, as defined in Section 102(a), report on calendar years, while housing element
planning periods may begin and end at various times throughout the year. When a
planning period begins after July, the APR for that year is attributed to the prior
housing element planning period. When the planning period ends before July 1, the
APR for that year will be attributed to the following housing element planning period.
(b) The determination is based on permitting progress toward a pro-rata share of the regional
housing need for the reporting period.
(1) Determinations calculated at the mid-point of the planning period are based upon
permitting progress toward a pro-rata share of half (50 percent), of the regional
housing need, while determinations calculated at the end of the planning period are
based upon permitting progress towards the entirety (100 percent) of the regional
housing need.
(2) For localities, as defined in Section 102(k), on a 5-year planning period, the mid-
point determination is based upon a pro-rata share of the regional housing need for
the first three years in the planning period, and 60 percent of the regional housing
need.
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(3) The determination applies to all localities beginning January 1, 2018, regardless of
whether a locality has reached the mid-point of the fifth housing element planning
period. For those local governments that have achieved the mid-point of the fifth
housing element planning period, the reporting period includes the start of the
planning period until the mid-point, and the next determination reporting period
includes the start of the planning period until the end point of the planning period. In
the interim period between the effective date of the Streamlined Ministerial Approval
Process, until a locality reaches the mid-point in the fifth housing element planning
period, the Department will calculate the determination yearly. This formula is based
upon the permitting progress towards a pro-rata share of the regional housing need,
dependent on how far the locality is in the planning period, until the mid-point of the
fifth housing element planning period is reached. See example below.
(c) To determine if a locality is subject to the Streamlined Ministerial Approval Process for
developments with 10 percent of units affordable to lower-income households, the
Department shall compare the permit data received through the APR to the pro-rata share
of their above-moderate income regional housing need for the current housing element
planning period. If a local government has permitted less than the pro-rata share of their
above-moderate income regional housing need, then the jurisdiction will be subject to the
Streamlined Ministerial Approval Process for developments with 10 percent affordability.
(d) Local governments that do not submit their latest required APR prior to the Department’s
determination are subject to the Streamlined Ministerial Approval Process for
developments with 10 percent of units affordable to lower-income households.
(e) To determine if a locality is subject to the Streamlined Ministerial Approval Process for
developments with 50 percent of units affordable to lower-income households, the
Department shall compare the permit data received through the APR to the pro-rata share
of their independent very-low and low-income regional housing need for the current
housing element planning period. If a local government has permitted the pro-rata share
of their above-moderate income regional housing need, and submitted their latest
required APR, but has permitted less than the pro-rata share of their very-low and lower
income regional housing need, they will be subject to the Streamlined Ministerial Approval
Example Calculation
For a locality two years into the reporting period, the determination is
calculated at two out of eight years of the planning period and will be based
upon a pro-rata share of two-eighths, or 25 percent, of the regional housing
need, and the following year, for the same locality, the determination will be
calculated at three out of eight years of the planning period based upon a
pro-rata share of three-eighths, or 37.5 percent, of the regional housing need,
and the following year for the same locality the determination will be
calculated at four out of eight years of the planning period based upon a pro-
rata share of four-eighths, or 50 percent, of the regional housing need. At that
point, the locality will reach its mid-point of the planning period and the
determination, the pro-rata share, and the permitting progress toward the pro-
rata share will hold until the locality reaches the end-point of the planning
period.
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Process for developments with 50 percent affordability. For purposes of these Guidelines,
as the definition of lower-income is inclusive of very low-income units. Very low -income
units permitted in excess of the very low-income need can be applied to demonstrate
progress towards the lower-income need. However, as the definition of very low-income
units does not include low-income units. Low-income units permitted in excess of the low-
income need cannot be applied to demonstrate progress towards the very low-income
need.
(f) To determine if a locality is not subject to the Streamlined Ministerial Approval Process,
the permit data from the APR shall demonstrate that the locality has permitted the entirety
of the pro-rata share of units for the above moderate-, low-, and very low- income
categories of the regional housing need for the relevant reporting period, and has
submitted the latest APR.
(g) The Department’s determination will be in effect until the Department calculates the
determination for the next reporting period unless updated pursuant to Section 201. A
locality’s status on the date the application is submitted determines whether an
application is subject to the Streamlined Ministerial Approval Process, and also
determines which level of affordability (10 or 50 percent) an applicant must provide to be
eligible for streamlined ministerial permitting.
NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65913.4(a)(4).
Section 201. Timing and Publication Requirements
The Department shall publish the determination by June 30 of each year, accounting for the
APR due April 1 of each year, though this determination may be updated more frequently
based on the availability of data, data corrections, or the receipt of new information. The
Department shall publish the determination on the Department’s website.
NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65913.4(a)(4).
ARTICLE III. APPROVAL PROCESS
Section 300. Local Government Responsibility
(a) A local government that has been designated as subject to the Streamlined Ministerial
Approval Process by the Department shall provide information, in a manner readily
accessible to the general public, about the locality’s process for applying and receiving
ministerial approval, materials required for an application as defined in Section 102(b),
and relevant objective standards to be used to evaluate the application. The information
provided may include reference documents and lists of other information needed to
enable the local government to determine if the application is consistent with objective
standards, consistent with Section 102(b). This can be through the use of checklists,
maps, diagrams, flow charts, or other formats. The locality’s process and application
requirements shall not in any way inhibit, chill, or preclude the ministerial approval
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process, which must be strictly focused on assessing compliance with the criteria required
for streamlined projects in Article IV of these guidelines.
(b) Determination of consistency
(1) When determining consistency with objective zoning, subdivision, or design review
standards, the local government can only use those standards that meet the
definition referenced in Section 102(p). For example, design review standards that
require subjective decision-making, such as consistency with “neighborhood
character”, cannot be applied as an objective standard unless “neighborhood
character” is defined in such a manner that is non-discretionary.
(2) General plan or zoning ordinance requirements for a specific plan or another
discretionary permit do not necessarily constitute objective zoning standard. A
locality may not require a development proponent to meet any standard for which
the locality typically exercises subjective discretion, on a case-by-case basis, about
whether to impose that standard on similarly situated development proposals.
(3) Modifications to objective standards granted as part of a density bonus concession,
incentive, parking reduction, or waiver of development standards pursuant to Density
Bonus Law Government Code section 65915,1 or a local density bonus ordinance,
shall be considered consistent with objective standards.
(4) Project eligibility for a density bonus concession, incentive, parking reduction, or
waiver of development standards shall be determined consistent with Density Bonus
Law.
(5) Objective standards may be embodied in alternative objective land use
specifications adopted by a city or county, and may include, but are not limited to,
the general plan, housing overlay zones, specific plans, inclusionary zoning
ordinances, and density bonus ordinances.
(6) In the event that objective zoning, general plan, subdivision, or design review
standards are mutually inconsistent, a development shall be deemed consistent with
the objective standards pursuant to Section 400(c) of these Guidelines if the
development is consistent with the standards set forth in the general plan.
1 Amended 1/9/19 -Grammatical correction
Example Design Review
Objective design review could include use of specific materials or styles, such
as Spanish-style tile roofs or roof pitches with a slope of 1:5. Architectural
design requirements such as “craftsman style architecture” could be used so
long as the elements of “craftsman style architecture” are clearly defined (e.g.,
“porches with thick round or square columns and low-pitched roofs with wide
eaves), ideally with illustrations.
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(7) Developments are only subject to objective zoning standards, objective subdivision
standards, and objective design review standards enacted and in effect at the time
that the application is submitted to the local government.
(8) Determination of consistency with objective standards shall be interpreted and
implemented in a manner to afford the fullest possible weight to the interest of, and
the approval and provision of, increased housing supply. For example, design review
standards or other objective standards that serve to inhibit, chill, or preclude the
development of housing under the Streamlined Ministerial Approval Process are
inconsistent with the application of state law.
(c) Density calculation
(1) When determining consistency with density requirements, a development that is
compliant with up to the maximum density allowed within the land use element
designation of the parcel in the general plan is considered consistent with objective
standards. For example, a development on a parcel that has a multifamily land use
designation allowing up to 45 units per acre is allowed up to 45 units per acre
regardless of the density allowed pursuant to the zoning code. In addition, the
development may request a density of greater than 45 units per acre if eligible for a
density bonus under Density Bonus Law.
(2) Growth, unit, or other caps that restrict the number of units allowed in the proposed
development or that expressly restricts the timing of development can be applied
only to the extent that those caps do not inhibit the development’s ability to achieve
the maximum density allowed by the land use designation and any density bonus
the project is eligible for and do not restrict the issuance of building permits for the
project.
(3) Additional density, floor area, or units granted as density bonus shall be considered
consistent with maximum allowable densities.
(4) Development applications are only subject to the density standards in effect at the
time that the development is submitted to the local government.
(d) Parking requirements
(1) Automobile parking standards shall not be imposed on a development that meets
any of the following criteria:
(A) The development is located where any part of the parcel or parcels on which
the development is located is within one-half mile of public transit, as defined by
Section 102(r) of these Guidelines.
(B) The development is located within a district designated as architecturally or
historically significant under local, state, or federal standards.
(C) When on-street parking permits are required, but not made available to the
occupants of the development.
(D) When there is a car share vehicle, (i.e. a designated location to pick up or drop
off a car share vehicle as defined by Section 102(d),) within one block of the
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development. A block can be up to 1,000 linear feet of pedestrian travel along a
public street from the development.
(2) For all other developments, the local government shall not impose automobile
parking requirements for streamlined developments approved pursuant to this
section that exceed one parking space per unit.
(e) A local government shall not adopt any requirement, including, but not limited to,
increased fees or inclusionary housing requirements, that applies to a project solely or
partially on the basis that the project is eligible to receive streamlined processing.
NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65913.4(a),(d), and (l).
Section 301. Development Review and Approval
(a) Ministerial processing
(1) Ministerial approval, as defined in Section 102(n), of a project that complies with
Article IV of these guidelines shall be non-discretionary and cannot require a
conditional use permit or other discretionary local government review or approval.
(2) Any ministerial design review or public oversight of the application may be
conducted by the local government’s planning commission or any equivalent board
or commission responsible for review and approval of development projects, or the
city council or board of supervisors, as appropriate.
(A) Design review or public oversight shall be objective and be strictly focused on
assessing compliance with criteria required for streamlined projects, as well as
any reasonable objective design standards published and adopted by
ordinance or resolution by a local government before submission of the
development application, and shall be broadly applicable to development within
the locality.
(B) Design review or public oversight shall not in any way inhibit, chill, stall, delay,
or preclude the ministerial approval provided by these Guidelines or its effect.
(3) If a local government determines that a development submitted pursuant to this
section is in conflict with any of the objective planning standards, it shall provide the
development proponent, as defined in Section 102(h), written documentation of
which standard or standards the development conflicts with, and an explanation for
the reason or reasons the development conflicts with that standard or standards,
within the timeframe specified in Section 301(b)(2) below. The local government
may elect to allow the development proponent to correct any deficiencies within the
timeframes for project approval specified in Section 301(b)(3) below.
(4) The denial of an application for streamlined processing does not preclude the
development proponent from correcting any deficiencies and resubmitting an
application for streamline review, or from to applying for the project under other local
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government processes. If the application is denied and the development proponent
elects to resubmit an application for streamlined review, the timeframes specified in
Section 301(b) below shall commence on the date of resubmittal.
(5) Approval of ministerial processing does not preclude imposed standard conditions of
approval as long as those conditions are objective and broadly applicable to development
within the locality regardless of streamline approval. This includes any objective process
requirements related to the issuance of a building permit. However, any further approvals,
such as demolition, grading and building period or, if required, final map, on a ministerial
basis is subject to the objective standards.
(A) Notwithstanding Paragraph (5), standard conditions that specifically implement
the provisions of these Guidelines such as commitment for recording covenant
and restrictions and provision of prevailing wage can be included in the
conditions of approval.
(6) The California Environmental Quality Act (Division 13 (commencing with section
21000) of the Public Resources Code) does not apply to the following in connection
with projects qualifying for the Streamlined Ministerial Approval Process :
(A) Actions taken by a state agency or local government to lease, convey, or
encumber land or to facilitate the lease, conveyance, or encumbrance of land
owned by the local government.
(B) Actions taken by a state agency or local government to provide financial
assistance to a development that receives streamlined approval pursuant to
this section that is to be used for housing for persons and families of very low,
low, or moderate income.
(C) The determination of whether an application for a development is subject to the
Streamlined Ministerial Approval Process.
(b) Upon a receipt of application, the local government shall adhere to the following:
(1) An application submitted hereunder shall be reviewed by the agency whether or not
it contains all materials required by the agency for the proposed project, and it is not
a basis to deny the project if either:
(A) The application contains sufficient information for a reasonable person to
determine whether the development is consistent, compliant, or in conformity
with the requisite objective standards (outlined in Article IV of these
Guidelines); or
(B) The application contains all documents and other information required by the
local government as referenced in section 300(a) of these Guidelines.
