Milpitas City Council
April 19, 2022

To estimate the potential number of jobs, wages, and housing units associated with each of the scenarios, City staff and EPS developed a set of development prototypes that could be associated with the Innovation District land use designations. Table 9 provides the assumed details of the different development prototypes, including density, number of stories, gross building area, and building square feet based on typical development characteristics seen in the region. City staff provided the Floor-Area-Ratios based on their preferred development typologies. As shown, the level of new building development on an acre of Innovation District land ranges from Land Use
Acres % Acres % Acres % Acres %
Employment Lands
Class A Office 0.0 0% 3.6 5% 17.2 23% 31.2 42%
Class A Office/R&D 0.0 0% 4.3 6% 20.2 27% 33.3 45%
Class B Office 9.7 13% 0.0 0% 0.0 0% 0.0 0%
Industrial 8.9 12% 0.0 0% 23.4 31% 0.0 0%
Warehouse/Distribution 32.1 43% 23.4 31% 0 0% 0.0 0%
Hotel 6.8 9% 4.5 6% 6.8 9% 6.8 9%
Commercial/Retail 1.5 2% 35.5 48% 0.0 0% 0.0 0%
Employment Lands Subtotal 59.0 79% 71.3 96% 67.6 91% 71.3 96% Nonemployment Lands
Housing 0.0 0% 0.0 0% 3.7 5% 0.0 0%
Open Space 0.0 0% 3.1 4% 3.1 4% 3.1 4%
Assembly 10.6 14% 0.0 0% 0 0% 0.0 0%
Vacant 4.8 6% 0.0 0% 0.0 0% 0.0 0%
Nonemployment Lands Subtotal 15.4 21% 3.1 4% 6.8 9% 3.1 4% Total 74.4 100% 74.4 100% 74.4 100% 74.4 100%
Scen. 1 Scen. 2 Scen. 3 Scen. 4
185
Item # 2.

Technical Memorandum October 25, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 24 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.25.21.docx 13,000 square feet for Commercial/Retail development to 65,300 square feet for Class A Office development. For Residential land uses, the number of units on each acre varies between 90 units and 180 units depending on whether the development is mid-rise or high-rise.

Table 9. Innovation District Development Prototypes/Intensities Applying the development prototype information to the land use scenarios provides the potential development under each of these scenarios as presented in Table 10. As shown, the amount of development on employment lands ranges from 790,000 square feet under Scenario 1 up to

3.8 million square feet under Scenario 4. There is no residential development in Scenarios 1, 2, and 4, with a potential 330 units under Scenario 3.

Table 10. Residential Units and Employment Lands Building Sq. Ft. by Scenario Area FAR/Density Stories Gross Acres
Gross Building
Area/# of Units
Building Sq. Ft./
Acre
Employment Lands Prototypes
Class A Office 1.5 8 5 326,700                   65,340 Class A Office/R&D 1.0 5 5 217,800                   43,560 Class B Office 0.4 3 5 87,120                      17,424 Light Industrial 0.6 3 5 130,680                   26,136 Warehouse/Distribution 0.6 1 5 130,680                   26,136 Hotel [1] 1.3 6 2.5 136,125                   54,450
Commercial/Retail 0.3 1 5 65,340                      13,068 Residential Development
Mid‐Rise (5‐7 story) 90 units/acre 7 2 180 90 units
High‐Rise (8‐12 story) 180 units/acre 12 2 360 180 units [1] 210 hotel rooms at 650 gross square feet per room. Gross square footage for hotel uses include the hotel room and additional eating, cooking, laundry spaces, plus other operational areas.

Area Scen. 1 Scen. 2 Scen. 3 Scen. 4
Employment Lands
Class A Office 0 235,224 1,125,155 2,039,784
Class A Office/R&D 0 187,308 879,825 1,449,677
Class B Office 168,664 0 0 0
Industrial 232,454 0 611,582 0
Warehouse/Distribution 839,122 611,582 0 0
Hotel 370,260 245,025 370,260 370,260
Commercial/Retail 19,406 463,888 0 0
Total Employment Lands (Building Sq. Ft.) 1,629,906 1,743,027 2,986,822 3,859,721 Residential Units 0 0 331 0
186
Item # 2.

Technical Memorandum October 25, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 25 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.25.21.docx Innovation District Jobs and Wages by Scenario
Table 11 through Table 14 summarize the potential land uses, development levels, jobs and total salaries for each scenario.

Scenario 1 (Table 11). Scenario 1 is expected to accommodate about 1.63 million square feet of employment lands development, including roughly 800,000 square feet of Warehouse and Distribution development. Collectively, a total of about 2,000 jobs providing about $140 million in annual wages could be accommodated (over $70,000 per worker).

Table 11. Scenario 1 Summary: Developed Acres, Building Square Footage, Employees, and Salaries Scenario 2 (Table 12). Scenario 2 is expected to accommodate about 1.74 million square feet of employment lands development, including 600,000 square feet of Warehouse and Distribution development. Collectively, a total of about 3,500 jobs providing about $307 million in annual wages could be accommodated (almost $88,000 per worker).

Table 12. Scenario 2 Summary: Developed Acres, Building Square Footage, Employees, and Salaries Total
Land Use Acres Units/ Sq. ft. # of Employees Employees/ Acre Salary/ Job Annual Salaries Employment Lands
Class A Office 0.0 0 0 0 $135,000 $0
Class A Office/R&D 0.0 0 0 0 $132,000 $0
Class B Office 9.7 168,664 562 58 $77,000 $43,291,000
Industrial 8.9 232,454 465 52 $118,000 $54,859,000
Warehouse/Distribution 32.1 839,122 645 20 $51,000 $32,919,000 Hotel 6.8 370,260 285 42 $25,000 $7,120,000
Commercial/Retail 1.5 19,406 49 33 $47,000 $2,280,000
Total 59.0 1,629,906 2,006 34 $70,000 $140,469,000
Residential 0.0 0 na na na na
* Excludes any open space, assembly uses, and vacant land.

Total
Land Use Acres Units/ Sq. ft. # of Employees Employees/ Acre Salary/ Job Annual Salaries Employment Lands
Class A Office 3.6 235,224 1,045 290 $135,000 $141,134,000 Class A Office/R&D 4.3 187,308 624 145 $132,000 $82,416,000 Class B Office 0.0 0 0 0 $77,000 $0
Industrial 0.0 0 0 0 $118,000 $0
Warehouse/Distribution 23.4 611,582 470 20 $51,000 $23,993,000 Hotel 4.5 245,025 188 42 $25,000 $4,712,000
Commercial/Retail 35.5 463,888 1,160 33 $47,000 $54,507,000 Total 71.3 1,743,027 3,488 49 $88,000 $306,762,000
Residential 0 0 na na na na
* Excludes any open space, assembly uses, and vacant land. 187
Item # 2.

Technical Memorandum October 25, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 26 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.25.21.docx Scenario 3 (Table 13). Scenario 3 is expected to accommodate about 3.0 million square feet of employment lands development. Collectively, a total of about 9,400 jobs providing about $1.2 billion in annual wages could be accommodated (near $128,500 per worker). This scenario also includes 331 residential units.

Table 13. Scenario 3 Summary: Developed Acres, Building Square Footage, Employees, and Salaries Scenario 4 (Table 14). Scenario 4 is expected to accommodate about 3.86 million square feet of employment lands development, primarily Class A Office and Class A Office/R&D. Collectively, a total of about 14,200 jobs providing almost $2.0 billion in annual wages could be accommodated (around $131,800 per worker).

Table 14. Scenario 4 Summary: Developed Acres, Building Square Footage, Employees, and Salaries Total
Land Use Acres Units/ Sq. ft. # of Employees Employees/ Acre Salary/ Job Annual Salaries Employment Lands
Class A Office 17.2 1,125,155 5,001 290 $135,000 $675,093,000 Class A Office/R&D 20.2 879,825 2,933 145 $132,000 $387,123,000 Class B Office 0.0 0 0 0 $77,000 $0
Industrial 23.4 611,582 1,223 52 $118,000 $144,333,000
Warehouse/Distribution 0.0 0 0 0 0 0
Hotel 6.8 370,260 285 42 $25,000 $7,120,000
Commercial/Retail 0.0 0 0 0 $47,000 $0
Total 67.6 2,986,822 9,441 140 $128,547 $1,213,669,000
Residential 3.7 331 na na na na
* Excludes any open space, assembly uses, and vacant land.

Total
Land Use Acres Units/ Sq. ft. # of Employees Employees/ Acre Salary/ Job Annual Salaries Employment Lands
Class A Office 31.2 2,039,784 9,066 290 $135,000 $1,223,870,000 Class A Office/R&D 33.3 1,449,677 4,832 145 $132,000 $637,858,000 Class B Office 0.0 0 0 0 $77,000 $0
Industrial 0.0 0 0 0 $118,000 $0
Warehouse/Distribution 0.0 0 0 0 0 0
Hotel 6.8 370,260 285 42 $25,000 $7,120,000
Commercial/Retail 0.0 0 0 0 $47,000 $0
Total 71.3 3,859,721 14,183 199 $131,769 $1,868,848,000 Residential 0.0 0 na na na na
* Excludes any open space, assembly uses, and vacant land. 188
Item # 2.

Technical Memorandum October 25, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 27 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.25.21.docx Innovation District Fiscal Impacts by Scenario
Table 15 estimates the net annual fiscal impacts of each of the Innovation District scenarios on the City’s General Fund at District buildout (in 2021 constant dollars). Estimated net fiscal impacts are derived by applying the average Net General Fund Fiscal Impact per Acre estimates derived in the above Fiscal Impact Analysis to each of the four Innovation District land uses scenarios. In summary:
 Scenario 1. At scenario buildout, Scenario 1 is estimated to generate about $6.5 million annually to the City’s General Fund. Over 85 percent of this net positive fiscal impact (approximately $5.6 million) is driven by the 6.8 acres of Hotel uses and their associated TOT revenues. The additional fiscal surplus of $900,000 annually comes from the combination of other uses.
 Scenario 2. At scenario buildout, Scenario 2 results in an estimated $6.8 million annually in positive net fiscal impact to the General Fund. While this scenario includes fewer Hotel acreage compared to Scenario 1, the overall impact is slightly greater due to the substantial acreage devoted to Commercial/Retail uses, which drive about $2.3 million in net annual fiscal impact due primarily to their significant sales and use tax revenues. About $850,000 annually of the fiscal surplus is associated with new uses other than Hotel and Commercial/Retail.
 Scenario 3. At scenario buildout, Scenario 3 is expected to generate a net fiscal impact of over $8.6 million annually. This scenario includes the same amount of Hotel acreage as Scenario 1 but is composed of a significant amount of Class A Office and Class A Office/R&D acreage. About $3.0 million of the annual fiscal surplus is estimated to be generated by nonHotel uses, fully generated by the new Class A Office, Class A Office/R&D, and Light Industrial development.
 Scenario 4. At scenario buildout, Scenario 4 generates the strongest net fiscal impact to the City’s General Fund at an estimated $9.9 million annually. This result is driven by maintaining the original 6.8 acres for Hotel use but shifting the remaining acreage entirely to Class A Office and Class A Office/R&D, which are strong fiscal contributors, while still preserving 3.1 acres for Open Space. About $4.4 million of the annual fiscal surplus is estimated to be generated by non-Hotel uses, with the new Class A Office and Class A Office/R&D generating all of these additional surplus revenues. 189
Item # 2.

Technical Memorandum October 25, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 28 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.25.21.docx Table 15. Annual Net Fiscal Impacts by Innovation District Scenario Land Use Per Acre Scenario 1 Scenario 2 Scenario 3 Scenario 4 Employment Lands
Class A Office $85,406 $0 $307,462 $1,470,694 $2,666,210 Class A Office/R&D $51,222 $0 $220,253 $1,034,577 $1,704,659 Class B Office $14,299 $138,414 $0 $0 $0
Industrial $22,648 $201,430 $0 $529,961 $0
Warehouse/Distribution $13,527 $434,295 $316,530 $0 $0
Hotel $826,580 $5,620,744 $3,719,610 $5,620,744 $5,620,744 Commercial/Retail $63,925 $94,929 $2,269,210 $0 $0
Employment Lands Subtotal $6,489,812 $6,833,065 $8,655,975 $9,991,613 Residential $9,153 $0 $0 $33,682 $0
Scenario Total $6,489,812 $6,833,065 $8,689,657 $9,991,613 Source: Economic & Planning Systems
Annual Net Fiscal Impact
190
Item # 2.

APPENDICES:

Appendix A: Maps
Appendix B: Fiscal Impact Analysis—Existing Uses
Appendix C: Fiscal Impact Analysis—New Uses
Appendix D: Glossary of Terms
Appendix E: Residual Land Value Analysis
Appendix F: Innovation District Scenarios
191
Item # 2.

APPENDIX A:

Maps
192
Item # 2.
193
Item # 2.

Milpitas Metro Specific Plan Land Uses
194
Item # 2.

Innovation District Land Uses
195
Item # 2.

APPENDIX B:

Fiscal Impact Analysis—Existing Uses
196
Item # 2.

Table 1
City of Milpitas Annual Citywide Fiscal Impact of Existing Uses City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Single Multi- Other
Annual General Fund Impacts Family Family Office Industrial Retail Hotel Uses Total General Fund Revenues
Property Tax $14,774,099 $6,671,212 $544,022 $6,251,994 $1,931,997 $627,253 $941,356 $31,741,933 Property Tax In-Lieu of VLF $3,696,107 $1,668,969 $136,100 $1,564,091 $483,337 $156,923 $235,503 $7,941,031 Sales Taxes $3,752,701 $1,076,926 $822,258 $6,950,982 $15,514,270 $34,669 $220,146 $28,371,951 Real Estate Transfer Tax $370,582 $167,335 $13,646 $156,820 $48,461 $15,734 $23,612 $796,190 Business License Tax $0 $0 $54,661 $199,016 $32,036 $14,356 $65,582 $365,650 Motor Vehicle In-Lieu $26,708 $7,665 $0 $0 $0 $0 $647 $35,020 Other Taxes $397,290 $175,000 $68,307 $355,836 $80,496 $30,089 $89,841 $1,196,860 Franchise Fees $3,221,727 $924,550 $192,907 $702,353 $113,058 $50,663 $309,528 $5,514,787 Transient Occupancy Tax $0 $0 $0 $0 $0 $13,452,683 $0 $13,452,683 Licenses, Permits, and Fines $5,787,719 $1,660,922 $346,551 $1,261,752 $203,105 $91,015 $556,055 $9,907,120 Total Revenues $27,933,537 $10,508,610 $1,974,045 $15,522,917 $17,842,927 $14,286,373 $2,116,925 $90,185,334 31% 12% 2% 17% 20% 16% 2% 100%
General Fund Expenditures
General Government $2,511,645 $720,775 $150,390 $547,551 $88,140 $39,497 $241,306 $4,299,304 Economic Development $534,026 $153,251 $31,976 $116,420 $18,740 $8,398 $51,307 $914,118 Building Safety & Housing $4,032,635 $1,157,260 $241,462 $879,135 $141,515 $63,415 $387,436 $6,902,858 Engineering $1,367,502 $392,437 $81,882 $298,122 $47,989 $21,505 $131,383 $2,340,819 Finance $2,545,109 $730,379 $152,393 $554,847 $89,314 $40,023 $244,521 $4,356,586 Fire $16,252,557 $4,664,053 $973,154 $3,543,140 $570,341 $255,581 $1,561,465 $27,820,292 Human Resources $1,227,784 $352,341 $73,516 $267,663 $43,086 $19,308 $117,959 $2,101,657 Information Technology $2,174,120 $623,915 $130,180 $473,969 $76,295 $34,189 $208,879 $3,721,547 Planning $579,456 $166,289 $34,696 $126,324 $20,334 $9,112 $55,671 $991,883 Police $21,940,150 $6,296,242 $1,313,710 $4,783,064 $769,932 $345,021 $2,107,901 $37,556,020 Public Works $5,348,454 $1,534,865 $320,249 $1,165,990 $187,690 $84,107 $513,853 $9,155,209 Recreation & Community Services $1,905,131 $546,722 $114,074 $415,328 $66,856 $29,959 $183,036 $3,261,106 Total Expenditures $60,418,568 $17,338,528 $3,617,682 $13,171,555 $2,120,232 $950,116 $5,804,717 $103,421,399 58% 17% 3% 13% 2% 1% 6% 100%
Annual Net Impact on General Fund ($32,485,031) ($6,829,918) ($1,643,637) $2,351,362 $15,722,695 $13,336,257 ($3,687,792) ($13,236,065) Source: Economic & Planning Systems
197
Item # 2.

Table 2
Milpitas Population and Employment
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Item Citywide Total Source
Housing Units 22,553 Department of Finance 2020
Occupied Households 21,814 Department of Finance 2020
Population 77,961 Department of Finance 2020
Persons/Household Single Family 3.76 ACS 2019 5-Year Est. & DOF 2020 Persons/Household Multifamily 2.70 ACS 2019 5-Year Est. & DOF 2020 Jobs 47,630 LEHD Employment Statistics 2018
Service Population 101,776 Assumes 1 employee is equivalent to 50% of a resident [1] See Appendix Table A-3 for calculations.

Source: Economic & Planning Systems
198
Item # 2.

Table 3
Land Use Assumptions
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Total Total
Land Use Category Residents Employees
Residential
Single Family 15,817 DUs - 59,457 - 59,457
Multi-Family 6,308 DUs - 17,063 - 17,063
Non-Residential2
Office - 1,780,063 SF - 7,120 3,560
Industrial - 20,865,527 SF - 25,924 12,962
Retail - 5,020,977 SF - 4,173 2,087
Hotel 2,667 Rooms - - 1,870 935
Other Uses3 428 DUs - SF 1,441 8,543 5,712
Citywide Total 22,553 DUs 27,666,567 SF 77,961 47,630 101,776 Source: CoStar Group; Economic & Planning Systems
[3] Other residential uses include mobile homes, other non-residential uses included within this category are listed in Table 12. [2] Per CoStar Group.
[1] Applies a factor of 100% to residents and 50% to employees.

Total Service
Population1
Dwelling Units
Citywide Inventory
Square Feet
199
Item # 2.

Table 4
Assessed Values by Land Use
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Milpitas 2021
Land Use Category Assessed Value1
Residential
Single Family 15,817 DUs $9,119,814,483
Multi-Family 6,308 DUs $4,118,031,901
Non-Residential
Office 1,780,063 SF $335,815,823
Industrial 20,865,527 SF $3,859,255,762
Retail 5,020,977 SF $1,192,590,968
Hotel 2,667 Rooms $387,193,287
Other Residential Uses2 $740,252
Other Non-Residential Uses3 $580,343,445
Citywide Residential Total 22,553 DUs
Citywide Non-Residential Total 27,666,567 SF
Citywide Total $19,593,785,921
Source: Parcel Atlas; Economic & Planning Systems
[1] Per data acquired via Parcel Atlas and Santa Clara County Assessor's Office.

Citywide Inventory
[2] Includes Mobile Homes.
[3] Land Uses included in this category are displayed in Table 12. 200
Item # 2.

Table 5
General Fund Revenue Summary
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 FY 2020/21
General Fund
Item Revenues*
Property Tax 36,872,241 16.20% of 1% of base assessed value Property Tax In-Lieu of VLF1 $7,941,031
Sales Taxes $28,371,951 1.25% of estimated taxable sales Real Estate Transfer Tax $796,190
Business License Tax $365,650 per employee
Motor Vehicle In-Lieu $35,020 per resident
Other Taxes $1,196,860
Franchise Fees $5,514,787 per service population
Transient Occupancy Tax $13,452,683
Licenses, Permits, and Fines $9,907,120 per service population Use of Money and Property $1,364,000 - not impacted
Intergovernmental $708,597 - not impacted
General Government Service Charges $640,000
Engineering Service Charges $1,814,000
Fire Service Charges $460,000
Police Service Charges $730,000
Recreation Service Charges $3,043,000
Building Service Charges $46,000
Planning Service Charges $939,500
Charges for Current Services $7,672,500
Other Revenue $68,000 - not impacted
Operating Transfers In $7,013,990 - not impacted
Total Revenues $112,142,729
Source: City of Milpitas 2020-2021 Adopted Budget & Financial Plan; Economic & Planning Systems [1] Subset of total property tax.
*2020-21 Adopted General Fund Budget values per City of Milpitas 2020-2021 Adopted Budget & Financial Plan [2] These revenues are considered as cost recovery revenues and are taken out of these departments' expenditures as shown in Table 6.

Impact Estimating Factors
Cost Recovery2
Cost Recovery2
Cost Recovery2
Case Study Approach
attributed by assessed value
fully attributed to Hotel use
Cost Recovery2
Cost Recovery2
Cost Recovery2
Cost Recovery2
Cost Recovery2
201
Item # 2.

Table 6
General Fund Expenditure Budget Summary and Fiscal Estimating Factors City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Per Service Pop.

Item Total Offsetting1 Net GF Expense2
General Government3 $4,939,304 $640,000 $4,299,304 101,776 Service Pop. $42.24 Economic Development $914,118 - $914,118 101,776 Service Pop. $8.98 Building Safety & Housing $6,948,858 $46,000 $6,902,858 101,776 Service Pop. $67.82 Engineering $4,154,819 $1,814,000 $2,340,819 101,776 Service Pop. $23.00 Finance $4,356,586 - $4,356,586 101,776 Service Pop. $42.81 Fire $28,280,292 $460,000 $27,820,292 101,776 Service Pop. $273.35 Human Resources $2,101,657 - $2,101,657 101,776 Service Pop. $20.65 Information Technology $3,721,547 - $3,721,547 101,776 Service Pop. $36.57 Planning $1,931,383 $939,500 $991,883 101,776 Service Pop. $9.75 Police $38,286,020 $730,000 $37,556,020 101,776 Service Pop. $369.01 Public Works $9,155,209 - $9,155,209 101,776 Service Pop. $89.95 Recreation & Community Services $6,304,106 $3,043,000 $3,261,106 101,776 Service Pop. $32.04 Other4 $5,623,983 - $5,623,983 $0.00
Total General Fund Expenditures $116,717,882 $109,045,382 $1,016 Source: Economic & Planning Systems
[3] General Government category consists of the City Council, City Manager, City Clerk, and City Attorney Departmental expenditures. [4] Other category consists of Equipment to be Depreciated, Non-Departmental expenditures, and Transfers Out.

FY 2020/21 Adopted GF Expenditures
Estimating Factors
[1] Represents departmental service charges shown in Table 5. [2] Divides net expenditure item by Service Population. not impacted
202
Item # 2.

Table 7
Property Tax Revenue by Land Use Estimate
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Property Tax and Estimating Factors Formula Single Family Multifamily Office Industrial Retail Hotel Other Property Tax
Total Assessed Value by Land Use1 see Table 4. a $9,119,814,483 $4,118,031,901 $335,815,823 $3,859,255,762 $1,192,590,968 $387,193,287 $581,083,697 Property Tax 1.0% Base Property Tax Rate b = a * 1.0% $91,198,145 $41,180,319 $3,358,158 $38,592,558 $11,925,910 $3,871,933 $5,810,837 General Fund Property Tax Revenue2 16.20% Allocation to General Fund c = b * 16.20% $14,774,099 $6,671,212 $544,022 $6,251,994 $1,931,997 $627,253 $941,356 Property Tax In-Lieu of VLF
Existing Citywide Property Tax In-Lieu of VLF3 $7,941,031 d = $7,941,031 Citywide Taxable Assessed Value1 $19,593,785,921 e = $19,593,785,921 Percentage of Citywide Assessed Value f = a / e 46.5% 21.0% 1.7% 19.7% 6.1% 2.0% 3.0% New General Fund Property Tax In-Lieu of VLF e = d * f $3,696,107 $1,668,969 $136,100 $1,564,091 $483,337 $156,923 $235,503 Source: Economic & Planning Systems
[3] Per Table 5.

Residential Non-Residential
Assumption / Est. Factor
[1] Per Table 4.
[2] Per Page 29 of Milpitas 2020-2021 Adopted Budget & Financial Plan. 203
Item # 2.

Table 8
Milpitas General Fund Annual Sales Tax Revenue Estimate from Residential Development City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Item Single Family Multi-family
Residential Spending
Estimated Annual Household Income $210,896 $151,755
Household Taxable Retail Spending as a Percent of Income 18% 18% Taxable Retail Spending per Household $37,961 $27,316
Citywide Household Counts 15,817 6,308
Total Citywide Retail Spending from Households $600,432,222 $172,308,140 Taxable Retail Sales Captured in Milpitas 50% of Retail Expenditures $300,216,111 $86,154,070 Total Retail Sales Tax Revenue from Household Spending 1.25% of Taxable Sales3 $3,752,701 $1,076,926 Source: Economic & Planning Systems
[2] Based on the Bureau of Labor Statistics 2018 Consumer Expenditure Survey, value shown is average between percentage for households with incomes above $200,000 and households with incomes between $150,000 and $199,999. [3] Includes the City's standard 1% share and the 0.25% additional share via Measure F, passed in 2020.

