Revitalizing Vallco as Shopping, Dining, Entertainment, and Housing
"What's Happening With Vallco?"
"What's happening with Vallco?" must be the question I have been asked the most during my almost four years on Cupertino City Council. It's a very complicated situation with a lot of intrigue. Be very careful about believing the revisionist history being promulgated by some current City Council candidates and by the property owner. Get the facts.
What Did the Current Owner of Vallco Purchase in 2014?
When the current owner bought the Vallco parcels in 2014 there was no office allocation or entitlement. The Vallco site was part of Cupertino’s Housing Element and the City was required to rezone sufficient land for the 389 units of housing (plus a 35% density bonus). The office allocation was granted, provisionally, after the purchase was completed. The timing is important because there could be no expectation at the time of purchase that the City Council would grant an office allocation.
Why Weren't There Objective Standards in Place on the Vallco Property to Prevent the High-rise Buildings in the SB-35 Plan?In late 2017 Council Members Darcy Paul and Steven Scharf attempted to create Objective Standards for the Vallco property prior to SB-35 taking effect on January 1st 2018. This effort lost on a 3-2 vote with the three developer-controlled Council Members voting against the proposal. This is the sole reason why we ended up with the SB-35 project as it is proposed. In the November 2018 election the Council Majority changed from developer-controlled to resident focused. But it was too late to adopt objective standards that would apply to the SB-35 project.
Did the City of Cupertino “Down-Zone” Vallco?
No. Because of the SB-35 approval, with its 2,402 housing units, the City of Cupertino did not rezone land for the 389 units in the Housing Element; we did not believe that it was necessary. Then we received a letter from the State advising us that should the lawsuit against the SB-35 project succeed we would be out of compliance with our Housing Element. The City Council took swift action and rezoned sufficient area for the necessary housing, just in case the SB-35 project was deemed to be non-compliant. Our attorneys advised us that we had to rezone a specific part of the site. Contrary to what the property owner, and some residents, claimed, this was not down-zoning, it was rezoning that was legally required by the State of California. The rezoning passed 4-1; only one Council Member wanted the City to be open to a lawsuit and fines; he was apparently upset that the much larger Tier 2 project, that he supported, was not allowed to proceed. The rezoning is now moot because the SB-35 plan has 2,402 housing units, far exceeding the 389 housing units (plus density bonus) that the City was required to zone for.
Friends of Better Cupertino Lawsuit
After the City Manager and the Community Development Director approved the SB-35 project, the "Friends of Better Cupertino" filed a lawsuit alleging that the SB-35 project should not have been approved because it failed to meet several of the requirements of the law. The lawsuit failed in the lower courts and there was no appeal. Vallco’s owner can now build their SB-35 Project. They have not moved forward. They have a “Make Ready” permit, but the work being done could be for any project on the site.
August 11th 2020 False Statements by Vallco’s Owner
In an August 11th 2020 story, published in the Silicon Valley Business Journal, Vallco’s owner claimed that the City of Cupertino had failed to issue excavation permits for the Vallco project. This was untrue. The property owner has not yet completed the application for an excavation permit. It was also reported that the owner stated: "If this happened to be in any other city in the Bay Area, let's say Mountain View, Sunnyvale, Santa Clara, or San Jose, it would be built by now.” This was also untrue. Even if the property owner had applied for an excavation permit two years ago, this project would take five to eight years to complete.
Who Likes the SB-35 Project?
The reality is that no one likes the SB-35 project. Affordable housing advocates decry the lack of affordable housing for families since all 1201 of the Below Market Rate (BMR) units are tiny units. Residents don’t like the height, the large amount of office space, and the lack of BMR housing for families. Market-rate housing advocates don't like the fact that the large amount of office space will actually worsen our jobs to housing balance. Nearby corporations don’t like the height because it will obstruct their views. Schools don't like the large number of rental units that will not pay individual parcel taxes. Transit advocates don't like large amounts of office and housing being built in an area with no mass transit. The property owner doesn’t like being required to build 50% affordable housing because it makes the project financially less desirable than other options.