(2) Local governments shall make a determination of consistency, as described in
Section 301(a)(3), as follows:
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(A) Within 60 calendar days of submittal of the application to the local government
pursuant to this section if the development contains 150 or fewer housing units.
(B) Within 90 calendar days of submittal of the application to the local government
pursuant to this section if the development contains more than 150 housing
units.
(C) Documentation of inconsistencies with objective standards must be provided to
the development proponent within these timeframes. If the local government
fails to provide the required documentation determining consistency within
these timeframes, the development shall be deemed to satisfy the objective
planning standards.
(3) Any design review or public oversight, as described in Section 301(a)(2), including
resulting final approval shall be completed as follows:
(A) Within 90 calendar days of submittal of the application to the local government
pursuant to this section if the development contains 150 or fewer housing units.
(B) Within 180 calendar days of submittal of the application to the local government
pursuant to this section if the development contains more than 150 housing
units.
(C) Although design review may occur in parallel with or as part of the consistency
determination set forth in paragraphs (1) and (2) above, failure to meet
subjective design review standards or obtain design review approval from the
oversight board shall not itself prevent or otherwise preclude a project from
being approved for development pursuant to this Section if objective design
review standards are met.
(c) Modifications to the development subsequent to the approval of the ministerial review but
prior to issuance of a building permit can be granted in the following circumstances:
1) For modification initiated by the development proponent.
A) Following approval of an application under the Streamlined Ministerial Review
Process, but prior to issuance of a building permit for the development, an
applicant may submit written request to modify the development. The
modification must conform with the following:
i. The change is consistent with the Streamlined Ministerial Approval
Process Guidelines.
ii. The change will not modify the project’s consistency with objective
development standards considered as part of the project’s review.
iii. The change will not conflict with a plan, ordinance or policy addressing
community health and safety.
iv. The change will not result in modifications to the concessions, incentives
or waivers to development standards approved pursuant to density bonus
law.
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B) Upon receipt of the request, the local agency shall determine if the requested
modification is consistent with the local agency’s objective development
standards in effect when the development was approved. Approval of the
modification request must be completed within 60 days of submittal of the
modification or 90 days if design review is required.
2) For modification initiated by the local agency
A) Following approval of an application under the Streamlined Ministerial Review
Process, but prior to issuance of a building permit for the development, a local
agency may require one-time changes to the development that are necessary
to comply with the local agency’s objective uniform construction codes
(including, without limitation building, plumbing, electrical, fire, and grading
codes), to comply with federal or state laws, or to mitigate a specific, adverse
impact upon the public health or safety and there is no feasible method to
satisfactorily mitigate or avoid the specific adverse impact without modifying the
development. A “specific, adverse impact” has the meaning defined in
Government Code section 65589.5(d)(2).
B) A determination that a change is required is a ministerial action. If a revised
application is required to address these modifications, the application shall be
reviewed as a ministerial approval within 60 days of re-submittal of the application.
(d) If a local government approves a development under the Streamlined Ministerial Approval
Process, notwithstanding any other law, the following expiration of approval timeframes
apply:
(1) If the project includes public investment in housing affordability, beyond tax credits,
where 50 percent of the units are affordable to households making at or below 80
percent of the AMI, then that approval shall not expire.
(2) If the project does not include public investment in housing affordability (including
local, state, or federal government assistance), beyond tax credits and at least 50
percent of the units are not affordable to households making at or below 80 percent
of the AMI, that approval shall automatically expire after three years.
(A) That development may receive a one-time, one-year extension if the project
proponent can provide documentation that there has been significant progress
toward getting the development construction ready, such as filing a building
permit application. The local government’s action and discretion in determining
whether to grant the foregoing extension shall be limited to considerations and
process set forth in this section.
(B) Approval shall remain valid for a development so long as vertical construction
of the development has begun and is in progress.
NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65913.4(a),(b), (c), (e), (h), and (k).
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ARTICLE IV. DEVELOPMENT ELIGIBILITY
Section 400. Housing Type Requirements
To qualify to apply for the Streamlined Ministerial Approval Process, the development
proponent shall demonstrate the development meets the following criteria:
(a) Is a multifamily housing development. The development can offer units for rental or for-
sale.
(b) At least two-thirds of the square footage of the development shall be designated for
residential use:
(1) For purposes of these Guidelines, the two-thirds calculation is based upon the
proportion of gross square footage of residential space and related facilities as
defined in Section 102(u), to gross development building square footage for an
unrelated use such as commercial. Structures utilized by both residential and non-
residential uses shall be credited proportionally to intended use. Additional density,
floor area, or units granted pursuant to Density Bonus Law are excluded from this
calculation.
(2) Both residential and non-residential components of a qualified mixed-use
development are eligible for the Streamlined Ministerial Approval Process. Additional
permitting requirements pertaining to the individual business located in the
commercial component (e.g. alcohol use permit or adult business permit) are subject
to local government processes.
(3) When the commercial component is not part of a vertical mixed-use structure,
construction of the residential component of a mixed-use development shall be
completed prior to, or concurrent with, the commercial component. .
(c) The development is consistent with objective zoning standards, objective subdivision
standards, and objective design review standards in effect at the time of the development
application submittal per Section 300 of these Guidelines, provided that any modifications
to density or other concessions, incentives, or waivers granted pursuant to the Density
Bonus Law shall be considered consistent with such objective zoning standards, objective
subdivision standards, and objective design review standards.
NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65913.4(a).
Section 401. Site Requirements
(a) The development proponent shall demonstrate in the application that, as of the date the
application is submitted, the proposed development is located on a site that meets the
following criteria:
(1) The site is a legal parcel, or parcels, located in either:
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(A) A city where the city boundaries include some portion of either an urbanized
area or urban cluster, as designated by the United States Census Bureau, or
(B) An unincorporated area where the area boundaries are wholly within the
boundaries of an urbanized area or urban cluster, as designated by the United
States Census Bureau.
(2) The site meets the definition of infill as defined by Section 102(j) of these Guidelines.
(3) The site must be zoned for residential use or residential mixed-use development, or
have a general plan designation that allows residential use or a mix of residential
and nonresidential uses.
(A) To qualify for the Streamlined Ministerial Approval Process, the site’s zoning
designation, applicable specific plan or master plan designation, or general plan
designation must permit residential or a mix of residential and nonresidential
uses by right or with a use permit.
(b) The development proponent shall demonstrate that, as of the date the application is
submitted, the development is not located on a legal parcel(s) that is any of the following:
(1) Within a coastal zone, as defined in Division 20 (commencing with section 30000) of
the Public Resources Code.
(2) Prime farmland or farmland of statewide importance, as defined pursuant to the
United States Department of Agriculture land inventory and monitoring criteria, as
modified for California, and designated on the maps prepared by the Farmland
Mapping and Monitoring Program of the Department of Conservation, or land zoned
or designated for agricultural protection or preservation by a local ballot measure
that was approved by the voters of that locality.
(3) Wetlands, as defined in the United States Fish and Wildlife Service Manual, Part 660
FW 2 (June 21,1993).
(4) Within a very high fire hazard severity zone, as determined by the Department of
Forestry and Fire Protection pursuant to Government Code section 51178, or within
a high or very high fire hazard severity zone as indicated on maps adopted by the
Department of Forestry and Fire Protection pursuant to Public Resources Code
section 4202.
(A) This restriction does not apply to sites excluded from the specified hazard
zones by a local agency, pursuant to Government Code section 51179(b), or
sites that are subject to adopted fire hazard mitigation measures pursuant to
existing building standards or state fire mitigation measures applicable to the
development.
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(B) This restriction does not apply to sites that have been locally identified as fire
hazard areas, but are not identified by the Department of Forestry and Fire
Protection pursuant to Government Code section 51178 or Public Resources
Code section 4202.
(5) A hazardous waste site that is currently listed pursuant to Government Code section
65962.5, or a hazardous waste site designated by the Department of Toxic
Substances Control pursuant to Health and Safety Code section 25356.
(A) This restriction does not apply to sites the Department of Toxic Substances
Control has cleared for residential use or residential mixed uses.
(6) Within a delineated earthquake fault zone as determined by the State Geologist in
any official maps published by the State Geologist.
(A) This restriction does not apply if the development complies with applicable
seismic protection building code standards adopted by the California Building
Standards Commission under the California Building Standards Law (Part 2.5
(commencing with Section 18901) of Division 13 of the Health and Safety
Code), and by any local building department under Chapter 12.2 (commencing
with Section 8875) of
Division 1 of Title 2.
(7) Within a special flood hazard area subject to inundation by the 1 percent annual
chance flood (100-year flood) as determined by the Federal Emergency
Management Agency in any official maps published by the Federal Emergency
Management Agency.
(A) This restriction does not apply if the site has been subject to a Letter of Map
Revision prepared by the Federal Emergency Management Agency and issued
to the local government.
(B) This restriction does not apply if the development proponent can demonstrate
that they will be able to meet the minimum flood plain management criteria of
the National Flood Insurance Program pursuant to Part 59 (commencing with
Section 59.1) and Part 60 (commencing with Section 60.1) of Subchapter B of
Chapter I of Title 44 of the Code of Federal Regulations.
i. If the development proponent demonstrates that the development satisfies
either subsection (A) or (B) above and that the development is otherwise
eligible for the Streamlined Ministerial Approval Process, the local
government shall not deny the application for the development on the
basis that the development proponent did not comply with any additional
permit requirement, standard, or action adopted by that local government
that is applicable to that site related to special floor hazard areas.
ii. If the development proponent is seeking a floodplain development permit
from the local government, the development proponent must describe in
detail in the application for the Streamlined Ministerial Approval Process
how the development will satisfy the applicable federal qualifying criteria
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necessary to obtain the floodplain development permit. Construction plans
demonstrating these details shall be provided to the locality before the
time of building permit issuance, however construction plans shall not be
required for the local jurisdiction to take action on the application under the
Streamlined Ministerial Approval Process.
(8) Within a regulatory floodway, as determined by the Federal Emergency
Management Agency, in any official maps published by the Federal Emergency
Management Agency.
(A) This restriction does not apply if the development has received a no-rise
certification in accordance with Section 60.3(d)(3) of Title 44 of the Code of
Federal Regulations.
(B) If the development proponent demonstrates that the development satisfies
subsection (A) above and that the development is otherwise eligible for the
Streamlined Ministerial Approval Process, the local government shall not deny
the application for development on the basis that the development proponent
did not comply with any additional permit requirement, standard, or action
adopted by that local government that is applicable to that site related to
regulatory floodways.
(9) Lands identified for conservation in an adopted natural community conservation plan
pursuant to the Natural Community Conservation Planning Act (Chapter 10
(commencing with Section 2800) of Division 3 of the Fish and Game Code), a
habitat conservation plan pursuant to the federal Endangered Species Act of 1973
(16 U.S.C. Sec. 1531 et seq.), or another adopted natural resource protection plan.
(10) Habitat for protected species identified as candidate, sensitive, or species of special
status by state or federal agencies, fully protected species, or species protected by
the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), the
California Endangered Species Act (Chapter 1.5 (commencing with Section 2050) of
Division 3 of the Fish and Game Code), or the Native Plant Protection Act (Chapter
10 (commencing with Section 1900) of Division 2 of the Fish and Game Code).
(A) The identification of habitat for protected species discussed above may be
based upon information identified in underlying environmental review
documents for the general plan, zoning ordinance, specific plan, or other
planning documents associated with that parcel that require environmental
review pursuant to the California Environmental Quality Act (Division 13
(commencing with Section 21000) of the Public Resources Code).
(11) Lands under conservation easement.
(12) An existing parcel of land or site that is governed under the Mobilehome Residency
Law (Chapter 2.5 (commencing with Section 798) of Title 2 of Part 2 of Division 2 of
the Civil Code), the Recreational Vehicle Park Occupancy Law (Chapter 2.6
(commencing with Section 799.20) of Title 2 of Part 2 of Division 2 of the Civil Code),
the Mobilehome Parks Act (Part 2.1 (commencing with Section 18200) of Division 13
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of the Health and Safety Code), or the Special Occupancy Parks Act (Part 2.3
(commencing with Section 18860) of Division 13 of the Health and Safety Code).
(c) The development proponent shall demonstrate that, as of the date the application is
submitted, the development is not located on a site where any of the following apply:
(1) The development would require the demolition of the following types of housing:
(A) Housing that is subject to a recorded covenant, ordinance, or law that restricts
rents to levels affordable to persons and families of moderate, low, or very low
income.
(B) Housing that is subject to any form of rent or price control through a locality’s
valid exercise of its police power.
(C) Housing that has been occupied by tenants, as defined by Section 102(y),
within the past ten years.
(2) The site was previously used for housing that was occupied by tenants that was
demolished within ten years before the development proponent submits an
application under the Streamlined Ministerial Approval Process.
(A) When property with a building that was demolished in the past ten years has
been zoned for exclusively residential use, there is a presumption that it was
occupied by tenants, unless the development proponent can provide verifiable
documentary evidence from a government or independent third party source to
rebut the presumption for each of the ten years prior to the application date.
