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Solimar Research

Will Silicon Valley Be Ground Zero For SB 35?

Josh Stephens on
Apr 8, 2018

Few symbols of the tech economy are more palpable or more massive than the Apple Corporation’s new headquarters, an enormous aluminum-clad torus that made landfall on the northern edge of Cupertino recently. Few symbols of the consequences of the tech economy are more palpable or more massive than Vallco Shopping Mall, a moribund 50-acre shopping center, just the other side of Interstate 280 from Apple. 

A standard-issue 1970s mall, once replete with Ice Capades, Orange Julius, May Co., and mountains of parking, Vallco has been wasting away roughly as long as the iTunes store has been in business. Developers have eyed the site for years, considering it an ideal location for redevelopment — in a city at the epicenter of California’s housing crisis, where an average two-bedroom goes for over $3,330. Due in large part to community opposition, redevelopment of the site has proceeded at a speeds more reminiscent of dial-up modems than 4G wireless. 

Developer Sand Hill Property Co. bought the property four years ago and proposed a mixed-use development for the site called Vallco Town Center. Sand Hill placed a measure on the 2016 Cupertino ballot that, if passed, would have enacted zoning to accommodate its proposed the project. Opponents put a competing measure on the ballot essentially calling for the downzoning of the entire site. Both measured failed, leaving stakeholders and the developer to prepare for a protracted battle. 

Last month, though, Sand Hill revealed a new proposal for a mixed use development with 2,400 housing units, two million square feet of office space, and the imprimatur of celebrity architect Rafael Viñoly. It also added a new killer app to get the project entitled: invocation of SB 35. 

Among the most prominent bills in the suite of 15 housing-related bills enacted last year, SB 35 attempts to add meaning to the state’s Regional Housing Needs Allocation. Traditionally, the Department of Housing and Community Development has set RHNA targets for housing production in every city in the state, but cities that failed to approve — much less zone for — the allocations essentially faced no consequences. SB 35 requires cities that are out of compliance with RHNA to streamline their approvals for certain housing developments by-right, provided that the developments include housing earmarked for low-income residents. 

SB 35 takes away a degree of local control. Some local stakeholders welcome it. 

Geoff Paulsen, chair of the Cupertino Planning Commission, said he is “pumped” about the Vallco proposal, and he “enthusiastically endorse(s)" the use of SB 35. 

Sand Hill envisions a mixed-use development at Vallco.

“We've been held hostage by the NIMBY element, which is just afraid of change,” said Paulsen, speaking as a private citizen and not in his official capacity as planning commissioner. “Let each city have its design input but not let each city have the control of stopping people from being afford a place to live."

Earlier this year, HCD published a list cities that have not fulfilled their RHNA obligations. Only 13 cities and counties avoided the list while 378, including Cupertino, received some level of censure. The city’s most recent housing report shows that only 199 units of the 1,064 in the city’s RHNA have been permitted; the city has permitted none of its allocated 563 units for low- and very-low-income residents. 

SB 35 includes tiered streamlining categories depending on how far out of compliance a jurisdiction is. In Cupertino projects must include at least 50 percent affordability to qualify for SB 35 streamlining. The invocation of SB 35 not only bypasses the City Council and Planning Commission also exempts the project from analysis under — and lawsuits based on — the California Environmental Quality Act. 

Even so, environmentalists wary of development on the urban fringe hail the maneuver. 

“This is one of the most important opportunities to provide new homes in the heart of Silicon Valley to address our jobs-housing imbalance and take pressure off of the natural and agricultural lands of the region that are threatened by sprawl development,” said Matt Vander Sluis, deputy director of Greenbelt Alliance. 

Sand Hill’s “Revitalize Vallco” website insists that it still intends to go through the traditional planning process. Cupertino planners are currently drafting a specific plan for the proposed development. The city’s general plan already allows for a mix of uses on the site. SB 35 requires that at least half of a mixed-use project’s square footage to go residential development. Sand Hill’s proposal would dedicate 4.7 million square feet, or 68 percent of the project’s total floor space, to residential uses. Paulsen said he will advocate for design changes such as more green space but acknowledged that design issues are “minor” compared to the need to provide well located housing. 

Along with a small multifamily development in Berkeley (see CP&DR coverage), Vallco is one of the first, and by far the largest, projects to use SB 35. Vander Suis called it a “wakeup call” for the cities of the San Francisco Peninsula and South Bay. Many of them have waved for years in a discomfiting condition in which they are trying to retain their bedroom-community character while suffering (or benefiting from) astronomical real estate prices and the presence of some of the 21st century’s most successful corporations. 

“Communities have so many reasons to build housing, and SB 35 is one more reason,” said Vander Sluis.

A recent informal poll conducted by residents group Better Cupertino found that, among five options for the Vallco site, just over 50 percent of the survey’s 2,555 respondents favored a mall. This despite the fact that the property is in dispute precisely because the community was not able to support the mall that is already there.

"Some of these people want to go back to the 1970s and bring back Penney’s and Kmart and that kind of thing,” said Paulsen. “That’s just not going to happen. The world is changing. We need to shape the change, not resist it.”

While homeowners have not been shy about opposing development, many of the companies and their employees have, traditionally, not gotten politically engaged. This deadlock has prevented many Silicon Valley cities from achieving their RHNA numbers. Now that they are vulnerable to SB 35 projects, they will either have to plan for growth and approve RHNA-supporting projects of their own accord — or be prepared to accept SB 35-compliants projects whether their plans and zoning call for it or not. 

Representatives of the Cupertino Planning Department and of Better Cupertino did not respond to requests for comment for this story. 

Contacts & Resources 

Revitalize Vallco (Sand Hill Property Co.)

Vallco Specific Plan

Geoff Paulsen, Chair, Cupertino Planning Commissiongpaulsen@cupertino.org

Matt Vander Sluis, Deputy Director, Greenbelt Alliancemvandersluis@greenbelt.org

Image courtesy of Revitalize Vallco.

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