Vallco Town Center rendering
April 3, 2018

San Jose Mercury News: Developer tries to fast-track housing at Vallco Mall under new state law


Silicon Valley at Home (SV@Home) Deputy Director Pilar Lorenzana was recently interviewed by Marisa Kendall of the San Jose Mercury News in relation to Sand Hill Property Company’s proposal to redevelop the empty, unused Vallco Shopping Mall in Cupertino, which would include 2,402 new housing units, half of which (1,202) would be affordable.

See the original story at the San Jose Mercury News.

Cupertino now has 180 days to approve the redevelopment proposal, which was submitted under the auspices of Senate Bill (SB) 35, the new state law that expedites the construction of housing near transit lines if 50% of the units are designated as affordable homes.

Developer tries to fast-track housing at Vallco Mall under new state law

Plan includes 2,402 housing units

By Marisa Kendall

CUPERTINO — Fed up with years of false-starts and controversy, the owner of defunct Vallco Mall on Tuesday went over city officials’ heads with a new proposal that aims to turn the failed shopping center into a downtown destination combining retail, housing and office space.

Plans for the new Vallco Town Center envision a thriving community space where people from Cupertino and beyond will come to browse their favorite stores, take in a movie, picnic with their families or even play sports. Mixed into the project will be 2,402 residential units — a huge jump from the 389 units in the city’s plan — and a major boost to the housing stock in a city where booming job growth and sluggish housing creation has driven the cost of renting or buying a home through the roof. Half of the proposed residential units would be reserved for qualifying low-income residents making $84,900 or less for a family of four.

Developers plan to do it all without giving Cupertino’s city leaders a chance to say no. Sand Hill Property Company on Tuesday submitted an application under SB 35, a new housing-focused state law that requires California cities to approve certain residential and mixed-use projects —  eliminating the political delays Sand Hill says have bogged down its Vallco redevelopment efforts for four years. It’s just the second proposal under the new law, which seeks to fast track affordable housing focused projects, following an application submitted for a 260-unit project at 1900 Fourth St. in Berkeley earlier this month.

“It has now gotten to a point where we do not have any confidence that this process can come to a conclusion in a timely manner,” said Reed Moulds, managing director of Sand Hill. “This housing crisis needs to be resolved in a manner that actually provides near-term solutions, and sites like this have an opportunity to do a lot of good for the housing situation.”

But the Vallco plan isn’t likely to get a warm reception from Cupertino residents who have sought to slow the city’s growth, concerned about increasing traffic, overcrowding city schools and losing local retail shops. The Better Cupertino political action group, for example, has fought against turning Vallco into a major office and housing project.

More than two-thirds of Vallco Town Center would be made up of residential units. The plan would increase Cupertino’s affordable housing stock fivefold, but the project also would include 1.8 million square feet of office space and 400,000 square feet of retail. The new plan is a significant shift from the original Hills at Vallco proposal Sand Hill floated in 2015. That plan called for 2.4 million square feet of office space, 640,000 square feet of retail and just 800 housing units — 10 percent of which would have been affordable. But the new plan keeps a signature component of the old Hills vision, the 30-acre rooftop park.

City Manager David Brandt said the city will review the Vallco application, but in the meantime the planning process already started by the city will continue.

“We encourage our community members to stay engaged in the design and planning process of the Vallco Special Area,” Brandt wrote in an emailed statement, “as it’s an opportunity to negotiate community benefits and express project options and preferences.”

City officials have 180 days to approve Sand Hill’s proposal under SB 35, assuming it meets the city’s big-picture zoning and planning requirements.

Councilman Barry Chang says it appears the city can’t reject the Vallco Town Center plan, but he’s hopeful city officials, Sand Hill and local residents can continue working together and possibly come up with a better project. 

Tara Sreekrishnan, a former city legislative adviser and teacher who is running for Cupertino City Council, said she’s happy to see more affordable housing proposed in her city but isn’t thrilled to see it attached to 1.8 million square feet of new office space.

Sreekrishnan also worries about Sand Hill using SB 35 to rush the plan through. Cupertino residents were told they would have a voice in the planning process, and now that’s been taken away, she said.

“I think it’s underhanded of Sand Hill to submit this application in the middle of the community engagement process,” Sreekrishnan said.

Vallco Town Center will have the feel of a bustling downtown, Moulds said. Retail stores will line Stevens Creek Boulevard, and two shopping streets — ideal for walking and biking — will cut through the middle of the project, leading to a town center. Underground, Sand Hill plans to create 10,500 parking spaces.

“We envision this being an exciting place to be — day and night,” Moulds said.

Built in the 1970s as a state-of-the-art shopping center, Vallco began to falter 10 years later when competitor Valley Fair, now owned by Westfield, opened in nearby Santa Clara. Vallco’s decline continued with the rise of online shopping, and its stores began to shutter — the mall lost its Macy’s and Sears in 2015, its J.C. Penney closed in 2016, and the AMC movie theater closed this month — though AMC will reopen if a plan to redevelop Vallco is approved by the end of this year, Moulds said.

Today the mall is a ghost town of empty store fronts, many shut with metal gates. The escalators have stopped moving, the vast parking lots and garages are abandoned, and few people walk the vacant hallways to get to the handful of amenities still open — an ice rink, a bowling alley and a Chinese restaurant.

Sand Hill Property Company bought Vallco in 2014. The developer spent nearly a year getting input from the community and in 2015 unveiled plans for the Hills at Vallco.