(B) When property with a building that was demolished in the past ten years has
been zoned to allow residential use in addition to other uses, the developer
proponent shall include in its application a description of the previous use and
verification it was not occupied by residential tenants.
(3) The development would require the demolition of a historic structure that was placed
on a national, state, or local historic register prior to the submission of an application.
(4) The property contains housing units that are occupied by tenants and the
development would require a subdivision.
(d) A development that involves a subdivision of a parcel that is, or, notwithstanding the
Streamlined Ministerial Approval Process, would otherwise be, subject to the Subdivision
Map Act (Division 2 (commencing with Section 66410)) or any other applicable law
authorizing the subdivision of land is not eligible for the Streamlined Ministerial Approval
Process.
(1) Subdivision (d) does not apply if the development is consistent with all objective
subdivision standards in the local subdivision ordinance, and either of the following
apply:
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(A) The development has received or will receive financing or funding by means of
a low-income housing tax credit and is subject to the requirement that
prevailing wages be paid pursuant to Section 403 of these Guidelines.
(B) The development is subject to the requirement that prevailing wages be paid,
and a skilled and trained workforce used.
(2) An application for a subdivision pursuant to the Subdivision Map Act (Division 2
(commencing with Section 66410)) for a development that meets the provisions in
(1) shall be exempt from the requirements of the California Environmental Quality
Act (Division 13 (commencing with Section 21000) of the Public Resources Code).
Such an application shall be subject to a ministerial process as part of the
Streamlined Ministerial Approval Process.
NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65913.4(a) and (c).
Section 402. Affordability Provisions
(a) A development shall be subject to a requirement mandating a minimum percentage of
units be affordable to households making at or below 80 percent AMI, based on one of
the following categories:
(1) In a locality that the Department has determined is subject to the Streamlined
Ministerial Approval Process pursuant to Section 200, subparagraph (c), the
development shall dedicate a minimum of 10 percent of the total number of units
prior to calculating any density bonus to housing affordable to households making at
or below 80 percent of the area median income.
(A) Developments of ten units or less are not subject to the 10 percent affordability
provision.
(B) If the locality has adopted a local ordinance that requires greater than 10
percent of the units be dedicated to housing affordable to households making at
or below 80 percent of the AMI, that local affordable housing requirement
applies.
(2) In a locality that the Department has determined is subject to the Streamlined
Ministerial Approval Process pursuant to Section 200, subparagraph (e), the
development shall dedicate a minimum of 50 percent of the total number of units
prior to calculating any density bonus to housing affordable to households making at
or below 80 percent of the AMI.
(A) If the locality has adopted a local ordinance that requires greater than 50
percent of the units be dedicated to housing affordable to households making at
or below 80 percent of the AMI, that local affordable housing requirement
applies.
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(3) In a locality that the Department has determined is subject to the Streamlined
Ministerial Approval Process pursuant to Section 200, subparagraph (d), the
development shall dedicate a minimum of 10 percent of the total number of units to
housing affordable to households making at or below 80 percent of the AMI.
(A) If the locality has adopted a local ordinance that requires greater than 10
percent of the units be dedicated to housing affordable to households making
below 80 percent of the AMI, that local affordable housing requirement applies.
(b) A covenant or restriction shall be recorded against the development dedicating the
minimum percentage of units to housing affordable to households making at or below 80
percent of the AMI pursuant to Section 402 (a)(1-3).
(1) The recorded covenant or restriction shall remain an encumbrance on the
development for a minimum of either:
(A) 55 years for rental developments or
(B) 45 years for owner-occupied properties
(2) The development proponent shall commit to record a covenant or restriction
dedicating the required minimum percentage of units to below market housing prior
to the issuance of the first building permit.
(c) The percentage of units affordable to households making at or below 80 percent of the
area median income per this section is calculated based on the total number of units in
the development exclusive of additional units provided by a density bonus.
(d) The percentage of units affordable to households making at or below 80 percent of the
area median income per this section shall be built on-site as part of the development.
(e) If the locality has adopted an inclusionary ordinance, the objective standards contained in
that ordinance apply to the development under the Streamlined Ministerial Approval
Process. For example, if the locality’s adopted ordinance requires a certain percentage of
the units in the development to be affordable to very low-income units, the development
would need to provide that percentage of very low-income units to be eligible to use the
Streamlined Ministerial Approval Process.
(f) All affordability calculations resulting in fractional units shall be rounded up to the next
whole number. Affordable units shall be distributed throughout the development and shall
be of comparable size, both in terms of the square footage and the number of bedrooms,
and quality to the market rate units with access to the same common areas and
amenities.
(g) Affordability of units to households at or below 2 80 percent of the area median income per
the section is calculated based on the following:
2 Amended 1/19/19 – Grammatical Correction
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1) For owner-occupied units, affordable housing cost is calculated pursuant to Health
and Safety Code Section 50052.5.
2) For rental units, affordable rent is calculated pursuant to Health and Safety Code
Section 50053.
NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65913.4(a).
Section 403. Labor Provisions
The Labor Provisions in the Streamlined Ministerial Approval Process, located in paragraph (8)
of subdivision (a) of Government Code section 65913.4, contain requirements regarding
payment of prevailing wages and use of a skilled and trained workforce in the construction of
the development.
The development proponent shall certify both of the following to the locality to which the
development application is submitted:
(a) The entirety of the development is a public work project, as defined in Section 102(s)
above, or if the development is not in its entirety a public work, that all construction
workers employed in the execution of the development will be paid at least the general
prevailing rate of per diem wages for the type of work and geographic area.
(1) The Department of Industrial Relations posts on its website letters and decisions on
administrative appeal issued by the Department in response to requests to
determine whether a specific project or type of work is a “public work” covered under
the state’s Prevailing Wage Laws. These coverage determinations, which are
advisory only, are indexed by date and project and available at:
https://www.dir.ca.gov/OPRL/pwdecision.asp
(2) The general prevailing rate is determined by the Department of Industrial Relations
pursuant to Sections 1773 and 1773.9 of the Labor Code. General prevailing wage
rate determinations are posted on the Department of Industrial Relations’ website at:
https://www.dir.ca.gov/oprl/DPreWageDetermination.htm.
(3) Apprentices registered in programs approved by the Chief of the Division of
Apprenticeship Standards may be paid at least the applicable apprentice prevailing
rate. To find out if an apprentice is registered in an approved program, please
consult the Division of Apprenticeship Standards’ “Apprenticeship Status and Safety
Training Certification” database at
https://www.dir.ca.gov/das/appcertpw/appcertsearch.asp.
(4) To find the apprentice prevailing wage rates, please visit the Department of
Industrial Relations’ website at:
https://www.dir.ca.gov/OPRL/PWAppWage/PWAppWageStart.asp. If you are
interested in requesting an apprentice, a list of approved programs is available at:
https://www.dir.ca.gov/databases/das/aigstart.asp. General information regarding
the state’s Prevailing Wage Laws is available in the Department of Industrial
Relations’ Public Works website (https://www.dir.ca.gov/Public-
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Works/PublicWorks.html) and the Division of Labor Standards Enforcement Public
Works Manual (https://www.dir.ca.gov/dlse/PWManualCombined.pdf).
(5) For those portions of the development that are not a public work, all of the following
shall apply:
(A) The development proponent shall ensure that the prevailing wage requirement
is included in all contracts for the performance of the work.
(B) All contractors and subcontractors shall pay to all construction workers
employed in the execution of the work at least the general prevailing rate of per
diem wages, except that apprentices registered in programs approved by the
Chief of the Division of Apprenticeship Standards may be paid at least the
applicable apprentice prevailing rate.
(C) All contractors and subcontractors shall maintain and verify payroll records
pursuant to Section 1776 of the Labor Code and make those records available
for inspection and copying as provided therein.
i. The obligation of the contractors and subcontractors to pay prevailing
wages may be enforced by the Labor Commissioner through the issuance
of a civil wage and penalty assessment pursuant to Section 1741 of the
Labor Code, which may be reviewed pursuant to Section 1742 of the
Labor Code, within 18 months after the completion of the development, by
an underpaid worker through an administrative complaint or civil action, or
by a joint labor-management committee though a civil action under
Section 1771.2 of the Labor Code. If a civil wage and penalty assessment
is issued, the contractor, subcontractor, and surety on a bond or bonds
issued to secure the payment of wages covered by the assessment shall
be liable for liquidated damages pursuant to Section 1742.1 of the Labor
Code.
ii. The payroll record and Labor Commissioner enforcement provisions in (C)
and (C)(i), above, shall not apply if all contractors and subcontractors
performing work on the development are subject to a project labor
agreement, as defined in Section 102(q) above, that requires the payment
of prevailing wages to all construction workers employed in the execution
of the development and provides for enforcement of that obligation
through an arbitration procedure.
(D) Notwithstanding subdivision (c) of Section 1773.1 of the Labor Code, the
requirement that employer payments not reduce the obligation to pay the hourly
straight time or overtime wages found to be prevailing shall not apply if
otherwise provided in a bona fide collective bargaining agreement covering the
worker. The requirement to pay at least the general prevailing rate of per diem
wages does not preclude use of an alternative workweek schedule adopted
pursuant to Sections 511 or 514 of the Labor Code.
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(b) For developments for which any of the following conditions in the charts below apply,
that a skilled and trained workforce, as defined in Section 102(w) above, shall be used to
complete the development if the application is approved.
Developments Located in Coastal or Bay Counties
Date Population of Locality to
which Development
Submitted pursuant to the
last Centennial Census
Number of Housing Units in
Development
January 1, 2018, until
December 31, 2021
225,000 or more 75 or more
January 1, 2022, until
December 31, 2025
225,000 or more 50 or more
Developments Located in Non-Coastal or Non-Bay Counties
Date Population of Locality to
which Development
Submitted pursuant to the
last Centennial Census
Number of Housing Units in
Development
January 1, 2018, until
December 31, 2019
Fewer than 550,000 75 or more
January 1, 2020, until
December 31, 2021
Fewer than 550,000 More than 50
January 1, 2022, until
December 31, 2025
Fewer than 550,000 More than 25
(1) Coastal and Bay Counties include: Alameda, Contra Costa, Del Norte, Humboldt,
Los Angeles, Marin, Mendocino, Monterey, Napa, Orange, San Diego, San
Francisco, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz,
Solano, Sonoma and Ventura.
(2) Non-Coastal and Non-Bay Counties include: Alpine, Amador, Butte, Calaveras,
Colusa, El Dorado, Fresno, Glenn, Imperial, Inyo, Kern, Kings, Lake, Lassen,
Madera, Mariposa, Merced, Modoc, Mono, Nevada, Placer, Plumas, Riverside,
Sacramento, San Benito, San Bernardino, San Joaquin, Shasta, Sierra, Siskiyou,
Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne, Yolo and Yuba.
(3) The skilled and trained workforce requirement in this subparagraph is not applicable
to developments with a residential component that is 100 percent subsidized
affordable housing.
(4) If the development proponent has certified that a skilled and trained workforce will be
used to complete the development and the application is approved, the following
shall apply:
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(A) The applicant shall require in all contracts for the performance of work that
every contractor and subcontractor at every tier will individually use a skilled
and trained workforce to complete the development.
(B) Every contractor and subcontractor shall use a skilled and trained workforce to
complete the development.
(C) The applicant shall provide to the locality, on a monthly basis while the
development or contract is being performed, a report demonstrating compliance
with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the
Public Contract Code.
i. A monthly report provided to the locality pursuant to this subclause shall
be a public record under the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1) and shall be open
to public inspection. An applicant that fails to provide a monthly report
demonstrating compliance with Chapter 2.9 (commencing with Section
2600) of Part 1 of Division 2 of the Public Contract Code shall be subject
to a civil penalty of ten thousand dollars ($10,000) per month for each
month for which the report has not been provided.
ii. Any contractor or subcontractor that fails to use a skilled and trained
workforce shall be subject to a civil penalty of two hundred dollars ($200)
per day for each worker employed in contravention of the skilled and
trained workforce requirement. Penalties may be assessed by the Labor
Commissioner within 18 months of completion of the development using
the same procedures for issuance of civil wage and penalty assessments
pursuant to Section 1741 of the Labor Code and may be reviewed
pursuant to the same procedures in Section 1742 of the Labor Code.
Penalties shall be paid to the State Public Works Enforcement Fund.
iii. The requirements in (C), (C)(i), and (C)(ii), above, do not apply if all
contractors and subcontractors performing work on the development are
subject to a project labor agreement that requires compliance with the
skilled and trained workforce requirement and provides for enforcement of
that obligation through an arbitration procedure.
(c) Notwithstanding subsections (a) and (b) A development is exempt from any requirement
to pay prevailing wages or use a skilled and trained workforce if it meets both of the
following:
(1) The project includes ten or fewer housing units.
(2) The project is not a public work for purposes of Chapter 1 (commencing with Section
1720) of Part 7 of Division 2 of the Labor Code.
(d) Offsite fabrication is not subject to this Section if it takes place at a permanent, offsite
manufacturing facility and the location and existence of that facility is determined wholly
without regard to the particular development. However, offsite fabrication performed at a
temporary facility that is dedicated to the development is subject to Section 403.
