Controversial Vallco project given its day in court

A group attempting to derail a major housing and office development in Cupertino faced off in court Thursday against the developer trying to save the project in the culmination of a much-watched fight that has become a test case of a controversial new state law.

Before a courtroom filled almost to capacity with both supporters and critics of the project, lawyers argued over a proposal to turn the defunct Vallco mall into 2,402 apartments, 400,000 square feet of retail and 1.8 million square feet of office space.

The issue at stake was whether the city erred in approving the project under Senate Bill 35, which went into effect last year and attempts to encourage housing development by requiring cities to fasttrack residential and mixed-use projects that meet certain criteria. As the first legal challenge to a major SB35 proposal, the case has been closely watched in Cupertino and beyond.

The wide-ranging debate covered things ranging from the intent of SB35 to the limits of a city’s control over local decisions to the attributes of the specific Vallco proposal. Bern Steves, attorney for Friends of Better Cupertino — the

community group attempting to block the project — argued the plan has several flaws thatmake it ineligible for SB35 status. He called the plan a “fig leaf” developers used to push through a large office development under the guise of a housing proposal.

“This amounts to abusing the SB35 scheme, or the SB35 process,” he said.

Jonathan Bass, attorney for Vallco Property Owner LLC — a subsidiary of developer Sand Hill Property Company, which proposed the project — countered that the Friends of Better Cupertino lawsuit is built on “a foundation of sand,” and that itmisconstrues the state law. SB35 is intended to produce housing and should not be interpreted in a way that would put up hurdles to that housing development, he said.

“It is not intended to set barriers,” Bass said. “It is, quite to the contrary, an invitation and encouragement to developers to present projects.”

Santa Clara County Superior Court Judge HelenWilliamsmade it clear that she is in unfamiliar territory navigating the new law. She questioned what the city’s obligations are under SB35, aswell as her own power to second-guess the city’s decision. SB35 leaves open some major questions, including which legal framework to use when analyzing the case, Williams said.

“I think the initial struggle for the court is what standard of review applies. How to evaluate this,” said Williams, who is expected to issue a decision soon. “And I don’t think that the Legislature did us any favors in setting the statute out this way.”

Her rulingwill be followed closely. The outcome could have implications beyond just theVallcocase, saidMattRegan, senior vice president of public policy for the BayArea Council. The council submitted an amicus curiae brief in support of the Vallco project, alongwith several other local organizations.

“This is a statement case if there ever was one,” Regan said.

The Vallco case is challenging only this specific SB35 designation, not the validity of the entire law. But even so, a ruling for Friends of Better Cupertino could embolden similar groups to challenge other SB35 projects, Regan said.

Thursday’s much-anticipated hearing was supposed to take place Nov. 1. But after Steves, the Friends of Better Cupertino lawyer, had a medical emergency in court that day, the judge cut the hearing short and rescheduled it.

Steves resumed his arguments Thursday, making the case that the Vallco project doesn’tmeet several criteria necessary to qualify for SB35. One requirement is that two-thirds of a project’s square footage be residential — a mandate he claimed the Vallco plan does not meet.

“If something doesn’t follow those rules, then it shouldn’t be included,” he said. “In other words, those rules need to be strictly enforced.”

Lawyers representing Sand Hill’s interests claimed the project does meet the two-thirds standard, kicking off a debate between the two sides over how residential space should be measured. Sand Hill counted residential parking, but not commercial parking, when coming up with its total — per Cupertino policy. Steves argued both types of parking should be counted equally.

The city of Cupertino — the defendant in the case — has remained neutral throughout the course of the lawsuit, but several officials have expressed concerns about the Vallco project in the past.

“The City has taken no position for or against this litigation and we await the Court’s ruling,” City Attorney Heather Minner wrote in an emailed statement.

There’s a lot riding on the Vallco case for Cupertino residents, many of whom have strong opinions on the long- debated future of the empty mall and attended the court hearing.

MikeMalik, 69, has lived a mile from the Vallco site for about 40 years and is eager to see the project go forward so the property no longer will sit empty. He’s hoping the judge tells the Friends of Better Cupertino members to “take a hike.”

But 77- year- old Jim Moore opposes the Vallco project, which he says brings toomuch office space — and therefore traffic — to an already struggling city.

“Our streets are already congested and crowded and dangerous and unsafe,” he said.

To NeilMcClintick, chair of pro-housing advocacy group Cupertino For All, the Vallco case represents Cupertino’s future. The 23-year-old, who rents a Cupertino duplex with his father, hopes the project is the first step in the city tackling its affordable housing shortage by approving additional dense, apartmentstyle developments.

“I think this case is emblematic of a much larger problem,” he said, “which is frankly our refusal to plan for the future.”