Last Edited on 1/26/2015

MYTH 1: The redevelopment plan of Peter Pau, Sand Hill Properties, is designed primarily to revitalize the retail element of Vallco Mall.

TRUTH: According to this news article from Silicon Valley Business Journal (Oct. 28, 2014):

In a letter to planning commissioners this month, Sand Hill’s principal and founder Peter Pau disclosed that his company was “in the midst of acquiring the Vallco parcels for potential redevelopment” and floated preliminary plans to replace the entire struggling center with a “new downtown” that would include up to 2 million square feet of office, 700 residential units, a full-service hotel and 600,000 square feet of retail.

According to the same article, the current Vallco Mall is 1.3 million square feet. Half of the mall space has tenants. Peter Pau’s plan would preserve only 0.6 million square feet of retail, which is less than 50% of the current Vallco Mall. Reducing the retail space is not a plan to revitalize the retail business.

Building and selling residential units is the most lucrative option for a developer in Cupertino.  Sand Hill will demand that any Vallco plan include high-density residences.  As a profit-driven entity, Sand Hill must consider profit first.  As neighbors that will live with Vallco for perhaps many years, Cupertino residents must stand up for our quality of life.

MYTH 2: The retail element of Vallco cannot be revitalized without the addition of residential, office, and hotel units to the project.

TRUTH: Non-retail development could help revitalize the retail element in two ways.

  1. Building and selling residential units in Cupertino is very lucrative for a developer.  If the Vallco project involves rebuilding all or most of the mall, the project will be expensive for the developer.  Revenue from selling high-density residences would greatly help to offset the cost of rebuilding the mall.  Sand Hill will claim that without the revenue from residences, Vallco cannot be re-built.  That’s a business decision that Sand Hill must know intimately.

  2. Residences, hotels, and offices at Vallco would increase foot traffic (potential customers) to the mall.  Undoubtedly true.  However, other development near Vallco will very probably drive potential consumers to Vallco.

The Apple campus, the Rosebowl project (directly across Wolfe Rd. from AMC cinemas), and the Main Street development (Stevens Creek Blvd. between Finch and Tantau Ave.) will bring potential customers to the Vallco area.  The Hamptons (Wolfe Rd. just north of 280) has been selected as a Housing Element site and will add several hundred units.

Without adding residential, office, and hotel space at Vallco, it is possible that better management of the mall could result in increased foot traffic to the mall.  The right mix of retail tenants is key.  Two retail centers near Vallco changed their tenants and experienced signficant growth: Loree Shopping Center (Stevens Creek Blvd. at Tantau) and The Marketplace (across Stevens Creek Blvd. from Vallco).  If you shop here, you know that parking is often full.  Further west, the Crossroads shopping Center (Stevens Creek Blvd. west of DeAnza Blvd.) has experienced an increase in traffic.  All of these retail centers found a better mix of tenants and increased business without adding office space or residential units.

MYTH 3: The Council agrees to not rezone Vallco until there is a specific plan approved by the residents. The Council won’t agree on a plan that over-develops Vallco.

TRUTH: True so far, but subject to the test of time.

At the Dec. 3 Council meeting, the Council allocated 389 high-density residential units to a Vallco project, as part of the HCD-required Housing Allocation of the General Plan.  The Council also allocated 389 Housing Element units at other sites, as a backup plan–in case the residences are not built at Vallco.  Vallco is currently not zoned for residential development, and residences cannot be built until Vallco is re-zoned.  The HCD requires that a Housing Element site must be appropriately zoned within 3 years of being adopted as a Housing Element.  (The Housing Element is planned to be adopted by the City–after HCD review–in May 2015.)

Early in Dec. 3 the meeting, the Council agreed among themselves and before many members of the community to discuss only the Housing Allocation part of the General Plan amendments. Much later that night, when many residents had gone home, the Council approved 2 million square feet of office space for Vallco.

Mayor Rod Sinks declared that the Council would not rezone Vallco for residential units and would remove the 2 million square feet of office space from the Vallco site unless the commmunity was “wowed” by Sand Hill’s plan for Vallco.