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NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65913.4(a), Subdivision (d) of Section 2601 of the Public Contract
Code, Sheet Metal Workers' International Association, Local 104, v. John C. Duncan (2014)
229 Cal.App.4th 192 [176 Cal.Rptr.3d 634].
Section 404. Additional Provisions
(a) A local government subject to the Streamlined Ministerial Approval Process shall allow for
a development proponent’s use of this process. However, the ability for a development
proponent to apply for the Streamlined Ministerial Approval Process shall not affect a
development proponent’s ability to use any alternative streamlined by right permit
processing adopted by a local government, including, but not limited to, the use by right
provisions of housing element law Government Code section 65583.2(i), local overlays, or
ministerial provisions associated with specific housing types.
NOTE: Authority cited: Government Code section 65913.4(j). Reference cited:
Government Code section 65913.4(g).
ARTICLE V. REPORTING
Section 500. Reporting Requirements
As part of the APR due April 1 of each year, local governments shall include the following
information. This information shall be reported on the forms provided by the Department. For
forms and more specific information on how to report the following, please refer to the
Department’s Annual Progress Report Guidelines.
(a) Number of applications submitted under the Streamlined Ministerial Approval Process.
(b) Location and number of developments approved using the Streamlined Ministerial
Approval Process.
(c) Total number of building permits issued using the Streamlined Ministerial Approval
Process.
(d) Total number of units constructed using the Streamlined Ministerial Approval Process by
tenure (renter and owner) and income category.
NOTE: Authority cited: Government Code section 65400(a)(2)(B). Reference cited:
Government Code section 65400(a)(2)(E).
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Attachment I
Comments from Planning Commission and City Council Study Sessions
Planning Commission comments: The following is a summary of comments and
concerns from Planning Commissioners regarding the proposed Draft Review
Procedures:
▪ Concerns that the Joint Oversight meeting may be perceived as an “approval”
meeting while the resolution is clear that the final determination is made by the
City Manager.
▪ Concerns about disapproving an incomplete application without an opportunity
for the applicant to correct minor deficiencies.
▪ Concerns about whether five business days would be adequate time to determine
whether a project is complete.
▪ Consider whether it would be possible to disallow applicants from applying for
concurrent review of a streamlined, ministerial project and a discretionary project.
▪ Concerns that one joint Planning Commission and City Council meeting, prior to
determination of SB 35 eligibility of a project, would not be enough public
oversight.
▪ Requiring plans that indicate density bonus baseline for the site when a density
bonus application is submitted – suggestion for a future update to the Municipal
Code.
Planning Commission comments: The following is a summary of comments and
concerns from Planning Commissioners regarding the draft application package:
▪ Prefer not to use the word “listed” contaminants in item #13 of the Project
Checklist in the Application Form.
▪ Recommend that plans include design specifications for density bonus units in
addition to BMR units to address item #20 of the Project Checklist in the
Application Form.
▪ Recommending that specifications for density bonus units not be required to be
included in the initial application and a request to research law to determine
whether this is lawful.
▪ Two commissioners recommended that a public hearing be required on Density
Bonus incentives/benefits while another suggested that this could be done as part
of the Oversight and Consistency meeting if it is done objectively.
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City Council comments: The following is a summary of comments and concerns from
City Councilmembers:
▪ Review Kitty Moore’s proposed changes and advise on them.
▪ Tighten up the language in Section 7 that Ms. Moore objects to.
▪ Look at the BMR section to make sure it reflects the City’s BMR program to the
extent it can.
▪ Add language that items will not be added to the checklist midstream when an
application has been submitted.
▪ Add to the recitals language that reflects the history and policy consequences of
AB 101. And add language that if in the future it becomes possible to calculate
excluding density bonus additions (per HCD’s November 2018 guidance), the City
intends to do so.
▪ Add sample calculations for how to calculate 2/3 residential use requirement.
▪ Clarify that staff has the option to hold the oversight hearing earlier than 5 days
before the consistency determination for larger projects if necessary.
▪ Consider allowing a second oversight hearing regarding the 2/3 residential use
requirement earlier at discretion of staff.
▪ In the section that says the application “needs sufficient” detail/information to
determine the 2/3 residential use determination, try to amend to h ave more
specific language and clarify what “sufficient” would be.
▪ Require applicants to specify the size and number of bedrooms for BMR units (if
the draft procedures don’t do this already).
1156175.1
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RESOLUTION NO. ________
A RESOLUTION OF THE CUPERTINO CITY COUNCIL
ADOPTING THE PROCESS FOR APPLYING FOR AND RECEIVING
MINISTERIAL APPROVAL UNDER SENATE BILL 35
WHEREAS, Senate Bill 35 added Government Code Section 65913.4 providing for
the ministerial approval of infill affordable housing projects.
WHEREAS, the California Division of Housing Development issued Guidelines
for implementing SB 35, Streamlined Ministerial Approval Process Guidelines
(“Guidelines”) on November 29, 2018.
WHEREAS, Assembly Bill 101, among its numerous other provisions, amended
Government Code Section 65913.4 to provide that the law’s minimum two-thirds
residential square footage requirement for qualifying projects is calculated including
additional density, floor area, and units, and any other concession, incentive, or waiver
of development standards granted pursuant to the Density Bonus Law. AB 101 was a
budget trailer bill and as such was adopted through a highly abbreviated process that
allowed for very limited review or public input. Its amendment to the residential square-
footage calculation reverses the guidance adopted by the Department of Housing and
Community Development last year and will allow projects with a larger amount of non-
residential development and fewer housing units to qualify for streamlined approval.
WHEREAS, the City Council, with the intention of requiring SB 35 projects to
provide as much housing as possible, will calculate the two-thirds residential
requirement excluding density bonus additions if in the future the law is further
amended and it becomes possible to do so.
WHEREAS, these the Guidelines direct local jurisdictions to provide information
about their process for applying and receiving ministerial approval.
WHEREAS, the City Council now provides that information about its process by
this resolution.
NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby adopt
the following:
Process for Applying for and Receiving Ministerial Approval
Under Senate Bill 35
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SECTION 1. Overview. Senate Bill 35 (SB 35) enacted Government Code section
65913.4, which requires certain cities and counties to use a streamlined ministerial
review process for qualifying multifamily housing developments that comply with the
jurisdiction’s objective planning standards, provide specified levels of affordable
housing, and meet other specific requirements. Government Code section 65913.4 has
been twice amended, most recently on July 31, 2019, and the City’s process reflects
these amendments. The California Department of Housing and Community
Development (HCD) determined that Cupertino is subject to SB 35.1 The HCD issued
guidelines for implementing SB 35, Streamlined Ministerial Approval Process Guidelines
(Guidelines), on November 29, 2018, which took effect on January 1, 2019. These
Guidelines direct a local jurisdiction to provide information about its process for
applying and receiving ministerial approval under SB 35. Guidelines § 300(a).
Under SB 35, the City is required to review qualifying projects using a ministerial
review process, which means that the City cannot require an applicant to obtain
discretionary permits that would typically be required (e.g., development permit or
conditional use permit). Guidelines § 301(a)(1). Instead, the City is required to process
applications within the timeframes specified in Government Code section 65913.4,
applying only those objective standards contained the City ’s General Plan, municipal
code, and other adopted land use plans in effect at the time the project application was
submitted. Guidelines § 300. The review process is also to be streamlined because the
project is not subject to environmental review under the California Environmental
Quality Act (CEQA). Guidelines § 301(a)(6).
This Resolution establishes the City of Cupertino’s SB 35 application and review
processes. It is not intended to supersede or waive any requirements from SB 35 or the
Guidelines not explicitly discussed in this document. This Resolution shall be
interpreted to incorporate and be consistent with Government Code section 65913.4
and the Guidelines, as they be amended from time to time.
SECTION 2. Eligibility Criteria. To be eligible for a streamlined review process, an
application must meet the objective planning standards required by SB 35, including
all applicable City objective land use standards, as described in Exhibit 1, the SB 35
Eligibility Checklist. These eligibility criteria are collectively referred to as the required
“objective planning standards.”
1 As of January 31, 2018, HCD determined that Cupertino is subject to SB 35 streamlining for eligible
projects. Cupertino remained subject to SB 35 streamlining under HCD’s December 2018 Statewide
Determination Summary.
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SECTION 3. Procedures for processing SB 35 Applications. To apply for a project
that qualifies under SB 35, an applicant must follow the procedures below:
1. Submit an SB 35 Application and a Certificate for Certification of Compliance
with Eligibility Requirements on forms provided by the Community
Development Director to the Planning Division. The application must be
submitted along with all of the material identified in an SB 35 Application
Checklist provided by the Community Development Director. The SB 35
Application Checklist shall require requires sufficient information for a
reasonable person to determine whether the development is consistent with the
required objective planning standards.
SB 35 applications will be subject to a Staff Hourly Rate fee for applicable staff
time and materials to process the project application, based on the rates set in the
adopted Fee Schedule.
2. The City shall post all application materials on the City’s webpage within two
business days after the application has been submitted, and keep the project
webpage updated including posting any additional submittals from the
applicant, initial and final City consistency determinations, and any project
approval or denial.
SECTION 4. Completeness Determination. Once the application is submitted, staff
will determine within 5 seven business days whether the application is complete.
Applications shall be complete if they contain all documents and other information
required by the City, as specified in the SB 35 Application Checklist provided by the
Department of Community Development. See Guidelines § 301(b)(1). All of the
information in the SB 35 Application Checklist is necessary to determine whether the
development is consistent, compliant, or in conformity with the objective planning
standards. If the application is incomplete, staff will deny the project, unless doing so
would be an invalid basis to deny the project under the Guidelines. See Guidelines
§ 301(b)(1). An applicant may submit a revised application for a previously denied
project at any time. The City will process the revised application as a new application
under these procedures and the timeframes for consistency determinations and project
approval shall commence on the date of resubmittal. Guidelines § 301(a)(4).
SECTION 5.
(a) Timeframe for Consistency Determination. If the application is complete, within
60 days of the initial application submittal for a project with 150 or fewer units, and
within 90 days for a project more than 150 units, the City will determine whether the
project conflicts with any of the required objective planning standards. Guidelines §
301(b).
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(b) Initial Determination. The Department of Community Development will make an
initial written determination of the proposed project’s consistency with applicable
objective planning standards. The application may be routed to other City department
staff for review, if deemed necessary. The Community Development Director shall
submit the department’s initial consistency determination to the Planning Commission
and the City Council for consideration at the Oversight and Consistency Review
Meeting.
(c) Oversight and Consistency Review Meeting. At When the initial determination is
complete or at least five business days before a final consistency determination is
made, the Planning Commission and the City Council shall hold a joint oversight
meeting to assess the proposed project’s compliance with required objective planning
standards. The Community Development Director may, on a case by case basis,
schedule this meeting earlier than five business days before the final consistency
determination for projects with more than 150 housing units, if necessary, and the
timing of initial review allows.
The Community Development Director may, on a case by case basis, schedule one
additional oversight meeting to assess a mixed-use project’s compliance with the two-
thirds residential requirement in Government Code § 65913.4(a)(2)(C) prior to the
oversight and consistency review meeting discussed above . This additional meeting
would be held within 45 days after the application is submitted, if possible.
If the project includes an application for a tentative or parcel map, this application will
also be considered during the joint oversight meeting, and the Council and Planning
Commission will assess the application’s consistency with objective subdivision
standards. Gov. Code § 65913.4(c)(2). If the project includes an application for a density
bonus, this application will also be considered during the joint oversight meeting, and
the Council and Planning Commission will assess the application’s consistency with
objective density bonus ordinance standards. Gov. Code § 65913.4(a)(5).
The Planning Commission and City Council’s oversight shall be objective, involving
little or no personal judgement as to the wisdom or manner of carrying out the project,
and be strictly focused on compliance with required objective planning standards. See
Guidelines § 102(n), 301(a)(2). The oversight shall not in any way inhibit, chill, stall,
delay, or preclude the ministerial approval. Guidelines § 300(a)(2).
The Oversight Meeting shall be a noticed, open, and public meeting in compliance with
the Ralph M. Brown Act. The applicant and members of the public shall have an
opportunity to speak as they would at other Planning Commission and City Council
meetings.
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In addition, the noticing requirements of Municipal Code section 19.12.110A for
Development Permits shall apply to the Oversight and Consistency Review Meeting.
(d) City Manager action following Oversight and Consistency Review Meeting.
Following the Council and Planning Commission’s Oversight and Consistency Review
Meeting and before the expiration of the timeframe for a consistency determination,
the City Manager will send the applicant either (1) a letter documenting which
standard or standards the development conflicts with and an explanation for the
reason or reasons the development conflicts with that standard or standards, or (2) a
letter stating that the project is consistent with all required objective planning
standards and an explanation for reasons the development is consistent with those
standards. See Guidelines § 301(a)(3).
SECTION 6. Procedure if project is consistent with all objective planning standards.