Assumptions / Estimating Factors
Residential
[1] Existing residential income estimates reflect ACS 2019 1-Year Estimates Per Capita Income for Milpitas' total population of $56,103, multiplied by the average household sizes of 3.76 for single family homes and 2.71 for multi-family homes.

Based on Per Capita Income1
Bureau of Labor Statistics2
204
Item # 2.

Table 9
Milpitas General Fund Annual Sales Tax Revenue Estimate from Commercial Development City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Sales Tax Sources and Estimating Factors Formula Office Industrial Retail Hotel Other Worker-Generated Retail Sales
Citywide Employees a 7,120 25,924 4,173 1,870 8,543
Weekly Taxable Retail Spending per Worker1 b $97.32 $77.73 $31.09 $36.35 $50.53 Annual Citywide Taxable Retail Spending 48 working weeks per year c = a * b * 48 $33,260,328 $96,721,740 $6,227,316 $3,262,940 $20,719,583 Milpitas Spending Capture2 85% of retail expenditures d = c * 85% $28,271,279 $82,213,479 $5,293,219 $2,773,499 $17,611,646 Annual General Fund Worker-Generated Retail Sales Tax Revenue 1.25% of taxable sales e = d * 1.25% $353,391 $1,027,668 $66,165 $34,669 $220,146 Non-Retail Establishment Sales
Business-to-Business Annual Retail Sales Tax Revenue $468,867 $5,923,313 - - - On-Site Retail Sales
Annual General Fund On-Site Retail Sales Tax Revenue - - $15,448,105 - - Total Annual General Fund Sales Tax Revenue $822,258 $6,950,982 $15,514,270 $34,669 $220,146 Source: Economic & Planning Systems
[2] EPS assumption.

Citywide Sales Tax Revenue less Other Sources
Assumptions / Estimating Factors
Non-Residential
per Avenue Insights & Analytics Data
per Table 3.
[1] Per ICSC data adjusted to 2021$ using BLS CPI Index. 205
Item # 2.

Table 10
Other General Fund Revenues
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Revenue Source Single Family Multifamily Office Industrial Retail Hotel Other Real Estate Transfer Tax $370,582 $167,335 $13,646 $156,820 $48,461 $15,734 $23,612 Business License Tax $7.68 per employee $0 $0 $54,661 $199,016 $32,036 $14,356 $65,582 Motor Vehicle In-Lieu $0.45 per resident $26,708 $7,665 $0 $0 $0 $0 $647 Franchise Fees $54.19 per service pop. $3,221,727 $924,550 $192,907 $702,353 $113,058 $50,663 $309,528 Licenses, Permits, and Fines $97.34 per service pop. $5,787,719 $1,660,922 $346,551 $1,261,752 $203,105 $91,015 $556,055 Total Annual Other Revenues $160 per service pop. $9,406,737 $2,760,472 $607,766 $2,319,941 $396,659 $171,768 $955,424 Source: Economic & Planning Systems
Assumption / Estimating
Factor1
Residential Non-Residential
[1] See Table 6 for cost estimates and Table 3 for total service population by land use. attributed by assessed value
206
Item # 2.

Table 11
General Fund Expenditure Calculations
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Expenditure Source Single Family Multifamily Office Industrial Retail Hotel Other General Government $42.24 per service pop. $2,511,645 $720,775 $150,390 $547,551 $88,140 $39,497 $241,306 Economic Development $8.98 per service pop. $534,026 $153,251 $31,976 $116,420 $18,740 $8,398 $51,307 Building Safety & Housing $67.82 per service pop. $4,032,635 $1,157,260 $241,462 $879,135 $141,515 $63,415 $387,436 Engineering $23.00 per service pop. $1,367,502 $392,437 $81,882 $298,122 $47,989 $21,505 $131,383 Finance $42.81 per service pop. $2,545,109 $730,379 $152,393 $554,847 $89,314 $40,023 $244,521 Fire $273.35 per service pop. $16,252,557 $4,664,053 $973,154 $3,543,140 $570,341 $255,581 $1,561,465 Human Resources $20.65 per service pop. $1,227,784 $352,341 $73,516 $267,663 $43,086 $19,308 $117,959 Information Technology $36.57 per service pop. $2,174,120 $623,915 $130,180 $473,969 $76,295 $34,189 $208,879 Planning $9.75 per service pop. $579,456 $166,289 $34,696 $126,324 $20,334 $9,112 $55,671 Police $369.01 per service pop. $21,940,150 $6,296,242 $1,313,710 $4,783,064 $769,932 $345,021 $2,107,901 Public Works $89.95 per service pop. $5,348,454 $1,534,865 $320,249 $1,165,990 $187,690 $84,107 $513,853 Recreation & Community Services $32.04 per service pop. $1,905,131 $546,722 $114,074 $415,328 $66,856 $29,959 $183,036 Total Annual Expenditures $1,016 per service pop. $60,418,568 $17,338,528 $3,617,682 $13,171,555 $2,120,232 $950,116 $5,804,717 Source: Economic & Planning Systems
Factors Applied to Estimate Residential Non-Residential Prototype Expenditures1
[1] See Table 6 for cost estimates and Table 3 for total service population by land use. 207
Item # 2.

Table 12
Milpitas Primary Use Code Categorization Index and Assessed Value Summary City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Primary Use Code1 Classification2 Primary Use Code1 Classification2 Single Family Retail
Duplex (2 units, any combination) Single Family Community: Shopping Plaza, Shopping Center, Mini-Mall Retail Residential (General) (Single) Single Family Neighborhood: Shopping Center, Strip Center, Enterprise Zone Retail Single Family Residential Single Family Recreational/Entertainment (General) Retail Townhouse (Residential) Single Family Regional: Shopping Center, Mall (w/Anchor) Retail Triplex (3 units, any combination) Single Family Retail Stores ( Personal Services, Photography, Travel) Retail Service station (full service) Retail
Wholesale Outlet, Discount Store (Franchise) Retail
Multifamily
Apartment house (5+ units) Multifamily
Condominium (Residential) Multifamily
Multi-Family Dwellings (Generic, any combination 2+) Multifamily Office
Professional Bldg (legal; insurance; real estate; business) Office Skyscraper/Highrise (Commercial Offices) Office Other Uses Charitable organization, Fraternal Not Included
City, Municipal, Town, Village Owned (Exempt) Not Included Hotel Community Center (Exempt) Not Included
Hotel Hotel Day care, Pre-school (Commercial) Not Included Homes (retired; handicap, rest; convalescent; nursing) Not Included Hospital-PUBLIC Not Included
Industrial Industrial-Vacant Land Not Included
Chemical Industrial Irrigation, Flood Control Not Included Condominiums (Industrial) Industrial Orchard (fruit; nut) Not Included Foundry, Industrial Plant (metal; rubber; plastic) Industrial Park, Playground, Picnic Area Not Included Horticulture, Growing Houses, Ornamental (Agricultural) Industrial Parking Lot Not Included Industrial (General) Industrial Pasture, Meadow Not Included Light Industrial (10% improved office space; Machine Shop) Industrial Public School (administration; campus; dorms; instruction) Not Included Lumberyard, Building Materials Industrial Public Swimming Pool Not Included Manufacturing (light) Industrial Railroad & related Not Included Mill (feed; grain; paper; lumber; textile; pulp) Industrial Recreation Center Not Included Mining (oil; gas; mineral, precious metals) Industrial Religious, Church, Worship (Synagogue, Temple, Parsonage) Not Included Mixed Use (Commercial/Industrial) Industrial Residential-Vacant Land Not Included Processing Plant (minerals; cement; rock; gravel; glass; clay) Industrial Roads, Streets, Bridges Not Included Public Utility (Electric; Water; Gas; etc.) Industrial Timberland, Forest, Trees (Agricultural) Not Included R&D Facility, Laboratory, Research Facility, Cosmetics, Pharmaceuti Industrial Vacant Land (General) Not Included Storage yard, Open Storage (light equipment, material) Industrial Waste Land, Marsh, Swamp, Submerged-Vacant Land Not Included Transportation & Communications (General) Industrial Winery Not Included Warehouse (Industrial) Industrial Mobile home Not Included Source: Santa Clara County Assessor; Economic & Planning Systems [1] Primary Use Codes per Santa Clara County Assessor Tax Roll data. Assesssed Values were summed by Primary Use Codes, which required classification into the land uses relevant for this effort to derive total Assessed Values by land use.
[2] Demonstrates how Primary Use Codes were grouped to arrive at total assessed value by land use type. 208
Item # 2.

APPENDIX C:

Fiscal Impact Analysis—New Uses
209
Item # 2.

Table 1
City of Milpitas Annual General Fund Fiscal Impacts per Acre City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse/
Annual General Fund Impacts Multifamily Multifamily Office R & D Industrial Distribution Hotel General Fund Revenues
Property Tax $191,702 $397,211 $352,556 $199,254 $78,611 $39,374 $126,707 Property Tax In-Lieu of VLF $47,959 $99,372 $88,201 $49,848 $19,666 $9,850 $31,699 Sales Taxes $28,005 $57,993 $156,730 $91,922 $40,181 $25,964 $801 Real Estate Transfer Tax $5,207 $10,788 $4,788 $2,706 $1,068 $535 $1,721 Business License Tax $0 $0 $10,032 $5,016 $1,505 $463 $614 Motor Vehicle In-Lieu $218 $437 $0 $0 $0 $0 $0
Other Taxes $5,425 $11,225 $14,820 $7,722 $2,572 $998 $2,335 Franchise Fees $21,341 $42,681 $57,382 $28,691 $8,607 $2,648 $3,513 Transient Occupancy Tax $0 $0 $0 $0 $0 $0 $1,916,250
Licenses, Permits, and Fines $38,338 $76,675 $103,086 $51,543 $15,463 $4,758 $6,311 Total Revenues $332,770 $685,158 $772,774 $428,980 $165,101 $83,592 $2,087,616 per Acre $166,385 $342,579 $154,555 $85,796 $33,020 $16,718 $835,046 General Fund Expenditures
General Government $3,217 $6,433 $3,537 $1,768 $530 $163 $217 Economic Development $1,368 $2,736 $1,504 $752 $226 $69 $92 Building Safety & Housing $10,329 $20,658 $11,357 $5,678 $1,703 $524 $695 Engineering $3,503 $7,005 $3,851 $1,926 $578 $178 $236
Finance $3,260 $6,519 $3,584 $1,792 $538 $165 $219
Fire $104,073 $208,146 $114,425 $57,212 $17,164 $5,281 $7,005 Human Resources $1,572 $3,145 $1,729 $864 $259 $80 $106 Information Technology $2,784 $5,569 $3,061 $1,531 $459 $141 $187 Planning $1,484 $2,968 $1,632 $816 $245 $75 $100
Police $140,493 $280,986 $154,468 $77,234 $23,170 $7,129 $9,456 Public Works $34,249 $68,497 $37,655 $18,828 $5,648 $1,738 $2,305 Recreation & Community Services $8,133 $16,266 $8,942 $4,471 $1,341 $413 $547 Total Expenditures $314,464 $628,929 $345,743 $172,872 $51,861 $15,957 $21,166 per Acre $157,232 $314,464 $69,149 $34,574 $10,372 $3,191 $8,466 Annual Net Impact on General Fund $18,305 $56,229 $427,031 $256,109 $113,239 $67,635 $2,066,450 per Acre $9,153 $28,115 $85,406 $51,222 $22,648 $13,527 $826,580 Source: Economic & Planning Systems
210
Item # 2.

Table 2
Milpitas Population and Employment
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Item Citywide Total Source
Housing Units 22,553 Department of Finance 2020
Occupied Households 21,814 Department of Finance 2020
Population 77,961 Department of Finance 2020
Persons/Household Multifamily 2.70 ACS 2019 5-Year Est. & DOF 2020 Jobs 47,630 LEHD Employment Statistics 2018
Service Population 97,437 See Table 3
Source: Economic & Planning Systems
211
Item # 2.

Service Population Factors based on Resident to Employee Equivalencies Item # %
Employment Status of Milpitas Residents1 Formula: a = b * 77,961 b 1 c = b * c Not in Labor Force 41,429 53.1% 100% 53.1%
Employed in the City3 3,808 4.9% 50% 2.4%
Employed Outside of the City 32,724 42.0% 67% 28.2%
Total Residents 77,961 100.0% 83.8%
Residence Status of Milpitas Employees1 Formula: a = b * 47,630 b 1 c = b * c Live in the City3 3,808 8.0% 50% 4.0%
Live Outside the City 43,825 92.0% 33% 30.3%
Total Jobs 47,630 100.0% 34.2%
Employee to Resident Equivalency Factor 4 (34.2% / 83.8%) = 40.9% Service Population Calculation
Amount Attributable to Residents (@ 100%) 77,961 80.0%
Amount Attributable to Employees (@ 40.9%) 19,476 20.0% Total Service Population 97,437 100.0%
Sources: LEHD OnTheMap 2018, Department of Finance, and Economic & Planning Systems, Inc.

Table 3
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 [2] Represents EPS estimate of how various types of residents and employees relate to each other in terms of demand for City Services. [3] The number of residents who are employed in the City and the number of employees in the City who are residents are the same, representing the same group of unique individuals. This group is reflected both in the Total Residents and the Total Jobs to demonstrate the composition of the totals, with their weighting split evenly between the resident and employee groups. [4] Equals weighted average of residents divided by weighted average of employees.

Existing Weight2 Weighted
Average
[1] Distribution and total jobs based on data from U.S. Census (OnTheMap 2018). Total residents based on 2020 estimates provided by DOF in Table E-5.
212
Item # 2.

Table 4
Prototype Developments by Land Use Type
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse /
Item Multifamily Multifamily Office R & D Industrial Distribution Hotel Gross Land Area (AC) 2.0 2.0 5.0 5.0 5.0 5.0 2.5
FAR - - 1.5 1.0 0.5 0.4 -
Gross Building Area 216,000 432,000 326,700 217,800 108,900 87,120 130,000 Net Leasable Area 172,800 345,600 294,030 196,020 98,010 78,408 104,000 Units / Rooms per AC 90 180 - - - - 80
Dwelling Units / Rooms 180 360 - - - - 200
Market Rate DU 153 306 - - - -
Market Rate Monthly Rent PSF $3.75 $3.90 - - - -
Below Market Rate DU 27 54 - - - - -
BMR Monthly Rent PSF $2.76 $2.76 - - - - -
Capitalized Value $118,334,782 $245,192,059 $217,626,944 $122,996,424 $48,525,159 $24,304,775 $78,214,286 per GBA $547.85 $567.57 $666.14 $564.72 $445.59 $278.98 $601.65 per DU / Room $657,415 $681,089 - - - - $391,071
Persons Per Household 2.70 2.70 - - - - -
Total Residents 486 972 - - - - -
Square Feet per Employee - - 225 300 500 1,300 1,300
Total Employees - - 1,307 653 196 60 80
Total Service Population1 486 972 534 267 80 25 33
Average HH Income $138,298 $143,194 - - - - -
Average Salary - - $135,000 $132,000 $118,000 $51,000 $25,000 Source: Economic & Planning Systems
Residential Non-Residential
[1] Applies a factor of 0.41 to employees and 1.0 to residents as derived in Table 3. 213
Item # 2.

Table 5
General Fund Revenue Summary
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 FY 2020/21
General Fund Table
Item Revenues* Reference
Property Tax 36,872,241 16.20% of 1% of base assessed value Table 7 Property Tax In-Lieu of VLF1 $7,941,031 Table 7
Sales Taxes $28,371,951 1.25% of taxable sales2 Tables 8 & 9 Real Estate Transfer Tax $796,190 $0.55 per $1,000 in assessed value Table 10 Business License Tax $365,650 $7.68 per Employee3 Table 12 Motor Vehicle In-Lieu $35,020 $0.45 per Resident3 Table 12 Other Taxes $1,196,860
Franchise Fees $5,514,787 $43.91 per Employee / Resident4 Table 12 Transient Occupancy Tax $13,452,683 14% of hotel revenues Table 11 Licenses, Permits, and Fines $9,907,120 $78.88 per Employee / Resident4 Table 12 Use of Money and Property $1,364,000 - not impacted
Intergovernmental $708,597 - not impacted
General Government Service Charges $640,000 Table 6
Operating Transfers In $7,013,990 - not impacted
Total Revenues $112,142,729
Source: City of Milpitas 2020-2021 Adopted Budget & Financial Plan; Economic & Planning Systems [1] Subset of total property tax.
*2020-21 Adopted General Fund Budget values per City of Milpitas 2020-2021 Adopted Budget & Financial Plan [5] These revenues are considered as cost recovery revenues and are taken out of these departments' expenditures as shown in Table 6. [2] Includes the City's standard 1% share and the 0.25% additional share via Measure F, passed in 2020. [3] Divides line item by the employee / resident totals from Table 2. [4] Divides line item by the total number of employees and residents citywide without applying a service population factor.

Impact Estimating Factors
Cost Recovery5
Case Study Approach
214
Item # 2.

Table 6
General Fund Expenditure Budget Summary and Fiscal Estimating Factors City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Percent Annual Variable Per Service Pop.

Item Total Offsetting1 Net Variable2 Expense GF Expense General Government3 $4,939,304 $640,000 $4,299,304 15% $644,896 97,437 Service Pop. $6.62 Economic Development $914,118 - $914,118 30% $274,235 97,437 Service Pop. $2.81 Building Safety & Housing $6,948,858 $46,000 $6,902,858 30% $2,070,857 97,437 Service Pop. $21.25 Engineering $4,154,819 $1,814,000 $2,340,819 30% $702,246 97,437 Service Pop. $7.21 Finance $4,356,586 - $4,356,586 15% $653,488 97,437 Service Pop. $6.71 Fire $28,280,292 $460,000 $27,820,292 75% $20,865,219 97,437 Service Pop. $214.14 Human Resources $2,101,657 - $2,101,657 15% $315,249 97,437 Service Pop. $3.24 Information Technology $3,721,547 - $3,721,547 15% $558,232 97,437 Service Pop. $5.73 Planning $1,931,383 $939,500 $991,883 30% $297,565 97,437 Service Pop. $3.05 Police $38,286,020 $730,000 $37,556,020 75% $28,167,015 97,437 Service Pop. $289.08 Public Works $9,155,209 - $9,155,209 75% $6,866,407 97,437 Service Pop. $70.47 Recreation & Community Services $6,304,106 $3,043,000 $3,261,106 50% $1,630,553 97,437 Service Pop. $16.73 Other4 $5,623,983 - $5,623,983 - $0 $0.00
Total General Fund Expenditures $116,717,882 $109,045,382 $63,045,961 $647.05 Source: Economic & Planning Systems
[3] General Government category consists of the City Council, City Manager, City Clerk, and City Attorney Departmental expenditures. [4] Other category consists of Equipment to be Depreciated, Non-Departmental expenditures, and Transfers Out.

FY 2020/21 Adopted GF Expenditures
Estimating Factors
[1] Represents departmental service charges shown in Table 5. [2] EPS assumption.
not impacted
215
Item # 2.

Table 7
Property Tax Revenue by Land Use Estimate
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse /
Property Tax and Estimating Factors Formula Multifamily Multifamily Office R & D Industrial Distribution Hotel Property Tax
Total Assessed Value1 see Table 4. a $118,334,782 $245,192,059 $217,626,944 $122,996,424 $48,525,159 $24,304,775 $78,214,286 Property Tax 1.0% Base Property Tax Rate b = a * 1.0% $1,183,348 $2,451,921 $2,176,269 $1,229,964 $485,252 $243,048 $782,143 General Fund Property Tax Revenue2 16.20% Allocation to General Fund c = b * 16.20% $191,702 $397,211 $352,556 $199,254 $78,611 $39,374 $126,707 Property Tax In-Lieu of VLF
Existing Citywide Property Tax In-Lieu of VLF3 $7,941,031 d = $7,941,031 Citywide Taxable Assessed Value4 $19,593,785,921 e = $19,593,785,921 Percentage of Citywide Assessed Value f = a / e 0.6% 1.3% 1.1% 0.6% 0.2% 0.1% 0.4% New General Fund Property Tax In-Lieu of VLF e = d * f $47,959 $99,372 $88,201 $49,848 $19,666 $9,850 $31,699 Source: Economic & Planning Systems
[4] Per Santa Clara County Assessor.
[3] Per Table 5.

Assumption / Est. Factor
[1] Per Table 4.
[2] Per Page 29 of Milpitas 2020-2021 Adopted Budget & Financial Plan. 216
Item # 2.

Table 8
Residential Sales Tax Revenue Estimates
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise
Item Multifamily Multifamily
Households 180 360
Estimated Annual Household Income1 $138,298 $143,194
Taxable Retail Spending per Household2 18% of Household Income $24,894 $25,775 Taxable Retail Spending by Prototype $4,480,842 $9,278,945 Taxable Retail Sales Captured in Milpitas 50% Capture Rate $2,240,421 $4,639,473 Annual General Fund Sales Tax Revenue 1.25% of Taxable Sales $28,005 $57,993 Source: Economic & Planning Systems
per Table 4
[2] Based on the Bureau of Labor Statistics 2018 Consumer Expenditure Survey.

Assumption
Rent is 30% of Income
[1] Annual rent estimated based on a 960 net square foot (NSF) apartment renting at $3.75 per NSF for both development types.
217
Item # 2.

Table 9
Non-Residential Sales Tax Revenue Estimates
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Class A Office / Light Warehouse /
Description Office R & D Industrial Distribution Hotel
Worker-Generated Retail Sales
Total Workers 1,307 653 196 60 80
Weekly Taxable Retail Spending per Worker1 $106 $104 $93 $40 $20 Annual Taxable Retail Spending per Worker 48 weeks per year $5,090 $4,977 $4,449 $1,923 $943 Total Annual Taxable Retail Spending $6,651,995 $3,252,087 $872,151 $115,984 $75,412 Milpitas Spending Capture 85% of retail expenditures $5,654,196 $2,764,274 $741,328 $98,586 $64,100 Annual General Fund Retail Sales Tax Revenue from Workers 1.25% of taxable sales $70,677 $34,553 $9,267 $1,232 $801 Non-Retail Establishment Sales
Business-to-Business Annual Retail Sales Tax Revenue $86,052 $57,368 $30,915 $24,732 $0 Total Annual General Fund Sales Tax Revenue $156,730 $91,922 $40,181 $25,964 $801 Source: Economic & Planning Systems
per Avenue Insights & Analytics Data
Assumption
see Table 4
218
Item # 2.

Table 10
Property Transfer Tax Estimates
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse /
Item Formula Multifamily Multifamily Office R & D Industrial Distribution Hotel Market Value Assumption1 a $118,334,782 $245,192,059 $217,626,944 $122,996,424 $48,525,159 $24,304,775 $78,214,286 Annual Turnover Rate2 b 8% 8% 4% 4% 4% 4% 4%
Annual Assessed Value Turnover c = a * b $9,466,783 $19,615,365 $8,705,078 $4,919,857 $1,941,006 $972,191 $3,128,571 Documentary Transfer to the City3 d = c / 1,000 * $0.55 $5,207 $10,788 $4,788 $2,706 $1,068 $535 $1,721 Source: Economic & Planning Systems
[1] Per Table 4.
[2] Assumes multifamily rental property resold every 15 years, commercial property resold every 30 years. [3] Per IX-10-2.01 of the Milpitas Code of Ordinances.
219
Item # 2.

Table 11
Transient Occupancy Tax
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Item Value
Total Hotel Rooms 200
Average Daily Rate (ADR)1 $250
Occupancy Rate1 75%
Annual Hotel Room Revenues $13,687,500
General Fund TOT Revenue 14% of revenue $1,916,250
Source: CoStar Group; Economic & Planning Systems
Assumption
see Table 4
[1] per CoStar Group data.
220
Item # 2.

Table 12
Other General Fund Revenue Item Estimates
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse /
Revenue Source Multifamily Multifamily Office R & D Industrial Distribution Hotel Business License Tax $7.68 per Employee $0 $0 $10,032 $5,016 $1,505 $463 $614 Motor Vehicle In-Lieu $0.45 per Resident $218 $437 $0 $0 $0 $0 $0 Franchise Fees $43.91 per Employee / Resident $21,341 $42,681 $57,382 $28,691 $8,607 $2,648 $3,513 Licenses, Permits, and Fines $78.88 per Employee / Resident $38,338 $76,675 $103,086 $51,543 $15,463 $4,758 $6,311 Total Annual Other Revenues $131 per Employee / Resident $59,897 $119,793 $170,500 $85,250 $25,575 $7,869 $10,438 Source: Economic & Planning Systems
Factors Applied to Estimate
Prototype Revenues1
[1] See Table 5 for revenue factors and Table 4 for total service population by land use. 221
Item # 2.