The developer has a track record of convincing the Council to revise plans in the developer’s favor. A recent example is Below-Market-Rate residences at the Main Street development. Main Street residences were originally planned for seniors, who would have a trivial impact on neighborhood schools. Late in the design process, the Council accommodated Sand Hill’s request to build and sell the residences at market rate (not restricted to seniors).  The result was lucrative for the developer, and will impact neighborhood schools.

Residents must be vigilant that the Council keep their word throughout the design and building (if any) of Vallco projects.

MYTH 4: The traffic impact that comes with 2 million square feet of office space at Vallco is minor and can be mitigated.

TRUTH: 2 million square feet of office space would house 10,000 employees.The City of Cupertino only has a population of 60,000. The number of people going in and out of Vallco area during peak hours would be about ⅙ of the population of Cupertino.

We have not yet seen the traffic impact that will be created by 14,000 employees at the Apple II campus, Main Street residences, and several hundred new residences at the Hamptons apartments. When the main streets are gridlocked, drivers will mitigate the traffic by taking altrnate routes through neighborhoods.

MYTH 5: The Councilmembers promised the residents a revitalized Vallco. A Vallco project that brings in additional revenue in taxes is a revitalized Vallco.

TRUTH: To many Cupertino residents, a revitalized Vallco is simply a plan to revitalize the middle part of the mall, which does not have stores that interest the residents. The plan Sand Hill has in mind would give us 0.6 million square feet of retail, which is less than 50% of the current retail space. Yet, it will add a huge amount of traffic in and out of Vallco during peak hours due to 2 million square feet of office space and 389 housing units. It won’t be as easy to find parking at Vallco as before. We would lose the open space along Stevens Creek since Vallco will be piled up with massive buildings.

The current redevelopment plan does not improve the retail space at Vallco at all. It does not revitalize Vallco Mall. It simply adds a lot of buildings on the Vallco site. The city may get more revenue, but the city also needs to invest more on mitigating the impact of traffic and other services.

MYTH 6: The City must ensure that Vallco is a vital community center.

Vallco developer is a property owner just like you and me. Any property owner should be allowed to develop their own property anyway they like. The city cannot ask Vallco owner to not build office space or housing.

TRUTH: Because of its location and size, Vallco is the single most signficant property in Cupertino.  The community welcomes the tax revenue and amenities that Vallco can provide.  The Vallco owner deserves a chance to make good business.  The City can work with Vallco owners and Cupertino residents to try to create an arrangement that works for all parties.  However, it is not the City’s responsibility to ensure that Vallco thrives in the manner acceptable to the Vallco owners.

Vallco owners purchased a Vallco that is zoned for retail activity–not zoned for residential development.  If Vallco owners can convince Cupertino residents that a Vallco with residential (and office and hotel) space enhances the quality of residents’ lives, then residents will approve a plan to change Vallco zoning and build as Sand Hill requests.

However, if Cupertino residents determine that residential, office, and hotel space at Vallco would not enhance their quality of life, then Vallco owners must try to make successful business with the current zoning designation.

As much as the community would like to see a thriving Vallco, it must come on terms that are amenable to Cupertino residents and are consistent with state and local laws.

We hope that our neighbors’ enterprise to purchase and manage their house will be successful.  If not, the neighbor must sell the house and let another try for success.  If a neighbor is unsuccesful, the City does not tolerate the neighbor to convert his house to a commercial building or to let the property decline in disrepair.  This is the covenant that binds us, and it applies to small property owners and to mega-mall developers.

MYTH 7: Prospective retail tenants are weary of Vallco. Vallco must be radically transformed to attract new tenants.

TRUTH: The foot traffic in Vallco is poor, especially the malls between the large “anchor” department stores.  However, a radical transformation might not be the only solution.  Other retail centers in Cupertino have significantly increased their foot traffic merely by getting a better mix of tenants.  These retail centers achieved increased foot traffic without adding office, residential, or hotel space on or near their sites.

MYTH 8: Vallco Mall is a ghost mall.

TRUTH: Vallo Mall has many shops beloved by Cupertino residents and its surrounding communities. People love to shop at Sears, JCPenny and Macy. Many love the Ice Rink and the Bowling Alley, Bowlmor. Many frequent TGIF, Fresh Choice and Alexander’s Steakhouse. Others often eat at the two Japanese restaurants, Benihana and Tatami or the Chinese restaurant in the basement, Dynasty. And of course, the movie theater, AMC. During Christmas shopping time in 2014, the mall was packed with people and it was even hard to park.