If the proposed development is consistent with all required objective planning
standards, the City Manager will prepare final approval documents and standard
conditions of approval. See Guidelines § 301(a)(5). Within 90 days from the initial
project application’s submittal for a project with 150 or fewer units, and within 180
days for a project with more than 150 units, the City Manager will provide the project
applicant with the final approval documents and standard conditions of approval.
Guidelines § 301(b)(3).
SECTION 7. Procedure if application is ineligible for streamlined review. If the City
determines that a project conflicts with any required objective planning standard, it
will deny the application for streamlined processing under SB 35. The City will not
continue to process the application while allowing the applicant to corre ct any
deficiencies. The denial of an application for streamlined processing does not preclude
the applicant from correcting any deficiencies and resubmitting a new application for
streamlined review or for review under standard City procedures. If the ap plicant
submits a corrected or revised application, the timeframes specified in these
procedures shall commence on the date of resubmittal. Guidelines § 301(a).
SECTION 8. Exhibit. The Exhibit to this document may be updated periodically by
Planning Division staff in order to respond to changes to the Cupertino Municipal
Code or to state law. Staff shall not weaken or remove any requirements unless
required to do so by changes in the law.
BE IT FURTHER RESOLVED that this Resolution is not a project under the
requirements of the California Environmental Quality Act of 1970, together with
related State CEQA Guidelines (collectively, “CEQA”) because it has no potential for
resulting in physical change in the environment. In the event that this Resolution is
found to be a project under CEQA, it is subject to the CEQA exemption contained in
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CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have no
possibility of a significant effect on the environment. CEQA applies only to actions
which have the potential for resulting in a significant effect on the environment. Where
it can be seen with certainty that there is no possibility that the activity in question may
have a significant effect on the environment, the activity is not subject to CEQA. In
this circumstance, the City’s Process for Applying for and Receiving Ministerial
Approval Under Senate Bill 35 would have no effect on the environment because it
only lays out the City’s procedures for implementing state law and would not cause
any physical change in the environment. The foregoing determination is made by the
City Council in its independent judgment.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this _ _ day of _______, by the following vote:
Members of the City Council
AYES:
NOES:
ABSENT:
ABSTAIN:
SIGNED:
________
Steven Scharf, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Grace Schmidt, City Clerk
________________________
Date
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Exhibit 1:
Senate Bill 35 Eligibility Checklist
To be eligible for a streamlined review process under SB 35, an application must meet the
objective planning standards required by SB 35, including all applicable City objective land
use standards, in effect at the time the application is submitted, as described below.
1. NUMBER AND DENSITY OF UNITS. The project must comply with the minimum
and maximum residential density range permitted for the site, plus any applicable
density bonus. Guidelines § 300(c)(1). If the zoning code’s density designation for the
site conflicts with the density allowed in the general plan’s land use designation, the
density in the general plan’s land use designation prevails. Gov. Code § 65913.4(a)(5).
The project, if eligible, may request a density bonus and/or waivers and/or concessions
under the Density Bonus Law (Gov. Code § 65915). Guidelines § 300(b)(3). Any increase
in density granted under the Density Bonus Law is considered consistent with
maximum allowable densities. Guidelines § 300(b)(3).
In addition:
(a) The project must propose at least two multifamily residential units. Guidelines
§§ 102(o), 400(a).
(b) If the project is mixed-use, at least two-thirds of the proposed development’s square
footage must be designated for residential use. Guidelines § 400(b).
i. The two-thirds calculation is based upon the proportion of gross square footage
of residential space and related facilities to gross development building square
footage for an unrelated use, such as commercial or office uses. Structures
utilized by both residential and non-residential uses shall be credited
proportionally to intended use. Guidelines § 400(b).
ii. Related residential facilities are defined as any manager’s units and any and all
common area spaces that are included within the physical boundaries of the
housing development, including, but not limited to, common area space,
walkways, balconies, patios, clubhouse space, meeting rooms, laundry facilities,
and parking areas that are exclusively available to residential users, except any
portions of the overall development that are specifically commercial space.
Guidelines § 102(u).
iii. Additional density, floor area, and units, and any other concession, incentive,
or waiver of development standards granted pursuant to Density Bonus Law
are included in the square footage calculation. Gov. Code § 65913.4(a)(2)(C).
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(c) If the development project qualifies for a density bonus under Government Code
section 65915, the applicant must submit detailed plans clearly showing location
and the square footage of:
i. Affordable units that qualify the project for a density bonus,
ii. Additional density, floor area, or units granted pursuant to Density Bonus law
The plans must be of sufficient detail to verify the square footage of the residential
units and additional bonus units, floor area, or density granted pursuant to
Density Bonus Law. The applicant must comply with all objective standards
relating to density bonus found in CMC Chapter 19.56. Guidelines § 300(b)(5).
(d) Both residential and non-residential components of a qualified mixed-use
development are eligible for the streamlined approval process. Guidelines §
400(b)(2). Additional or subsequent permitting requirements pertaining to the
individual businesses located in the commercial component (e.g. late night activity,
live music or child care use permits) are subject to the City ’s General Plan and
Development Code requirements. Guidelines § 400(b)(3).
2. AFFORDABILITY. The project must provide affordable housing as specified under
Government Code section 65913.4(a)(3)(A) and (a)(4)(B) and under Cupertino ’s Below
Market Rate Housing Program inclusionary zoning ordinance specifically:
(a) SB 35 projects must reserve at least 50% of their total units as affordable to
households making below 80 percent of the area median income in Santa Clara
County.2 Guidelines § 402(a)(2); see § 402(e). As a subset of the SB 35 affordable
units, Cupertino’s inclusionary zoning ordinance requires either payment of an
Affordable Housing Mitigation Fee or that 15% of the base number of units (total
units minus any density bonus units) in a project be reserved as follows:
(b) Cupertino’s inclusionary zoning ordinance provides objective affordability
standards for its inclusionary BMR units in a project as follows:
i. For developments that offer rental housing: very low-income and low-income
households at a 60:40 ratio. Because SB 35 requires rental units be made
available to households making below 80 percent of the area median income, if
the project applicant wants to take credit for both SB 35 units and the City BMR
Program, then the most restrictive requirement would apply and these rental
2 When jurisdictions have insufficient progress toward their Lower income RHNA (Very Low and Low income)
but have had sufficient progress toward their Above Moderate income RHNA, they are subject to the
streamlined ministerial approval process for proposed developments with at least 50 percen t affordability.
Gov. Code § 65913.4(a)(4)(B)(ii). Cupertino has had sufficient progress toward the Above Moderate income
RHNA, but not toward the Lower income RHNA, and is therefore subject to streamlining of projects offering at
least 50 percent affordability under SB 35 according to the most recent SB 35 Determination Summary, available
at http://www.hcd.ca.gov/community-development/housing-
element/docs/SB35_StatewideDeterminationSummary.pdf.
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units must be made available to households at the ratio required by the City’s
BMR Program.
ii. For developments that offer ownership housing: median and moderate income
households at a 50:50 ratio. Because SB 35 requires ownership units be made
available to households making below 80 percent of the area median income, if
the project applicant wants to take credit for both SB 35 units and the BMR
Program, then the most restrictive requirement would apply and these
ownership units must be made available to households making below 80
percent of the area median income rather than median and moderate income
households.
iii. The objective standards in Cupertino’s inclusionary zoning ordinance shall
apply to the BMR Program subset of the units of the project’s affordable units.
project. Guidelines § 402(e).
iv. Alternatively, if the project applicant does not wish to provide units subject to
Cupertino’s BMR Program, it may instead As provided in the City’s BMR
Program, applicants for projects proposing up to six residential units may pay
the Affordable Housing Mitigation Fee and provide in-lieu of providing on-site
affordable units subject only to SB 35’s restrictionsto the City’s BMR Ordinance.
Payment of the fee does not change or override any of SB 35’s affordability
requirements.
(c) (b)The applicant must record a land use restriction or covenant providing that the
lower income housing units shall remain available at affordable housing costs or
rent to persons and families of lower-income (or very low income, as applicable) for
no less than the following periods of time, as applicable:
i. For the units subject to Cupertino’s inclusionary zoning ordinance:
• 99 years or
• 55 years (if a project financed with low-income housing tax credits (LIHTC))
ii. For the units subject to SB 35 affordability requirements in excess of
Cupertino’s inclusionary zoning ordinance:
• 55 years for rental units
• 45 years for ownership units
(d) An affordable housing and/or regulatory agreement concerning all affordable units
shall be recorded against the property prior to the issuance of the first building
permit. The agreement(s) shall ensure compliance with all applicable laws and
regulations and be consistent with the City’s BMR Housing Mitigation Program
Procedural Manual, except to the extent the Manual conflicts with SB 35’s
requirements.
3. URBAN INFILL. The project must be located on a legal parcel or parcels within the
incorporated City limits. Guidelines § 401(a). At least 75 percent of the perimeter of the
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site must adjoin parcels that are developed with urban uses. Guidelines §§ 102(j), 400(a).
For purposes of SB 35, “urban uses” means any current or former residential,
commercial, public institutional, transit or transportation passenger facility, or retail
use, or any combination of those uses. Guidelines § 102(z). Parcels that are only
separated by a street or highway shall be considered adjoined. Guidelines § 102(j).
4. ZONED OR PLANNED RESIDENTIAL USES. The project must be located on a site
that is either zoned or has a General Plan designation for residential or residential
mixed-use development, including sites where residential uses are permitted as a
conditional use. Guidelines § 401(a).
5. CONSISTENT WITH OBJECTIVE STANDARDS. The project must meet all objective
general plan, zoning, design review, and other objective land use standards in effect at
the time the application is submitted. Gov. Code § 65913.4(a)(5).
(a) If the project is consistent with the minimum and maximum density range allowed
within the General Plan land use designation, it is consistent with housing density
standards. Guidelines § 300(c).
(b) Modifications to otherwise-applicable standards under density bonus law do not
affect a project’s ability to qualify for SB 35. Guidelines § 300(c)(3).
(c) Objective standards are those that require no personal or subjective judgment and
must be verifiable by reference to an external and uniform source available prior to
submittal. Guidelines § 102(p). Sources of objective standards include, without
limitation:
i. General Plan.
ii. Municipal Code, including, without limitation, the Zoning, Subdivisions, and
Building Codes
iii. Heart of the City Specific Plan
iv. Monta Vista Design Guidelines
v. North De Anza Conceptual Zoning Plan
vi. South De Anza Conceptual Plan
vii. Saratoga-Sunnyvale Conceptual Plan
viii. BMR Housing Mitigation Procedural Manual
6. PARKING. The project must provide at least one parking space per unit; however, no
parking is required if the project meets any of the following criteria. Guidelines § 300(d):
(a) The project is located within one-half mile of public transit.
(b) The project is located within an architecturally and historically significant historic
district.
(c) On-street parking permits are required but not offered to the occupants of the project.
(d) The project is located within one block of a car share vehicle station.
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However, if any parking is provided, it must meet the City’s objective standards from
Chapter 19.124 of the Municipal Code and Public Works Standards. Guidelines §
300(d)(2).
7. LOCATION. The project must be located on a property that is outside each of the
following areas (see Guidelines § 401(b)):
(a) The project must not be located on a legal parcel(s) that is any of the following (see
Guidelines § 401(b)):
i. xv.Either prime farmland or farmland of statewide importance, as defined
pursuant to United States Department of Agriculture land inventory and
monitoring criteria, as modified for California, and designated on the maps
prepared by the Farmland Mapping and Monitoring Program of the Department
of Conservation, or land zoned or designated for agricultural protection or
preservation by a local ballot measure that was approved by Cupertino’s voters.3
ii. xvi.Wetlands, as defined in the United States Fish and Wildlife Service Manual, Part
660 FW 2 (June 21, 1993).
iii. xvii.A Within a very high fire hazard severity zone, as determined by the
Department of Forestry and Fire Protection pursuant to Section 51178, or within a
high or very high fire hazard severity zone as indicated on maps adopted by the
Department of Forestry and Fire Protection pursuant to Section 4202 of the Public
Resources Code. This does not apply to sites excluded from the specified hazard
zones by the City, pursuant to subdivision (b) of Section 51179, or sites that have
adopted fire hazard mitigation measures pursuant to existing building standards
or state fire mitigation measures applicable to the development.
iv. xviii.A hazardous waste site that is listed pursuant to Section 65962.5 or a
hazardous waste site designated by the Department of Toxic Substances Control
pursuant to Section 25356 of the Health and Safety Code, unless the State
Department of Public Health, State Water Resources Control Board, or Department
of Toxic Substances Control has cleared the site for residential use or residential
mixed-use uses.
v. xix.A Within a delineated earthquake fault zone as determined by the State
Geologist in any official maps published by the State Geologist, unless the
development complies with applicable seismic protection building code standards
adopted by the California Building Standards Commission under the Califo rnia
Building Standards Law (Part 2.5 (commencing with Section 18901) of Division 13
3 As of July 1, 2019, no properties in Cupertino fall within this category. Prior to submitting an application
for streamlined review, applicants should confirm with the Planning Division if the listed exclusion is
applicable.