The SB-35 project was never a project that the property owner wanted to build. It was applied for as a warning that should the more profitable Tier 2 project not be approved that they would build a project that everyone agreed was not desirable.
However, it needs to be said that the SB-35 project, despite its flaws, is still much better than the Tier 2 project. We will get a very large number of Below Market Rate apartments, and even though they are too small for families, there is still a big need for this subsidized housing. Cupertino needs do its part in addressing the shortage of affordable subsidized housing. In talking with State Senator Jim Beall a few weeks ago, he acknowledged that there is no shortage of unaffordable market-rate housing in California, the real need is for additional affordable housing.
It’s Not Too Late to Do a Better Project
It is not too late for the property owner to work with the City and with residents to design a project that is both more profitable for the property owner as well as better for the City and its residents. So far, discussions with the City on this have not been successful, but both the City and the residents are open to negotiate a better project. The door is always open.
There has never been any engagement with the community on what would constitute an acceptable project. There was only the farcical "Charette Process" which was funded by the property owner. The Charette process completely ignored the input of residents that in good faith participated. What the residents did express was that they wanted a project with more retail, less office space, and housing that included inclusionary Below Market Rate housing for families.
Covid-19, Class A Office Space, and Luxury Housing
The permanent changes in demand for both commercial office space as well as market-rate housing, caused by Covid-19, would make it a good idea for the three sides to get together to negotiate a mutually beneficial new project. We are already seeing what the long-term effects of Covid-19 will be: remote-working from areas with sufficient land for single-family homes, a desire for less dense housing that is less likely to lead to the spread of disease, and less need for expensive commercial office space.This is not the time to try to save face. There is also the option to sell the land to another developer who would be willing to work with the City to design and build a good project. Many developers were interested in buying the Vallco property when it was put up for sale.
Let’s Not Repeat What Happened in Sunnyvale
There is also the possibility that one of the entities reported to be funding the Vallco project, the Abu Dhabi Investment Authority, may not be keen on the SB-35 project because of the financials. With Covid-19 predicted to lead to permanent changes in commercial office space viability, as well as the increasing glut of both Class A commercial office space and luxury high-density housing, an alternative to SB-35 would be in everyone’s best interest. We don’t want a repeat of what happened with Sunnyvale Town Center, with defaults on loans, foreclosures, and lawsuits, that delayed that project for more than a decade.
“Community Benefits” or “Let us Build a Terrible Project and We’ll Give You Free Stuff”
With the failure of "Tier 2" some people were upset over the loss of "Community Benefits." The narrative of “in return for allowing us to build a really bad project, that negatively affects the community, we’ll give you free stuff” is not a good one! If Cupertino wants or needs capital projects such as a new city hall, a performing arts center, an aquatic center, or a transit center, then we need to find ways to fund these projects without sacrificing our soul.
Beware of False Information About Vallco being Promulgated by Developer-Controlled City Council Candidates
On Sunday September 13th I received an e-mail with a presentation that had been presented by another candidate regarding the Vallco project. It had a lot of incorrect information and data and it looked like it had been prepared by either the property owner or by a disgruntled current City Council member. Especially disturbing was the false information regarding the Below Market Rate (BMR) housing that is being included in the SB-35 project.
If someone is going to make their campaign solely about Vallco then they should at least should get the facts right and not promulgate a revisionist history.
Why Didn't the City Council Put the Referendums on the Ballot?
After the Tier 2 project was passed by the previous City Council residents collected signatures in an effort to overturn that decision. In a very short period of time, residents collected an incredibly high number of signatures, far exceeding the number necessary. After the signatures were verified the City Council had two choices. One choice was to put the referendums on the ballot at the next regular election. The other choice was to overturn the previous Council's approval by a vote of the City Council.
