CC 10-06-2026
#10
Approved
remediation plan for
soil contamination at
The Rise
Presentation
City Council Informational Item
Eden Housing Environmental Vapor
Barrier and Vapor Intrusion Mitigation
System (VIMS)
Richard Campbell
Special Counsel
Purpose of Informational Session
General overview of
Planned environmental
mitigation at Eden Housing
Project
Vapor Barrier and Vapor Intrusion Mitigation
System (VIMS)
Responsible Agency: Santa Clara County
Department of Environmental Health (DEH)
• Initial soil sampling showed elevated levels of
volatile organic chemicals (VOCs) such as
trichloroethylene (TCE) associated with
industrial solvents, and tetrachloroethene (PCE)
historically used in dry cleaning operations
• DEH is agency overseeing site cleanup under
California Health and Safety Code sec. 101480
What is Vapor Intrusion?
Migration of vapor
from chemical
deposits in
subsurface soils
that rise into
surface structures
PCE and TCE are
such vapor-forming
chemicals
https://www.epa.gov/vaporintrusion/what-vapor-intrusion Vapor Barrier (i.e. passive mitigation)
The vapor barrier is
designed to stop
soil vapors from
seeping through
the ground into
buildings and
impacting indoor
air quality.
Applicant’s VIMS Basis of
Design Report (2026)
Active Venting System
- If indoor air monitoring indicates that additional
measures are needed, modifications will be made to
the passive system.
- After modifications, follow-up monitoring will confirm effectiveness of the mitigation measures.
- If monitoring indicates that modifications are not
sufficient, contingent active venting system will be
implemented.
Applicant’s VIMS Basis of Design Report (July 2026)
City Responsibility Limited to Building Code
“[T]he City of Cupertino will not approve the
hazardous materials or soil vapor intrusion
mitigation aspects of the VIMS design plans,
but [City] will review and approve the VIMS
design plans as they relate to applicable
building code, fire code, etc. as part of the
overall building design plans.”
Department of Environmental Health BOD Approval
Letter, September 1, 2026
Post-Occupancy Indoor Air Sampling
At least three long-term verification sampling
events will be conducted following building
occupancy
FIRST: Sampling Event 3 - 6 months
SECOND: Sampling Event 4 - 12 months
THIRD: Sampling Event 5 - 24 months
Questions
CC 10-06-2026
#11
Block 5 Vallco
TEFRA
Baker Tilly
Desk Item
COMMUNITY DEVELOPMENT DEPARTMENT
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
TELEPHONE: (408) 777-3200
CUPERTINO.GOV
CITY COUNCIL DESK ITEM
Meeting: October 6, 2026
Agenda Item #11
Subject
Tax and Equity Fiscal Responsibility Act (TEFRA) public hearing and approval of conduit financing for The RISE Block 5 Apartments Project Recommended Action
1. Conduct the public hearing under the requirements of the Tax and Equity Fiscal Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, as amended (the “Code”).
2. Adopt Resolution No. 26-___ approving the issuance of the Bonds by the California Municipal Finance Authority (CMFA) for the benefit of Eden Housing, Inc., a California nonprofit public benefit corporation (the “Developer”), on behalf of a limited partnership or another ownership entity to be formed by the Developer or an affiliate of the Developer (such limited partnership or other ownership entity being referred to herein as the “Borrower”), to provide for the financing of the Project, such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Code and the California Government Code Section 6500 (and following). The resolution will also authorize the Mayor or designee to execute the Joint Exercise of Powers Agreement with the CMFA.
Background:
Staff’s responses to questions received from councilmembers are shown in italics.
Q1: What environmental information concerning the Block 5 parcel was disclosed by Eden Housing and/or Vallco Property Owner, LLC to CDLAC/CTCAC in connection with the CA-26-515 application?
Staff response: Tab 12 of the attachments to the CTCAC/CDLAC application discloses that the master developer has enrolled in a Santa Clara County Department of Environmental Health site cleanup program and indicates that a Vapor Intrusion Mitigation System (VIMS) will be installed. The developer indicates that the purpose of the separate environmental disclosure box on the CTCAC/CDLAC application is to list environmental remediation items that will be using tax credit funding. In the case of the Block 5: Eden Housing does not plan to use tax credit funding for soil remediation or vapor intrusion mitigation, as the master developer for the RISE project, Vallco Property Owner, LLC, has or will be funding these costs.
Q2: Did the state application include a Phase I or Phase II Environmental Site Assessment, soil/toxic reports, PCB reports, or other environmental due-diligence materials including SCCDEH oversight materials?