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of the Health and Safety Code), and by any local building department under
Chapter 12.2 (commencing with Section 8875) of Division 1 of Title 2.
vi. xx.A Within a special flood hazard area subject to inundation by the 1 percent
annual chance flood (100-year flood) as determined by the Federal Emergency
Management Agency in any official maps published by the Federal Emergency
Management Agency. This restriction does not apply if the site has been subject to
a Letter of Map Revision prepared by the Federal Emergency Management Agency
and issued to the City or if the applicant can demonstrate that the site will be able
to meet the minimum flood plain management criteria of the National Flood
Insurance Program.
vii. xxi.A Within a regulatory floodway as determined by the Federal Emergency
Management Agency in any official maps published by the Federal Emergency
Management Agency, unless the development has received a no-rise certification
in accordance with Section 60.3(d)(3) of Title 44 of the Code of Federal
Regulations. .
viii. xxii.xxii.Lands identified for conservation in an adopted natural community
conservation plan pursuant to the Natural Community Conservation Planning Act
(Chapter 10 (commencing with Section 2800) of Division 3 of .xxiii.the Fish and
Game Code), habitat conservation plan pursuant to the federal Endangered Species
Act of 1973 (16 U.S.C. Sec. 1531 et seq.), or other adopted natural resource
protection plan.
ix. Habitat for protected species identified as candidate, sensitive, or species of special
status by state or federal agencies, fully protected species, or species protected by
the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), the
California Endangered Species Act (Chapter 1.5 (commencing with Section 2050)
of Division 3 of the Fish and Game Code), or the Native Plant Protection Act
(Chapter 10 (commencing with Section 1900) of Division 2 of the Fish and Game
Code).
x. xxiv.Lands under conservation easement.
(b) In addition, the project must not be located on a site where any of the following apply:
i. (k)A site that would require demolition of housing that is:
i.1. Subject to recorded restrictions or law that limits rent to levels affordable to
moderate, low, or very-low income households.
ii.2. Subject to rent control.
iii.3. Or has been occupied by tenants within the past 10 years.
ii. (l)A site that previously contained housing occupied by tenants that was
demolished within the past 10 years.
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iii. (m)A property that contains housing units that are occupied by tenants, and units
at the property are, or were, subsequently offered for sale to the general public by
the subdivider or subsequent owner of the property.
iv. (n)A parcel of land or site governed by the Mobilehome Residency Law, the
Recreational Vehicle Park Occupancy Law, the Mobilehome Parks Act, or the
Special Occupancy Parks Act.4
v. (o) A site that would require demolition of an historic structure that is on a local,
state, or federal register.
8. SUBDIVISIONS. The project does not involve an application to create separately
transferable parcels under the Subdivision Map Act. Guidelines § 401(d). However, a
subdivision is permitted if the development is consistent with all objective subdivision
standards in the subdivision ordinance, and either of the following apply (Guidelines §
401(d)):
(a) The project is financed with low-income housing tax credits (LIHTC) and satisfies the
prevailing wage requirements identified in item 9 of this Eligibility Checklist.
(b) The project satisfies the prevailing wage and skilled and trained workforce
requirements identified in items 9 and 10 of this Eligibility Checklist.
9. PREVAILING WAGE. The project proponent must certify that at least one of the
following is true (Guidelines § 403):
(a) The entirety of the project is a public work as defined in Government Code section
65913.4(8)(A)(i).
(b) The project is not in its entirety a public work and all construction workers
employed in the execution of the development will be paid at least the general
prevailing rate of per diem wages for the type of work and geographic area.
(c) The project includes 10 or fewer units AND is not a public work AND does not
require subdivision.
10. SKILLED AND TRAINED WORKFORCE. If the project consists of 75 or more units
that are not 100 percent subsidized affordable housing, the project proponent must
certify that it will use a skilled and trained workforce, as defined in Government Code
section 65913.4(8)(B)(ii).5 Guidelines § 403.
1146192.13
4 As of June 2019, no properties in Cupertino fall within this category. Prior to submitting an application for
streamlined review, applicants should confirm with the Planning Division if the listed exclusion is applicable.
5 Beginning January 1, 2022, the skilled and trained workforce requirement is reduced to apply to projects of 50
units or more that are not 100 percent subsidized affordable housing.
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DRAFT SENATE BILL 35 APPLICATION FORM
SUBMITTAL REQUIREMENTS. The following information and materials listed on the
attached SB 35 Application Checklist , at the time the application is submitted, are
required for a complete application in order to determine if a project qualifies under
Senate Bill 35. Please review this checklist with City’s Planning Division staff to confirm
specific requirements and to determine if other applications are required.
Project Information to be filled in by Applicant and/or Property Owner:
Applicant’s Contact Information: Property Owner’s Contact Information:
Name:
Address:
City, State: ZIP:
Email:
Phone:
Name:
Address:
City, State: ZIP:
Email:
Phone:
Project Site / Address(es):
Assessor’s Parcel Number(s):
General Plan and Zoning Designations:
Proposed Unit Count with Density Bonus
Units, if applicable:
Proposed Non-Residential
Square Footage:
Proposed Residential Square Footage Unit
Count without Density Bonus Units, if
applicable:
Proposed Residential Square
Footage with Density Bonus (if
applicable):
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YES NO N/A
1. Type of Multifamily Housing Development Proposed:
a. Multifamily rental; residential only with no proposed
subdivision.
b. Multifamily residential with proposed subdivision
(must qualify for exception to subdivision exclusion)
c. Mixed-use: at least 2/3 of gross square footage
(including additional density, floor area, and units, and
any other concession, incentive, or waiver of
development standards granted pursuant to Density
Bonus Law) must be designated for residential use. If a
subdivision is included, the development must qualify
for exception to subdivision exclusion.
2. Number of Parking Spaces Proposed: -
_______________________
a. Is the site within one-half mile of public transit?
b. Is the site within an architecturally and historically
significant historic district?
c. Are on-street parking permits required but not offered
to the occupants of the project?
d. Is the site within one block of a car share vehicle station?
3. Does the project propose 2 or more residential units?
a. Has the applicant certified compliance with
affordability requirements?
4. Does the project include more than 10 units?
5. Is the project a public work?
a. Has the development proponent If it is a public work,
has the applicant certified to the City that the entirety of
the development is a public work?
b. Has If it is not a public work, has the applicant certified
compliance with prevailing wage requirements?
6. Does the project propose 75 units or more?
a. Has the applicant certified compliance with skilled and
trained workforce requirements?
7. Does the project involve a subdivision of land?
a. Is the development consistent with all objective
standards in the subdivision ordinance?
b. Is the project financed with low-income housing tax
credits?
c. Has the applicant certified compliance with prevailing
wage requirements?
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YES NO N/A
d. Has the applicant certified compliance with skilled and
trained workforce requirements?
8. Would the development require demolition of any of the
following types of housing?
a. Housing subject to a recorded covenant, ordinance or
law that restricts rents to levels affordable to persons
and families of moderate, low, or very low income.
b. Housing that is subject to any form or rent or price
control.
c. Housing that has been occupied by tenants within the
past 10 years.
9. Was the site previously used for housing that was
occupied by tenants that was demolished within 10 years
before the application was submitted?
10. Does the property contain housing units that are occupied
by tenants, and units at the property are, or were,
subsequently offered for sale to the general public by the
subdivider or subsequent owner of the property?
11. Would the development require demolition of a historic
structure that was placed on a national, state, or local
historic register?
12. Is the project site within a very high fire hazard severity
zone?
a. Are If yes, are there adopted fire hazard mitigation
measures applicable to the development?
13. Is the project site a hazardous waste site that is listed
pursuant to Government Code section 65962.5 or a
hazardous waste site designated by the Department of
Toxic Substances Control pursuant to Health and Safety
Code section 25356 of the Health and Safety Code?
a. If the site has been so listed or designated, has the
applicant provided evidence that the site has received
the required clearance from the State Department of
Public Health, State Water Resources Control Board, or
Department of Toxic Substances Control for
development as a residential use or residential mixed-
use?
14. Is the project site within a delineated earthquake fault
zone?
a. Does If yes, does the development comply with
applicable seismic protection building code standards?
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YES NO N/A
15. Is the project site habitat for protected species, identified
in an adopted natural community conservation plan, or
under a conservation easement?
16. Does the project site contain wetlands?
17. Is the project site within a special flood hazard area?
a. Has If yes, has the site been subject to a Letter of Map
Revision or does the site meet Federal Emergency
Management Agency requirements necessary to meet
minimum flood plain management criteria?
18. Is the project site within a regulatory floodway?
a. Has If yes, has the project received a no-rise certification?
19. Is the project site located on lands under a conservation
easement?
20. Is the project seeking a density bonus and/or any
incentive, concession, waiver, or reduction of parking
standards under state Density Bonus Law?
a. 21.Does If yes, does the project proponent demonstrate
how the requested concession, waiver or reduction of
standards is the least amount necessary to develop the
proposed affordable housing?
21. Are the project’s affordable units distributed throughout
the development and of comparable size, both in terms of
the square footage and the number of bedrooms, and
quality to the market rate units with access to the same
common areas and amenities?
X_____________________________________________________________________________
Property Owner Signature(s) Print Property Owner’s Name Date
FOR STAFF USE ONLY:
Application accepted on _________________ by ___________________________
Application Type: _________________________________
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Certificate for Certification of Compliance with Eligibility Requirements
I, __________________, do hereby certify and declare as follows:
(a) The subject property is located at:
Address(es) Assessor’s Parcel Number(s)
(b) I am a duly authorized officer or owner of the subject property.
(c) The property owner agrees to comply with the applicable affordable housing
dedication requirements established under Government Code section
65913.4(a)(4).
(d) That one of the following is true pursuant to Government Code section
65913.4(a)(8)(A) (check one that applies):
⃞ The entirety of the development is a public work under Government Code
section 65913.4(a)(8)(A)(i).
⃞ (d)The property owner agrees to comply with the applicable prevailing
wage requirements established under Government Code section
65913.4(a)(8)(A)(ii).
(e) The property owner agrees to comply with the applicable skilled and trained
workforce requirements established under Government Code section
65913.4(a)(8)(B).
(f) The property owner certifies that the project site has not contained any housing
occupied by tenants within 10 years prior to the date written above.
I declare under penalty of perjury under the laws of the State of California that the
foregoing and all submitted material is true and correct.
Executed on this day in:
Location Date
Signature Name (Print), Title
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SENATE BILL 35 APPLICATION CHECKLIST
SUBMITTAL REQUIREMENTS. The following materials are required for a
complete application in order for the City to determine eligibility for streamlining
under SB 35. Please review this checklist with City of Cupertino Planning and Public
Works Divisions.
1. ☐APPLICATION FORM. Include signature and contact information for the legal
property owner, applicant or authorized agent and contact information for the
Civil Engineer, Architect, Landscape Architect, and all other consultants
involved with the application on another sheet if necessary.
2. ☐FILING FEE. (See the City’s Fee Schedule for current year. Note: Depending on
the project, it could be subject to the City’s hourly staff rate and the cost of
contracts plus any administrative charges).
3. ☐CERTIFICATE FOR CERTIFICATION OF COMPLIANCE WITH
ELIGIBILITY REQUIREMENTS. The property owner or the owner’s authorized
agent must certify under penalty of perjury that certain threshold eligibility
criteria are satisfied.
4. ☐POWER OF ATTORNEY. Provide evidence of power of attorney, if the
application is being by a person other than the property owner.
5. ☐TITLE REPORT. Prepared within the past three months (three copies). The title
report must include a legal description of the property and a listing of all
easements, rights-of-way, and owners shall be supplied.
6. ☐ARBORIST REPORT. Prepared within the last year by an ISA Certified
Arborist for the removal or disturbance of any Protected Tree on the site or on an
adjacent property which could be impacted by the proposed development.
Describe the condition of all Protected trees to be removed/disturbed and
provide a statement of specific reasons for the proposed removal. Provide three
copies.
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7. ☐PHASE I REPORTENVIRONMENTAL SITE ASSESSMENT (ESA)
REPORTS. A Phase 1 ESA report shall be provided with the application. If the
Phase 1 ESA report indicates that a Phase 2 ESA report or additional assessment
is recommended, a Phase 2 ESA report must accompany the application.
8. FISCAL IMPACT ANALYSIS. Provide a fiscal impact analysis, in compliance
with General Plan Strategy LU-8.2.1.
9. PRELIMINARY TRASH MANAGEMENT PLAN. Provide a preliminary trash
management plan. Chapters 6.24, 9.16 and 9.18 of the Municipal Code relate to
Garbage, Recycling and Organic Waste Collection. Contact the Environmental
Services Division for coordination with Recology, the City’s waste collection
company.
10. ☐PROJECT DESCRIPTION. A narrative project description that summarizes
the proposed project and its purpose must be provided. Please include a
discussion of the project site context, including what existing uses, if any, adjoin
the project site and whether the location is eligible for Streamlined Housing
Development processing.
11. ☐AFFORDABLE HOUSING PLAN. Provide an Affordable Housing Plan
describing how a development project will comply with the City’s Below Market
Rate (BMR) Program requirements set forth in the BMR Housing Mitigation
Program Procedural Manual.