Table 13
General Fund Expenditure Estimates
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse /
Expenditure Source Multifamily Multifamily Office R & D Industrial Distribution Hotel General Government $6.62 per Service Pop. $3,217 $6,433 $3,537 $1,768 $530 $163 $217 Economic Development $2.81 per Service Pop. $1,368 $2,736 $1,504 $752 $226 $69 $92 Building Safety & Housing $21.25 per Service Pop. $10,329 $20,658 $11,357 $5,678 $1,703 $524 $695 Engineering $7.21 per Service Pop. $3,503 $7,005 $3,851 $1,926 $578 $178 $236 Finance $6.71 per Service Pop. $3,260 $6,519 $3,584 $1,792 $538 $165 $219 Fire $214.14 per Service Pop. $104,073 $208,146 $114,425 $57,212 $17,164 $5,281 $7,005 Human Resources $3.24 per Service Pop. $1,572 $3,145 $1,729 $864 $259 $80 $106 Information Technology $5.73 per Service Pop. $2,784 $5,569 $3,061 $1,531 $459 $141 $187 Planning $3.05 per Service Pop. $1,484 $2,968 $1,632 $816 $245 $75 $100 Police $289.08 per Service Pop. $140,493 $280,986 $154,468 $77,234 $23,170 $7,129 $9,456 Public Works $70.47 per Service Pop. $34,249 $68,497 $37,655 $18,828 $5,648 $1,738 $2,305 Recreation & Community Services $16.73 per Service Pop. $8,133 $16,266 $8,942 $4,471 $1,341 $413 $547 Total Annual Expenditures $647 per Service Pop. $314,464 $628,929 $345,743 $172,872 $51,861 $15,957 $21,166 Source: Economic & Planning Systems
[1] See Table 6 for cost estimates and Table 4 for total service population by land use.

Factors Applied to Estimate
Prototype Expenditures1
222
Item # 2.

APPENDIX D:

Glossary of Terms
223
Item # 2.

Glossary of Terms
 Gross Land Area. This is the total land area associated with a development measured in acres. It includes not only the building itself, but also parking and landscaping areas, as well as roads and other supporting areas.
 Gross Area. This is the total square footage of any buildings for lease. It includes both the occupied areas – such as apartment square footage/ office suite square footage – as well as common areas, such as elevators and corridors, as well as mechanical and storage areas.  Efficiency Ratio. The efficiency ratio represents the ratio, often presented as a percentage, between the Net Area (defined below) and the Gross Leasable Area.  Net Area. The net area represents the leased area that is specifically for the tenant, such as apartment size or office suite etc. The net area is equal to the gross area multiplied by the efficiency ratio.
 Parking Spaces. This represents the number of parking spaces associated with a building.

The number of spaces is often defined by the required parking ratio that provides the number of parking spaces that must be provided for every 1,000 gross square feet of space.  Gross Revenue. Gross revenues, sometimes referred to as full service gross (FSG), represents the gross revenues expected to be paid by the tenant. This can be expressed as an annual lease payment per net square foot per year as well as a total annual gross revenue for the full net area leased.
 Operating Expenses. The building owner/ landlord receives the gross revenues but also must directly pay a broad range of building operating expenses, including janitorial, building maintenance, insurance, property taxes, and utilities. These are estimated as a percentage of gross revenues.
 Commissions. Leasing commissions represent the percentage of rent that is passed on to real estate agents in connection with the building lease.  Vacancy Rate. The vacancy rate represents the average percentage of the net leasable area that is vacant at any point in time.
 Capitalized Value. The capitalized value represents the estimated value/ sales price of a building/ development. It is typically calculated based on: (1) annual net operating income (annual revenues minus annual operating expenditures); and, (2) the capitalization (cap) rate which represents the observed ratio between building sales prices and net operating incomes in different market areas.
 Building Construction Cost. Building construction represents the direct cost of constructing the building often expressed on a cost per gross area basis.  Parking Cost/Site Work. Parking costs represent the direct cost of constructing parking spaces (whether surface or structured), while site work consists of preparing the site for construction (e.g. grading).
224
Item # 2.

Appendix D September 21, 2021
Glossary of Terms Page D-2
Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\appendices\AppD_Glossary.docx  Tenant Improvements. Beyond the costs of constructing the building, tenants will often require additional improvements inside their office suite for example. This can include costs of carpeting, interior configurations, kitchens, and other unique features. Landlords typically contribute to these costs.
 Commercial Housing Linkage Fee. A fee paid by commercial development to help fund affordable housing.
 TADIF Fee. This is the Transit Area Development Impact Fee, an impact fee established under the Mitigation Fee Act that portions a proportionate share of transit area public improvement costs (e.g. sewer, water, transportation, and parks) to new development.  Other Permits & Fees. In addition to the TADIF, the City and other agencies charge other fees and permit charges.
 General & Administrative. General and Administrative costs are the general day-to-day/ overhead operations costs to the developer.
 Financing Costs. These represents the construction financing costs associated with the use of construction loans while developing buildings.
 Contingency. A contingency is included in development pro formas to account for cost overruns/ unforeseen cost items.
 Profit Margin. The profit margin represents the level of profit a developer will require in order to consider taking the risks associated with the development. 225
Item # 2.

APPENDIX E:

Residual Land Value Analysis
226
Item # 2.

Table 1a - Baseline Scenario
Class A Office Pro Forma (Midrise, 1.0 FAR)
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.00 F.A.R. 217,800
Elevation 5 stories
Efficiency Ratio 90%
Net Area 196,020
Parking Spaces 3.3 parking space per 1,000 sq.ft.

Structured/Podium Parking 75% of parking spaces 545
Surface Parking 25% of parking spaces 182
Total Parking Spaces 726

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $51.00 /net sq. ft./yr. $45.90 $9,997,020 (less) Operating Expenses 25.0% ($11.48) ($2,499,255)
(less) Commissions 2.5% ($1.15) ($249,926)
(less) Vacancy Rate 5.0% ($2.30) ($499,851)
Subtotal, Annual Net Operating Income $30.98 $6,747,989 Capitalized Value (2) 6.25% cap rate $480.85 $104,728,782

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $325.00 /GLA sq. ft. $325.00 $70,785,000 Parking Cost/Site Work $40,000 /structured space $100.00 $21,780,000 Parking Cost/Site Work $5,000 /surface space $4.17 $907,500 Total Direct Costs $429.17 $93,472,500
Indirect Costs
Tenant Improvements $40.00 /net sq. ft. $36.00 $7,840,800 Legal, Insurance & Inspections 3.0% of direct costs $12.88 $2,804,175 Architecture & Engineering 7.0% of direct costs $30.04 $6,543,075 Commercial Housing Linkage Fee (3) $8.00 /net sq. ft. $7.20 $1,568,160 TADIF Fee $42.52 /net sq. ft. $38.27 $8,334,770
Other Permits & Fees (4) 3.0% of direct costs $12.88 $2,804,175 General & Administrative 2.5% of direct costs $10.73 $2,336,813 Financing Costs 5.0% of direct costs $21.46 $4,673,625
Total Indirect Costs 39.5% of direct costs $169.45 $36,905,593 Subtotal, Direct and Indirect Costs $598.61 $130,378,093 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $29.93 $6,518,905 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $94.28 $20,534,550 Total Costs $723 $157,431,547
RESIDUAL LAND VALUE ($241.98) ($52,703,000)
Per Acre ($10,540,600)
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 227 Item # 2.

Table 1b - Improved Scenario
Class A Office Pro Forma (Midrise, 1.0 FAR)
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.00 F.A.R. 217,800
Elevation 5 stories
Efficiency Ratio 90%
Net Area 196,020
Parking Spaces 2.4 parking space per 1,000 sq.ft.

Structured/Podium Parking 75% of parking spaces 392
Surface Parking 25% of parking spaces 131
Total Parking Spaces 523

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $65.00 /net sq. ft./yr. $58.50 $12,741,300 (less) Operating Expenses 25.0% ($14.63) ($3,185,325)
(less) Commissions 2.5% ($1.46) ($318,533)
(less) Vacancy Rate 5.0% ($2.93) ($637,065)
Subtotal, Annual Net Operating Income $39.49 $8,600,378 Capitalized Value (2) 5.75% cap rate $666.14 $145,084,629

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $325.00 /GLA sq. ft. $325.00 $70,785,000 Parking Cost/Site Work $40,000 /structured space $72.04 $15,690,000 Parking Cost/Site Work $5,000 /surface space $3.00 $653,750 Total Direct Costs $400.04 $87,128,750
Indirect Costs
Tenant Improvements $40.00 /net sq. ft. $36.00 $7,840,800 Legal, Insurance & Inspections 3.0% of direct costs $12.00 $2,613,863 Architecture & Engineering 7.0% of direct costs $28.00 $6,099,013 Commercial Housing Linkage Fee (3) $8.00 /net sq. ft. $7.20 $1,568,160 TADIF Fee $0.00 /net sq. ft. $0.00 $0
Other Permits & Fees (4) 3.0% of direct costs $12.00 $2,613,863 General & Administrative 2.5% of direct costs $10.00 $2,178,219 Financing Costs 5.0% of direct costs $20.00 $4,356,438
Total Indirect Costs 31.3% of direct costs $125.21 $27,270,354 Subtotal, Direct and Indirect Costs $525.25 $114,399,104 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $26.26 $5,719,955 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $82.73 $18,017,859 Total Costs $634 $138,136,918
RESIDUAL LAND VALUE $31.90 $6,948,000
Per Acre $1,389,600
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 228 Item # 2.

Table 2a - Baseline Scenario
Class A Office Pro Forma (Midrise, 1.5 FAR)
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.50 F.A.R. 326,700
Elevation 8 stories
Efficiency Ratio 90%
Net Area 294,030
Parking Spaces 3.3 parking space per 1,000 sq.ft.

Structured/Podium Parking 100% of parking spaces 1,089
Surface Parking 0% of parking spaces 0
Total Parking Spaces 1,089

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $51.00 /net sq. ft./yr. $45.90 $14,995,530 (less) Operating Expenses 25.0% ($11.48) ($3,748,883)
(less) Commissions 2.5% ($1.15) ($374,888)
(less) Vacancy Rate 5.0% ($2.30) ($749,777)
Subtotal, Annual Net Operating Income $30.98 $10,121,983 Capitalized Value (2) 6.25% cap rate $480.85 $157,093,172

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $325.00 /GLA sq. ft. $325.00 $106,177,500 Parking Cost/Site Work $40,000 /structured space $133.33 $43,560,000 Parking Cost/Site Work $5,000 /surface space $0.00 $0
Total Direct Costs $458.33 $149,737,500
Indirect Costs
Tenant Improvements $40.00 /net sq. ft. $36.00 $11,761,200 Legal, Insurance & Inspections 3.0% of direct costs $13.75 $4,492,125 Architecture & Engineering 7.0% of direct costs $32.08 $10,481,625 Commercial Housing Linkage Fee (3) $8.00 /net sq. ft. $7.20 $2,352,240 TADIF Fee $42.52 /net sq. ft. $38.27 $12,502,156
Other Permits & Fees (4) 3.0% of direct costs $13.75 $4,492,125 General & Administrative 2.5% of direct costs $11.46 $3,743,438 Financing Costs 5.0% of direct costs $22.92 $7,486,875
Total Indirect Costs 38.3% of direct costs $175.43 $57,311,783 Subtotal, Direct and Indirect Costs $633.76 $207,049,283 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $31.69 $10,352,464 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $99.82 $32,610,262 Total Costs $765 $250,012,009
RESIDUAL LAND VALUE ($284.42) ($92,919,000)
Per Acre ($18,583,800)
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 229 Item # 2.

Table 2b - Improved Scenario
Class A Office Pro Forma (Midrise, 1.5 FAR)
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.50 F.A.R. 326,700
Elevation 8 stories
Efficiency Ratio 90%
Net Area 294,030
Parking Spaces 2.4 parking space per 1,000 sq.ft.

Structured/Podium Parking 100% of parking spaces 784
Surface Parking 0% of parking spaces 0
Total Parking Spaces 784

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $65.00 /net sq. ft./yr. $58.50 $19,111,950 (less) Operating Expenses 25.0% ($14.63) ($4,777,988)
(less) Commissions 2.5% ($1.46) ($477,799)
(less) Vacancy Rate 5.0% ($2.93) ($955,598)
Subtotal, Annual Net Operating Income $39.49 $12,900,566 Capitalized Value (2) 5.75% cap rate $666.14 $217,626,944

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $325.00 /GLA sq. ft. $325.00 $106,177,500 Parking Cost/Site Work $40,000 /structured space $95.99 $31,360,000 Parking Cost/Site Work $5,000 /surface space $0.00 $0
Total Direct Costs $420.99 $137,537,500
Indirect Costs
Tenant Improvements $40.00 /net sq. ft. $36.00 $11,761,200 Legal, Insurance & Inspections 3.0% of direct costs $12.63 $4,126,125 Architecture & Engineering 7.0% of direct costs $29.47 $9,627,625 Commercial Housing Linkage Fee (3) $8.00 /net sq. ft. $7.20 $2,352,240 TADIF Fee $0.00 /net sq. ft. $0.00 $0
Other Permits & Fees (4) 3.0% of direct costs $12.63 $4,126,125 General & Administrative 2.5% of direct costs $10.52 $3,438,438 Financing Costs 5.0% of direct costs $21.05 $6,876,875
Total Indirect Costs 30.8% of direct costs $129.50 $42,308,628 Subtotal, Direct and Indirect Costs $550.49 $179,846,128 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $27.52 $8,992,306 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $86.70 $28,325,765 Total Costs $665 $217,164,199
RESIDUAL LAND VALUE $1.42 $463,000
Per Acre $92,600
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 230 Item # 2.

Table 3a - Baseline Scenario
Class A Office/R&D Pro Forma
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.00 F.A.R. 217,800
Efficiency Ratio 90%
Elevation 5 stories
Net Area 196,020
Parking Spaces 2.3 parking space per 1,000 sq.ft.

Structured/Podium Parking 50% of parking spaces 249
Surface Parking 50% of parking spaces 249
Total Parking Spaces 498

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $45.00 /net sq. ft./yr. $40.50 $8,820,900 (less) Operating Expenses 25.0% ($10.13) ($2,205,225)
(less) Commissions 2.5% ($1.01) ($220,523)
(less) Vacancy Rate 5.0% ($2.03) ($441,045)
Subtotal, Annual Net Operating Income $27.34 $5,954,108 Capitalized Value (2) 6.00% cap rate $441.96 $96,258,071

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $295.00 /GLA sq. ft. $295.00 $64,251,000 Parking Cost/Site Work $40,000 /structured space $45.73 $9,960,000 Parking Cost/Site Work $5,000 /surface space $5.72 $1,245,000 Total Direct Costs $346.45 $75,456,000
Indirect Costs
Tenant Improvements $30.00 /net sq. ft. $27.00 $5,880,600 Legal, Insurance & Inspections 3.0% of direct costs $10.39 $2,263,680 Architecture & Engineering 7.0% of direct costs $24.25 $5,281,920 Commercial Housing Linkage Fee (3) $8.00 /net sq. ft. $7.20 $1,568,160 TADIF Fee $42.52 /net sq. ft. $38.27 $8,334,770
Other Permits & Fees (4) 3.0% of direct costs $10.39 $2,263,680 General & Administrative 2.5% of direct costs $8.66 $1,886,400 Financing Costs 5.0% of direct costs $17.32 $3,772,800
Total Indirect Costs 41.4% of direct costs $143.49 $31,252,010 Subtotal, Direct and Indirect Costs $489.94 $106,708,010 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $24.50 $5,335,401 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $77.16 $16,806,512 Total Costs $592 $128,849,923
RESIDUAL LAND VALUE ($149.64) ($32,592,000)
Per Acre ($6,518,400)
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 231 Item # 2.

Table 3b - Improved Scenario
Class A Office/R&D Pro Forma
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.00 F.A.R. 217,800
Efficiency Ratio 90%
Elevation 5 stories
Net Area 196,020
Parking Spaces 2.3 parking space per 1,000 sq.ft.

Structured/Podium Parking 50% of parking spaces 249
Surface Parking 50% of parking spaces 249
Total Parking Spaces 498

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $57.50 /net sq. ft./yr. $51.75 $11,271,150 (less) Operating Expenses 25.0% ($12.94) ($2,817,788)
(less) Commissions 2.5% ($1.29) ($281,779)
(less) Vacancy Rate 5.0% ($2.59) ($563,558)
Subtotal, Annual Net Operating Income $34.93 $7,608,026 Capitalized Value (2) 6.00% cap rate $564.72 $122,996,424

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $295.00 /GLA sq. ft. $295.00 $64,251,000 Parking Cost/Site Work $40,000 /structured space $45.73 $9,960,000 Parking Cost/Site Work $5,000 /surface space $5.72 $1,245,000 Total Direct Costs $346.45 $75,456,000
Indirect Costs
Tenant Improvements $30.00 /net sq. ft. $27.00 $5,880,600 Legal, Insurance & Inspections 3.0% of direct costs $10.39 $2,263,680 Architecture & Engineering 7.0% of direct costs $24.25 $5,281,920 Commercial Housing Linkage Fee (3) $4.00 /net sq. ft. $3.60 $784,080 TADIF Fee $0.00 /net sq. ft. $0.00 $0
Other Permits & Fees (4) 3.0% of direct costs $10.39 $2,263,680 General & Administrative 2.5% of direct costs $8.66 $1,886,400 Financing Costs 5.0% of direct costs $17.32 $3,772,800
Total Indirect Costs 29.3% of direct costs $101.62 $22,133,160 Subtotal, Direct and Indirect Costs $448.07 $97,589,160 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $22.40 $4,879,458 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $70.57 $15,370,293 Total Costs $541 $117,838,911
RESIDUAL LAND VALUE $23.68 $5,158,000
Per Acre $1,031,600
Assumption
Economic & Planning Systems, Inc. 9/20/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_091921.xlsx 232 Item # 2.

Table 4 - Baseline Scenario
Light Industrial Pro Forma
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 0.50 F.A.R. 108,900
Efficiency Ratio 90%
Elevation 3 stories
Net Area 98,010
Parking Spaces 0.5 parking space per 1,000 sq.ft.

Structured/Podium Parking 0% of parking spaces 0
Surface Parking 100% of parking spaces 58
Total Parking Spaces 58

REVENUE ASSUMPTIONS
Gross Revenue (NNN) (1) $35.00 /net sq. ft./yr. $31.50 $3,430,350 (less) Operating Expenses 5.0% ($1.58) ($171,518)
(less) Commissions 2.5% ($0.79) ($85,759)
(less) Vacancy Rate 5.0% ($1.58) ($171,518)
Subtotal, Annual Net Operating Income $27.56 $3,001,556 Capitalized Value (2) 6.00% cap rate $445.59 $48,525,159

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $195.00 /GLA sq. ft. $195.00 $21,235,500 Parking Cost/Site Work $40,000 /structured space $0.00 $0 Parking Cost/Site Work $5,000 /surface space $2.66 $290,000 Total Direct Costs $197.66 $21,525,500
Indirect Costs
Tenant Improvements $20.00 /net sq. ft. $18.00 $1,960,200 Legal, Insurance & Inspections 3.0% of direct costs $5.93 $645,765 Architecture & Engineering 7.0% of direct costs $13.84 $1,506,785 Commercial Housing Linkage Fee (3) $4.00 /net sq. ft. $3.60 $392,040 TADIF Fee $0.00 /net sq. ft. $0.00 $0
Other Permits & Fees (4) 3.0% of direct costs $5.93 $645,765 General & Administrative 2.5% of direct costs $4.94 $538,138 Financing Costs 5.0% of direct costs $9.88 $1,076,275
Total Indirect Costs 31.4% of direct costs $62.12 $6,764,968 Subtotal, Direct and Indirect Costs $259.78 $28,290,468 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $12.99 $1,414,523 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $40.92 $4,455,749 Total Costs $314 $34,160,740
RESIDUAL LAND VALUE $131.90 $14,364,000
Per Acre $2,872,800
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 233 Item # 2.

Table 5 - Baseline Scenario
Warehouse/ Distribution Pro Forma
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 0.40 F.A.R. 87,120
Efficiency Ratio 90%
Elevation 1 story
Net Area 78,408
Parking Spaces 0.5 parking space per 1,000 sq.ft.

Structured/Podium Parking 0% of parking spaces 0
Surface Parking 100% of parking spaces 46
Total Parking Spaces 46

REVENUE ASSUMPTIONS
Gross Revenue (NNN) (1) $21.00 /net sq. ft./yr. $18.90 $1,646,568 (less) Operating Expenses 5.0% ($0.95) ($82,328)
(less) Commissions 2.5% ($0.47) ($41,164)
(less) Vacancy Rate 5.0% ($0.95) ($82,328)
Subtotal, Annual Net Operating Income $16.54 $1,440,747 Capitalized Value (2) 5.75% cap rate $278.98 $24,304,775

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $85.00 /GLA sq. ft. $85.00 $7,405,200 Parking Cost/Site Work $40,000 /structured space $0.00 $0 Parking Cost/Site Work $5,000 /surface space $2.64 $230,000 Total Direct Costs $87.64 $7,635,200
Indirect Costs
Tenant Improvements $20.00 /net sq. ft. $18.00 $1,568,160 Legal, Insurance & Inspections 3.0% of direct costs $2.63 $229,056 Architecture & Engineering 7.0% of direct costs $6.13 $534,464 Commercial Housing Linkage Fee (3) $4.00 /net sq. ft. $3.60 $313,632 TADIF Fee $0.00 /net sq. ft. $0.00 $0
Other Permits & Fees (4) 2.5% of direct costs $2.19 $190,880 General & Administrative 2.5% of direct costs $2.19 $190,880 Financing Costs 3.0% of direct costs $2.63 $229,056
Total Indirect Costs 42.6% of direct costs $37.38 $3,256,128 Subtotal, Direct and Indirect Costs $125.02 $10,891,328 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $6.25 $544,566 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $19.69 $1,715,384 Total Costs $151 $13,151,279
RESIDUAL LAND VALUE $128.02 $11,153,000
Per Acre $2,230,600
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 234 Item # 2.

Table 6
Residential Rental (Midrise) - Baseline Scenario
Milpitas Employment Lands, EPS #211034
Item Total

DEVELOPMENT PROGRAM
Land Area 2 acres 87,120
Total Units 180 units
Elevation 7 stories
Total Building Area 1,200 per unit 216,000
Percent On-Site BMR 15%
Net Residential Unit Area 80% 172,800
Podium Parking Spaces 1.20 parking space per unit 216

REVENUE ASSUMPTIONS
Gross Rental Revenue
Market Rate (1) $3.75 /nsf per month $6,609,600
Affordable (80% of AMI) $2.76 /nsf per month $858,470
(less) Vacancy 5.0% -$373,404
(less) Operating Expenses (Residential) (2) 26.5% -$1,979,039 (less) Capital Reserves $0.50 /nsf -$86,400
Residential NOI $5,029,228
Effective Capitalized Value (3) 4.25% cap rate $118,334,782 (less Cost of Sale) 3.0% of capitalized value -$3,550,043 Net Value $114,784,738

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $260 /gsf $56,160,000
Site Work $10 /land sq.ft. $871,200
Total Direct Costs $57,031,200
Parking Construction Cost $40,000 per space $8,640,000
Direct Cost (including Parking) $65,671,200
Indirect Costs
Soft Costs (4) 15.0% of DPC $9,850,680
TADIF Fee $40,487 per unit $7,287,660
Other Development Fees (5) 2.5% of DPC $1,641,780
Carrying and Financing Cost 5.0% of DPC $3,283,560
Total Indirect Costs 33.6% of DPC $22,063,680
Total Direct and Indirect Costs $87,734,880
Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $4,386,744 Profit Margin (% of direct and indirect costs) (6) 15.0% of direct and indirect costs $13,160,232 Total Costs $105,281,856
RESIDUAL LAND VALUE $9,503,000
Per Acre $4,752,000
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 235
Item # 2.

Table 7a - Baseline Scenario
Residential Rental (Highrise)
Milpitas Employment Lands, EPS #211034
Item Total

DEVELOPMENT PROGRAM
Land Area 2 acres 87,120
Total Units 360 units
Elevation 12 stories
Total Building Area 1,200 per unit 432,000
Percent On-Site BMR 15%
Net Residential Unit Area 80% 345,600
Podium Parking Spaces 1.20 parking space per unit 432

REVENUE ASSUMPTIONS
Gross Rental Revenue
Market Rate (1) $3.75 /nsf per month $13,219,200
Affordable (80% of AMI) $2.76 /nsf per month $1,716,941 (less) Vacancy 5.0% -$746,807
(less) Operating Expenses (Residential) 26.5% -$3,958,077 (less) Capital Reserves $0.50 /nsf -$172,800
Residential NOI $10,058,456
Effective Capitalized Value (2) 4.25% cap rate $236,669,563 (less Cost of Sale) 3.0% of capitalized value -$7,100,087 Net Value $229,569,477

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $300 /gsf $129,600,000
Site Work $10 /land sq.ft. $871,200
Total Direct Costs $130,471,200
Parking Construction Cost $40,000 per space $17,280,000 Direct Cost (including Parking) $147,751,200
Indirect Costs
Soft Costs (3) 15.0% of DPC $22,162,680
TADIF Fee $40,487 per unit $14,575,320
Other Development Fees (4) 2.5% of DPC $3,693,780
Carrying and Financing Cost 5.0% of DPC $7,387,560
Total Indirect Costs 32.4% of DPC $47,819,340
Total Direct and Indirect Costs $195,570,540
Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $9,778,527 Profit Margin (% of direct and indirect costs) (5) 15.0% of direct and indirect costs $29,335,581 Total Costs $234,684,648
RESIDUAL LAND VALUE ($5,115,000)
Per Acre ($2,558,000)
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 236
Item # 2.