Many mention that they choose Vallco over Valley Fair because it is close by and it is easy to find parking, and not over-built.

MYTH 9: The three anchor stores in Vallco Mall have been losing money.

TRUTH:  All three anchor stores are performing well at Vallco. Macy’s earning is better than the Macy’s in Sunnyvale.   Valley Fair Macy’s–in a large mall with better regional location–is doing better than the Vallco Macy’s.  The earnings of Vallco JCPenny is among the best in California. Sears is also profitable. All three anchor stores did not have any plan to close the store in Vallco, when interviewed for the Retail Strategy Report (March 6, 2014, prepared by the retail consultant for the GPA).

Reference: Stakeholder Interviews and Discussion, Page 54 of the Retail Strategy Report.

“It was confirmed that the Vallco store does better than Macy’s at Sunnyvale Town Center, but much lower sales than Valley Fair. …. While no plans to do so were expressed, if choosing a store to close between Vallco and Sunnyvale, Sunnyvale would be the more obvious choice. … Since the store makes money, the tendency is not to consider closure.”

“….[Sears] intend to maintain control over their real estate, they do not want any planning process to result in a redevelopment plan they do not like, …. There was little interest expressed in either relocation or a store closure.”

“While the surrounding mall environment is severely packing, the store performs well. JCPenny has reinvested in the Vallco store over the past two years including the addition of a home department and other shops in the store. … They would be concerned about the size of a retail component as part of such a project, like many retailers wanting to be part of a critical mass large enough to be a designation attraction for customers. … they would like to continue operating in the market and at Vallco”

MYTH 10: Vallco Mall sits between Valley Fair and Stanford Shopping Center. It cannot compete with these two large shopping centers.

TRUTH: Shopping centers of different sizes and of different price ranges serve different clientele. They all could thrive as long as you find the right mix of stores–stores that fit the need of potential customers. Vallco offers something very unique that actually aligns with modern trend for shopping malls: Entertainment. Vallco has the Ice Rink, Bowling Alley, Bay Club and the AMC cinemas. Many Cupertino residents do not go to Valley Fair since it is too hard to find parking. Many only go to Santana Row for the restaurants because those high-end shops are not what family-oriented communities in Cupertino need. Stanford shopping center is simply too far away. Vallco is the largest retail property in Cupertino and its surrounding areas. There are great opportunities to revitalize Vallco as retail mall.  Do the owners have the vision and execution to turn opportunity into reality?

MYTH 11:  Most of the housing units at Vallco would be occupied by Apple employees and employees from the Vallco office building. So, there won’t be much impact to traffic.

TRUTH: About 5% of Apple employees walk or bike to work (Reference). According to the 2008-2012 Census, about 0.9% and 1.7% of people in Cupertino bike or walk to work, respectively. So, there is less than 5% people in Vallco office or housing units who do walk or bike to work, whether or not Apple is nearby. A family often has two parents who commute to two different locations. Multiple singles often share one apartment and not all would work nearby. Thus, traffic impact would be significant from both 2 million square feet of office, which houses about 10,000 employees and 389 housing units.

MYTH 12: High-density housing units that are proposed for Vallco would be too small for families with kids. The residences would be occupied by young singles that do not have kids. The impact on schools would be minimal.

TRUTH:  It contradicts reason that childless households would pay exorbitant prices to live in a community that is famous for childrens’ amenities (schools).

Consultants indicate that young singles prefer to live in an urban environment with more amenities for young singles. San Francisco is the prime example. It is possible that Cupertino will be transformed into such a city.  The Community Vision 2040 General Plan document frequently mentions the “urban” development path for Cupertino.  Young singles might be attracted to such a Cupertino, even at prices that are unreasonable for childless households.

Current Cupertino residents must consider if we want to trade our sub-urban community for an imitation of San Francisco.  Do we want more crowded schools, increased traffic on major streets and in neighborhoods, concrete canyons where we once had views of sky and distant hills?