12. ☐STATEMENT OF CONSISTENCY WITH OBJECTIVE STANDARDS.
Explain how the proposed project is consistent with all objective zoning,
subdivision (if applicable), and design review standards applicable to the project
site, including those standards included in the General Plan, Cupertino
Municipal Code, Heart of the City Specific Plan, Monta Vista Design Guidelines,
North De Anza Boulevard Conceptual Plan, South De Anza Conceptual Plan,
Saratoga-Sunnyvale Conceptual Zoning Plan, South Vallco Connectivity Plan
and other applicable City documents. Particular details shall be provided to
define how the project complies with use requirements, floor area standards,
density, setbacks, height standards, lot coverage ratios, landscaping standards,
creek setbacks, tree preservation and protection standards, water efficient
landscaping requirements, stormwater requirements, and common open space,
private useable open space, and public open space requirements.
13. ☐STATEMENT OF DESIGN INTENT. Describe the design program, the
designer’s approach, and how the architectural, landscape and other elements
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have been integrated in compliance with the City’s objective standards. The
relationship of the project to adjacent properties and to the adjacent streets
should be expressed in design terms. Define the site, building design, and
landscape concepts in terms of site design goals and objectives, pedestrian
circulation, outdoor-use areas, visual screening and enhancements, conservation
of natural resources, mitigation of negative site characteristics, and off-site
influences.
14. ☐DEVELOPMENT PLAN SETS. The following plans shall comprise the
development plan set:
15. ☐TITLE SHEET Including project name, location, assessor’s parcel numbers,
prior development approvals, and table of contents listing all the plan sheets
with content, page numbers, and date prepared. Include a vicinity map showing
north arrow, the location and boundary of the project, major cross streets and the
existing street pattern in the vicinity with the following information: General
Plan and Zoning designations.
16. ☐DEVELOPMENT PROGRAM. The development plans shall clearly include
the following in a tabular format:
a. ☐Size of property including gross and net lot area (square feet and acres).
REQUIREMENTS FOR ALL DEVELOPMENT PLANS. If the application is
filed in conjunction with other applications, submittal requirements from all
applicable checklists shall be incorporated into one set of plans. All plans shall:
Be prepared, signed and stamped by licensed professionals.
Include the date of preparation and dates of each revision.
Be fully dimensioned and drawn to scale on the same size sheets, with a
consistent scale (as noted) throughout all plan sheets.
Be submitted in collated sets and folded to 8-1/2" x 11".
Be numbered in proper sequence.
A set of plans shall be submitted on a CD or USB flash drive in pdf format and
the following numbers of plan sets are required:
8 sets full size 24" x 36"
15 sets reduced to 11" x 17"
Additional plan sets may be requested if necessary.
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b. ☐For mixed use projects, total square footage of residential space and
related residential facilities (as defined in the City’s Eligibility Checklist),
square footage of non-residential uses, and square footage utilized by both
residential and non-residential uses. A calculation of how the project
meets the eligibility criteria to qualify for streamlined and ministerial
review pursuant to SB 35. Detailed breakdowns, to scale, with dimensions,
shall be shown on Floor Plan submittals as indicated below. Exhibits
showing how to calculate the 2/3 residential requirement are included
below.
c. ☐For residential development, include the floor area for each unit type,
the number of bedrooms, the number of units by type, the number of units
per building, the total number of units, and net density. Include the
amount of private open space provided for each unit. Identify unit type,
size, number of bedrooms, number of units in each building and total
number of units by affordability level and tenure (rental or ownership).
d. ☐For commercial development, total floor area in each building (including
basements, mezzanines, interior balconies, and upper stories or levels in a
multistory building) and total building area, including non-residential
garages.
e. ☐Percent lot coverage, percent of net lot area covered by buildings (total
ground floor area of all buildings divided by net lot area).
f. ☐Percentage of net lot area devoted to landscaping, common open space
and private useable open space.
g. ☐Parking requirements under Government Code section 65913.4(d) and
tabulation of the number of parking spaces proposed by type (universal
and ADA compliant) and proposed parking ratios.
h. ☐Bicycle parking (required and proposed) under City of Cupertino
Municipal Code Chapter 19.124.040.
17. ☐SITE PLAN. Prepared by a licensed Civil Engineer, drawn at 1”= 20’ scale, with
scale noted, a graphic bar scale, and north arrow. The plan shall include the
following:
a. ☐Existing and proposed property lines with dimensions, bearings, radii
and arc lengths, easements, and net & gross lot area for existing and
proposed parcels. Benchmark based on USGS NAVD 88 vertical.
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b. ☐Location and dimensions of all existing and proposed structures
extending 50 feet beyond the property as required for other, non-SB 35,
projects. If adjacent to a street, show the entire width of street to the next
property line, including driveways. Clearly identify all existing and
proposed structures such as fencing, walls, all building features including
decks and porches, all accessory structures including garages and sheds,
mailboxes, and trash enclosures. Label all structures and indicate the
structures to remain and the structures to be removed.
c. ☐Dimensions of setbacks from property lines and between structures.
d. ☐Location, dimension and purpose (i.e. water, sewer, access, etc.) of all
easements including sufficient recording data to identify the conveyance
(book and page of official records).
e. ☐Location and dimensions for all adjacent streets (public and private) and
proposed streets showing both sides of streets, street names, street width,
striping, centerlines, centerline radii of all curves, median and landscape
strips, bike lanes, pedestrian ways, trails, bridges, curb, gutters, sidewalks,
driveways, and edge of right-of-way including any proposed or required
right-of-way dedication. Show all existing and proposed improvements
including traffic signal poles and traffic signs. Show line of sight for all
intersections and driveways based on current City of Cupertino
standards.
f. ☐Existing topography and proposed grading extending 50 feet beyond the
property at 2 foot contour intervals for slopes up to 10% and less than 5
feet in height; and contour intervals of 5 feet for slopes over 10% or greater
than 5 feet in height. Include spot elevations, pad elevations, and show all
retaining walls with TOW/BOW elevations.
g. ☐Drainage information showing spot elevations, pad elevations, existing
catch basins, and direction of proposed drainage, including approximate
street grade and existing and proposed storm drain locations.
h. ☐Location and dimensions of existing and proposed utilities including
water supply system, sanitary sewers and laterals, drainage facilities,
wells, septic tanks, underground and overhead electrical lines, utility
poles, utility vaults, cabinets and meters, transformers, electroliers, street
lights, lighting fixtures, underground irrigation and drainage lines,
backflow prevention and reduced pressure devices, traffic signal poles,
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underground conduit for signals and interconnect, and traffic signal pull
boxes, signal cabinets, service cabinets, and other related facilities.
i. ☐Location and dimensions of parking spaces, back-up, safe pedestrian
paths to building entrances, loading areas, and circulation patterns.
j. ☐Survey of all existing trees on the site and adjacent to the site, at 1”=20’
scale, indicating species, diameter at breast height (DBH) as defined in
Chapter 14.18 of the Cupertino Municipal Code, and base elevation. Trunk
locations and the drip line shall be accurately plotted. Identify all
protected trees as defined in Chapter 14.18 of the Cupertino Municipal
Code.
k. Tentative locations for public artwork in compliance with Section
19.148.050(B) of the Municipal Code.
l. ☐Location of all natural features such as creeks, ponds, drainage swales,
wetlands (as defined in the United States Fish and Wildlife Service
Manual, Part 660 FW 2 (June 21, 1993)), etc., extending 50 feet beyond the
property line to show the relationship with the proposed development.
m. ☐Location on the site of any prime farmland or farmland of statewide
importance, as defined pursuant to United States Department of
Agriculture land inventory and monitoring criteria, as modified for
California, and designated on the maps prepared by the Farmland
Mapping and Monitoring Program of the Department of Conservation, or
land zoned or designated for agricultural protection or preservation by a
local ballot measure that was approved by Cupertino’s voters.
n. ☐If any parcel is within a FEMA defined 100-year floodplain or floodway:
i. ☐Identify the floodplain or floodway on all plan sheets depicting
the existing and proposed site, with the base flood elevation (BFE)
and flood zone type clearly labeled. In addition, show the existing
site topography and finish floor elevations for all existing and
proposed structures. If FEMA has not defined a BFE, a site specific
hydraulic analysis will be required to determine the BFE prior to
deeming the application complete (CMC Sec. 34-32.b2).
ii. ☐Flood zone boundaries and floodwater surface elevation. If the
property proposed to be developed is within or adjacent to the 100
year flood zone (Zone A or AE) or the National Flood Insurance
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Program, Flood Insurance Rate Map, the extent of Zone A or AE
shall be clearly drawn on the tentative map and the 100 year flood
water surface elevation shall be shown. The map shall show the
approximate location of the Floodway Boundary as shown on the
latest edition of the “Flood Boundary and Floodway Map”
published by the Federal Emergency Management Agency.
18. ☐CONTEXTUAL PLAN. Use topographic or aerial map as base. Show the
relationship of the project to the building and site features within 50 feet of the
property line. The plan shall include:
a. ☐Building footprints, pad elevations and building height. Land use and
zoning designation on all lots.
b. ☐Property lines and dimensions of the subject site and adjacent properties
showing all easements.
c. ☐Location of streets, medians, curb cuts, sidewalks, driveways, and
parking areas.
d. ☐Location of all creeks, waterways and trees.
e. ☐Vicinity map indicating site in relation to major streets.
19. ☐DENSITY BONUS. In addition to the other submittal requirements, projects
requesting a density bonus or concessions are required to submit a density bonus
application pursuant to CMC Chapter 19.56, including plans for the project that
clearly indicate the location and square footage of:
☐ Affordable units that qualify the project for a density bonus,
☐ Additional density, floor area, or units granted pursuant to Density Bonus
law,
☐ which units are the density bonus units.
20. ☐BUILDING ELEVATIONS. Plans shall be drawn by a licensed Architect at
1/8”= 1’ minimum scale; dimensioned vertically and horizontally with sample
representations at ¼”= 1’ scale for detail areas. Elevations should not include
superimposed landscaping and trees that hide the buildings. Height is measured
from natural grade established at subdivision. The plans shall include:
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a. ☐Fully dimensioned elevations for buildings identifying materials, details
and features include visible plumbing, electrical meters and method of
concealment.
b. ☐All four sides of all buildings.
c. ☐Vertical dimensions from all points above natural, existing and finished
grade on all elevations.
d. ☐Topography with natural, existing, and proposed grades accurately
represented to show building height to show the relationship of the
building to the site and adjacent properties.
e. ☐Location, height and design of rooftop mechanical equipment and
proposed screening. Provide a section detail showing height of equipment
in relation to the height of the proposed screen structure.
f. ☐Elevations and dimensions for existing structures to remain. Location
and type of building mounted exterior lighting.
g. ☐Detailed building sections showing depth of reveals, projections,
recesses, etc.
h. ☐Details of vents, gutters, downspouts, scuppers, external air
conditioning equipment, etc.
i. ☐Details including materials and dimensions of door and window
treatments, railings, stairways, handicap ramps, trim, fascia, soffits,
columns, fences, and other elements which affect the building. Provide
wall sections at ½”=1’ scale to clarify detailing as appropriate.
21. ☐FLOOR PLANS. Plan shall be drawn by a licensed Architect at 1/8”= 1’ or
larger scale.
a. ☐Floor area diagrams must be provided with dimensions and tabulations
of each area of each floor.
b. ☐Floor plans shall clearly indicate areas attributed to residential, non-
residential, and shared use and should show garages, parking areas, and
amenity spaces.
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c. ☐Floor plans shall include the square footage of residential space and
related residential facilities, non-residential uses, and structures uses by
both residential and non-residential uses.
d. ☐Floor plans shall clearly identify affordable units (City BMR and SB 35
units)
e. If structured parking is provided, identify compliance with requirements
of Chapter 19.124 of the Municipal Code and clearly identify required
pedestrian paths pursuant to General Plan Policy M-3.6.
22. ☐ROOF PLAN. Plan shall be drawn by a licensed Architect at 1/8”= 1’ or larger
scale. The plan shall include property lines, outline of building footprint,
ridgelines, valleys, flat roof areas, roof pitch and rooftop mechanical equipment,
and screening. Plans shall show existing roof forms and roof forms to be added
or changed.
23. ☐TRUE CROSS-SECTIONS. A minimum of two cross-sections (more as needed
to showing varying site conditions) drawn at 1:1 scale (same scale used for both
vertical and horizontal axis), 1”=20’ minimum scale, with scale noted, and a
graphic bar scale, through critical portions of the site extending 50 feet beyond
the property line onto adjacent properties or to the property lines on the opposite
side of adjacent streets. Sections shall include existing topography, slope lines,
final grades, location and height of existing and proposed structures, fences,
walls, roadways, parking areas, landscaping, trees, and property lines. Section
locations shall be identified on the Site Plan.
24. ☐COLOR AND MATERIALS BOARD. Samples of materials and color palette
representative of actual materials/colors for all buildings and structures. Identify
the name of manufacturer, product, style, identification numbers and other
pertinent information on the display. Displays should be no larger than 24” by
36”, except where actual material samples are presented.