Table 7b - Improved Scenario
Residential Rental (Highrise)
Milpitas Employment Lands, EPS #211034
Item Total

DEVELOPMENT PROGRAM
Land Area 2 acres 87,120
Total Units 360 units
Elevation 12 stories
Total Building Area 1,200 per unit 432,000
Percent On-Site BMR 15%
Net Residential Unit Area 80% 345,600
Podium Parking Spaces 1.20 parking space per unit 432

REVENUE ASSUMPTIONS
Gross Rental Revenue
Market Rate (1) $3.90 /nsf per month $13,747,968
Affordable (80% of AMI) $2.76 /nsf per month $1,716,941 (less) Vacancy 5.0% -$773,245
(less) Operating Expenses (Residential) 26.5% -$4,098,201 (less) Capital Reserves $0.50 /nsf -$172,800
Residential NOI $10,420,663
Effective Capitalized Value (2) 4.25% cap rate $245,192,059 (less Cost of Sale) 3.0% of capitalized value -$7,355,762 Net Value $237,836,298

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $300 /gsf $129,600,000
Site Work $10 /land sq.ft. $871,200
Total Direct Costs $130,471,200
Parking Construction Cost $40,000 per space $17,280,000 Direct Cost (including Parking) $147,751,200
Indirect Costs
Soft Costs (3) 15.0% of DPC $22,162,680
TADIF Fee $40,487 per unit $14,575,320
Other Development Fees (4) 2.5% of DPC $3,693,780
Carrying and Financing Cost 5.0% of DPC $7,387,560
Total Indirect Costs 32.4% of DPC $47,819,340
Total Direct and Indirect Costs $195,570,540
Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $9,778,527 Profit Margin (% of direct and indirect costs) (5) 15.0% of direct and indirect costs $29,335,581 Total Costs $234,684,648
RESIDUAL LAND VALUE $3,152,000
Per Acre $1,576,000
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 237
Item # 2.

APPENDIX F:

Innovation District Scenarios
238
Item # 2.

Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_21.09.21.docx Table F-1. Innovation District Scenarios: Land Use by Parcel Current
Area Acres BPRD1 Allowed Uses Scenario 1 Scenario 2 Scenario 3 Scenario 4 Existing TASP Area
Great Mall Adjacent
Area A 2.7 BPRD‐R Non‐Resi. Commercial/Retail (55%) + Vacant (45%) Commercial/Retail Class A Office (60%) + Housing (40%) Class A Office Area B 14.7 Non‐Resi.

Area B1 (Stratford) 3.6 BPRD‐H Non‐Resi. Assembly ‐ School Commercial/Retail Class A Office Class A Office Area B2 (Lightwave) 4.3 BPRD‐R Non‐Resi. Class B Office Class A Office/R&D Class A Office (60%) + Housing (40%) Class A Office Area B3 (Marriott Hotel) 3.2 BPRD‐H Non‐Resi. Hotel Commercial/Retail Hotel Hotel Area B4 (Marriott Hotel) 3.6 BPRD‐H Non‐Resi. Hotel Class A Office Hotel Hotel Subtotal 17.4
East TASP
Area C 3.3 BPRD‐H Resi + Non‐Resi. Industrial (46%) + Warehouse/Distribution (54%) Commercial/Retail Class A Office Class A Office Area D 4.8 BPRD‐H Resi Industrial (77%) + Warehouse/Distribution (23%) Commercial/Retail Class A Office Class A Office Area E 2.2 BPRD‐R Resi Warehouse/Distribution Commercial/Retail Class A Office (60%) + Housing (40%) Class A Office Subtotal 10.3
Total Existing TASP Area 27.7
Additional Metro SP Employment Area
North of Montague Expressway
Area F 4.5 BPRD‐H Non‐Resi. Warehouse/Distribution Hotel Class A Office/R&D Class A Office/R&D Area G 5.4 BPRD‐H Non‐Resi. Class B Office Commercial/Retail Class A Office/R&D Class A Office/R&D Area H 7.0 BPRD‐L Non‐Resi. Assembly ‐ Church Warehouse Industrial Class A Office/R&D Subtotal 16.9
South of Montague Expressway
Area I 13.4 BPRD‐H Non‐Resi. Industrial (20%) + Warehouse/Distribution (80%) Commercial/Retail (77%) + Open Space (23%) Class A Office/R&D (77%) + Open Space (23%) Class A Office (77%) + Open Space (23%) Area J 2.0 BPRD‐L Non‐Resi. Warehouse/Distribution Warehouse Industrial Class A Office/R&D Area K 5.6 BPRD‐L Non‐Resi. Warehouse/Distribution Warehouse Industrial Class A Office/R&D Area L 1.0 BPRD‐L Non‐Resi. Industrial Warehouse Industrial Class A Office/R&D Area M 4.2 BPRD‐L Non‐Resi. Warehouse/Distribution Warehouse Industrial Class A Office/R&D Area N 3.6 BPRD‐L Non‐Resi. Vacant Warehouse Industrial Class A Office/R&D

29.8 Total Add'l Empl. Lands 46.68
TOTAL INNOVATION DISTRICT 74.38
(1) BPRD‐L: 1.0‐2.5 FAR. Allows for lower density office, R&D, warehouses, hotels, and industrial. Office‐supportive commercial retail uses are conditionally permitted.

BPRD‐H: 1.0‐2.5 FAR. Allows for higher density office, R&D, commercial/retail, and hotels.

BPRD‐R: 1.0‐5.0 FAR. Minimum of 1.0 FAR of office and R&D. Additional residential is allowed up to 5.0 FAR total. Allows office, R&D, commercial/retail, hotels, and residential. 239
Item # 2.

SPECIAL MEETING OF THE

MILPITAS CITY COUNCIL
October 12, 2021 Milpitas City Council Agenda Page 1

SPECI AL MEETI NG AG END A
TUESDAY, OCTOBER 12, 2021
CITY COUNCIL CHAMBERS, 2nd Floor,
455 E. CALAVERAS BLVD., MILPITAS, CA
5:30 PM (PUBLIC BUSINESS)
For assistance in the following languages, you may call:

Đối với Việt Nam, gọi 408-586-3122
Para sa Tagalog, tumawag sa 408-586-3051
Para español, llame 408-586-3232

CITY OF MILPITAS - NOTICE OF SPECIAL MEETING
NOTICE IS HEREBY GIVEN that a Special Meeting of the Milpitas City Council will be held at 5:30 p.m. on October 12, 2021 in the City Council Chamber at City Hall, 455 E. Calaveras Blvd., Milpitas and via teleconference/Zoom webinar.

You may watch the Council meeting without providing public comment by accessing it via links here.

Meeting shall be livestreamed - Go to:

Facebook: https://www.facebook.com/CityofMilpitas/
YouTube: https://www.ci.milpitas.ca.gov/youtube
Web Streaming: https://www.ci.milpitas.ca.gov/webstreaming

PUBLIC COMMENT INSTRUCTIONS
Oral public comments may be provided live during the City Council meeting in person or by registering for the zoom meeting in advance. To register you will need to provide an email address (not disclosed) and a name. To minimize technical difficulties, please make sure that you have the latest version of the Zoom Application. Below is the link to register for this meeting only:
https://ci-milpitas-ca-gov.zoom.us/webinar/register/WN_imnQFRzRRru5yGDfOjT1EA After you register a link will be sent to you to join the City Council meeting in order to give your comments.

All registered meeting attendees who wish to speak must click on the “raise hand” icon when the Mayor calls for public comments. If participating by calling in on your phone, dial *9 to use the “raise hand” feature, and when you are called upon, hit *6 to unmute your phone. Your phone number will be displayed in the live meeting. The Mayor will call the speakers to begin.

All comments provided shall be limited to three minutes or less as determined by the Mayor. All members of the public will be limited to one comment per agenda item, and one comment for non-agenda items.

MILPITAS CITY COUNCIL CODE OF CONDUCT
 Be respectful and courteous (words, tone, and body language).  Model civility.
 Avoid surprises.
 Praise publicly and criticize privately.
 Focus on the issue, not the person.
 Refrain from using electronic devices while on the Council dais.  Disclose conflicts of interest and affiliations related to agenda items.  Separate governing from campaigning.
 The Council speaks with one voice after making policy on issues.  Respect the line between policy and administration.
 Council will hold one another accountable to comply with this Code of Conduct. 2401
Item # 2.

October 12, 2021 Milpitas City Council Agenda Page 2
CALL MEETING TO ORDER by Mayor and ROLL CALL by City Clerk

PLEDGE OF ALLEGIANCE

PUBLIC FORUM
Those in the audience and via Zoom are invited to address City Council on any subject not on tonight’s agenda. In-person speakers wishing to address the Council are requested, but not required to complete a Speaker Card and submit it to the Mayor. In-person speakers will then be asked to come up to the podium and state their name for the record. Those interested in speaking via Zoom may do so by following the instructions on page one (1) of the agenda. Comments may be limited to three (3) minutes or less at the Mayor’s discretion. As an item not listed on the agenda, no response is required from City staff or the Council and no action can be taken. The City Council may instruct the City Manager to place the item on a future meeting agenda.

NOTE: If a member of the public wishes to share any presentation materials for Council consideration, they must be submitted to the Clerk’s Office by email to [email protected] by 12:00 p.m. on the day of the meeting. No presentations will be accepted in person in the Council Chambers.

ANNOUNCEMENTS

ANNOUNCEMENT OF CONFLICT OF INTEREST AND CAMPAIGN CONTRIBUTIONS

READING OF THE CITY COUNCIL CODE OF CONDUCT

APPROVAL OF AGENDA

AGENDA ITEMS

1. Fiscal Benefits of Employment Lands Study (Staff Contacts: Alex Andrade, Director of Economic Development, 408-586-3046 and Daniel Degu Sr., Economic Development Coordinator, 408-586-3054)
Recommendation: (1) Receive and accept a report on the Fiscal Benefits of Employment Lands Study; (2) Provide direction to staff on development of an Innovation District as part of the Milpitas Metro Specific Plan.

2. Receive a Presentation on the Draft Milpitas Metro Specific Plan (Update of 2008 Transit Area Specific Plan) (Staff Contact: Ned Thomas, Planning Director, 408-586-3273 and Kevin Riley, TASP (Metro) Manager 408-586-3292)
Recommendation: (1) Receive a presentation from staff and consultants; (2) Receive public comment; and (3) Provide feedback and direction on the Draft Milpitas Metro Specific Plan.

ADJOURNMENT

KNOW YOUR RIGHTS UNDER THE OPEN GOVERNMENT ORDINANCE
Government’s duty is to serve the public, reaching its decisions in full view of the public. Commissions and other City agencies exist to conduct the people’s business. This ordinance assures that deliberations are conducted before the people and City operations are open to the people’s review. For more information on your rights under the Open Government Ordinance or to report a violation, contact the City Attorney’s office at Milpitas City Hall, 455 E. Calaveras Blvd., Milpitas, CA 95035 e-mail:[email protected] / Phone: 408-586-3040
The Open Government Ordinance is codified in the Milpitas Municipal Code as Title I Chapter 310 and is available online at the City’s website www.ci.milpitas.ca.gov by selecting the Milpitas Municipal Code link. 2412
Item # 2.

October 12, 2021 Milpitas City Council Agenda Page 3
Materials related to an item on this agenda submitted to the City Council after initial distribution of the agenda packet are available for public inspection at the City Clerk’s office at Milpitas City Hall, 3rd floor 455 E. Calaveras Blvd., Milpitas and on City website. City Council agendas and related materials can be viewed online: www.ci.milpitas.ca.gov/government/council/agenda_minutes.asp (select meeting date)

APPLY TO SERVE ON A CITY COMMISSION
Commission application forms are available online at www.ci.milpitas.ca.gov or at Milpitas City Hall.

Contact the City Clerk’s Office at 408-586-3001 for more information.

If you need assistance, per the Americans with Disabilities Act, for any City of Milpitas public meeting, please call the City Clerk at 408-586-3001 or send an e-mail to [email protected] prior to the meeting. You may request a larger font agenda.
2423
Item # 2.
1 CITY OF MILPITAS

AGENDA REPORT
(AR)
Item Title: Fiscal Benefits of Employment Lands Study
Category: Community Development
Meeting Date: 10/12/2021
Staff Contact: Alex Andrade, Director of Economic Development, 408-586-3046 Daniel Degu Sr., Economic Development Coordinator, 408-586-3054 Recommendation: 1. Receive and accept a report on the Fiscal Benefits of Employment Lands Study.

2. Provide direction to staff on development of an Innovation District as part of the Milpitas Metro Specific Plan.

Background:

Economic Development and Job Growth is one of the City Council’s seven priorities. Employment lands are significant contributors to the City’s General Fund through substantial net positive revenues that support essential and critical public services. As such, it’s imperative that the City of Milpitas prioritize preserving and protecting employment lands to ensure long-term fiscal sustainability through diversifying the local economy and creating high-quality job opportunities for residents.

On March 9, 2021 the City Council adopted the Milpitas 2040 General Plan Update. The General Plan Update’s Action ED-3i recommends exploring the creation of an Innovation District in the Milpitas Metro Specific Plan area to facilitate increases in employment densities while leveraging the area’s proximity to mass transit. And, on May 5, 2020, the City Council adopted the Economic Development Strategy (EDS) to serve as Milpitas’ road map to grow and diversify the City’s economy, support businesses and workers, and improve quality of life in the community. Strategy 27 recommends identifying and preserving high-priority office and Research and Development (R&D) sites in the Transit Area Specific Plan (future Milpitas Metro Specific Plan) including changes to land use policy.

On June 4, 2021, the Office of Economic Development retained Economic & Planning Systems, Inc. (EPS) to prepare a Fiscal Benefits of Employment Lands Study. The study will guide City policy towards a fiscally resilient future based on preserving and protecting our employment lands, attracting innovative businesses focused on emerging technologies, and developing the Innovation District as part of the Milpitas Metro Specific Plan.

The Innovation District will be designed as an employment destination with modern office, R&D buildings and flexible space for people to interact through “creative collisions” and placemaking. The aim is to plan for a wellconnected Innovation District with proximity to public transit and infrastructure that supports bike paths, pedestrian scale sidewalks, social gathering places, and high-speed fiber. With the growing innovation economy, technology businesses prefer locations in and around transit areas for ease of employee access and mobility to and from employment centers.
2434
Item # 2.
2 Analysis:

The Fiscal Benefits of Employment Lands Study is divided into two phases. Phase I includes a Fiscal Impact Analysis; Employment Density, Occupational and Wage Analysis; Residual Land Value Analysis; and Innovation District Development Scenarios Analysis. Phase II consists of the Innovation District Framework Plan, and a set of potential City policies and actions to help support the evolution and development of the Innovation District.

The findings from Phase I have been collated and summarized for this Agenda Report with excerpts reproduced from the Fiscal Benefits of Employment Lands Study Phase I: Narrative Summary of Conclusions Report and can be found below. While Phase I consists of various technical and data analyses, the most important findings are illustrated below. For the full report, see Attachment A and the Appendices for additional tables, definitions, maps, etc.

Fiscal Impact Analysis
The Fiscal Impacts Analysis estimates the impact of existing land uses and future developments on the City’s General Fund budget. The methodology EPS used to complete the Fiscal Impact Analysis is based on the City’s Adopted Fiscal Year 2020-2021 budget.1 EPS combined financial information from the City’s budget with available information on existing land uses, potential future land uses, assessed values, taxable sales, and other parameters. EPS then estimated the taxes and other public revenues that accrue to the City’s General Fund through different land uses as well as the public expenditures required to support them. By comparing expected revenues to expected expenditures for different land uses, it is possible to determine whether, on average, the land use will have an overall positive or overall negative impact on the City’s General Fund budget.

As shown in Table 1 (pg. 7), the City’s current employment lands generate substantial revenues to the City’s budget. Analysis of the broad set of existing land uses in Milpitas shows that Retail ($15,722,695 annually), Hotel ($13,336,257 annually), and Industrial ($2,351,362 annually) uses all make positive contributions to the City’s budget.

On the contrary, existing Single Family Residential (-$32,485,031 annually) and Multi-Family Residential (-$6,829,918 annually) uses cause the greatest expense to the City’s budget, meaning existing residential uses are unable to cover their public service cost needs and are supported by the following employment land uses: Hotel, Retail, and Industrial uses.

Employment lands make up 55% of the City’s General Fund total revenues, while non-employment land uses such as Single Family Residential, Multi-Family Residential, and Other Uses2 make up 75% of the City’s General Fund total expenditures.

As shown in Table 2 (pg. 10), on average, all types of new development are expected to provide new revenue to the City, though to varying degrees. To estimate the impacts of potential new developments on the City’s budget, nine development prototypes across a range of land uses were studied. The higher property values of new development results in significant increased property tax revenues for the City’s budget. For example, new Hotel ($826,580 per acre) development will continue to be the fiscally strongest use, though new Class A Office ($85,406 per acre), Retail ($63,925 per acre), and Class A Office/R&D ($51,222 per acre) generate significant revenues in the future.

Employment Density, Occupational, and Wage Analysis
The Employment Density, Occupational, and Wage Analysis estimates the expected number of jobs and wages generated by development and occupancy of different commercial developments. EPS used two different methods of analysis to complete the Employment Density, Occupational, and Wage Analysis. For

1 When EPS commenced research, only the City’s adopted FY2020-2021 budget was available at that time. 2 The term “Other Uses” includes hospitals, vacant land, civic uses, and parking lots. 2445
Item # 2.
3 employment density, EPS reviewed a range of data sources to determine estimates of the average number of workers per building square foot and the average square feet required per worker. For the wage analysis, EPS obtained U.S. Census Bureau information on wages by industry sector by city. A connection was then made between the land use/development types being evaluated and the typical industry sectors occupying those buildings. Then EPS was able to estimate the average wages of jobs in different building types in different cities. Because wage information by city is imperfect and due to the regional nature of employment markets, an average of the four cities evaluated was also calculated to provide a planning-level estimate of future wages by building type.

As shown in Table 4 (pg. 14), occupational wages in Milpitas tend not to be as strong as Mountain View, Sunnyvale, and Santa Clara. The strongest annual wages by land use/development types in Milpitas are associated with Class A Office/R&D ($122,100) and Class A Office ($121,500). Alternatively, the lowest annual wages by land use and development types in Milpitas are associated with Hotel ($33,900), Retail ($34,000), and Warehouse and Distribution ($39,300).

Although it is discussed in more detail below in Tables 11 through Table 14 (pgs. 25-26), it’s important to note that approximately 2,000 to 14,200 jobs may be created providing almost $140M to $2B in annual wages. This may be accommodated in the Innovation District by protecting and preserving Milpitas’ employment lands.

Residual Land Value Analysis
A Residual Land Value Analysis estimates the development revenues to development costs to determine if a development project “pencils out.” EPS used the following methodology formula to complete the Residual Land Value Analysis: Residual Land Value = Project Development Value minus Development Costs (excluding the cost to purchase land). The following key methodological assumptions were used by EPS to determine the development value and development costs: estimated lease rates; vacancy rates; operating expenses and income; parking requirements; and costs associated with permitting, construction, financing, and other regulatory requirements.

City actions can help spur business attraction and development of the Innovation District. For the Milpitas Innovation District, challenges include the lack of large and vacant sites, competition for Class A Office/R&D uses among Silicon Valley communities, high costs of building and parking development associated with Class A Office/ R&D uses, strong market demand for residential development, the economics of existing uses and competition with other lower-intensity uses (e.g. storage; warehouse and distribution), and the current lack of connectivity and sense of place and amenities.

As shown in Table 7 (pg. 20), Class A Office (5-Story), Class A Office (8-Story), and Class A Office/R&D (4-5 Story) uses are not currently economically feasible and other uses such as Warehouse and Distribution and Mid-Rise Residential (7-Story) are more likely to occur if employment lands are not protected and preserved for innovative business uses.

Table 7 also shows that with significant improvements in market conditions and supportive City polices, the desired Innovation District employment land uses become more economically feasible for real estate development projects to pencil out. Analysis was completed on specific development types that results in a negative return on investment and identified how to make projects more feasible through strategic City policy decisions. The two key areas of focus to ensure projects are feasible are increases in lease rates and reductions in capitalization rates.
3 For policy adjustments, the two key areas of focus were reductions in Transit Area Development Impact Fees (TADIF) on commercial development and the easing of parking

3 Capitalized Value. The capitalized value represents the estimated value/sales price of a building/development. It is typically calculated based on: (1) annual net operating income (annual revenues minus annual operating expenditures); and, (2) the capitalization (cap) rate which represents the observed ratio between building sales prices and net operating incomes in different market areas.
2456
Item # 2.
4 requirements within the Innovation District. These policy options were selected as they directly affect the feasibility of Class A Office (5-Story), Class A Office (8-Story), and Class A Office/R&D (4-5 Story) uses.

The improved Residual Land Value scenarios result in development projects being feasible and diversifying the local economy with increased revenues and fiscal health for the City.

Innovation District Development Scenarios Analysis
The Innovation District Development Scenarios Analysis estimates the different levels of development, jobs, salaries, and fiscal impacts based on the buildout of various Innovation District land use scenarios. EPS applied the Employment Density, Occupation and Wage Analysis, and Fiscal Impact Analysis to four Innovation District Development Scenarios to determine the different economic and fiscal impact analyses associated with each scenario as its methodology to complete the Innovation District Development Scenarios Analysis.

The City’s Innovation District has the potential to accommodate a significant amount of new Class A Office and R&D development as well as Hotel and other commercial uses. As shown in Table 11 through Table 14, the Innovation District is expected to create between $1.74M and $3.86M square feet of commercial development.

As shown in Table 15 (pg. 28), it is projected that at full buildout of the Innovation District the result may be future revenues in the range of $6.5M to $9.9M annually, which creates long term fiscal sustainability for the City through growing and diversifying the economy.

Development Scenario 1. This scenario reflects the existing environment and current parcel uses of the Innovation District. Current parcel uses include Warehouse and Distribution (43 percent of Innovation District acres), Assembly4(14%), Class B Office (13%), and Industrial (12%). Scenario 1 is estimated to generate approximately $6.5M annually for Milpitas’ General Fund.

Development Scenario 2. This scenario primarily represents redevelopment of parcels as Commercial/Retail (48% of Innovation District acres) with a strong ongoing Warehouse and Distribution component (31%). Scenario 2 results in an estimated $6.8M annually in positive net fiscal impact to the General Fund.

Development Scenario 3. This scenario represents a strong presence of new Class A Office and Class Office/R&D development (50%), Light Industrial uses (31%), continued Hotel uses, and modest amounts of Housing and Open Space. Scenario 3 is expected to generate a net fiscal impact of over $8.6M annually.

Development Scenario 4. This scenario represents even stronger presence of new Class A Office and Office/R&D development (87%) along with continued hotel uses. Scenario 4 generates the strongest net fiscal impact to the City’s General Fund at an estimated $9.9M annually.

Policy Options:

While the City of Milpitas does not typically act as a real estate developer, the City Council, as a legislative body, has the authority to enact legislation, establish policies, and provide guidance and direction for actions which affect development and land use. In order to develop a successful Innovation District, the following types of policies and actions will need to be explored by the City Council in the future to ensure that development projects are feasible:

4 Assembly means the provision of activities for assembled groups of participants at institutions or facilities including but not limited to private and nonprofit clubs; social or fraternal organizations; and churches, temples, synagogues and other places of worship.
2467
Item # 2.
5  Protect and preserve employment lands through land use designations;  Offer flexibility in density and height to support development economics;  Consider reduced parking requirements for employment uses in a transit-oriented area;  Consider reduced development impact fees on future Office and R&D projects; and  Expedite the entitlement and permit processes through Development Agreements, Public/Private Partnerships, and facilitating pre-development meetings with various City departments and developers.

These policy actions will allow future real estate developers and new technology businesses to take vital steps toward investing in the Innovation District. At the June 14, 2021 Milpitas Metro Specific Plan Study Session, the City Council reached consensus on providing the right land uses and implementation tools to protect and incentivize commercial development within the Innovation District. In order to positively differentiate Milpitas and gain a competitive advantage, real estate developers and investors will recognize the City of Milpitas’ entrepreneurial spirit and will take on opportunities that will attract new businesses with emerging technologies, create quality jobs and diversify and grow the local economy. With appropriate implementation of policy actions and the right investment opportunities, Milpitas can be the strategic location of a premier Innovation District.

Summary of Findings:

Employment lands make substantial and positive revenue contributions. Overall, it is projected that developing the Innovation District will likely result in future revenues within the range of $6.5M to $10M annually to the City’s budget. Although occupational wages in Milpitas tend not to be as strong as Mountain View, Sunnyvale, and Santa Clara today, all types of new development will result in positive externalities such as strong revenue generation and high-quality new jobs for residents in the long term. City policy options as outlined above can catalyze the successful evolution and development of the Innovation District.

