A Whopper of a Lie – The Pre-Bonus Vallco Town Center

February 15, 2019

The Vallco Town Center pre-bonus project was at least 550,000 square feet short of the Senate Bill 35 eligibility requirement that it be two-thirds (66.7%) residential. View the following calculations for proof. All the numbers used in these calculations are available in the links listed at the end of this article. 

In his June 19, 2018, “Vallco Town Center SB35 Application — Updated Supplemental Information” letter to City Manager David Brandt, Reed Moulds, Managing Director for Sand Hill Property (SHP), writes “This pre-bonus project included the following program: 1,810,000 square feet of office, 600,000 square feet of retail, and 1,778 residential units within 4,820,000 residential square feet (including amenity and garage space). This program is consistent with the General Plan and still designates at least two-thirds of the square footage for residential uses.” This quoted text is on page four of his unnumbered six-page letter. (He later corrected this number to 1,779 units.)

With Vallco’s claimed 4,820,000 square feet of residential uses, we can calculate the percent of residential use space as follows:

4,820,000 / (1,810,000 + 600,000 + 4,820,000)

We get 0.6666667 (66.6666667%), which conveniently equals exactly two-thirds to a zillion decimal places. Absent from his June 19 letter, or in any written communication to the City or residents, are site plans/drawings, number and size of each unit type, or any information that would shed light on the validity of this 4,820,000 square feet of “residential use space” claimed by Peter Pau dba Sand Hill Property for this pre-bonus 1,779-unit Vallco project. Nonetheless, we can derive the pre-bonus numbers we need to determine its validity. 

Also on page four (paragraph four), Mr. Moulds writes: “…we arrived at the final design that was included in the SB35 application: 1,810,000 square feet of office, 400,000 square feet of retail, and 4,700,000 square feet of residential uses (including 2,402 units).” This 2,402 unit number is calculated by applying the 35% Bonus Density: 1,779 x 1.35 = 2,402. 

Residents who read this letter will be surprised that the submitted Vallco Town Center (VTC) design with 2,402 residential units requires 120,000 square feet less floor space than the pre-bonus 1,779 residential units project with its 623 fewer units.

An explanation for this perplexing Vallco claim of “less floor space, more units” appears to be given by Mr. Moulds’ later statement “increasing the number of residential units without meeting the identical design requirements in Cupertino’s density bonus code.” As background, a 35% Bonus Density requires three concessions by the City. One of these concessions allows SHP to build smaller Below Market Rate (BMR) studios and one-bedroom units than market rate (MR) studios and one-bedroom units. Let’s calculate what this concession provided in floor space savings and see if this amount of savings explains our “less floor space with more units” conundrum.

We first need some numbers from the Vallco site plans, drawings, tables, reports, etc. These numbers are only available for the Vallco project with 2,402 residences. For this project, here is the breakdown of its 4.7 million sq. ft. of residential use: 550,055 sq. ft. for amenities, 1,435,605 sq. ft. for residential parking, and 2,714,340 sq. ft. for the 2,402 units (50% BMR / 50% MR). These numbers are from the June 19, 2018 Supplement, Exhibit A: Supplemental Area Calculations, Table I, Floor Area Calculations.

To start, let’s give this 1,779 residential unit pre-bonus Vallco project a huge advantage in reaching its claimed 4.82 million sq. ft. for residential use by allowing it to use the same amount of parking space (1,435,605 sq. ft.) and the same amount of amenity space (550,055 sq. ft.) as the larger 2,402-unit Vallco project with its 623 additional residences.

We can calculate the amount of residential floor space used by 1,779 units by assuming (realistically) that it will have the same mix of units (studios, one-bedroom, two-bedroom, etc.) as the 2,402-unit Vallco project. Here is that calculation:

1779 ÷2402 x 2,714,340 sq. ft. = 2,010,329 sq. ft.

We’ll do the same to determine the number of BMR studios and BMR one-bedroom units prior to the 35% bonus density. Here are these calculations:

1779 ÷ 2402 x 898 (BMR studios after) = 665 (BMR studios before), and

1779 ÷ 2402 x 303 (BMR one-bedrooms after) = 225 (BMR 1-Brs before)

The number of BMR studios and one-bedrooms after is shown in the Affordability Summary Table on Site Plans / Sheet P-0102 in SHP’s March 27, 2018 SB35 Application.

Next, we need to add back the floor space for the BMR studios and one-bedroom units downsized by the bonus density concession. Following this concession, per Vallco, BMR studios are 398 sq. ft. and BMR one-bedrooms are 542 sq. ft. (9/7/18), market rate studios are 652 sq. ft. (7/31/18 derived), and market-rate one-bedrooms are 863 sq. ft. (6/1/18). The amount of floor space we need to add back is the following: 665 (studios before) x (652 – 398) or 168,910 sq. ft., plus 225 (one-bedrooms before) x (863 – 542) or 72,225 sq. ft., which sum to 241,135 sq. ft. When this 241,135 sq. ft. is added back, all pre-bonus studios will be 652 sq. ft. and all pre-bonus one-bedrooms will be 863 sq. ft. — that is, these BMR and market-rate unit sizes will be the same.

We can now add the parking space (1,435,605 sq. ft.) plus the residential amenities (550,055 sq. ft.) plus an equal mix of residential units for the 1,779-unit project (2,010,329 sq. ft.) and the BMR floor space downsized by the concession (241,135 sq. ft.). This totals 4,237,124 sq. ft., far short of the SHP-claimed 4,820,000 sq. ft. for this smaller 1,779 unit project. This shortfall is 582,876 sq. ft., equivalent to over 675 one-bedrooms, 890 Studios, or 1000 BMR bonus-density sized residential units. This monstrous shortfall proves that the pre-bonus Vallco takes much less space with its fewer units (1779) than its larger 2,401-unit follow-on project.

With this realistic, and very conservative number of 4,237,124 sq. ft. (remember we used the same parking and amenity space as the 2,402 units VTC project), we can calculate the pre-bonus percent of residential space (1,779 units including parking and amenities) compared to the Total Project Space (not including Office and Retail parking). Here is that calculation:

4,237,124 ÷ (4,237,124 + 600,000 retail + 1,810,000 office) = 63.7%

(not 2/3rds which is 66.7%)

This pre-bonus Vallco project with 1,779 residential units, which is a required SB35 pre-requisite to the 2,402-unit Vallco project, was never eligible for SB35 fast-track ministerial approval, yet City staff declared its follow-on 35% bonus density 2,402-unit Vallco project SB35 eligible on June 25, 2018, and approved it on September 22, 2018. 

These calculations show that Peter Pau/SHP/Reed Moulds told a whopper of a lie when they provided their made-up number of 4,820,000 sq. ft. residential use purporting to show that their pre-bonus 1,779-unit project met the two-thirds residential eligibility requirement for SB35 ministerial fast-tracking. It missed the two-thirds SB35 residential requirement by more than 550,000 sq. ft., equivalent to more than 1,000 density-bonus-sized BMR units.

March 27, 2018 Application, P-0102

June 1, 2018 Supplement, page 2 of 37

June 19, 2018 Supplement, page 4 of 6

July 31, 2018 Updated Site Plans, Part I, P-0102

September 7, 2018 Fiscal Analysis, Table 1 (page 3)