We chose the latter based on multiple reasons. First, based on the very large number of signatures collected it was clear that residents were overwhelmingly against the Tier 2 plan. Second, the 2018 City Council election made it clear that the vast majority of residents opposed the Tier 2 plan. Third, the property owner did not show up to the City Council meeting to tell the City Council what they preferred; probably because they knew that in an election they would lose by a large margin. Fourth, we knew that the property owner would come back to the table once the Tier 2 project was rejected. Fifth, if they did decide to proceed with the SB-35 project an election would cause needless delay The cost of an election was not a consideration. If citizens care enough to collect signatures to overturn a City Council decision then they deserve either an election or the consideration by the City Council of the issue.
Brown Act Violations and the Referendums
The Ralph M. Brown Act forbids a majority of an elected body from meeting in secret to discuss issues being considered by that elected body.
On September 24th 2018 there was a luncheon at Hong Fu Restaurant organized by 2018 (and 2020) City Council Candidate Hung Wei. This meeting was not advertised to the general public. Council member Barry Chang also advertised the meeting to his WeChat supporters. The meeting was held between the first and second reading of the approval of the Tier 2 project when residents were already preparing for referendum signature gathering.
The private meeting at Hong Fu was attended by Savita Vaidhyanathan, Rod Sinks, and Barry Chang (a quorum of 3 council members), all of whom spoke, two City Council candidates also spoke (Hung Wei, and Orrin Mahoney), as did the property owner. The intent of the meeting was to collaborate to derail the referendum signature gathering. If you were around the Cupertino Library during the referendum signature gathering you witnessed the paid thugs (recruited on LinkedIn) that were attempting to disrupt the ability of residents to collect signatures.
Hundreds of Thousands of Dollars Spent By Developers to Elect Council Members that Would Support Them
It's not surprising that City Council candidates that had hundreds of thousands of dollars spent by developers to elect them would meet in secret to lobby for one of those developer's projects.
In 2018, Savita Vaidhyanathan, Orrin Mahoney, and
Hung Wei were supported by developers, not residents, and they all
lost.
The total contributions to these candidates were over $590,000, and
that's just the money that we know about. See https://tinyurl.com/developer-controlled-candidate
for a detailed break-down.
Fortunately, all that money could not fool Cupertino voters and all three of the developers' candidates lost in 2018. We did not end up with, as one campaign flyer stated, "The Worst City Council that Money Could Buy." Incredibly, in the 2020 election, Hung Wei is claiming "Supported by Residents, Not Developers," in fact, the opposite is true.
Developer-Controlled Candidates Putting Signs at Vallco and Main Street Private Property
In every recent City Council election the
developer-controlled candidates have been permitted to put their
signs up at Main Street and Vallco, two sites owned by the same
property owner. Pro-resident City Council candidates are not allowed
to post signs there. It’s an easy way for residents to tell which
candidates are owned by developers and which are not.
Let's Move Cupertino Forward and Create a Vallco that Thrives!
We can achieve a "win-win" at Vallco by working with the property owner to design a good project that is more profitable for them than the SB-35 project, that includes affordable housing for families, and that acknowledges the realities of the post-Covid market for commercial office space. Please vote for candidates not controlled by special-interests whose only goal is to extract as much financial gain as possible from Cupertino.The two serious candidates that are not developer-controlled are Steven Scharf and Kitty Moore.Memories of Vallco
Many of us have fond memories of Vallco. I first shopped there in 1980, long before moving to Cupertino. At the time,Valley Fair was not an enclosed mall, it was an open-air center anchored by Emporium and Macy’s. Vallco had two food courts at one time, one by Sears and one downstairs by J.C. Penney. Over the years I bought appliances, furniture, tools, shoes, and children’s clothing at Vallco. We enjoyed eating at Fresh Choice, Todai, Wolfe Creek Café, and Grain D'Or. It didn’t have to turn out this way. Other area malls were revitalized as dynamic combinations of traditional retail, entertainment, and dining but a succession of Vallco’s owners were only interested in extracting the maximum value from the land.
Paid for by Steven Scharf for Cupertino City Council 2020 FPPC ID #1388099