Next Steps:

City Council feedback from the Study Session will be used to guide the project team throughout the execution of Phase II of the Fiscal Benefits of Employment Lands Study. Phase II of the study will take a closer look at the Innovation District and combine case studies and lessons learned to develop a set of potential City policies and actions to support Innovation District implementation as outlined in the Summary of Findings above.

The City’s consultant, EPS, has commenced Phase II work. To date, EPS has been able to study the key existing characteristics of the Milpitas Innovation District; draw preliminary lessons learned from other successful Innovation Districts; and begin to identify the key influences, actions, and policies that could support the successful development of the Milpitas Innovation District. The Phase II Findings is tentatively scheduled to be completed in the first quarter of 2022. The project team anticipates returning to the Council in the second quarter of 2022 to report on the Phase II Findings.

Fiscal Impact:

There is no fiscal impact related to receiving this staff report. On June 4, 2021, the Office of Economic Development retained EPS to prepare a Fiscal Benefits of Employment Lands Study. This study is fully funded and budgeted using the Adopted Fiscal Year 2020-21 and Adopted Fiscal Year 2021-22 operating budget of the Office of Economic Development. The contract amount is $93,000.

California Environmental Quality Act:
2478
Item # 2.
6 In providing direction to staff, the City Council will not be taking any discretionary action requiring environmental review under the California Environmental Quality Act (CEQA) as the initial direction to staff on development of an Innovation District would not constitute a project under CEQA. Further, future projects envisioned under this report will receive environmental review consistent with the Milpitas Metro Specific Plan and its associated Subsequent Environmental Impact Report.

Recommendation:

1. Receive and accept a report on the Fiscal Benefits of Employment Lands Study.

2. Provide direction to staff on development of an Innovation District as part of the Milpitas Metro Specific Plan.

Attachments:

A. Fiscal Benefits of Employment Lands Study Phase I: Narrative Summary of Conclusions Report 2489
Item # 2.

D RAFT T ECHNICAL M EMORANDUM
To: Daniel Degu, City of Milpitas
From: Economic & Planning Systems, Inc.

Subject: Fiscal Benefits of Employment Lands Study Phase 1:

Narrative Summary of Conclusions
Date: October 7, 2021
The City of Milpitas (City) engaged Economic & Planning Systems, Inc. (EPS) to prepare a Fiscal Benefits of Employment Lands Study (Study).

The Study will guide City policy towards a fiscally resilient future based on protection and preservation of employment lands, the expansion and attraction of innovative and competitive businesses, and the evolution of the City’s new Innovation District. The Innovation District, located within the Milpitas Metro Specific Plan (MMSP), provides a vital economic development opportunity to support the City fiscally and economically.

The overall study is divided into two phases, with Phase 1 including the Fiscal Impact Analysis, the Occupation and Wage Analysis, the Residual Land Value Analysis, and the Innovation District’s Development Scenarios Analysis. Phase 2 will include the development of the Innovation District Framework Plan, a set of potential City policies and actions to help support the evolution and development of the Innovation District.

This memorandum provides a narrative summary of conclusions from these analyses with detailed table sets included in the Appendices. The Phase 1 memorandum, that informs the Phase 2 work, is organized as follows:

Summary of Findings. Summarizes the key findings from the different technical components of the Phase 1 Study.

Fiscal Impact Analysis. Provides a summary of findings concerning the impacts of existing land uses and future development on the City’s General Fund.

Employment Density, Occupational, and Wage Analysis. Estimates the expected number of jobs and wages generated associated with the development and occupancy of different non-residential developments. 24910
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 2 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Residual Land Value Analysis. Assesses the development economics/development feasibility of different land uses under current market conditions as well as under a combination of improved market conditions and suggested refined policies.

Innovation District Development Scenarios Analysis. Estimates the different levels of development, jobs, salaries, and net fiscal impacts based on the buildout of different Innovation District land use scenarios.

Summary of Findings
Phase 1 of the Fiscal Benefits of Employment Lands Study (Study) provides broad insights into the role and importance of employment lands in Milpitas as well as the opportunities and challenges associated with the creation of a new Innovation District as part of MMSP.1 The overall findings of the Phase 1 work are as follows:

1. Employment lands play a critical economic and fiscal role in supporting essential and critical City services.

2. Cultivation of an Innovation District as a key component of MMSP and City economic development efforts would provide new, expansive benefits to the City.

3. There are challenges to spurring the development of the Innovation District and the City will need to play a proactive role in generating incentives to catalyze the Innovation District.

A more detailed summary of key findings from Phase 1 are provided below:
 The successful development of an Innovation District would bring a broad range of substantial benefits (see Innovation Districts Scenario Analysis section). The City’s new Innovation District has the potential to accommodate millions of square feet of new Office and R&D development as well as supportive Hotel and other non-residential uses. The impacts of the successful development of the Innovation District are estimated in this memorandum and include:
‐ Substantial net revenues to the City’s General Fund.
‐ Accommodation of a range of new professional, scientific, and technology businesses bringing thousands of well-paying jobs.
‐ The broader transformation of the TASP/MMSP area into a vital mixed-use transitoriented area.  The City’s current employment lands make substantial and positive net fiscal contributions to the City’s budget. Analysis of the broad set of existing land uses in the city shows that hotel, retail, and industrial uses all make positive contributions to the City’s 1 This memorandum refers to a range of different geographic areas, including (1) the Transit Area Specific Plan (TASP) area – the planning area of the 2008 Specific Plan; (2) the Metro Milpitas Specific Plan (MMSP) area – the updated/adjusted Specific Plan area that incorporates additional lands to the east of the TASP that form part of the envisioned Innovation District. The proposed Innovation District also is defined geographically in two ways, including a broader Innovation District area as well as a core set of parcels that form the basis of much of the technical analysis in this memorandum.

Maps showing these different areas are included in Appendix A. 25011
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 3 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx General Fund. Collectively existing residential uses, however, are unable to cover their public service cost needs and are cross-subsidized by non-residential uses (see Fiscal Impact Analysis section (existing uses)).
 Although wages in Milpitas tend not to be as strong as Mountain View, Sunnyvale, and Santa Clara today, full buildout of the Innovation District would accommodate high-quality new jobs and wages for residents in the long term. The strongest annual wages by land use/development types in Milpitas are associated with Class A Office/R&D and Class A Office uses. The lowest annual wages by land use and development types in Milpitas are associated with Hotel, Retail, and Warehouse/Distribution uses.  On average, all types of new development in the City are expected to provide positive fiscal contributions to the City, though to varying degrees. The higher property values of new development will generally allow them to make fiscally positive contributions to the City. New hotel development will continue to be the fiscally strongest use, though new Class A Office, Class A Office/R&D, and Retail generate significant fiscal positives. New multi-family residential, Class B office, industrial, and warehouse/ distribution uses all generate positive but smaller fiscal impacts. New residential development in the Transit Area Specific Plan (TASP) also makes additional contributions towards public services through the payment of the Communities Facilities District (CFD) special tax (see Fiscal Impact Analysis section (new uses)).
 The MMSP is intended to support the incremental redevelopment of the identified area into a vital Innovation District. The Innovation District area currently includes a broad range of uses, ranging from public storage to light industrial to hotel uses. With the recent opening of the multi-modal Milpitas Transit Station Center (VTA/BART) and new policies, investments, and improvements, an incremental evolution of these uses is sought towards a more dense, transit-oriented set of employment and supporting uses located near residential development.
 There are a broad range of development challenges to achieving the Innovation District vision including the economics of Office/R&D development (see Residual Land Value Analysis section). For jurisdictions throughout the U.S., there are a broad range of development challenges that arise when supporting area transformation. As a result, progress often occurs incrementally and over time. For the Milpitas Innovation District, key challenges include the lack of large and vacant sites, competition for Office/R&D uses among Silicon Valley communities, the high costs of building and parking development associated with Office/R&D uses, high market demand for residential development, the economics of existing uses and competition with other lower-intensity uses (e.g. storage; warehouse/ distribution), and the current lack of connectivity and sense of place/amenities.  City actions can help spur the evolution and development of the Innovation District.

It will be important for the City to consider the full range of actions to support the goals of the Innovation District, particularly preserving and protecting its employment lands and incentivizing the development of a premier Innovation District. These include a broad range of policies, investments, funding mechanisms, outreach, and partnership pursuit. This is the focus of Phase 2 with an important overlap with the MMSP that will lay out a number of important policies and actions that will guide the Innovation District. 25112
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 4 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Phase 2 of the Study will take a closer look at the Innovation District, combining existing conditions, case studies, and Phase 1 findings, to develop a set of potential policies and actions to support Innovation District implementation.

Fiscal Impact Analysis
A fiscal impact analysis estimates the impact of different land uses on both the City’s General Fund revenues and expenditures. By comparing the revenue and expenditure impacts, it is possible to determine whether particular land uses are expected to have positive or negative impacts on the City’s General Fund. This analysis examines the fiscal impacts of both existing land uses and potential future developments. Appendix B and Appendix C provide the full fiscal impact analysis table set for existing land uses and future land uses respectively.

Methodology
The City’s General Fund is a key City fund where a broad range of revenues are deposited and from which expenditures on key public services are made. A number of taxes and other public revenues accrue to the City’s General Fund, including property taxes, sales taxes, and transient occupancy taxes, among others. The General Fund also provides all or a significant proportion of funding for a range of important public services, including police, fire, and public works, among others.

In this analysis, two planning-level fiscal impact analyses are conducted, including: (1) estimated fiscal impacts of existing land uses; and (2) estimated fiscal impacts of potential new developments/ land uses. The results for existing uses provide insights into the relative fiscal contributions of existing land uses. The results for future uses provide insights into how different land use policies and development types could affect the City’s fiscal situation.

Existing Land Uses
The City of Milpitas 2020-2021 Adopted Budget and Financial Plan provides information on the City’s General Fund revenues and expenditures by category. A range of information was used to distribute these revenues and expenditures between different land uses. Building inventory by land use was a key piece of information. On the revenue side, additional information sources included existing assessed values by land use that supported the estimates of property taxes by land use and taxable sales information by land use that supported the estimates of sales and use tax by land use.

On the expenditure side, an average per service population approach was used. Under this approach, all General Fund expenditures are distributed between residents and workers.

Because they are, on average, present in the City for less time, a single worker is given half the weighting of a single resident.2 It is then possible to combine the City’s budget information on existing General Fund expenditures by category with the City’s existing service population to determine the average General Fund expenditure (in total and by expenditure category) associated with each resident and worker. Using information on the number of residents 2 Service population is a measure that combines both residents and workers, reflecting the fact that they both demand/use City services. Workers are given a partial weighting as they are in the city for a smaller proportion of their time. Because different land uses bring different levels of new service population to the city, different land uses have different public service expenditure impacts. 25213
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 5 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx currently living in different types of residential land uses and the number of workers accommodated in different types of workspaces, it is then possible to allocate General Fund expenditures by category to different land uses.

New Land Uses
The fiscal impacts of new land uses are estimated using a similar approach with some important differences. For new land uses it is helpful to specify the nature of the new land uses assessed; the land uses/development prototypes considered in this analysis are further described below.

In addition, new development will typically have substantially higher assessed values based on their new development value. This requires specific assumptions concerning the development value of different land uses. On the expenditure side, the same service population approach is used. In other words, each new resident or worker is assumed to require the same level of General Fund expenditures as existing residents and workers. As a result, based on information on persons per household and workers per square foot, it is possible to derive General Fund expenditures by land us type.

Impacts of Existing Uses
Land Uses and Approach
Milpitas has a broad range of existing land use types located in different employment areas in the city. The analysis provides planning-level land use-specific conclusions on the net General Fund fiscal impact of existing land uses. The existing land uses in the city of Milpitas are categorized as follows:

1. Single-Family Residential. Including detached and attached units up to and including triplexes.

2. Multifamily Residential. Including apartment houses with 5 or more units, condominiums, and generic multifamily dwellings.

3. Office. Including professional buildings and commercial offices.

4. Industrial: Broad industrial category including manufacturing, warehousing and distribution, research and development (R&D) facilities, and similarly intensive uses.

5. Retail. Including all shopping establishments and service stations.

6. Hotel. Including all hotel uses.

7. Other Uses. Including everything not captured in above categories. Exemplary uses include hospitals, vacant land, civic uses, parking lots, and other. 25314
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 6 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Fiscal Results
Estimated fiscal impacts by land use are shown in Table 1 and show estimated General Fund revenues, expenditures, and the net fiscal impact associated with each existing land use category.

These results reflect the current (FY 2020/21) collective, average impacts of the different existing land use categories.3 Each actual existing development has a differential impact based on the timing of its development and project specifics. The impacts of new development are discussed in the next section.

Key conclusions from Table 1 are as follows:
 Residential. Existing residential uses, both single-family and multifamily, indicate the largest fiscal deficits with General Fund revenues covering about 50 percent of General Fund expenditures. This is true even with the attribution of sales and use tax revenues from resident spending to residential uses. This is a common finding for existing residential land uses in California cities.
 Office. Existing office uses also generate a net fiscal deficit for the City’s General Fund. This is primarily a reflection of the age of the office building stock (average age of office buildings in Milpitas is over 30 years) that limits the property tax revenue generation.  Industrial. The City has a large base of industrial development that varies in specific use type. Overall existing industrial uses generate a net fiscal positive impact for the City’s General Fund. An important reason for this outcome is the substantial sales and use tax revenues (business-to-business taxes) generated by many industrial uses.  Retail. As is common under the State of California’s tax system, retail uses provide a substantial positive fiscal impact to the City’s General Fund. The Great Mall is a key driver of this contribution with additional contributions from retail establishments throughout the city.

Dependence on retail uses and their associated sales tax generation is a common theme for many California cities.
 Hotel. Similar to retail uses, hotel uses and their associated transient occupancy taxes also bring a substantial positive fiscal impacts to the City. These revenues can fluctuate substantially with economic conditions.4
As with most California cities, the pandemic-related recession brought challenges to the City of Milpitas, with the primary generators of fiscal revenues (retail and hotel uses) being especially affected by social-distancing guidelines and stay-at-home orders. 3 The analysis distributes the large majority of General Fund revenues and expenditures. Only exceptions are items that are unrelated to land use/development (e.g., transfers in). 4 More recent information than the City’s 2020-2021 Adopted Budget indicates a substantial reduction in Transient Occupancy Tax revenues associated with the pandemic. 25415
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 7 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Table 1. Annual General Fund Net Fiscal Impacts of Existing Land Uses Single Multi‐ Other
Annual General Fund Impacts Family1 Family1 Office Industrial Retail Hotel Uses Total General Fund Revenues
Property Tax $14,774,099 $6,671,212 $544,022 $6,251,994 $1,931,997 $627,253 $941,356 $31,741,933 Property Tax In‐Lieu of VLF $3,696,107 $1,668,969 $136,100 $1,564,091 $483,337 $156,923 $235,503 $7,941,031 Sales Taxes $3,752,701 $1,076,926 $822,258 $6,950,982 $15,514,270 $34,669 $220,146 $28,371,951 Real Estate Transfer Tax $370,582 $167,335 $13,646 $156,820 $48,461 $15,734 $23,612 $796,190 Business License Tax $0 $0 $54,661 $199,016 $32,036 $14,356 $65,582 $365,650 Motor Vehicle In‐Lieu $26,708 $7,665 $0 $0 $0 $0 $647 $35,020 Other Taxes $397,290 $175,000 $68,307 $355,836 $80,496 $30,089 $89,841 $1,196,860Franchise Fees $3,221,727 $924,550 $192,907 $702,353 $113,058 $50,663 $309,528 $5,514,787 Transient Occupancy Tax $0 $0 $0 $0 $0 $13,452,683 $0 $13,452,683 Licenses, Permits, and Fines $5,787,719 $1,660,922 $346,551 $1,261,752 $203,105 $91,015 $556,055 $9,907,120 Total Revenues $27,933,537 $10,508,610 $1,974,045 $15,522,917 $17,842,927 $14,286,373 $2,116,925 $90,185,334 31% 12% 2% 17% 20% 16% 2% 100%
General Fund Expenditures
General Government $2,511,645 $720,775 $150,390 $547,551 $88,140 $39,497 $241,306 $4,299,304 Economic Development $534,026 $153,251 $31,976 $116,420 $18,740 $8,398 $51,307 $914,118Building Safety & Housing $4,032,635 $1,157,260 $241,462 $879,135 $141,515 $63,415 $387,436 $6,902,858 Engineering $1,367,502 $392,437 $81,882 $298,122 $47,989 $21,505 $131,383 $2,340,819Finance $2,545,109 $730,379 $152,393 $554,847 $89,314 $40,023 $244,521 $4,356,586Fire $16,252,557 $4,664,053 $973,154 $3,543,140 $570,341 $255,581 $1,561,465 $27,820,292Human Resources $1,227,784 $352,341 $73,516 $267,663 $43,086 $19,308 $117,959 $2,101,657 Information Technology $2,174,120 $623,915 $130,180 $473,969 $76,295 $34,189 $208,879 $3,721,547 Planning $579,456 $166,289 $34,696 $126,324 $20,334 $9,112 $55,671 $991,883Police $21,940,150 $6,296,242 $1,313,710 $4,783,064 $769,932 $345,021 $2,107,901 $37,556,020Public Works $5,348,454 $1,534,865 $320,249 $1,165,990 $187,690 $84,107 $513,853 $9,155,209Recreation & Community Services $1,905,131 $546,722 $114,074 $415,328 $66,856 $29,959 $183,036 $3,261,106 Total Expenditures $60,418,568 $17,338,528 $3,617,682 $13,171,555 $2,120,232 $950,116 $5,804,717 $103,421,399 58% 17% 3% 13% 2% 1% 6% 100%
Annual Net Impact on General Fund ($32,485,031) ($6,829,918) ($1,643,637) $2,351,362 $15,722,695 $13,336,257 ($3,687,792) ($13,236,065) Source: Economic & Planning Systems
[1] Residential developments in the TASP/CFD area pay an additional annual CFD special tax toward the provision of public services throughout the TASP. These revenues do not flow into the City's General Fund and therefore are omitted from this table. 25516
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 8 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Impacts of New Uses
Land Uses and Approach
To estimate the fiscal impacts of potential new developments on the City of Milpitas’ General Fund, City staff and EPS considered nine (9) development prototypes across a range of land uses. These prototypes were selected as they represent development types that might be considered for development within the Innovation District and the broader MMPS. The prototypes examined are as follows:

1. Mid-Rise Multifamily Residential. Apartment building of 7 stories in height with a density of about 90 Dwelling Units per Acre.

2. High-Rise Multifamily Residential. Apartment building of 12 stories in height with a density of about 180 Dwelling Units per Acre.

3. Class A Office. A 5- to 8-story office building with high-quality finishes, amenities, and systems.

4. Class B Office. A 3-story office building with mid-quality finishes, amenities, and systems.

5. Office/R&D. A 4- to 5-story commercial building with more flexible space that can accommodate both office and R&D uses.

6. Light Industrial. A 1- to 3-story building intended for production, processing, and assembly activities that do not generate noise, odors, or fumes to the degree a heavy industrial use would.

7. Warehouse/Distribution.5 A 1-story building intended for warehousing and logistic uses.

8. Retail. A traditional 1-story commercial building with substantial parking and a low Floor Area Ratio intended for on-site retail sales.

9. Hotel. A 210-room hotel with 650 sq. ft. per room.

Fiscal impacts for the new prototype developments were derived using the same general methodology as for existing uses, with the major difference arising in the assessed value assumptions.6 For new uses, development values/assessed values are based on recent market 5 Warehouse and distribution uses include logistics/fulfillment centers. 6 Assessed value represents the basis on which property owners pay their property taxes. For existing developments, County Assessor records provide information on actual assessed values. For new development, the assessment is set at the sales price or property value of the new development. For for-sale properties, new development will be assessed at its sale price. For new income (rental) properties, the assessed value of the new property will be estimated by the Santa Clara County Assessor’s Office on either a capitalized value or total cost basis (see next footnote). 25617
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 9 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx information.7 The prototype land uses are estimated on lots of varying size, so results are presented on a per-acre basis to facilitate comparison. The estimated net annual fiscal impacts of new and future uses on Milpitas’ General Fund are presented in Table 2.

Results
As shown in Table 2, on a per-acre basis, the new development prototypes all cover their estimated costs and nonresidential uses generally provide greater annual fiscal surpluses to the City’s General Fund. Hotel uses provide the greatest fiscal impact at $826,580 per acre, though as experienced during the pandemic, these revenues sources are subject to fluctuation with economic conditions. After hotels uses, Class A Office ($85,406), Retail ($63,925), and Office/R&D ($51,222) uses provided the next highest fiscal impact per acre. The next set of uses in order of positive fiscal impact per acre include, High-Rise Residential ($28,115), Light Industrial ($22,648), Class B Office ($14,299), Warehouse and Distribution ($13,527), and MidRise Residential ($9,153). The higher development values and associated property tax generation by new development are a key driver of the improved fiscal results. Employment uses often generate higher fiscal surpluses as opposed to residential uses, due to their lower service population generation and subsequently lower impact on General Fund expenditures.

It is important to note that these results represent planning-level averages and individual developments will vary from these results based on project specifics and market timing. The CFD special taxes paid by new residential development in the TASP are not included in this table but are discussed below (these revenues do not flow directly into the City’s General Fund but they do support the provision of public services in the TASP).8 Key conclusions from Table 2 are as follows:
 Residential. New mid-rise development prototypes – a predominant recent development type in the TASP - are expected to generate sufficient General Fund revenues annually (about $333,000) to cover the new General Fund expenditures (about $315,000) with a positive fiscal surplus of about $18,000 or $9,000 per acre. New high-residential development prototypes (a product type that is yet to be developed in the City) are also expected to generate a positive fiscal surplus of about $56,000 for the prototype, equivalent to $28,000 per acre, with higher General Fund revenue and expenditure impacts than new mid-rise development. The significant property tax revenues generated by new residential developments’ high market values are the primary contributor to their positive net fiscal impacts. These estimates do not include the additional public service special tax payments made by new residential in the TASP that are discussed below. 7 Development values (and hence assessed values of new development) were estimated using a capitalized value approach driven by market rent/lease rate information and capitalized rates. Rents and associated values were developed using 2019 data to avoid the impact of the pandemic-induced market downturn. Capitalized values were developed as part of the Residual Land Value Analysis section. A glossary of terms is provided in Appendix D. 8 The Transit Area Specific Plan (TASP) is the 2008 document that sets forth the vision, design guidelines, and policies for the City to redevelop the area surrounding the now opened Milpitas BART station. The new Milpitas Metro Specific Plan represents an update to this document. 25718
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 10 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Table 2. Annual General Fund Net Fiscal Impacts of New Land Uses Mid‐Rise High‐Rise Class A Class B Office/ Light Warehouse/ Annual General Fund Impacts Multifamily1 Multifamily1 Office Office R&D Industrial Distribution Retail Hotel General Fund Revenues
Property Tax $191,702 $397,211 $352,556 $59,768 $199,254 $78,611 $39,374 $68,201 $126,707Property Tax In‐Lieu of VLF $47,959 $99,372 $88,201 $14,952 $49,848 $19,666 $9,850 $17,062 $31,699 Sales Taxes $28,005 $57,993 $156,730 $31,010 $91,922 $40,181 $25,964 $254,244 $801 Real Estate Transfer Tax $5,207 $10,788 $4,788 $812 $2,706 $1,068 $535 $926 $1,721 Business License Tax $0 $0 $10,032 $2,006 $5,016 $1,505 $463 $1,191 $614 Motor Vehicle In‐Lieu $218 $437 $0 $0 $0 $0 $0 $0 $0
Other Taxes $5,425 $11,225 $14,820 $2,818 $7,722 $2,572 $998 $2,118 $2,335 Franchise Fees $21,341 $42,681 $57,382 $11,476 $28,691 $8,607 $2,648 $6,814 $3,513Transient Occupancy Tax $0 $0 $0 $0 $0 $0 $0 $0 $1,916,250 Licenses, Permits, and Fines $38,338 $76,675 $103,086 $20,617 $51,543 $15,463 $4,758 $12,241 $6,311 Total Revenues $332,770 $685,158 $772,774 $140,642 $428,980 $165,101 $83,592 $360,681 $2,087,616 per Acre $166,385 $342,579 $154,555 $28,128 $85,796 $33,020 $16,718 $72,136 $835,046 General Fund Expenditures
General Government $3,217 $6,433 $3,537 $707 $1,768 $530 $163 $420 $217 Economic Development $1,368 $2,736 $1,504 $301 $752 $226 $69 $179 $92Building Safety & Housing $10,329 $20,658 $11,357 $2,271 $5,678 $1,703 $524 $1,349 $695 Engineering $3,503 $7,005 $3,851 $770 $1,926 $578 $178 $457 $236Finance $3,260 $6,519 $3,584 $717 $1,792 $538 $165 $426 $219Fire $104,073 $208,146 $114,425 $22,885 $57,212 $17,164 $5,281 $13,588 $7,005Human Resources $1,572 $3,145 $1,729 $346 $864 $259 $80 $205 $106Information Technology $2,784 $5,569 $3,061 $612 $1,531 $459 $141 $364 $187Planning $1,484 $2,968 $1,632 $326 $816 $245 $75 $194 $100Police $140,493 $280,986 $154,468 $30,894 $77,234 $23,170 $7,129 $18,343 $9,456Public Works $34,249 $68,497 $37,655 $7,531 $18,828 $5,648 $1,738 $4,472 $2,305 Recreation & Community Services $8,133 $16,266 $8,942 $1,788 $4,471 $1,341 $413 $1,062 $547 Total Expenditures $314,464 $628,929 $345,743 $69,149 $172,872 $51,861 $15,957 $41,057 $21,166 per Acre $157,232 $314,464 $69,149 $13,830 $34,574 $10,372 $3,191 $8,211 $8,466 Annual Net Impact on
General Fund $18,305 $56,229 $427,031 $71,493 $256,109 $113,239 $67,635 $319,624 $2,066,450 per Acre $9,153 $28,115 $85,406 $14,299 $51,222 $22,648 $13,527 $63,925 $826,580 Source: Economic & Planning Systems
[1] The current CFD special tax rate is about $650 per unit annually. As a result, mid‐rise residential developments (see prototypes above) in the TASP/CFD area generate a significant additional annual $117,000 in tax revenue per acre of development and high‐rise developments an additional $234,000 per acre. The City uses these revenue streams to support additional public safety services in the TASP. 25819
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 11 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx  Office and Office/R&D. Class A Office and Office R&D prototype developments are expected to generate strong fiscal impacts to the City. The Class A office development prototype is expected to generate about $770,000 in new General Fund revenues annually, more than double its expected new General Fund expenditures of $345,000, with an average fiscal surplus per acre of $85,000 per acre. The Class B Office prototype, although fiscally positive, is estimated to generate a significantly lower net fiscal impact than the other two Office uses at about $14,000 per acre. Office/R&D development is expected to generate about $430,000 in new General Fund revenues annually relative to expected new General Fund expenditures of $175,000, with an average fiscal surplus of $50,000 per acre.  Light Industrial and Warehouse/Distribution Uses. Light Industrial uses and Warehouse/Distribution uses are both estimated to generate positive annual net fiscal impacts. Their expected revenue generation is sufficient to cover their relatively modest costs, though the lower density nature of these developments means modest per acre fiscal positives. On a per acre basis, light industrial uses generate a fiscal surplus of $23,000 per acre and warehouse and distribution uses about $14,000 per acre.  Hotel and Retail Uses. As is typical under the State of California’s system of public finance, new hotel uses and retail generate strong fiscal surpluses to the City’s General Fund. Hotel uses, with their strong transient occupancy taxes (TOT) and more modest public service demands, generate the highest fiscal surplus estimated. For Milpitas and the hotel development prototype evaluated (210 hotel rooms on 2.5 gross acres), the fiscal surplus is estimated at about $825,000 per acre. New retail uses also generate a positive fiscal surplus due to their strong sales and use tax generation. For Milpitas and the relatively low density retail development prototype evaluated (0.3 FAR, one-story development on 5 gross acres), the fiscal surplus of about $320,000 is spread across a broader land area resulting in a fiscal surplus of about $63,000 per acre.9
 CFD/TASP Residential Development. The above results for existing and new land uses are expressed strictly in terms of the fiscal impacts of the various land uses on the City’s General Fund and exclude the role of the TASP’s CFD. For existing and any future residential development inside the TASP, developments pay an additional annual payment towards the provision of public services through a CFD special tax.10 This CFD was formed by the City to support the provision of additional public services for residential uses in the TASP, including police, fire, and storm protection services. The current CFD special tax rate is about $650 per unit annually. As a result, mid-rise residential developments (see prototypes above) in the TASP/CFD area generate a significant additional annual $117,000 in tax revenue per acre of development and high-rise developments an additional $234,000 per acre. The City uses these revenues streams to support additional public safety services in the TASP. 9 Because of e-commerce and other factors, retail uses are generally re-positioning and/or contracting in California cities so substantial new retail developments are expected to be relatively infrequent.

