By Matthew Wilson – The Mercury News, October 5, 2017

Vallco Shopping Mall ownership told the city of Cupertino this week it’s ready to restart planning for a transformation of the 58-acre property.

Sand Hill Property Company submitted a letter to city manager David Brandt on Wednesday asking to “restart the community planning process” on what to do with the mostly vacant mall. The letter, penned by company managing director Reed Moulds, comes nearly a year after the $3 billion green-roof-topped Hills at Vallco project was defeated by voters and two years since that project was formally submitted to city staff for review.

Sand Hill says it’s not ready to submit any projects to the city. Rather, it wants to suspend further review of The Hills and to work with the city on a specific plan that would provide more options to be reviewed by the city council in the future. The letter says the company is “now open to other possibilities.”

Sand Hill wants the city to consider the existing office-centric mixed-use vision in the General Plan and also study a housing-centric use that would reduce non-residential space. A third option would study a middle ground between office and housing.

Sand Hill’s letter also requests that environmental review continue.

The mall is described in the letter as the city’s and West Valley’s “greatest opportunity to have a focused and meaningful positive impact on the housing and affordability crisis.”

In a discussion earlier this week with this newspaper, Moulds said Sand Hill feels the time is right to re-engage with the city, pointing to a recently concluded speaker series hosted by the city that featured panel discussions on retail, housing, planning and transportation trends. He also said regional narratives and concerns have changed a bit since The Hills was pitched two years ago, specifically in regard to housing issues.

The letter states that “panelists confirmed to the community not only that the mall is, in fact, dead, but that the housing shortage is real and Cupertino, along with some other cities in the region, has not done and is not doing enough to address it.”

The letter adds that the “obvious takeaway” from the speaker series was that a “thoughtfully conceived mixed-use plan” at the mall can “provide solutions to these issues and provide for economic development and diversity” in the city.

Moulds said in the letter that fallout from the November election taught the company a few lessons. The Hills project in the form of Measure D went head to head with Measure C, a citizen initiative that sought to restrict the mall to just commercial use.

“Through Measure D we also learned, despite many significant benefits and a well-received design, that not everyone has become comfortable with 2 million square feet of office space. The failure of Measure C also taught us that doing nothing at all at Vallco, an irreparable blight and severe drain on city resources, was considered by most of the community to be unacceptable.”

In a statement released Wednesday evening by the city, Mayor Savita Vaidhyanathan said “I’m looking forward to finally resolving the issue of the Vallco redevelopment project. This could be a signature project for our city and it should be something our residents want to contribute their thoughts to and be proud of in the end. I want community engagement right from the get-go in a positive and productive manner that results in a creative solution that will benefit our whole community.”

The city said on its website it “expects to hold multiple public meetings and invite public input throughout the process.” Updates will be provided on the website.

Adult School

Meanwhile, Sand Hill continues to empty out the mall. Most entrances are locked or sealed up, with the exception of those near the few amenities still open on the mall periphery; the bowling alley, Dynasty Restaurant, AMC movie theater, Bay Club, the ice rink and Benihana. The mall interior also now has drywall barriers up in some places to restrict foot traffic to more vacant portions.

However, there will be new life coming in the summer. Last week mall ownership announced it will give the Fremont Union High School District rent-free space there to house its Adult School for approximately four years.

The agreement allows the district to reconfigure portions of the former food court and construct 12 to 15 temporary classrooms for the Adult School program—which serves roughly 16,000 students—while it builds new permanent facilities and classrooms near its Sunnyvale headquarters. The district said the arrangement will save it roughly $4 million in rent and other temporary construction fees.

Moulds estimates there’s about 30,000 square feet of space to work with near some of the few tenants still occupying the center. Students can park in the former JCPenney lot near a mall entrance by the food court.

Associate Superintendent Graham Clark said the temporary classroom construction will cost about $1 million, although about half that cost will go toward modular walls that can be used again elsewhere. The district will be on the hook for utilities and general operating expenses such as janitorial and extra security services, if necessary. Lighting and Americans with Disability Act accessibility upgrades might be done as well, Clark said.

“I think it’s a win for the community, a win for the district and a win for Vallco,” he said.

The Adult School currently conducts classes in an old warehouse building and more than a dozen portables near district headquarters at 589 W. Fremont Ave. in Sunnyvale

The new building will be funded through Measure K bond funds, approved by district voters in November 2014. A contract was scheduled to be reviewed by the school board on Tuesday, according to Clark.

The renovation plan has been in the works for years, and the district considered renting at other sites and acquiring new property. Adding portables at the school campuses also was considered, but not enough space was available.

Clark said the district made a bid to buy the Raynor Activity Center from the city of Sunnyvale, but it was not selected. Moffett Field was also considered, but Clark said the district wanted a central location and likes Vallco’s location relative to its five school campuses in Cupertino, Sunnyvale and West San Jose.

“It’s closer to the center of our district. We kind of are skewed toward northern Sunnyvale, and we want to serve the entire area,” he said.

Clark also touted the mall’s large parking lots.

Moulds said the lease agreement is in keeping with pledges Sand Hill made in 2015 when it pitched The Hills at Vallco. The company promised a bevy of monetary and infrastructure benefits to both Cupertino school districts if the project was approved by either the city or voters.

“We have a long-term relationship with the high school district, and it’s been a long conversation with how we can provide benefits to this community,” Moulds said. “We’ve had a great open relationship with their (school) board and administration for a long time. It was an ongoing discussion.”

After The Hills was rejected by voters, Moulds said the district approached Sand Hill with the lease proposal, adding it was a “pretty easy decision” for the company.