Janice Bitters – Silicon Valley Business Journal, June 25, 2018

Sand Hill Property Co., the company working to redevelop Cupertino’s Vallco Shopping Mall, is on track to be the first in Silicon Valley to forge ahead using a new and highly controversial state law aimed at speeding up residential development in California.

The project would bring 2,402 residential units, 400,000 square feet of retail space and 1.81 million square feet of office to the 58 acres where the nearly vacant Vallco shopping center sits today. Cupertino city officials said Monday the development proposal checked all the state-mandated boxes to qualify for streamlined approvals through the law, known as SB-35.

“This is an important first step toward a viable future at Vallco,” Reed Moulds, managing director at Sand Hill Property Co., said in a statement Monday.

Under the new law, the city had 90 days from when Sand Hill proposed the project to decide whether the plan met the state requirements for streamlining. With that part decided, Cupertino staff members and elected officials have another 90 days to take a closer look at the specifics of the proposal and take a vote on the project.

“While the city has determined in the prescribed 90-day period under SB35 that the project application is eligible for streamlined, ministerial review, the applicant shall be required to submit additional information … in order for the city to confirm the proposed project, as it relates to the applicable objective planning standards, will be properly implemented,” a letter to the developer dated June 22 states.

City officials will make a final decision on the project by Sept. 24, according to the letter.

Per state law, half of the residential units in the project will be considered below market rate and affordable to people of varying income levels. That’s particularly significant in a city that has seen scarce new residential development in recent years.

Moulds said Monday those apartments would be priced “at a fraction of market rates.”

The news comes after years of controversy around the 1970s-era Vallco Mall. Since Sand Hill purchased the property in 2014, it has been at the center of two ballot measures that aimed — and failed — to decide the fate of the site, an ongoing lawsuit, and dozens of impassioned community meetings.

Meanwhile, Vallco has steadily emptied out in recent years and only a handful of retailers remain on the site. Dynasty and Benihana restaurants remain at the mall, along with a Bay Club fitness center, Ice Center skating rink, and a Bowlmor bowling alley.

Earlier this year, the mall’s biggest remaining draw, the AMC Theater, also shuttered, but with a promise to return if a development plan for the property could be approved by the end of 2018. Sand Hill is counting on that promise, making AMC an anchor for the new proposed development dubbed the Vallco Town Center.

Renderings for the Vallco Town Center are highly reminiscent of Sand Hill’s earlier vision for the site, which was known as The Hills at Vallco. But its new plan has far more residential units — a feature that Sand Hill has highlighted as a selling point for the new proposal.

That earlier proposal included only about 800 residential units, but 2.4 million square feet of office space and 640,000 square feet of retail space. Both plans include a 30-acre green rooftop park, of which 26 acres would be open to the community.

The biggest difference between the two visions is that the new plan shows tall towers reaching as high as 22 stories punctuating the grassy rooftop, each to be filled with residential uses.

Notably, the proposal comes at the same time the city of Cupertino is working through a community-based process that aims to provide feedback and work up a new specific plan for what should replace the existing 1.2 million-square-foot mall. That process, paid for by Sand Hill, is still ongoing.

“We are enthusiastically preparing to build Vallco Town Center, just as we are eager to find out if the City can conclude their community-driven process later this year with an even better solution for all,” Moulds said in the statement. “One way or another, we now feel we are on the cusp of moving this long-awaited project forward, and we are proud to be doing so in a way that begins to chip away at Silicon Valley’s dire housing shortage.”