Smaller, new retail development are occurring on the ground floor of mixed uses buildings typically with residential and office on the higher floors and with structured parking sharing the ground floor with the retail areas.
10 Milpitas’ Community Facilities District (CFD) 2008-1 was formed in 2008 under the authority of the Mello-Roos Community Facilities Act of 1982.
25920
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 12 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Employment Density and O ccupation/Wage Analysis
Different types of new workforce development accommodate different types of industries and different numbers of jobs/workers with different average wages/salaries. The sections below provide estimates of the expected employment densities and salaries/wages for selected land uses/development types.

Methodology
There are a range of data sources available that provide information or estimates of employment density (number of jobs per 1,000 square feet of a particular building type) as well as on wage levels by occupation. For employment density, information is often reported at a regional or statewide level. EPS reviewed multiple data sources to determine estimates of the average number of workers per building square foot and the average square feet required per worker.

For the wage analysis, the first step was to obtain U.S. Census Bureau information on wages by industry sector by City. A connection was then made between the land use/development types being evaluated and the typical industry sectors occupying those building. It was then possible to estimate average wages of jobs in different building types in different cities. Because wage information by City is imperfect and due to the regional nature of employment markets, an average of the four cities evaluated was calculated to provide a planning-level estimate of future wages by building type.

Employment Density
The relationship between new development (building square feet) and the expected number of new workers accommodated is typically expressed as a jobs or employment density on a jobs per 1,000 square feet basis. Table 3 shows the average expected jobs densities for different types of workplace development. EPS reviewed available data from CoStar in terms of jobs by building square feet for different uses in a range of Silicon Valley cities, reviewed information in different brokerage reports, project-specific information for recent developments where available, and other industry reports.11 There is not sufficient variation between cities or data available to draw distinctions between the same land uses in different cities in Santa Clara County.
11 CoStar Group, Inc. provides a web-based tool that collects data and analytics on commercial real estate industry sales and market trends.
26021
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 13 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Table 3. Employment Density by Land Use/Development Type As shown in Table 3, the average employment density varies by development type. For office/industrial uses, Class A office is expected to have the highest density of workers of 225 square feet per worker (4.4 workers per 1,000 square feet); followed by Class A Office/R&D and Class B Office with 300 square feet per worker (3.3 workers per 1,000 square feet); Light Industrial with 500 square feet per worker (2 workers per 1,000 square feet); and Warehouse and Distribution with 1,300 square feet per worker (0.77 workers per 1,000 square feet).

Retail and Hotel employment densities often vary depending on the type of retail and hotel, though on average employment densities for retail developments are expected to be about 400 square feet per worker (2.5 workers per 1,000 square feet) and for hotel developments about 1,300 square feet per worker (typically about 0.5 workers per hotel room).

Land use
Sq. Ft./
Employee
Workers / 1,000
Sq. Ft.

Light Industrial 500                                              2.0 Retail 400                                              2.5 Warehouse and Distribution 1,300                                           0.8 Class A Office 225                                              4.4 Class A Office/ R&D 300                                              3.3 Class B Office 300                                              3.3 Hotel 1,300                                           0.5 Source: CoStar, Cushman & Wakefield, Bureau of Labor
Statistics, Moody’s, EPS prior project work.
26122
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 14 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Industries and Annual Wages
Different land use/development types typically accommodate businesses from specific sets of industry sectors. U.S. Census Bureau information (American Community Surveys and associated applications) provide average wages by industry sector by city. EPS first linked different land use/development types to different industry sectors based on typically observed tenant profiles.

Average wages for each of these industry sectors (or set of industry sectors) were then identified for the city of Milpitas and three other Santa Clara County cities – Sunnyvale, Santa Clara, and Mountain View, shown in Table 4.

Table 4. Industries and Annual Wages by Land Use/Development Type Where development types typically accommodate multiple industry sectors with different wages, an average wage was calculated based on the cities’ current mix of those industry types.

Because there is typically a regional market for jobs and because of the potential for outliers/anomalies in individual cites, a four-city average wage was developed by land use/development type.

Land Use/ Development Type Milpitas Santa Clara Sunnyvale Mountain View Primary Industry Sectors Office/ Industrial
Class A Office $121,500 $112,400 $120,900 $130,500 Information; Professional; Management Class A Office/ R&D $122,100 $120,600 $135,700 $145,900 Professional; Scientific; Technical Class B Office $78,200 $88,300 $55,300 $80,500 Finance, Insurance; Real Estate Light Industrial $89,500 $120,600 $135,600 $120,600 Manufacturing Warehouse/ Distribution [1] $39,300 $43,600 $75,200 ‐ Transportation and Warehousing Retail/ Hotel
Retail $34,000 $31,300 $41,100 $51,000 Retail Trade
Hotel $33,900 $21,700 $23,600 $25,800 Accommodation and Food Services [1] Mountain View has a low number of warehouse/ distribution jobs, therefore skewing the salary data. For this reason, an average salary is not used in this category as it does not provide a representative comparison.

Source: 2019 1‐Year ACS Estimates, Table S2413;  U.S. Census Bureau, OnTheMap Application and LEHD Origin‐Destination Employment Statistics. 26223
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 15 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Table 5 shows the 2019 four-city average wages by land use category. This represents the estimated average wage for each new job accommodated in the specific land use category and is considered to be the best estimate of future wages by development type for the city of Milpitas.

Table 5. Industries and Annual Wages by Land Use/Development Type As shown in Table 5, jobs in Class A Office, Class A Office/R&D, and Light Industrial Uses (especially manufacturing sector) provide the highest average wages. Class B Office jobs accommodate a broader range of industries with, on average, more modest wages.

Warehouse/distribution, retail, and hotel jobs provide relatively lower wages.12 Residual Land Value Analysis
Residual land value is a method for calculating the value of development land. A Residual Land Value Analysis provides important insights on the feasibility of different land uses/development types under current/recent market conditions and City policies. It also provides a tool to explore the extent to which the prospects for development improve as market conditions improve and/or as City policies are adjusted.

In this analysis, EPS conducted residual land value analysis on a set of potential Innovation District and MMSP area development prototypes in partnership with City staff. An initial residual land value analysis was conducted under recent market conditions and, where development prototypes were infeasible, under a potential, alternative set of conditions where market conditions were improved and/or City policies adjusted. The residual land value analyses provide important insights (as summarized further below) in terms of the level of change that may be required to support certain land uses. Appendix E provides the full residual land value table set. 12 Jobs in Warehouse/Distribution include jobs in e-commerce fulfillment centers, such as Amazon.

Land Use/ Development Type Annual Wages Primary Industry Sectors Office/ Industrial
Class A Office $135,000 Information; Professional; Management Class A Office/ R&D $132,000 Professionl; Scientific; Technical Class B Office $77,000 Finance, Insurance; Real Estate
Light Industrial $118,000 Manufacturing
Warehouse/ Distribution $51,000 Transportation and Warehousing Retail/ Hotel
Retail $47,000 Retail Trade
Hotel $25,000 Accomodation and Food Services
Source: 2019 1‐Year ACS Estimates, Table S2413;  U.S. Census Bureau, OnTheMap Application and LEHD Origin‐Destination Employment Statistics.
26324
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 16 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Overall, the analysis shows that many of the uses of interest for the Innovation District are not currently feasible with other uses more likely to occur if lands are not protected for innovation uses in the medium/longer term. The analysis also shows that with significant improvements in market conditions and supportive polices, the desired uses for the Innovation District become feasible. As described elsewhere in this memorandum, these Innovation District uses would provide substantial fiscal and economic benefits to the City of Milpitas.

Methodology
A residual land value analysis specifically estimates the amount developers could pay for land and still meet a hurdle/basic level of return on their investment. A negative residual land value indicates the project is infeasible and a zero residual land value indicates the project is only feasible if land is available at no cost. Feasible projects on private land will need to cover all costs/return requirements and provide a sufficient land value payment to the existing landowner for them to agree to sell their land. Landowner threshold requirements for their land will depend on a range of factors, including, but not limited to (1) existing land uses, leases, and associated revenues streams; (2) land price expectations, sometimes informed by other recent land sales; and (3) general interest of landowner in selling land.

For each of the development prototypes (see below), the residual land value analyses compared the estimated development value of the development prototype once completed to the estimated development costs and return requirements (excluding any land acquisition costs). As a formula:

Residual Land Value = Project Development Value minus Development Costs (excluding the cost to purchase land)
The following assumptions underlie the residual land value analysis:
 Project Development Value. Project development value is driven by:
(1) Estimated lease rates, vacancy rates, operating expenses and resulting Net Operating Income; and
(2) The return on investment a project buyer would be looking for in acquiring the completed project (also known as the capitalization rate).

Market conditions are generally the key factor to project development value and change through time with business and real estate cycles.
 Project Development Costs. Project development costs include a broad range of costs. The direct costs of construction primarily depend on material costs and construction labor costs, which are in turn tied to development type and height (that affect materials required and type of labor required). Parking requirements and the type of parking required are also key drivers to direct construction costs. Indirect costs are also substantial and include architecture and engineering costs, tenant improvements costs, legal, insurance, and inspection costs, financing costs, and permit fees, development impact fees, and other regulatory requirements.
26425
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 17 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Estimated project development costs are subtracted from project development values to determine the estimated residual land value. For each development prototype, the total residual land value is also converted into a per acre residual land value to allow for comparison of residual land values between different land uses/development prototypes.

Land Uses/Development Prototypes Evaluated
Seven (7) different development prototypes were created to support the feasibility analysis, including 5 different workspace prototypes and 2 residential prototypes. Four of the workspace prototypes represent development types that the City seeks to attract into the Innovation District. These include Class A Office (5 stories), Class A Office (8 stories), Class A Office/R&D and Light Industrial development types. In addition, the warehouse and distribution prototype is a workspace category that, with e-commerce growing, is being developed and proposed in the city of Milpitas and elsewhere and is studied as a point of comparison. The mid-rise residential development prototype has been increasingly common in the TASP area and is important as a point of reference as well as in terms of developer-decision making when offered residential and commercial development opportunities. High-rise residential development was also considered as a use of interest to the City in appropriate, transit-proximate locations.

The prototypes examined include:
 Class A Office (5-story). A 5-story office building with high-quality finishes, amenities, and systems.
 Class A Office (8-story). An 8-story office building with high-quality finishes, amenities, and systems.
 Class A Office/R&D. A 4- to 5-story commercial building with more flexible space that can accommodate both office and R&D uses.
 Light Industrial. A 3-story building intended for production, processing, and assembly activities that do not generate noise, odors, or fumes to the degree a heavy industrial use would.
 Warehouse/Distribution. A 1-story building intended for logistics, distribution, and warehouse uses.
 Mid-Rise Multifamily Residential. Apartment building of 7 stories in height with a density of about 90 Dwelling Units per Acre.
 High-Rise Multifamily Residential. Apartment building of 12 stories in height with a density of about 180 Dwelling Units per Acre.
26526
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 18 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Initial Results Under Current Market Conditions
Table 6 shows results of the residual land value analysis under early 2020 (pre-pandemic) market conditions and policies as described below. It is important to note that individual project residual land values will vary around the estimated planning-level average based on project specifics and costs/ revenues at time of development/going to market:
 Class A Office and Office/R&D Development. The combination of 2020 market conditions, development costs, and City policies/requirements indicate that new Class A office development, at both 5 stories and 8 stories, as well as Class A Office/R&D development are not currently feasible. A comparison of estimated development costs to development value indicates a negative residual land value. These results are consistent with the current lack of these types of development in the city of Milpitas.  Light Industrial and Warehouse and Distribution Uses. For light industrial and warehouse and distribution developments the current economic picture is more positive. For the prototypes evaluated, development values cover development costs and generate positive residual land values. Under these assumptions, these developments could pay between $2.2 million and $2.8 million per acre for land and still cover their development costs and meet a hurdle rate of return. This development economics picture is also reflected on the ground in the city of Milpitas with recent developments. Warehouse and distribution uses, in particular, have been driven by increasing demand associated with e-commerce, a trend that has strengthened during the pandemic, and directly results in stronger residual land values.
 Residential Development.13 Mid-rise residential development also shows robust development economics using pre-COVID impact lease rates. Assuming the post-pandemic recovery continues and brings lease rates back to pre-COVID levels, new midrise residential development will continue to be a strong land use, with estimated residual land values of about $4.75 million per acre. Recent increases in construction costs may erode the residual land values, though it is likely that developers will continue to be willing to pay more for land that is suitable for and allows residential uses than for other uses. High-rise residential comes with higher per square foot construction costs and at the current time does not appear feasible in Milpitas.
13 The baseline/current analyses are based on pre-COVID lease rates/development values. Forecasts indicate that, depending on the land uses, these rates should be achievable by 2023 or sooner. The application of pandemic lease rates would make residual land values lower for most land uses. 26627
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 19 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Table 6. Baseline Residual Land Value Results by Development Prototype (Current Market Conditions) Sensitivity Analyses and Results
Sensitivity analysis is a tool used to determine how outcomes and conclusions change as difficult model assumptions are adjusted. In this section, the analysis considers how improvements in market conditions as well as different policy approaches could change the outcomes of the residual land value analysis.

In general, it is expected that, over time, the combination of the new multi-modal Milpitas Transit Center (VTA/BART), the envisioned improvements and connections under the MMSP, broader awareness of opportunities in Milpitas, and the continued pre-eminence of Silicon Valley as a global innovation ecosystem will all result in improved market performance.

The sensitivity analyses looked at the land uses that currently return negative residual land values and potentially improved market conditions over time as potential City policy decisions.

For market conditions, improvements were considered where conditions were similar to those in North San Jose in recent years. North San Jose currently shows substantially stronger conditions for office and office/R&D product types but was chosen due to its proximity to Milpitas and its more recent emergence as a jobs center relative to more established jobs center in Palo Alto and other cities. For policy adjustments, the two key areas of focus were reductions in Transit Area Development Impact Fees (TADIF) on nonresidential development in the Innovation District and the easing of parking requirements in the Innovation District. These policy options were selected as they directly affect the feasibility of these new development types. This analysis is particularly pertinent to the development of the Innovation District Implementation Framework in Phase 2 as it provides some indication of potential City actions.

The results of the sensitivity analyses are shown in Table 7 and described below.

Gross FAR/ Building SF/ Residual Per Acre
Prototype Acres Density Units Costs Value Land Value Land Value Workspace
1 Class A Office/ 5-Story 5 1.00 217,800 $157,400,000 $104,700,000 ($52,700,000) ($10,540,000) 2 Class A Office/ 8-Story 5 1.50 326,700 $250,000,000 $157,100,000 ($92,900,000) ($18,580,000) 3 Class A Office/ R&D 5 1.00 217,800 $128,800,000 $96,300,000 ($32,500,000) ($6,500,000) 4 Light Industrial 5 0.50 108,900 $34,200,000 $48,500,000 $14,300,000 $2,860,000 5 Warehouse & Distribution 5 0.40 87,120 $13,200,000 $24,300,000 $11,100,000 $2,220,000 Residential
6 Mid-Rise Residential 2 90 180 $105,300,000 $114,800,000 $9,500,000 $4,750,000 7 High-Rise Residential 2 180 360 $234,700,000 $229,600,000 ($5,100,000) ($2,550,000) 26728
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 20 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Table 7. Baseline vs. Improved Residual Land Value Results by Development Prototype Class A Office (5-story)
To test an improved scenario, the analysis: (1) improves development values by about $40 million by increasing the assumed lease rate by about 30 percent to be consistent with top of market rents in North San Jose and by reducing capitalization rates by 50 basis points; (2) decreases development costs by about $19 million through a combination of not charging the TADIF fee (about $8 million) and reducing the parking ratio to 2.4 spaces per 1,000 square feet (about $11 million) as opposed to the current number of spaces required per 1,000 square feet of office of 3.3. The parking cost savings assumes the developer can reduce its parking development without affecting the marketability of the office space.

The 5-story office development prototype showed a baseline negative residual land value of $52.7 million. The overall effect of these changes results in a residual land value of about $7 million or $1.4 million per acre, a substantial improvement. Some of the potential improvements are policy-driven while others depend on a combination of improvements in the area and evolution of Silicon Valley real estate in a way that supports higher rents in Milpitas.

Under these circumstances, Class A office development might be feasible though may still struggle to compete to purchase land relative to the land values that residential, light industrial, and warehouse and distribution sources can afford to pay.

Class A Office (8-story)
To test an improved Class A Office (8-story) scenario, the analysis makes the same adjustments as for the 5-Story Class A Office building including: (1) improved development values through lease rate increase and capitalization rate reduction; and (2) reduced development costs by not charging the TADIF fee and reducing the parking ratio to 2.4.

The 8-story office development prototype showed a baseline negative residual land value of $92.9 million. The overall effect of these changes results in a residual land value of about $460,000 or $92,000 per acre, a substantial improvement. Some of the potential improvements Building SF/ Residual Per Acre
Prototype Units Costs Value Land Value Land Value
Class A Office/ 5-Story
Baseline 217,800 $157,400,000 $104,700,000 ($52,700,000) ($10,540,000) Improved 217,800 $138,100,000 $145,100,000 $7,000,000 $1,400,000 Class A Office/ 8-Story
Baseline 326,700 $250,000,000 $157,100,000 ($92,900,000) ($18,580,000) Improved 326,700 $217,200,000 $217,600,000 $400,000 $80,000 Class A Office/ R&D
Baseline 217,800 $128,800,000 $96,300,000 ($32,500,000) ($6,500,000) Improved 217,800 $117,800,000 $123,000,000 $5,200,000 $1,040,000 High-Rise Residential
Baseline 360 $234,700,000 $229,600,000 ($5,100,000) ($2,550,000) Improved 360 $234,700,000 $237,800,000 $3,100,000 $1,550,000 26829
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 21 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx are policy-driven while others depend on a combination of improvements in the area and evolution of Silicon Valley real estate in a way that supports higher rents in Milpitas. The primary reason the results are worse for the 8-story vs. 5-story office building is the greater proportion of parking that needs to be structured.

Under these circumstances, higher density Class A Office development can cover its non-land development cost but does not generate sufficient value to cover land costs as well. As a result, there may be a longer wait (for market rents to go even higher) and/or it might require a joint venture with a public agency that is able to provide land at below market rates.

Class A Office/R&D (5-story)
To test an improved Office/R&D (5-story) scenario, the analysis (1) improves development values by about $27 million by increasing the assumed lease rate by about 30 percent; and (2) decreases development costs by about $9 million by not charging the TADIF office fee. No change in parking ratio is modelled as the baseline parking ratio is already relatively low at

2.3 space/1,000 square feet.

The Office/R&D development prototype showed a baseline negative residual land value of $32.5 million. The overall effect of these changes results in a positive residual land value of about $5.2 million or about $1 million per acre. Under these circumstances, Class A Office/ R&D development might be feasible though may still struggle to compete to purchase land relative to the land values that residential, light industrial, and warehouse and distribution sources can afford to pay.

High-Rise Residential Development
To test an improved high-rise residential scenario, the analysis improves development values by about $8 million by increasing the assumed lease rate by about 4 percent to be consistent with rents near the top end of the San Jose market.

The high-rise residential development prototype showed a baseline negative residual land value of $5.1 million. The improved development values with the increased lease rates turns the residual land value positive to about $1.6 million per acre. While this positive residual land value is not at the same level as the mid-rise residential development or some industrial uses, it does indicate that if residential lease rates increase faster than development costs in the coming years, high-rise residential development would become feasible in Milpitas.

Innovation District Scenarios Analysis
The vision for the Innovation District is described below:

The Innovation District will be an employment destination with modern office, research and development buildings and flexible space for people to interact through “creative collisions” and an innovative ecosystem. This ecosystem supports a risk-taking environment, facilitates idea generation with experimentation being central to the success of the Innovation District. The City of Milpitas aims to plan for a well-connected Innovation District with proximity to public transit and public infrastructure that supports bike paths, pedestrian scale sidewalks, social gathering places, and high-speed fiber. The growing innovation economy in Milpitas will require local leaders to plan long-term, but with short-term flexibility to shape future growth strategies within the Central Manufacturing Area South’s Innovation District. The vision includes shaping our 26930
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 22 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx urban development practices to build a culture of creativity, innovation, inclusivity and equity, and agility to help advance opportunities for innovation.

The Innovation District Scenarios Analysis considers the potential benefits/impacts of Innovation District development assuming District buildout under four (4) potential Innovation District scenarios.

Methodology
The Innovation District Development Scenarios Analysis applies the Employment Density, Occupation and Wage Analysis, and Fiscal Impact Analysis to the four potential Innovation District scenarios to determine the different economic and fiscal impact analyses associated with each scenario. The City’s Office of Economic Development developed four development scenarios in close collaboration with the Planning Department and the MMSP consultant team.

The scenarios incorporate a subset of MMSP parcels that have been identified as part of the Innovation District, and indicates the expected land use of each parcel, as well as the assumed density of development (i.e., Floor-Area-Ratios or residential units/acre).

For each scenario, the potential amount of new development by scenario was estimated. The employment density and wage analysis results were then applied to each development scenario to determine the number of jobs that could be accommodated and the associated estimated wages. In addition, the fiscal impact analysis estimates of impact per acre were also applied to the development scenarios to estimate the expected net impact on the General Fund under each of the scenarios.