Staff response: No, see above in answer #1. The master developer for the RISE project, Vallco Property Owner, LLC, will be responsible for these items. They are not included in the Block 5 tax credit funding costs.
Q3: Was Santa Clara County Environmental Health’s involvement in the site’s remediation disclosed to the state, CMFA, and the bond purchaser? Staff response: Yes, in Tab 12 of the attachments of the CTCAC application, Eden Housing disclosed that the master developer, Vallco Property Owner, LLC, has enrolled in a Santa Clara County Department of Environmental Health site cleanup program and will install a vapor intrusion mitigation system. CMFA also received this disclosure as a joint applicant of the CTCAC/CDLAC application. However, CMFA is not a reviewer of environmental remediation actions and only acts as an intermediate bond issuer for tax-exempt bonds in connection with tax credit projects. Site remediation is unrelated to CMFA’s role. Environmental issues have also been disclosed to the purchaser, Chase Bank.
Q4: What environmental information did Eden provide to CMFA in connection with CMFA Resolution 25-478 and the proposed bond financing? Staff response: Environmental reports were not provided to CMFA because CMFA is not a reviewer of environmental remediation actions and only acts as an intermediate bond issuer for tax-exempt bonds in connection with tax credit projects. Site remediation is unrelated to CMFA’s role. However, CMFA was a joint-applicant to CTCAC/CDLAC along with Eden Housing and is aware of environmental remediation actions in connection with the site.
Q5: Does the City’s staff have copies of any of those environmental disclosures or reports, and if so, can they be provided to Council before Tuesday or should we postpone the item?
Staff response: Environmental reports are not relevant to this item, however, the Phase I or Phase II Environmental Site Assessment, soil/toxic reports, PCB reports, and other similar environmental clearances are publicly available on the Geotracker website and can currently be viewed by Council. Review of soil remediation and the VIMS system will be completed by Santa Clara County Department of Environmental Health, and City staff will be confirming that clearance is completed as part of the building permit approval.
Q6: Are there outstanding remediation obligations, environmental restrictions, indemnities, or potential remediation costs associated with the Block 5 parcel that could affect the acquisition or financing?
Staff response: We do not believe so, see above in answer #1 and answer #4.
Q7: Most importantly, is there any indication that material environmental information known about the property was omitted or inaccurately characterized in the state, CMFA, or TEFRA financing process? How was this established?
Staff response: No, CMFA is not a reviewer of environmental remediation actions and only acts as an intermediate bond issuer for tax-exempt bonds in connection with tax credit projects. Site remediation is unrelated to CMFA’s role, as well as the TEFRA process. However, in Tab 12 of the attachments of the CTCAC/CDLAC application, Eden Housing disclosed to CTCAC and to CMFA as a joint-applicant that the master developer has enrolled in a Santa Clara County Department of Environmental Health site cleanup program and will install a vapor intrusion mitigation system (VIMS).
Q8: Please share the application for 4% LIHTC and CMFA bonds submitted to the state by the developer which demonstrates that the contamination has been disclosed Staff response: The main application submittal of CA-26-515 is electronically posted and available for viewing on the CTCAC website. The attachments, including Tab 12, are available for viewing upon request to the CTCAC office.
Q9: SHPCO is not the signatory on the project, rather an employee of ADIA, can you explain this?
Staff response: It appears that the Abu Dhabi Investment Authority (“ADIA”) has an ownership stake in the project; however, details are not readily available.
Q10: The affordability shown in the second attachment is very different from what the city has accepted, can you explain the discrepancy?
Staff response: The affordability level shown on the second attachment is for households earning 30%-70% of the area median income, which is classified as very-low or low-income households, consistent with the affordability levels for the project.
Q11: The city allegedly issued a building permit for Block 5, is this correct? Staff response: The City has not issued a building permit for Block 5.
Q12: What is the status of the VIMS and the deed restriction for Block 5? Staff response: As the oversight agency for soil remediation, the County Department of Environmental Health (DEH) reviewed and approved the Vapor Intrusion Mitigation System (VIMS) on September 16, 2026, and will determine and implement any necessary deed restrictions for the property. The building permit application for the VIMS was received and routed for plan review on September 29, 2026. If approved, the VIMS plans and supporting documentation will be incorporated into the permit plan set for Block 5 prior to building permit issuance. The City's review is limited to ensuring compliance with applicable building, mechanical, plumbing, and electrical code requirements associated with the system. The County DEH will continue to oversee the environmental aspects of the VIMS, including installation monitoring, quality control testing, and long-term reporting and compliance requirements.