25. ☐LANDSCAPE PLANS. Plan shall be drawn at 1” = 20’ or larger scale by a
licensed Landscape Architect. The plan shall incorporate the proposed Grading
and Utility Plan, showing the location of existing and proposed utility lines and
utility structures screened back, but legible, and shall include the following:
a. ☐Final planting plan showing proposed trees, shrubs and shrub
groupings, lawn, and groundcover areas, existing trees to be saved,
stormwater treatment areas, special paving, hardscape, and site
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furnishings. Include a landscape legend with a list of proposed plant
materials (indicate both Latin and common name), including size, spacing,
total quantities, ultimate height, and spread of materials. Trees shall be a
minimum of 24 gallon size and shrubs a minimum of 5 gallon size. Accent
or sub-shrubs may be 1- gallon in size. Larger trees may be required
depending on project location, size, or other conditions.
b. ☐Size, species, trunk location, and canopy of all existing trees (6” in
diameter or larger) on-site and on abutting property that could be affected
by the project. Identify which trees will remain and trees to be removed.
Any tree proposed as mitigation for the removal of a protected tree shall
be identified as a replacement tree. Replacement trees shall comply with
the requirements of Chapter 14.15 of the Cupertino Municipal Code.
c. ☐Show accurate representation of plant materials within three years.
d. ☐Identify the location and screening of all above ground utilities and bio-
swales or other stormwater treatment areas with 1:10 scale cross sections
showing the planting within the bio-swales and screening of the utilities.
e. ☐Provide enlarged details (minimum of 1:10 scale) for focal points and
accent areas.
f. ☐Location and details and/or manufacturers catalogue cuts of walls,
fences, paving, decorative planters, trellises, arbors, and other related site
improvements.
g. ☐Landscape plans with more than two sheets shall show the plant legend
with symbols for each species on every sheet.
h. ☐Statement indicating that a fully automatic irrigation system will be
provided.
i. ☐Color and materials submittal for all special paving, hardscape
treatment, walls, landscape lighting, and site furnishings.
j. ☐The Landscape plan shall be coordinated and consistent with the
Stormwater Plan.
k. ☐Note signed and dated by project Landscape Architect that plans are in
compliance with all City standards.
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l. ☐Provide information on landscaping used as screening for utility
equipment.
26. ☐TREE SURVEY. Prepared by an ISA Certified Arborist, drawn at 1”=20’ scale,
showing accurate trunk location and drip line for all existing trees on the site and
adjacent to the site. For each tree, specify the species, diameter breast height
(DBH) as defined in Chapter 14.18.020, and base elevation and clearly indicate if
it is to be preserved or to be removed. Identify all Protected Trees as defined in
Chapter 14.18.020. Identify existing trees or plant materials on abutting
properties that could influence site design or be impacted by the project.
27. ☐FENCE PLAN. Drawn at 1”=20’ scale showing the location, height and type of
all fences and walls.
28. ☐LIGHTING PLAN. Location and type of exterior lighting, both fixed to the
building and freestanding, any and all lights for circulation, security,
landscaping, building accent or other purpose.
29. ☐PHOTOMETRIC PLAN. Indicate compliance with no lighting glare.
Photometric plan must indicate that lighting levels do not spill into adjacent
properties.
30. ☐PHOTO-SIMULATIONS. Digital photo-simulations of the site with and
without the project, taken from various points off-site with the best visibility of
the project. Include a key map showing the location where each photo was taken.
31. ☐GRADING PLAN. Use the grading plans approved with any past subdivision
to indicate the natural grade and how the proposed project meets height
requirements based on this. If a new subdivision is proposed, please indicate the
new proposed natural grade. The natural grade should not be modified to a great
extent unless necessary to meet engineering standards and specificationsGrading
shall comply with requirements of Chapters 16.08 and 18.52 of the Cupertino
Municipal Code, as applicable. Show the relationship of the project to the
building and site features within 50 feet. The plan shall include:
a. ☐Proposed building footprints, pad elevations and building height
b. ☐Existing and proposed contours which can be easily differentiated (2ft
intervals if slope is 10% or less, 5 ft intervals for slopes greater than 10%)
c. ☐Spot elevations of survey points
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d. ☐Source and date of the contour and spot elevation information
e. ☐Limits of cut and fill
f. ☐Grading Quantities (Cut and Fill Cubic Yards)
g. ☐Cross-sections of the areas of greatest cut and greatest fill to scale
h. ☐Topography and elevation of adjoining parcels (for a minimum of 50’)
i. ☐Slope ratio
j. ☐Show all existing and proposed retaining walls with TOW/BOW
elevations.
32. ☐SUBDIVISION PLAN. Provide a subdivision plan, if applicable. Please
indicate compliance with the objective zoning and subdivision development
standards. The plan shall comply with the City’s subdivision ordinance and shall
include:
a. ☐Existing Assessor’s Parcel Numbers
b. ☐A title which shall contain the subdivision number, name and type of
subdivision.
c. ☐Name and address of legal owner, subdivider and person preparing the
map (include professional license number)
d. ☐Date, north arrow, scale and contour interval
e. ☐Land Use (existing and proposed)
f. ☐Vicinity Map showing roads, adjoining subdivisions, Cities, creeks,
railroads, and other data sufficient to locate the proposed subdivision and
show its relation to the community.
g. ☐Existing Trees, type, diameter at breast height (DBH) and indicate drip
line/canopy. Any trees proposed to be removed shall be clearly indicated.
h. ☐Existing structures, approximate location and outline identified by type.
Buildings to be removed shall be clearly indicated.
i. ☐Lot area with density per gross acre for each parcel (net square footage)
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j. ☐Existing and proposed lot line dimensions (bearings and distances)
k. ☐Exhibits indicating compliance with objective zoning standards (e.g.
minimum lot sizes, lot widths etc.)
l. ☐Areas subject to inundation or storm water overflow. Width and
direction of flow for each water course should be shown with
approximate location.
m. ☐Existing easements with widths, locations, type and sufficient recording
data to identify the conveyance (book and page of official records).
n. New and amended easements with width, locations, type and purpose.
o. ☐Proposed infrastructure including utilities and surface/street
improvements (both private and public). Show location and size of
utilities. Show proposed slopes and elevations of utilities and surface
hardscape improvements.
p. ☐Accompanying data and reports to be supplied with Subdivision Plan:
i. ☐Geologic and Geotechnical Report – A preliminary geotechnical
report is required by Section 16.12 of the Cupertino Municipal
Code and shall verify if there is a presence of critically expansive
soils or other soil problems, which, if not corrected, would lead to
structural defects or differential settlement of infrastructure, and
shall provide recommendations for necessary corrective action.
The report shall show all geological hazard zones identified in the
General Plan and which are known or portrayed in other geological
studies for the area. It shall also include descriptions and physical
characteristics on all geological formations, anomalies, and
earthquake characteristics. Mitigation measures shall be identified
for any geological hazard or concern.
33. ☐UTILITY PLAN. Prepared by a licensed Civil Engineer and drawn at 1”= 20’
scale, with scale noted, showing the location and dimensions of existing and
proposed utilities including water supply system, sanitary sewers and laterals,
drainage facilities/storm drainage system, wells, septic tanks, underground and
overhead electrical lines, utility poles, utility vaults, cabinets and meters,
transformers, underground irrigation and drainage lines, backflow prevention
and reduced pressure devices, electroliers, lighting fixtures, street lights, traffic
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signal poles, traffic signal pull boxes, signal cabinets. Provide details on
screening utility equipment. Indicate compliance with Chapter 14.24.
34. ☐STORMWATER CONTROL PLAN. See Stormwater Control Plan Application
Checklist. All Stormwater Plans shall be coordinated and consistent with all Site,
Grading, Utility, and Landscape Plans. If the project creates or replaces more
than 10,000 sq. ft. of impervious area, a Stormwater Control Plan is required, and
shall meet the standards and regulations established for the Municipal Regional
Stormwater NPDES Permit. Provide the following information to determine if
the project meets this threshold:
a. ☐Site size in sq. ft.
b. ☐Existing impervious surface area (all land covered by buildings, sheds,
patios, parking lots, streets, paved walkways, driveways, etc.) in sq. ft.
c. ☐Impervious surface area created, added or replaced in sq. ft. Total
impervious surface area in sq. ft.
d. ☐Percent increase/replacement of impervious surface area (new
impervious surface area in sq. ft./existing impervious surface area in sq. ft.
multiplied by 100).
e. ☐Estimated area in sq. ft. of land disturbance during construction
(including clearing, grading or excavating.
35. ADDITIONAL INFORMATION TO DETERMINE COMPLIANCE WITH
ELIGIBILITY CRITERIA. Provide the following information if applicable:
a. If the project is located on a hazardous waste site that is listed pursuant to
Government Code Section 65962.5 or a hazardous waste site designated
by the Department of Toxic Substances Control pursuant to Health and
Safety Code Section 25356, submit a signed Hazardous Waste and
Substances Statement as required by Government Code Section 65962.5(f)
and information showing that the State Department of Public Health, State
Water Resources Control Board, or Department of Toxic Substances
Control has cleared the site for residential use or residential mixed uses.
b. If the project is located within a special flood hazard area defined by
Government Code Section 65913.4(a)(6)(G), explain why development is
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allowed under the exceptions explained in Government Code Section
65913.4(a)(6)(G).
c. If the project is located within a regulatory floodway defined by
Government Code Section 65913.4(a)(6)(H), submit the development’s no-
rise certification in accordance with Section 60.3(d)(3) of Title 44 of the
Code of Federal Regulations.
1146193.12
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CITY COUNCIL STAFF REPORT
Meeting: September 3, 2019
Subject
Options for unofficial transcription of City Council meetings (continued from July 16).
Recommended Action
Receive options for unofficial transcription of City Council meetings and provide direction to
staff to use the free YouTube auto-captioning feature for transcription of Council meetings.
Discussion
At its July 16 meeting, Council viewed a demonstration of the free YouTube auto-captioning
feature which can be used to create an unofficial transcript of City Council meetings. The
demonstration showed how timestamps in the transcript are live and link directly to that portion
in the video. One can also search the transcript for specific words which will again link directly
to that part of the video. It is also possible to copy the entire transcript and paste it into a Word
document to search text.
If Council decides to implement YouTube auto-captioning, then a YouTube video link to the
Council meeting would be placed on the Granicus agendas/minutes page. Meetings that extend
beyond four hours would contain multiple videos with a link to a YouTube playlist. The City
Council meeting would be the first video in the playlist and would automatically play each
section of the meeting in order until the end of the sequence.
Another option for transcribing meetings would be to hire an outside transcription vendor
service. This could be Granicus, our current vendor, or a new vendor. Using one of these services
would provide a more accurate transcription but with a large cost. Additional detail regarding
options and cost is listed below.
Outside vendor transcription service
Done by a person after the meeting from the audio/video
Average Cost: $33 to $60 per hour
Typically takes 4 to 5 times the length of the meeting to transcribe (not verbatim)
Example: 5-hour meeting would take 20 to 25 hours to transcribe for an estimate of $660
to $1500 per meeting or $15,840 to $36,000 per year (24 meetings)
98% accurate
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Text is searchable
Granicus (current vendor) captioning and transcription service for televised meetings
Live transcriber during the meeting provides real-time captioning for viewers of the live
Granicus feed
Transcription document available within 48 hours after meeting (not verbatim)
Text is searchable and contains video timestamps
Average Cost: $140 per hour (Example: 5-hour meeting estimate of $700 per meeting or
$16,800 per year (24 meetings))
After-the-fact captioning/transcription service also available at about $200 per hour
(estimate $1,000 per meeting or $24,000 per year)
98% accurate
Text is searchable
You-Tube
Has auto-captioning feature for videos
The auto-captioning (speech-to-text) has difficulty with proper names and syntax
Average Cost: free
88-90% accurate
Text is searchable (not verbatim)
In reaching out to other cities in the area, the City of Palo Alto uses an outside transcription service
at a cost to provide “sense (summary)” minutes for reference only and action minutes and video
recording are considered the official record. The action minutes record only the action whereas
the “sense” minutes include a summary of all speaker comments. The Cities of Sunnyvale and
San Jose use Granicus captioning services for reference only and action minutes and video
recording are considered the official record.
The advantage of providing an unofficial transcript is to allow Council and the public to recap
the discussion without the need to watch the video recording . Using a free service provided by
YouTube would save taxpayer money. The disadvantage of using a free service, rather than an
outside transcription service or Granicus, is that the transcription would not be as accurate,
although it would be used for reference only.
Staff recommends providing an unofficial transcript of City Council meetings using the free
YouTube auto-captioning feature.
Sustainability Impact
No sustainability impact.
Fiscal Impact
No fiscal impact unless Council wishes to use a vendor to create a transcript instead of using the
free YouTube feature.
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_____________________________________
Prepared by: Grace Schmidt, City Clerk
Approved for Submission by: Deborah Feng, City Manager
Attachments: None
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