No offices at Vallco site if development plan goes down, Cupertino decides

Opponents called the move an attempt to block housing at location

CUPERTINO » If the current plan for redeveloping Vallco Shopping Mall gets tossed, whatever project eventually replaces it won’t feature any office space, the Cupertino City Council decided this week.

A general plan amendment the council approved Tuesday eliminates a component of the plan that allowed up to 2 million square feet of office space at the Vallco site. The amendment also imposes a 60-foot height limit on buildings at the vacant shopping mall.

Council members and residents who support the move say office buildings would only exacerbate the region’s housing crisis by bringing in new workers without the homes to accommodate them. For that reason, they have

been critical of Sand Hill Property Co.’s plan to build 1.8 million square feet of office space there as part of its proposed mixed-use redevelopment.

“What is being done with the general plan — complete maximum housing, complete maximum office space and sacrifice the retail — the developer wins, community loses,” Councilman Jon Willey said. “That’s why we need to rush to make sure we have not been derelict in our duty to protect the community.”

Sand Hill Property Co., the owner and developer of Vallco, has the right under state legislation to build 2,402 apartment units — half of them below market rate — 1.8 million square feet of office space, 400,000 square feet of retail and a 30-acre rooftop park at the defunct shopping mall.

The legislation, known as SB35, requires cities to approve housing developments as long as they include enough affordable homes and meet zoning and planning rules. Although the general plan amendment approved Tuesday doesn’t affect Sand Hill’s plan, it would dictate what can be built at the Vallco site if a lawsuit succeeds in blocking the developer’s project.

Friends of Better Cupertino, a group of residents opposed to the Vallco project has challenged the validity of Sand Hill’s proposed redevelopment under the auspices of SB35. The issue will go before a judge at a hearing scheduled for early October.

Sand Hill and pro-housing residents argue that eliminating office space at Vallco is a move designed to also block housing there by making projects economically infeasible.

“In the event that the SB35 project is blocked… the city is saddled, for the foreseeable future, with a blighted, 50-acre parcel with an unusable, partially demolished mall on it,” Sand Hill’s attorney, Charmaine Yu, wrote in a letter to the council.

In that letter, Yu called the changes an “unconstitutional taking” of Sand Hill’s property by “placing unreasonable restrictions on the property that render any development infeasible” and warned the city it could be liable for reducing Vallco’s land value.

Councilman Rod Sinks, the only one to vote against the general plan amendment, said he agrees with the principles of maximizing new housing and limiting office space but believes some office space is needed to help projects pencil out.

“The idea of mixed-use… is that the homes help nighttime and weekend sales for retail and dining, while office helps the daytime sales,” Sinks said. “So I think we need to think carefully about having enough office to make that retail and dining healthy.”

Eliminating all office space would place another obstacle in the city’s relationship with Sand Hill, Sinks said.

“We could continue this war where the developer is putting a lot of money into lawyers, and we put a lot of money into lawyers, or we could begin a good faith negotiation,” he said.

Mayor Steven Scharf said he’s not categorically opposed to office space, but 2 million square feet is too much.

A developer could request another general plan amendment or special planning approvals to build additional housing or office space in the future, he said, adding “This isn’t closing the door to office.”

The general plan amendment maintains the existing allocation of residential units on the 50-acre site at 389 to 459 homes, except now they would have to be contained within 13.1 acres. They would be allowed by right, meaning a developer no longer would need additional permission to build homes on the site.

If a future project qualifies for a state density bonus, a developer could build up to 620 units on the site.

Councilman Darcy Paul asked the staff to study a future general plan amendment for Vallco that would allow up to 1,500 housing units. “I’m completely sincere about the desire … to deliver an environment that’s good for everyone and that people want to go to,” Paul said.

Though the council has asked the developer to discuss alternative plans for the site, Sand Hill has shown no desire to abandon its current project. This month, the city approved additional demolition permits for the site so Sand Hill can start taking down the former Macy’s building and portions of the mall west of Wolfe Road.

The city is under state pressure to develop housing at the Vallco site. The state Department of Housing and Community Development told the city in a letter Aug. 2 that if the current project is blocked in court, Cupertino could violate laws that require cities to zone property to enable new housing developments.