Q13: Where is the site plan for Block 5 showing the building massing and basic information for the public to see?
Staff response: The site plan for the entire site, including Block 5, can be found on the city’s website Vallco/The Rise site plan.
Q14: Did the developer/design professional elect not to provide a site plan or massing diagram for public distribution under Government Code § 65103.5? If so, please explain how the City is applying the statutory provision that deems permission granted for the City to copy and distribute the architectural drawings in that circumstance. If the City believes that the statute nevertheless prevents publication of the submitted architectural materials, please identify the specific statutory provision supporting that conclusion.
Staff response: A site plan for the project that includes all buildings is available on the city’s website Vallco/The Rise site plan.
Q15: Please provide a public-facing site plan and/or massing diagram showing, at a minimum: the location and general outline of each proposed building; building heights and/or number of stories; building footprints; setbacks; streets and surrounding public rights-of-way; and major open-space areas and other information necessary to understand the project’s overall massing.
Staff response: A site plan for all buildings onsite is available on the city’s website (Vallco/The Rise site plan). The city is in contact with the developer and has requested more detailed plans and will make those available in the future.
Q16: City obligations and exposure: Could staff clarify whether this structure creates any direct or contingent obligations for the City—including financial, legal, environmental, or indemnification obligations—under scenarios such as borrower default, incomplete construction, or financing restructuring? Staff response: The debt to be issued by the California Municipal Finance Authority (CMFA) will be the sole responsibility of the Borrower. The City will have no financial or legal obligations or responsibilities regarding the repayment of the debt, regardless of default, incomplete construction, environmental condition or remediation, financial restructuring, or any other similar event. All financing documents will carry disclaimers that the loan is not an obligation of the City. The City will also bear no costs in the issuance of the proposed debt.
Q17: CMFA membership: Why is Cupertino being asked to become a member of CMFA for this transaction, and what, if any, ongoing obligations would the City have after this bond issuance?
Staff response: The CMFA is a joint powers authority formed to assist local governments, nonprofit organizations, and businesses with the issuance of both taxable and tax-exempt debt. To authorize the CMFA to issue the bonds on the City’s behalf it must become a member of the CMFA JPA. There will be no ongoing obligations for the City after bond issuance.
Q18: Financing structure: Could staff provide a high-level description of the project’s financing structure and sources of capital, including how the CMFA bonds relate to construction financing, permanent financing, tax-credit equity, City funding, and other sources?
Staff response: For Construction Financing: Tax-credit equity will be $7,355,886 out of a total of $176,265, 927. For Permanent Financing: Tax Credit Equity will be $75,898,855 out of a total $200,035,551. The remaining sources of both financing costs come mostly from private loans. At least 50% of tax credit equity will be backed by bonds issued by the CMFA. There is no City funding provided in the Block 5 Vallco.
Q19: Environmental and remediation exposure: Given the separate remediation issues at The RISE site, would participation in CMFA or approval of these bonds affect the City’s environmental or remediation exposure in any way?
Staff response: Environmental issues are not relevant to this item. Site remediation is unrelated to CMFA’s role, as well as the TEFRA process. CMFA only acts as an intermediate bond issuer for tax-exempt bonds in connection with tax credit projects.
Q20: Public benefit and oversight: What specific public benefit does CMFA financing provide for this project, and what continuing oversight, if any, would the City have after the bonds are issued?
Staff response: There are no costs associated with membership in the CMFA and the City will have no financial liability associated with its membership in the CMFA. In addition, participation by the City in the CMFA will not impact the City’s appropriations limits, nor will it constitute any type of indebtedness by the City. Through issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities. The City of Cupertino will receive 25% of the issuance fee, which may be used for any lawful purpose of the City.