Innovation District Scenarios
The City has identified approximately 74 acres of land as part of the Innovation District. This includes roughly 17 acres of land that are located adjacent to the Great Mall and an additional 57 acres of contiguous land. The 57-acre contiguous area includes about 10 acres on the eastern edge of the current TASP area boundary as well as an additional 47 acres of additional land further to the east on both sides of Montague Expressway, that is being incorporated into the new MMSP area.

City staff indicated different potential land uses for each of the parcels within the Innovation District (see Appendix A and Appendix F). Table 8 shows a summary of the allocation of acres by land use for each of the scenarios. Land uses are divided into two broader categories and specific land use categories, including:
 Employment Lands. Class A Office; Class A Office/R&D, Class B Office, Industrial, Hotel, Warehouse/Distribution, and Commercial/Retail.14
 Non-Employment Lands. Housing, Open Space, Assembly, and Vacant uses are represented.
14 Warehouse/Distribution uses are included as employments lands as they will generate some jobs, although they are often not viewed as job creators.
27031
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 23 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Table 8. Innovation District Scenario Acres by Land Use The four scenarios are generally intended to reflect the following circumstances:
 Scenario 1. Represents the existing environment and current land use designations in the Innovation District (ID). Current parcel uses include Warehouse/Distribution (43 percent of ID acres), Assembly4 (14 percent), Class B Office (13 percent), and Industrial (12 percent).  Scenario 2. Scenario where Innovation District (ID) parcels are primarily redeveloped as retail/commercial (48 percent of ID acres) with a strong ongoing warehouse/distribution component (31 percent).
 Scenario 3. Represents a potential Innovation District (ID) with a strong presence of new Class A Office and Office/R&D development (50 percent of ID acres), light industrial uses (31 percent), continued hotel uses, and modest amounts of housing and open space.  Scenario 4. Represents a potential Innovation District (ID) with an even stronger presence of new Class A Office and Office/R&D development (87 percent of ID acres) along with continued hotel uses.

To estimate the potential number of jobs, wages, and housing units associated with each of the scenarios, City staff and EPS developed a set of development prototypes that could be associated with the Innovation District land use designations. Table 9 provides the assumed details of the different development prototypes, including density, number of stories, gross building area, and building square feet based on typical development characteristics seen in the region. City staff provided the Floor-Area-Ratios based on their preferred development typologies. As shown, the level of new building development on an acre of Innovation District land ranges from 13,000 square feet for commercial/retail development to 65,300 square feet for Class A office Land Use
Acres % Acres % Acres % Acres %
Employment Lands
Class A Office 0.0 0% 3.6 5% 17.2 23% 31.2 42%
Class A Office/R&D 0.0 0% 4.3 6% 20.2 27% 33.3 45%
Class B Office 9.7 13% 0.0 0% 0.0 0% 0.0 0%
Industrial 8.9 12% 0.0 0% 23.4 31% 0.0 0%
Warehouse/Distribution 32.1 43% 23.4 31% 0 0% 0.0 0%
Hotel 6.8 9% 4.5 6% 6.8 9% 6.8 9%
Commercial/ Retail 1.5 2% 35.5 48% 0.0 0% 0.0 0%
Employment Lands Subtotal 59.0 79% 71.3 96% 67.6 91% 71.3 96% Nonemployment Lands
Housing 0.0 0% 0.0 0% 3.7 5% 0.0 0%
Open Space 0.0 0% 3.1 4% 3.1 4% 3.1 4%
Assembly 10.6 14% 0.0 0% 0 0% 0.0 0%
Vacant 4.8 6% 0.0 0% 0.0 0% 0.0 0%
Nonemployment Lands Subtotal 15.4 21% 3.1 4% 6.8 9% 3.1 4% Total 74.4 100% 74.4 100% 74.4 100% 74.4 100%
Scen. 1 Scen. 2 Scen. 3 Scen. 4
27132
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 24 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx development. For residential land uses, the number of units on each acre varies between 90 units and 180 units depending on whether the development is mid-rise or high-rise.

Table 9. Innovation District Development Prototypes/Intensities Applying the development prototype information to the land use scenarios provides the potential development under each of these scenarios as presented in Table 10. As shown, the amount of development on employment lands ranges from 790,000 square feet under Scenario 1 up to

3.8 million square feet under Scenario 4. There is no residential development in Scenarios 1, 2, and 4, with a potential 330 units under Scenario 3.

Table 10. Residential Units and Employment Lands Building Sq. Ft. by Scenario Area FAR/ Density Stories Gross Acres Gross Building Area/ # of Units Building Sq. Ft./ Acre Employment Lands Prototypes
Class A Office 1.5 8 5 326,700                                          65,340 Class A Office/ R&D 1.0 5 5 217,800                                          43,560 Class B Office 0.4 3 5 87,120                                            17,424 Light Industrial 0.6 3 5 130,680                                          26,136 Warehouse/ Distrib. 0.6 1 5 130,680                                          26,136 Hotel [1] 1.3 6 2.5 136,125                                          54,450 Commercial/ Retail 0.3 1 5 65,340                                            13,068 Residential Development
Mid‐Rise (5‐7 story) 90 units/acre 7 2 180 90 units
High‐Rise (8‐12 story) 180 units/acre 12 2 360 180 units [1] 210 hotel rooms at 650 gross square feet per room. Gross square footage for hotel uses include the hotel room and additional eating, cooking, laundry spaces, plus other operational areas.

Area Scen. 1 Scen. 2 Scen. 3 Scen. 4
Employment Lands
Class A Office 0 235,224 1,125,155 2,039,784
Class A Office/ R&D 0 187,308 879,825 1,449,677
Class B Office 168,664 0 0 0
Industrial 232,454 0 611,582 0
Warehouse/Distribution 839,122 611,582 0 0
Hotel 370,260 245,025 370,260 370,260
Commercial/ Retail 19,406 463,888 0 0
Total Employment Lands (Building Sq. Ft.) 1,629,906 1,743,027 2,986,822 3,859,721 Residential Units 0 0 331 0
27233
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 25 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Innovation District Jobs and Wages by Scenario
Table 11 through Table 14 summarize the potential land uses, development levels, jobs and total salaries for each scenario.

Scenario 1 (Table 11). Scenario 1 is expected to accommodate about 1.63 million square feet of employment lands development, including roughly 800,000 square feet of warehouse and distribution development. Collectively, a total of about 2,000 jobs providing about $140 million in annual wages could be accommodated (over $70,000 per worker).

Table 11. Scenario 1 Summary: Developed Acres, Building Square Footage, Employees, and Salaries Scenario 2 (Table 12). Scenario 2 is expected to accommodate about 1.74 million square feet of employment lands development, including 600,000 square feet of warehouse and distribution development. Collectively, a total of about 3,500 jobs providing about $307 million in annual wages could be accommodated (almost $88,000 per worker).

Table 12. Scenario 2 Summary: Developed Acres, Building Square Footage, Employees, and Salaries Total
Land Use Acres Units/ Sq. ft. # of Employees Employees/ Acre Salary/ Job Annual Salaries Employment Lands
Class A Office 0.0 0 0 0 $135,000 $0
Class A Office/ R&D 0.0 0 0 0 $132,000 $0
Class B Office 9.7 168,664 562 58 $77,000 $43,291,000
Industrial 8.9 232,454 465 52 $118,000 $54,859,000
Warehouse/Distribution 32.1 839,122 645 20 $51,000 $32,919,000 Hotel 6.8 370,260 285 42 $25,000 $7,120,000
Commercial/ Retail 1.5 19,406 49 33 $47,000 $2,280,000
Total 59.0 1,629,906 2,006 34 $70,000 $140,469,000
Residential 0.0 0 na na na na
* Excludes any open space, assembly uses, and vacant land.

Total
Land Use Acres Units/ Sq. ft. # of Employees Employees/ Acre Salary/ Job Annual Salaries Employment Lands
Class A Office 3.6 235,224 1,045 290 $135,000 $141,134,000 Class A Office/ R&D 4.3 187,308 624 145 $132,000 $82,416,000 Class B Office 0.0 0 0 0 $77,000 $0
Industrial 0.0 0 0 0 $118,000 $0
Warehouse/Distribution 23.4 611,582 470 20 $51,000 $23,993,000 Hotel 4.5 245,025 188 42 $25,000 $4,712,000
Commercial/ Retail 35.5 463,888 1,160 33 $47,000 $54,507,000 Total 71.3 1,743,027 3,488 49 $88,000 $306,762,000
Residential 0 0 na na na na
* Excludes any open space, assembly uses, and vacant land. 27334
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 26 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Scenario 3 (Table 13). Scenario 3 is expected to accommodate about 3.0 million square feet of employment lands development. Collectively, a total of about 9,400 jobs providing about $1.2 billion in annual wages could be accommodated (near $128,500 per worker). This scenario also includes 331 residential units.

Table 13. Scenario 3 Summary: Developed Acres, Building Square Footage, Employees, and Salaries Scenario 4 (Table 14). Scenario 4 is expected to accommodate about 3.86 million square feet of employment lands development, primarily Class A Office and Office/R&D. Collectively, a total of about 14,200 jobs providing almost $2.0 billion in annual wages could be accommodated (around $131,800 per worker).

Table 14. Scenario 4 Summary: Developed Acres, Building Square Footage, Employees, and Salaries Total
Land Use Acres Units/ Sq. ft. # of Employees Employees/ Acre Salary/ Job Annual Salaries Employment Lands
Class A Office 17.2 1,125,155 5,001 290 $135,000 $675,093,000 Class A Office/ R&D 20.2 879,825 2,933 145 $132,000 $387,123,000 Class B Office 0.0 0 0 0 $77,000 $0
Industrial 23.4 611,582 1,223 52 $118,000 $144,333,000
Warehouse/Distribution 0.0 0 0 0 0 0
Hotel 6.8 370,260 285 42 $25,000 $7,120,000
Commercial/ Retail 0.0 0 0 0 $47,000 $0
Total 67.6 2,986,822 9,441 140 $128,547 $1,213,669,000
Residential 3.7 331 na na na na
* Excludes any open space, assembly uses, and vacant land.

Total
Land Use Acres Units/ Sq. ft. # of Employees Employees/ Acre Salary/ Job Annual Salaries Employment Lands
Class A Office 31.2 2,039,784 9,066 290 $135,000 $1,223,870,000 Class A Office/ R&D 33.3 1,449,677 4,832 145 $132,000 $637,858,000 Class B Office 0.0 0 0 0 $77,000 $0
Industrial 0.0 0 0 0 $118,000 $0
Warehouse/Distribution 0.0 0 0 0 0 0
Hotel 6.8 370,260 285 42 $25,000 $7,120,000
Commercial/ Retail 0.0 0 0 0 $47,000 $0
Total 71.3 3,859,721 14,183 199 $131,769 $1,868,848,000 Residential 0.0 0 na na na na
* Excludes any open space, assembly uses, and vacant land. 27435
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 27 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Innovation District Fiscal Impacts by Scenario
Table 15 estimates the net annual fiscal impacts of each of the Innovation District scenarios on the City’s General Fund at District buildout (in 2021 constant dollars). Estimated net fiscal impacts are derived by applying the average Net General Fund Fiscal Impact per Acre estimates derived in the above Fiscal Impact Analysis to each of the four Innovation District land uses scenarios. In summary:
 Scenario 1. At scenario buildout, Scenario 1 is estimated to generate about $6.5 million annually for Milpitas’ General Fund. Over 85 percent of this net positive fiscal impact (approximately $5.6 million) is driven by the 6.8 acres of Hotel uses and their associated transient occupancy tax revenues. The additional fiscal surplus of $900,000 annually comes from the combination of other uses.
 Scenario 2. At scenario buildout, Scenario 2 results in an estimated $6.8 million annually in positive net fiscal impact to the General Fund. While this scenario includes fewer Hotel acreage compared to Scenario 1, the overall impact is slightly greater due to the substantial acreage devoted to Commercial/Retail uses, which drive about $2.3 million in net annual fiscal impact due primarily to their significant sales and use tax revenues. About $850,000 annually of the fiscal surplus is associated with new uses other than hotel and commercial/retail.
 Scenario 3. At scenario buildout, Scenario 3 is expected to generate a net fiscal impact of over $8.6 million annually. This scenario includes the same amount of hotel acreage as Scenario 1 but is composed of a significant amount of Class A Office and Office/R&D acreage.

About $3.0 million of the annual fiscal surplus is estimated to be generated by non-hotel uses, fully generated by the new Class A Office, Office/R&D, and Light Industrial development.
 Scenario 4. At scenario buildout, Scenario 4 generates the strongest net fiscal impact to the City’s General Fund at an estimated $9.9 million annually. This result is driven by maintaining the original 6.8 acres for hotel use but shifting the remaining acreage entirely to Class A Office and Class A Office/R&D, which are strong fiscal contributors, while still preserving 3.1 acres for Open Space. About $4.4 million of the annual fiscal surplus is estimated to be generated by non-hotel uses, with the new Class A Office and Office/R&D generating all of these additional surplus revenues.
27536
Item # 2.

Draft Technical Memorandum October 7, 2021
Fiscal Benefits of Employment Lands Study: Phase 1 Page 28 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_10.07.21.docx Table 15. Annual Net Fiscal Impacts by Innovation District Scenario Land Use Per Acre Scenario 1 Scenario 2 Scenario 3 Scenario 4 Employment Lands
Class A Office $85,406 $0 $307,462 $1,470,694 $2,666,210 Class A Office/ R&D $51,222 $0 $220,253 $1,034,577 $1,704,659 Class B Office $14,299 $138,414 $0 $0 $0
Industrial $22,648 $201,430 $0 $529,961 $0
Warehouse/Distribution $13,527 $434,295 $316,530 $0 $0
Hotel $826,580 $5,620,744 $3,719,610 $5,620,744 $5,620,744 Commercial/ Retail $63,925 $94,929 $2,269,210 $0 $0
Employment Lands Subtotal $6,489,812 $6,833,065 $8,655,975 $9,991,613 Residential $9,153 $0 $0 $33,682 $0
Scenario Total $6,489,812 $6,833,065 $8,689,657 $9,991,613 Source: Economic & Planning Systems
Annual Net Fiscal Impact
27637
Item # 2.

APPENDICES:

Appendix A: Maps
Appendix B: Fiscal Impact Analysis—Existing Uses
Appendix C: Fiscal Impact Analysis—New Uses
Appendix D: Glossary of Terms
Appendix E: Residual Land Value Analysis
Appendix F: Innovation District Scenarios
27738
Item # 2.

APPENDIX A:

Maps
27839
Item # 2.
27940
Item # 2.

Milpitas Metro Specific Plan Land Uses
28041
Item # 2.

Innovation District Land Uses
28142
Item # 2.

APPENDIX B:

Fiscal Impact Analysis—Existing Uses
28243
Item # 2.

Table 1
City of Milpitas Annual Citywide Fiscal Impact of Existing Uses City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Single Multi- Other
Annual General Fund Impacts Family Family Office Industrial Retail Hotel Uses Total General Fund Revenues
Property Tax $14,774,099 $6,671,212 $544,022 $6,251,994 $1,931,997 $627,253 $941,356 $31,741,933 Property Tax In-Lieu of VLF $3,696,107 $1,668,969 $136,100 $1,564,091 $483,337 $156,923 $235,503 $7,941,031 Sales Taxes $3,752,701 $1,076,926 $822,258 $6,950,982 $15,514,270 $34,669 $220,146 $28,371,951 Real Estate Transfer Tax $370,582 $167,335 $13,646 $156,820 $48,461 $15,734 $23,612 $796,190 Business License Tax $0 $0 $54,661 $199,016 $32,036 $14,356 $65,582 $365,650 Motor Vehicle In-Lieu $26,708 $7,665 $0 $0 $0 $0 $647 $35,020 Other Taxes $397,290 $175,000 $68,307 $355,836 $80,496 $30,089 $89,841 $1,196,860 Franchise Fees $3,221,727 $924,550 $192,907 $702,353 $113,058 $50,663 $309,528 $5,514,787 Transient Occupancy Tax $0 $0 $0 $0 $0 $13,452,683 $0 $13,452,683 Licenses, Permits, and Fines $5,787,719 $1,660,922 $346,551 $1,261,752 $203,105 $91,015 $556,055 $9,907,120 Total Revenues $27,933,537 $10,508,610 $1,974,045 $15,522,917 $17,842,927 $14,286,373 $2,116,925 $90,185,334 31% 12% 2% 17% 20% 16% 2% 100%
General Fund Expenditures
General Government $2,511,645 $720,775 $150,390 $547,551 $88,140 $39,497 $241,306 $4,299,304 Economic Development $534,026 $153,251 $31,976 $116,420 $18,740 $8,398 $51,307 $914,118 Building Safety & Housing $4,032,635 $1,157,260 $241,462 $879,135 $141,515 $63,415 $387,436 $6,902,858 Engineering $1,367,502 $392,437 $81,882 $298,122 $47,989 $21,505 $131,383 $2,340,819 Finance $2,545,109 $730,379 $152,393 $554,847 $89,314 $40,023 $244,521 $4,356,586 Fire $16,252,557 $4,664,053 $973,154 $3,543,140 $570,341 $255,581 $1,561,465 $27,820,292 Human Resources $1,227,784 $352,341 $73,516 $267,663 $43,086 $19,308 $117,959 $2,101,657 Information Technology $2,174,120 $623,915 $130,180 $473,969 $76,295 $34,189 $208,879 $3,721,547 Planning $579,456 $166,289 $34,696 $126,324 $20,334 $9,112 $55,671 $991,883 Police $21,940,150 $6,296,242 $1,313,710 $4,783,064 $769,932 $345,021 $2,107,901 $37,556,020 Public Works $5,348,454 $1,534,865 $320,249 $1,165,990 $187,690 $84,107 $513,853 $9,155,209 Recreation & Community Services $1,905,131 $546,722 $114,074 $415,328 $66,856 $29,959 $183,036 $3,261,106 Total Expenditures $60,418,568 $17,338,528 $3,617,682 $13,171,555 $2,120,232 $950,116 $5,804,717 $103,421,399 58% 17% 3% 13% 2% 1% 6% 100%
Annual Net Impact on General Fund ($32,485,031) ($6,829,918) ($1,643,637) $2,351,362 $15,722,695 $13,336,257 ($3,687,792) ($13,236,065) Source: Economic & Planning Systems
28344
Item # 2.

Table 2
Milpitas Population and Employment
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Item Citywide Total Source
Housing Units 22,553 Department of Finance 2020
Occupied Households 21,814 Department of Finance 2020
Population 77,961 Department of Finance 2020
Persons/Household Single Family 3.76 ACS 2019 5-Year Est. & DOF 2020 Persons/Household Multifamily 2.70 ACS 2019 5-Year Est. & DOF 2020 Jobs 47,630 LEHD Employment Statistics 2018
Service Population 101,776 Assumes 1 employee is equivalent to 50% of a resident [1] See Appendix Table A-3 for calculations.

Source: Economic & Planning Systems
28445
Item # 2.

Table 3
Land Use Assumptions
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Total Total
Land Use Category Residents Employees
Residential
Single Family 15,817 DUs - 59,457 - 59,457
Multi-Family 6,308 DUs - 17,063 - 17,063
Non-Residential2
Office - 1,780,063 SF - 7,120 3,560
Industrial - 20,865,527 SF - 25,924 12,962
Retail - 5,020,977 SF - 4,173 2,087
Hotel 2,667 Rooms - - 1,870 935
Other Uses3 428 DUs - SF 1,441 8,543 5,712
Citywide Total 22,553 DUs 27,666,567 SF 77,961 47,630 101,776 Source: CoStar Group; Economic & Planning Systems
[3] Other residential uses include mobile homes, other non-residential uses included within this category are listed in Table 12. [2] Per CoStar Group.
[1] Applies a factor of 100% to residents and 50% to employees.

Total Service
Population1
Dwelling Units
Citywide Inventory
Square Feet
28546
Item # 2.

Table 4
Assessed Values by Land Use
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Milpitas 2021
Land Use Category Assessed Value1
Residential
Single Family 15,817 DUs $9,119,814,483
Multi-Family 6,308 DUs $4,118,031,901
Non-Residential
Office 1,780,063 SF $335,815,823
Industrial 20,865,527 SF $3,859,255,762
Retail 5,020,977 SF $1,192,590,968
Hotel 2,667 Rooms $387,193,287
Other Residential Uses2 $740,252
Other Non-Residential Uses3 $580,343,445
Citywide Residential Total 22,553 DUs
Citywide Non-Residential Total 27,666,567 SF
Citywide Total $19,593,785,921
Source: Parcel Atlas; Economic & Planning Systems
[1] Per data acquired via Parcel Atlas and Santa Clara County Assessor's Office.

Citywide Inventory
[2] Includes Mobile Homes.
[3] Land Uses included in this category are displayed in Table 12. 28647
Item # 2.

Table 5
General Fund Revenue Summary
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 FY 2020/21
General Fund
Item Revenues*
Property Tax 36,872,241 16.20% of 1% of base assessed value Property Tax In-Lieu of VLF1 $7,941,031
Sales Taxes $28,371,951 1.25% of estimated taxable sales Real Estate Transfer Tax $796,190
Business License Tax $365,650 per employee
Motor Vehicle In-Lieu $35,020 per resident
Other Taxes $1,196,860
Franchise Fees $5,514,787 per service population
Transient Occupancy Tax $13,452,683
Licenses, Permits, and Fines $9,907,120 per service population Use of Money and Property $1,364,000 - not impacted
Intergovernmental $708,597 - not impacted
General Government Service Charges $640,000
Engineering Service Charges $1,814,000
Fire Service Charges $460,000
Police Service Charges $730,000
Recreation Service Charges $3,043,000
Building Service Charges $46,000
Planning Service Charges $939,500
Charges for Current Services $7,672,500
Other Revenue $68,000 - not impacted
Operating Transfers In $7,013,990 - not impacted
Total Revenues $112,142,729
Source: City of Milpitas 2020-2021 Adopted Budget & Financial Plan; Economic & Planning Systems [1] Subset of total property tax.
*2020-21 Adopted General Fund Budget values per City of Milpitas 2020-2021 Adopted Budget & Financial Plan [2] These revenues are considered as cost recovery revenues and are taken out of these departments' expenditures as shown in Table 6.

Impact Estimating Factors
Cost Recovery2
Cost Recovery2
Cost Recovery2
Case Study Approach
attributed by assessed value
fully attributed to Hotel use
Cost Recovery2
Cost Recovery2
Cost Recovery2
Cost Recovery2
Cost Recovery2
28748
Item # 2.

Table 6
General Fund Expenditure Budget Summary and Fiscal Estimating Factors City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Per Service Pop.

Item Total Offsetting1 Net GF Expense2
General Government3 $4,939,304 $640,000 $4,299,304 101,776 Service Pop. $42.24 Economic Development $914,118 - $914,118 101,776 Service Pop. $8.98 Building Safety & Housing $6,948,858 $46,000 $6,902,858 101,776 Service Pop. $67.82 Engineering $4,154,819 $1,814,000 $2,340,819 101,776 Service Pop. $23.00 Finance $4,356,586 - $4,356,586 101,776 Service Pop. $42.81 Fire $28,280,292 $460,000 $27,820,292 101,776 Service Pop. $273.35 Human Resources $2,101,657 - $2,101,657 101,776 Service Pop. $20.65 Information Technology $3,721,547 - $3,721,547 101,776 Service Pop. $36.57 Planning $1,931,383 $939,500 $991,883 101,776 Service Pop. $9.75 Police $38,286,020 $730,000 $37,556,020 101,776 Service Pop. $369.01 Public Works $9,155,209 - $9,155,209 101,776 Service Pop. $89.95 Recreation & Community Services $6,304,106 $3,043,000 $3,261,106 101,776 Service Pop. $32.04 Other4 $5,623,983 - $5,623,983 $0.00
Total General Fund Expenditures $116,717,882 $109,045,382 $1,016 Source: Economic & Planning Systems
[3] General Government category consists of the City Council, City Manager, City Clerk, and City Attorney Departmental expenditures. [4] Other category consists of Equipment to be Depreciated, Non-Departmental expenditures, and Transfers Out.

FY 2020/21 Adopted GF Expenditures
Estimating Factors
[1] Represents departmental service charges shown in Table 5. [2] Divides net expenditure item by Service Population. not impacted
28849
Item # 2.

Table 7
Property Tax Revenue by Land Use Estimate
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Property Tax and Estimating Factors Formula Single Family Multifamily Office Industrial Retail Hotel Other Property Tax
Total Assessed Value by Land Use1 see Table 4. a $9,119,814,483 $4,118,031,901 $335,815,823 $3,859,255,762 $1,192,590,968 $387,193,287 $581,083,697 Property Tax 1.0% Base Property Tax Rate b = a * 1.0% $91,198,145 $41,180,319 $3,358,158 $38,592,558 $11,925,910 $3,871,933 $5,810,837 General Fund Property Tax Revenue2 16.20% Allocation to General Fund c = b * 16.20% $14,774,099 $6,671,212 $544,022 $6,251,994 $1,931,997 $627,253 $941,356 Property Tax In-Lieu of VLF
Existing Citywide Property Tax In-Lieu of VLF3 $7,941,031 d = $7,941,031 Citywide Taxable Assessed Value1 $19,593,785,921 e = $19,593,785,921 Percentage of Citywide Assessed Value f = a / e 46.5% 21.0% 1.7% 19.7% 6.1% 2.0% 3.0% New General Fund Property Tax In-Lieu of VLF e = d * f $3,696,107 $1,668,969 $136,100 $1,564,091 $483,337 $156,923 $235,503 Source: Economic & Planning Systems
[3] Per Table 5.