CC 10-06-2026
#11
Block 5 Vallco
TEFRA
Baker Tilly
Presentation
Nicky Vu, Senior Housing Coordinator
October 6, 2026
Block 5/Vallco Rise Tax Equity and
Fiscal Responsibility Act (TEFRA)
Hearing
Tax Equity and Fiscal Responsibility
Act (1982) “The Act”
● Federal law requiring a public
hearing before government can
issue tax-exempt private/non-profit
activity bonds for a project
● Jurisdiction (city or county) for
project location must approve the
proposed financing via resolution
Block 5/Vallco “The Project”
● 100% affordable housing
● 58 low income, 174 very low
income, 2 manager (234 units
total)
● Eden Housing “The Borrower”
California Municipal Finance
Authority (CMFA) “The Issuer”
● Statewide joint powers authority
● Conduit bond issuer on behalf of
host cities/counties
● Education, medical, affordable
housing
● Up to $135,000,000 in tax-exempt
revenue bonds
The City of Cupertino
● No financial or legal obligations or
responsibilities regarding the
repayment of the debt
● No costs for the issuance of the
debt
● Adopt a resolution to approve the
issuance of bonds
Fiscal Benefit
● CMFA shares a portion of the issuance
fees it receives with its member
communities
● By joining the JPA, the City of Cupertino
will become a member, and therefore
receive a portion of revenues
● Grant from CMFA to the City’s General
Fund
Staff Representatives
● Ben Barker (CMFA, “The Issuer”)
● Dixie Baus (Eden Housing, “The Borrower”)
Motion
● Adopt the resolution, and execute the JPA
agreement, to approve issuance of bonds by
CMFA for the borrower to satisfy the
requirements of TEFRA, the Code, and
Government Code Section 6500.
CC 10-06-2026
#12
Muni Code
Amendments to
Chapter 19.08
Presentation
City Council October 6, 2026
Municipal Code Amendment: Chapter
19.08 (Definitions)
John Cardenas
Special Counsel
Evaluation of Recent Housing Projects: Streamlined review of mixed-use development highlighted a mismatch between
local municipal code and state standards.
"Floor Area": Staff historically relied on the local definition of "floor area" (Section 19.08.030(F)) due to the lack of a standalone "square footage" definition.
Risk: Continuing this substitution exposes the City to future potential disputed interpretations regarding statestreamlined applications.
Context & Need for Amendment
SB 35 Compliance (GCS § 65913.4): Requires the City to verify that at least two-thirds of a project's total "square footage" is designated for residential use.
Zoning vs. Housing Law: Local "floor area" applies to parcellevel Floor Area Ratios (FAR) and General Plan "development allocations".
Preserving Local Protections: Altering the existing local "floor area" definition to fit state ratios would impact Cupertino’s environmental & zoning frameworks.
State Mandates vs. Local Frameworks
• Standalone Definition: aligned with state housing laws like GCS § 65913.4 and § 65589.5.
• Subterranean Treatment: Consistent with Building Code by excluding underground spaces.
• Mixed-Use Common Areas: Clarifies that shared elevators, hallways, and lobbies are proportionally allocated.
• Effective Date: Applies only to new applications submitted after ordinance effective.
New Definition – "Square Footage"
• Original Intent: Reference to “residential garage” in “floor area” definition meant to apply to address massing of
buildings within lower-density neighborhoods.
• Existing: vague definition to include any enclosed building for motor vehicles – includes structured residential parking. • Proposed Clarifications:
• Clarify to single-level or detached structures serving smallscale residential units. • Exclude large parking structures with drive aisles and maneuvering areas.
Revised Definition – "Garage, Residential"
• Existing: attic simply an unconditioned, uninhabitable area between the ceiling and roof.
• Proposed Objective Criteria: To exclude from “floor area” calculations, attic must be: unfinished, lack permanent stairs from the floor below, feature no operable windows • Enforcement: Any space failing these metrics must be
counted as both floor area and square footage to prevent manipulation of volume metrics.
Revised Definition – "Attic"
• Not a Project: The ordinance does not constitute a "project" under CEQA because it has no potential to cause a direct or ultimate physical change to the environment.
• Alternatively exempt per CEQA Guidelines Section
15061(b)(3).
• Accessory structures like parking do not generate traffic on their own; de minimis or zero impact.
Environmental Review (CEQA)
Aligns Cupertino Law: Brings local ordinances into absolute consistency with evolving state housing legislation.
Protects the City: Eliminates administrative ambiguities and lowers the risk of disputes and possible litigation.
Streamlines Process: Provides staff and builders clear, objective rules for evaluating complex, multi-family, and mixed-use programs.
Summary of Administrative Impacts
Adopt the Draft Ordinance: Recommend that the City
Council adopt an ordinance amending Chapter 19.08
(Definitions).
Recommended Action
CC 10-06-2026
#13
Coach House
Presentation
City Council
October 6, 2026
Housing Development
1655 South De Anza Boulevard
Project Site
Address
1655 S. De Anza Blvd
7357 Prospect Road
Zoning District
P (CG, Res 5-15)
Request
35-unit housing
development and
removal of 15 trees City of Saratoga
City of San
Jose
Prospect Road
S. De Anza Blvd
Project Background
Existing Uses
● 13,500-square-foot commercial building
Previous Approvals
● 2023 approval for a mixed-use development with 34
residential units and 7,500 square feet of commercial
space
Applications
● SB330 Application submitted on September 12, 2025
● Formal application submitted on September 29, 2025
State Housing Laws
● Housing Accountability Act (HAA)
Cannot make project infeasible or reduce density.
● Housing Crisis Act (“SB 330” or “HCA”)
Streamlines permit processing and locks-in fees and
standards. Vesting Date: September 12, 2025
● Density Bonus Law
Allows for additional units, waivers, concessions, and
reduced parking standards.
● No Net Loss (SB 166)
Sites to accommodate RHNA by income level must be
available.
Proposal Data
Project Data Required Proposed
Maximum Density Up to 15 units/acre 26.5 units/acre*
Building Height 30’ max. 44’-9”**
Setbacks
Front (S. De Anza) 35’ 27’-5”**
South (Prospect) 20’ 7’-6”**
Interior Sides 6’ 11’-6”
West 15’ to 50’ 34’**
Private Open Space
60 s.f. / unit
no dimension less
than 6’
> 60 s.f. / unit
Parking 1 space per unit
(35 spaces) 77 spaces
* Density Bonus Eligible **Density Bonus Waiver
Project Details
● Five residential buildings
● 35 units (5 BMR, 30 market rate)
● Four stories (Three stories and a roof deck)
● Units ranging from 2,137 sq. ft. to 2,704 sq. ft. (gross) ● 47 new onsite trees, including replacements for the 15 protected development trees proposed to be removed
● Vesting tentative map for condominium purposes
BMR Unit
Project Design
View from S. De Anza Blvd
Project Consistency Analysis
● Project is consistent with applicable objective
standards.
● One Density Bonus concession to waive requirement for a retail component.
● 11 Density Bonus waivers relating to:
a. Setbacks
b. Landscape Buffers
c. Street Improvements
d. Height and Story Limitation
e. Floor Area Maximum
f. Design Features
Setback Waivers
Required 20’ Setback
Provided 7’-6” Setback
Required 35’ Setback
Provided 27’-5” Setback
Required 50’ Setback
Provided 34’ Setback
Required 50’ Setback
Provided 46’-6” Setback
Landscape Buffer Waivers
Required 25’ Buffer
Provided 20’-7” Buffer
Required 35’ Buffer
Provided 27’-5” Buffer
Required 20’ Buffer
Provided 5’ to 9’ Buffer
Street Improvement Waiver
Required 10’ Planting Strip
Provided 8’ Planting Strip
Height, Floor Area, and Stall Size
Project Data Required Proposed
Maximum Height 30’ 43’-9” to 44’-9”
(All Buildings)
# of Stories 3 stories max. 4 stories
Building Plane Slope 1:1 Encroachment
Floor Area Ratio 85% max. 163%
● Proposed public art plaza on
the northeastern corner of the
property along S. De Anza
Boulevard.
● To be reviewed and
approved by Arts and Culture
Commission after project
approval.
Public Art Dedication
S. De Anza Blvd
Park Land Dedication
● Staff recommends payment of in-lieu fee.
● Project is conditioned to pay in-lieu fee of $1,620,000 for the 30 market rate units.
● Consistent with Quimby Act requirements.
BMR Requirements
Number of
Units
Number of
Bedrooms
Average Unit
Size
BMR Units 5 3-4 2,364 square
feet
Market-Rate
Units 30 3-4 2,414 square
feet
5 BMR units – 3 very-low, 1 moderate, and 1 median
Proposed BMR units are comparable to market rate
units in type and size:
AB 130 Exemption
AB 130 Exemption Memorandum prepared:
● A Phase I ESA and Transportation Analysis were
reviewed in association with the environmental
review.
● Project was found to qualify for a statutory
exemption under Public Resources Code Section
21080.66.
Planning Commission
September 8th Planning Commission Hearing:
● 5-0 vote to recommend approval
● Discussion:
● Project noticing
● Traffic impacts
● Connection to the north
● Conceptual Plan requirements
● Phase I ESA
● Landscaping and screening
● Loss of retail
Recommended Actions
That the City Council adopt the draft resolutions to:
1. Find the project exempt from CEQA;
2. Approve the following permits:
a. Architectural & Site Approval (ASA-2025-014);
b. Tentative Final Map (TM-2025-006);
c. Use Permit (U-2025-005); and
d. Tree Removal Permit (TR-2025-030).