Residential Non-Residential
Assumption / Est. Factor
[1] Per Table 4.
[2] Per Page 29 of Milpitas 2020-2021 Adopted Budget & Financial Plan. 28950
Item # 2.

Table 8
Milpitas General Fund Annual Sales Tax Revenue Estimate from Residential Development City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Item Single Family Multi-family
Residential Spending
Estimated Annual Household Income $210,896 $151,755
Household Taxable Retail Spending as a Percent of Income 18% 18% Taxable Retail Spending per Household $37,961 $27,316
Citywide Household Counts 15,817 6,308
Total Citywide Retail Spending from Households $600,432,222 $172,308,140 Taxable Retail Sales Captured in Milpitas 50% of Retail Expenditures $300,216,111 $86,154,070 Total Retail Sales Tax Revenue from Household Spending 1.25% of Taxable Sales3 $3,752,701 $1,076,926 Source: Economic & Planning Systems
[2] Based on the Bureau of Labor Statistics 2018 Consumer Expenditure Survey, value shown is average between percentage for households with incomes above $200,000 and households with incomes between $150,000 and $199,999. [3] Includes the City's standard 1% share and the 0.25% additional share via Measure F, passed in 2020.

Assumptions / Estimating Factors
Residential
[1] Existing residential income estimates reflect ACS 2019 1-Year Estimates Per Capita Income for Milpitas' total population of $56,103, multiplied by the average household sizes of 3.76 for single family homes and 2.71 for multi-family homes.

Based on Per Capita Income1
Bureau of Labor Statistics2
29051
Item # 2.

Table 9
Milpitas General Fund Annual Sales Tax Revenue Estimate from Commercial Development City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Sales Tax Sources and Estimating Factors Formula Office Industrial Retail Hotel Other Worker-Generated Retail Sales
Citywide Employees a 7,120 25,924 4,173 1,870 8,543
Weekly Taxable Retail Spending per Worker1 b $97.32 $77.73 $31.09 $36.35 $50.53 Annual Citywide Taxable Retail Spending 48 working weeks per year c = a * b * 48 $33,260,328 $96,721,740 $6,227,316 $3,262,940 $20,719,583 Milpitas Spending Capture2 85% of retail expenditures d = c * 85% $28,271,279 $82,213,479 $5,293,219 $2,773,499 $17,611,646 Annual General Fund Worker-Generated Retail Sales Tax Revenue 1.25% of taxable sales e = d * 1.25% $353,391 $1,027,668 $66,165 $34,669 $220,146 Non-Retail Establishment Sales
Business-to-Business Annual Retail Sales Tax Revenue $468,867 $5,923,313 - - - On-Site Retail Sales
Annual General Fund On-Site Retail Sales Tax Revenue - - $15,448,105 - - Total Annual General Fund Sales Tax Revenue $822,258 $6,950,982 $15,514,270 $34,669 $220,146 Source: Economic & Planning Systems
[2] EPS assumption.

Citywide Sales Tax Revenue less Other Sources
Assumptions / Estimating Factors
Non-Residential
per Avenue Insights & Analytics Data
per Table 3.
[1] Per ICSC data adjusted to 2021$ using BLS CPI Index. 29152
Item # 2.

Table 10
Other General Fund Revenues
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Revenue Source Single Family Multifamily Office Industrial Retail Hotel Other Real Estate Transfer Tax $370,582 $167,335 $13,646 $156,820 $48,461 $15,734 $23,612 Business License Tax $7.68 per employee $0 $0 $54,661 $199,016 $32,036 $14,356 $65,582 Motor Vehicle In-Lieu $0.45 per resident $26,708 $7,665 $0 $0 $0 $0 $647 Franchise Fees $54.19 per service pop. $3,221,727 $924,550 $192,907 $702,353 $113,058 $50,663 $309,528 Licenses, Permits, and Fines $97.34 per service pop. $5,787,719 $1,660,922 $346,551 $1,261,752 $203,105 $91,015 $556,055 Total Annual Other Revenues $160 per service pop. $9,406,737 $2,760,472 $607,766 $2,319,941 $396,659 $171,768 $955,424 Source: Economic & Planning Systems
Assumption / Estimating
Factor1
Residential Non-Residential
[1] See Table 6 for cost estimates and Table 3 for total service population by land use. attributed by assessed value
29253
Item # 2.

Table 11
General Fund Expenditure Calculations
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Expenditure Source Single Family Multifamily Office Industrial Retail Hotel Other General Government $42.24 per service pop. $2,511,645 $720,775 $150,390 $547,551 $88,140 $39,497 $241,306 Economic Development $8.98 per service pop. $534,026 $153,251 $31,976 $116,420 $18,740 $8,398 $51,307 Building Safety & Housing $67.82 per service pop. $4,032,635 $1,157,260 $241,462 $879,135 $141,515 $63,415 $387,436 Engineering $23.00 per service pop. $1,367,502 $392,437 $81,882 $298,122 $47,989 $21,505 $131,383 Finance $42.81 per service pop. $2,545,109 $730,379 $152,393 $554,847 $89,314 $40,023 $244,521 Fire $273.35 per service pop. $16,252,557 $4,664,053 $973,154 $3,543,140 $570,341 $255,581 $1,561,465 Human Resources $20.65 per service pop. $1,227,784 $352,341 $73,516 $267,663 $43,086 $19,308 $117,959 Information Technology $36.57 per service pop. $2,174,120 $623,915 $130,180 $473,969 $76,295 $34,189 $208,879 Planning $9.75 per service pop. $579,456 $166,289 $34,696 $126,324 $20,334 $9,112 $55,671 Police $369.01 per service pop. $21,940,150 $6,296,242 $1,313,710 $4,783,064 $769,932 $345,021 $2,107,901 Public Works $89.95 per service pop. $5,348,454 $1,534,865 $320,249 $1,165,990 $187,690 $84,107 $513,853 Recreation & Community Services $32.04 per service pop. $1,905,131 $546,722 $114,074 $415,328 $66,856 $29,959 $183,036 Total Annual Expenditures $1,016 per service pop. $60,418,568 $17,338,528 $3,617,682 $13,171,555 $2,120,232 $950,116 $5,804,717 Source: Economic & Planning Systems
Factors Applied to Estimate Residential Non-Residential Prototype Expenditures1
[1] See Table 6 for cost estimates and Table 3 for total service population by land use. 29354
Item # 2.

Table 12
Milpitas Primary Use Code Categorization Index and Assessed Value Summary City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Primary Use Code1 Classification2 Primary Use Code1 Classification2 Single Family Retail
Duplex (2 units, any combination) Single Family Community: Shopping Plaza, Shopping Center, Mini-Mall Retail Residential (General) (Single) Single Family Neighborhood: Shopping Center, Strip Center, Enterprise Zone Retail Single Family Residential Single Family Recreational/Entertainment (General) Retail Townhouse (Residential) Single Family Regional: Shopping Center, Mall (w/Anchor) Retail Triplex (3 units, any combination) Single Family Retail Stores ( Personal Services, Photography, Travel) Retail Service station (full service) Retail
Wholesale Outlet, Discount Store (Franchise) Retail
Multifamily
Apartment house (5+ units) Multifamily
Condominium (Residential) Multifamily
Multi-Family Dwellings (Generic, any combination 2+) Multifamily Office
Professional Bldg (legal; insurance; real estate; business) Office Skyscraper/Highrise (Commercial Offices) Office Other Uses Charitable organization, Fraternal Not Included
City, Municipal, Town, Village Owned (Exempt) Not Included Hotel Community Center (Exempt) Not Included
Hotel Hotel Day care, Pre-school (Commercial) Not Included Homes (retired; handicap, rest; convalescent; nursing) Not Included Hospital-PUBLIC Not Included
Industrial Industrial-Vacant Land Not Included
Chemical Industrial Irrigation, Flood Control Not Included Condominiums (Industrial) Industrial Orchard (fruit; nut) Not Included Foundry, Industrial Plant (metal; rubber; plastic) Industrial Park, Playground, Picnic Area Not Included Horticulture, Growing Houses, Ornamental (Agricultural) Industrial Parking Lot Not Included Industrial (General) Industrial Pasture, Meadow Not Included Light Industrial (10% improved office space; Machine Shop) Industrial Public School (administration; campus; dorms; instruction) Not Included Lumberyard, Building Materials Industrial Public Swimming Pool Not Included Manufacturing (light) Industrial Railroad & related Not Included Mill (feed; grain; paper; lumber; textile; pulp) Industrial Recreation Center Not Included Mining (oil; gas; mineral, precious metals) Industrial Religious, Church, Worship (Synagogue, Temple, Parsonage) Not Included Mixed Use (Commercial/Industrial) Industrial Residential-Vacant Land Not Included Processing Plant (minerals; cement; rock; gravel; glass; clay) Industrial Roads, Streets, Bridges Not Included Public Utility (Electric; Water; Gas; etc.) Industrial Timberland, Forest, Trees (Agricultural) Not Included R&D Facility, Laboratory, Research Facility, Cosmetics, Pharmaceuti Industrial Vacant Land (General) Not Included Storage yard, Open Storage (light equipment, material) Industrial Waste Land, Marsh, Swamp, Submerged-Vacant Land Not Included Transportation & Communications (General) Industrial Winery Not Included Warehouse (Industrial) Industrial Mobile home Not Included Source: Santa Clara County Assessor; Economic & Planning Systems [1] Primary Use Codes per Santa Clara County Assessor Tax Roll data. Assesssed Values were summed by Primary Use Codes, which required classification into the land uses relevant for this effort to derive total Assessed Values by land use.
[2] Demonstrates how Primary Use Codes were grouped to arrive at total assessed value by land use type. 29455
Item # 2.

APPENDIX C:

Fiscal Impact Analysis—New Uses
29556
Item # 2.

Table 1
City of Milpitas Annual General Fund Fiscal Impacts per Acre City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse/
Annual General Fund Impacts Multifamily Multifamily Office R & D Industrial Distribution Hotel General Fund Revenues
Property Tax $191,702 $397,211 $352,556 $199,254 $78,611 $39,374 $126,707 Property Tax In-Lieu of VLF $47,959 $99,372 $88,201 $49,848 $19,666 $9,850 $31,699 Sales Taxes $28,005 $57,993 $156,730 $91,922 $40,181 $25,964 $801 Real Estate Transfer Tax $5,207 $10,788 $4,788 $2,706 $1,068 $535 $1,721 Business License Tax $0 $0 $10,032 $5,016 $1,505 $463 $614 Motor Vehicle In-Lieu $218 $437 $0 $0 $0 $0 $0
Other Taxes $5,425 $11,225 $14,820 $7,722 $2,572 $998 $2,335 Franchise Fees $21,341 $42,681 $57,382 $28,691 $8,607 $2,648 $3,513 Transient Occupancy Tax $0 $0 $0 $0 $0 $0 $1,916,250
Licenses, Permits, and Fines $38,338 $76,675 $103,086 $51,543 $15,463 $4,758 $6,311 Total Revenues $332,770 $685,158 $772,774 $428,980 $165,101 $83,592 $2,087,616 per Acre $166,385 $342,579 $154,555 $85,796 $33,020 $16,718 $835,046 General Fund Expenditures
General Government $3,217 $6,433 $3,537 $1,768 $530 $163 $217 Economic Development $1,368 $2,736 $1,504 $752 $226 $69 $92 Building Safety & Housing $10,329 $20,658 $11,357 $5,678 $1,703 $524 $695 Engineering $3,503 $7,005 $3,851 $1,926 $578 $178 $236
Finance $3,260 $6,519 $3,584 $1,792 $538 $165 $219
Fire $104,073 $208,146 $114,425 $57,212 $17,164 $5,281 $7,005 Human Resources $1,572 $3,145 $1,729 $864 $259 $80 $106 Information Technology $2,784 $5,569 $3,061 $1,531 $459 $141 $187 Planning $1,484 $2,968 $1,632 $816 $245 $75 $100
Police $140,493 $280,986 $154,468 $77,234 $23,170 $7,129 $9,456 Public Works $34,249 $68,497 $37,655 $18,828 $5,648 $1,738 $2,305 Recreation & Community Services $8,133 $16,266 $8,942 $4,471 $1,341 $413 $547 Total Expenditures $314,464 $628,929 $345,743 $172,872 $51,861 $15,957 $21,166 per Acre $157,232 $314,464 $69,149 $34,574 $10,372 $3,191 $8,466 Annual Net Impact on General Fund $18,305 $56,229 $427,031 $256,109 $113,239 $67,635 $2,066,450 per Acre $9,153 $28,115 $85,406 $51,222 $22,648 $13,527 $826,580 Source: Economic & Planning Systems
29657
Item # 2.

Table 2
Milpitas Population and Employment
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Item Citywide Total Source
Housing Units 22,553 Department of Finance 2020
Occupied Households 21,814 Department of Finance 2020
Population 77,961 Department of Finance 2020
Persons/Household Multifamily 2.70 ACS 2019 5-Year Est. & DOF 2020 Jobs 47,630 LEHD Employment Statistics 2018
Service Population 97,437 See Table 3
Source: Economic & Planning Systems
29758
Item # 2.

Service Population Factors based on Resident to Employee Equivalencies Item # %
Employment Status of Milpitas Residents1 Formula: a = b * 77,961 b 1 c = b * c Not in Labor Force 41,429 53.1% 100% 53.1%
Employed in the City3 3,808 4.9% 50% 2.4%
Employed Outside of the City 32,724 42.0% 67% 28.2%
Total Residents 77,961 100.0% 83.8%
Residence Status of Milpitas Employees1 Formula: a = b * 47,630 b 1 c = b * c Live in the City3 3,808 8.0% 50% 4.0%
Live Outside the City 43,825 92.0% 33% 30.3%
Total Jobs 47,630 100.0% 34.2%
Employee to Resident Equivalency Factor 4 (34.2% / 83.8%) = 40.9% Service Population Calculation
Amount Attributable to Residents (@ 100%) 77,961 80.0%
Amount Attributable to Employees (@ 40.9%) 19,476 20.0% Total Service Population 97,437 100.0%
Sources: LEHD OnTheMap 2018, Department of Finance, and Economic & Planning Systems, Inc.

Table 3
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 [2] Represents EPS estimate of how various types of residents and employees relate to each other in terms of demand for City Services. [3] The number of residents who are employed in the City and the number of employees in the City who are residents are the same, representing the same group of unique individuals. This group is reflected both in the Total Residents and the Total Jobs to demonstrate the composition of the totals, with their weighting split evenly between the resident and employee groups. [4] Equals weighted average of residents divided by weighted average of employees.

Existing Weight2 Weighted
Average
[1] Distribution and total jobs based on data from U.S. Census (OnTheMap 2018). Total residents based on 2020 estimates provided by DOF in Table E-5.
29859
Item # 2.

Table 4
Prototype Developments by Land Use Type
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse /
Item Multifamily Multifamily Office R & D Industrial Distribution Hotel Gross Land Area (AC) 2.0 2.0 5.0 5.0 5.0 5.0 2.5
FAR - - 1.5 1.0 0.5 0.4 -
Gross Building Area 216,000 432,000 326,700 217,800 108,900 87,120 130,000 Net Leasable Area 172,800 345,600 294,030 196,020 98,010 78,408 104,000 Units / Rooms per AC 90 180 - - - - 80
Dwelling Units / Rooms 180 360 - - - - 200
Market Rate DU 153 306 - - - -
Market Rate Monthly Rent PSF $3.75 $3.90 - - - -
Below Market Rate DU 27 54 - - - - -
BMR Monthly Rent PSF $2.76 $2.76 - - - - -
Capitalized Value $118,334,782 $245,192,059 $217,626,944 $122,996,424 $48,525,159 $24,304,775 $78,214,286 per GBA $547.85 $567.57 $666.14 $564.72 $445.59 $278.98 $601.65 per DU / Room $657,415 $681,089 - - - - $391,071
Persons Per Household 2.70 2.70 - - - - -
Total Residents 486 972 - - - - -
Square Feet per Employee - - 225 300 500 1,300 1,300
Total Employees - - 1,307 653 196 60 80
Total Service Population1 486 972 534 267 80 25 33
Average HH Income $138,298 $143,194 - - - - -
Average Salary - - $135,000 $132,000 $118,000 $51,000 $25,000 Source: Economic & Planning Systems
Residential Non-Residential
[1] Applies a factor of 0.41 to employees and 1.0 to residents as derived in Table 3. 29960
Item # 2.

Table 5
General Fund Revenue Summary
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 FY 2020/21
General Fund Table
Item Revenues* Reference
Property Tax 36,872,241 16.20% of 1% of base assessed value Table 7 Property Tax In-Lieu of VLF1 $7,941,031 Table 7
Sales Taxes $28,371,951 1.25% of taxable sales2 Tables 8 & 9 Real Estate Transfer Tax $796,190 $0.55 per $1,000 in assessed value Table 10 Business License Tax $365,650 $7.68 per Employee3 Table 12 Motor Vehicle In-Lieu $35,020 $0.45 per Resident3 Table 12 Other Taxes $1,196,860
Franchise Fees $5,514,787 $43.91 per Employee / Resident4 Table 12 Transient Occupancy Tax $13,452,683 14% of hotel revenues Table 11 Licenses, Permits, and Fines $9,907,120 $78.88 per Employee / Resident4 Table 12 Use of Money and Property $1,364,000 - not impacted
Intergovernmental $708,597 - not impacted
General Government Service Charges $640,000 Table 6
Operating Transfers In $7,013,990 - not impacted
Total Revenues $112,142,729
Source: City of Milpitas 2020-2021 Adopted Budget & Financial Plan; Economic & Planning Systems [1] Subset of total property tax.
*2020-21 Adopted General Fund Budget values per City of Milpitas 2020-2021 Adopted Budget & Financial Plan [5] These revenues are considered as cost recovery revenues and are taken out of these departments' expenditures as shown in Table 6. [2] Includes the City's standard 1% share and the 0.25% additional share via Measure F, passed in 2020. [3] Divides line item by the employee / resident totals from Table 2. [4] Divides line item by the total number of employees and residents citywide without applying a service population factor.

Impact Estimating Factors
Cost Recovery5
Case Study Approach
30061
Item # 2.

Table 6
General Fund Expenditure Budget Summary and Fiscal Estimating Factors City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Percent Annual Variable Per Service Pop.

Item Total Offsetting1 Net Variable2 Expense GF Expense General Government3 $4,939,304 $640,000 $4,299,304 15% $644,896 97,437 Service Pop. $6.62 Economic Development $914,118 - $914,118 30% $274,235 97,437 Service Pop. $2.81 Building Safety & Housing $6,948,858 $46,000 $6,902,858 30% $2,070,857 97,437 Service Pop. $21.25 Engineering $4,154,819 $1,814,000 $2,340,819 30% $702,246 97,437 Service Pop. $7.21 Finance $4,356,586 - $4,356,586 15% $653,488 97,437 Service Pop. $6.71 Fire $28,280,292 $460,000 $27,820,292 75% $20,865,219 97,437 Service Pop. $214.14 Human Resources $2,101,657 - $2,101,657 15% $315,249 97,437 Service Pop. $3.24 Information Technology $3,721,547 - $3,721,547 15% $558,232 97,437 Service Pop. $5.73 Planning $1,931,383 $939,500 $991,883 30% $297,565 97,437 Service Pop. $3.05 Police $38,286,020 $730,000 $37,556,020 75% $28,167,015 97,437 Service Pop. $289.08 Public Works $9,155,209 - $9,155,209 75% $6,866,407 97,437 Service Pop. $70.47 Recreation & Community Services $6,304,106 $3,043,000 $3,261,106 50% $1,630,553 97,437 Service Pop. $16.73 Other4 $5,623,983 - $5,623,983 - $0 $0.00
Total General Fund Expenditures $116,717,882 $109,045,382 $63,045,961 $647.05 Source: Economic & Planning Systems
[3] General Government category consists of the City Council, City Manager, City Clerk, and City Attorney Departmental expenditures. [4] Other category consists of Equipment to be Depreciated, Non-Departmental expenditures, and Transfers Out.

FY 2020/21 Adopted GF Expenditures
Estimating Factors
[1] Represents departmental service charges shown in Table 5. [2] EPS assumption.
not impacted
30162
Item # 2.

Table 7
Property Tax Revenue by Land Use Estimate
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse /
Property Tax and Estimating Factors Formula Multifamily Multifamily Office R & D Industrial Distribution Hotel Property Tax
Total Assessed Value1 see Table 4. a $118,334,782 $245,192,059 $217,626,944 $122,996,424 $48,525,159 $24,304,775 $78,214,286 Property Tax 1.0% Base Property Tax Rate b = a * 1.0% $1,183,348 $2,451,921 $2,176,269 $1,229,964 $485,252 $243,048 $782,143 General Fund Property Tax Revenue2 16.20% Allocation to General Fund c = b * 16.20% $191,702 $397,211 $352,556 $199,254 $78,611 $39,374 $126,707 Property Tax In-Lieu of VLF
Existing Citywide Property Tax In-Lieu of VLF3 $7,941,031 d = $7,941,031 Citywide Taxable Assessed Value4 $19,593,785,921 e = $19,593,785,921 Percentage of Citywide Assessed Value f = a / e 0.6% 1.3% 1.1% 0.6% 0.2% 0.1% 0.4% New General Fund Property Tax In-Lieu of VLF e = d * f $47,959 $99,372 $88,201 $49,848 $19,666 $9,850 $31,699 Source: Economic & Planning Systems
[4] Per Santa Clara County Assessor.
[3] Per Table 5.

Assumption / Est. Factor
[1] Per Table 4.
[2] Per Page 29 of Milpitas 2020-2021 Adopted Budget & Financial Plan. 30263
Item # 2.

Table 8
Residential Sales Tax Revenue Estimates
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise
Item Multifamily Multifamily
Households 180 360
Estimated Annual Household Income1 $138,298 $143,194
Taxable Retail Spending per Household2 18% of Household Income $24,894 $25,775 Taxable Retail Spending by Prototype $4,480,842 $9,278,945 Taxable Retail Sales Captured in Milpitas 50% Capture Rate $2,240,421 $4,639,473 Annual General Fund Sales Tax Revenue 1.25% of Taxable Sales $28,005 $57,993 Source: Economic & Planning Systems
per Table 4
[2] Based on the Bureau of Labor Statistics 2018 Consumer Expenditure Survey.

Assumption
Rent is 30% of Income
[1] Annual rent estimated based on a 960 net square foot (NSF) apartment renting at $3.75 per NSF for both development types.
30364
Item # 2.

Table 9
Non-Residential Sales Tax Revenue Estimates
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Class A Office / Light Warehouse /
Description Office R & D Industrial Distribution Hotel
Worker-Generated Retail Sales
Total Workers 1,307 653 196 60 80
Weekly Taxable Retail Spending per Worker1 $106 $104 $93 $40 $20 Annual Taxable Retail Spending per Worker 48 weeks per year $5,090 $4,977 $4,449 $1,923 $943 Total Annual Taxable Retail Spending $6,651,995 $3,252,087 $872,151 $115,984 $75,412 Milpitas Spending Capture 85% of retail expenditures $5,654,196 $2,764,274 $741,328 $98,586 $64,100 Annual General Fund Retail Sales Tax Revenue from Workers 1.25% of taxable sales $70,677 $34,553 $9,267 $1,232 $801 Non-Retail Establishment Sales
Business-to-Business Annual Retail Sales Tax Revenue $86,052 $57,368 $30,915 $24,732 $0 Total Annual General Fund Sales Tax Revenue $156,730 $91,922 $40,181 $25,964 $801 Source: Economic & Planning Systems
per Avenue Insights & Analytics Data
Assumption
see Table 4
30465
Item # 2.

Table 10
Property Transfer Tax Estimates
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse /
Item Formula Multifamily Multifamily Office R & D Industrial Distribution Hotel Market Value Assumption1 a $118,334,782 $245,192,059 $217,626,944 $122,996,424 $48,525,159 $24,304,775 $78,214,286 Annual Turnover Rate2 b 8% 8% 4% 4% 4% 4% 4%
Annual Assessed Value Turnover c = a * b $9,466,783 $19,615,365 $8,705,078 $4,919,857 $1,941,006 $972,191 $3,128,571 Documentary Transfer to the City3 d = c / 1,000 * $0.55 $5,207 $10,788 $4,788 $2,706 $1,068 $535 $1,721 Source: Economic & Planning Systems
[1] Per Table 4.
[2] Assumes multifamily rental property resold every 15 years, commercial property resold every 30 years. [3] Per IX-10-2.01 of the Milpitas Code of Ordinances.
30566
Item # 2.

Table 11
Transient Occupancy Tax
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Item Value
Total Hotel Rooms 200
Average Daily Rate (ADR)1 $250
Occupancy Rate1 75%
Annual Hotel Room Revenues $13,687,500
General Fund TOT Revenue 14% of revenue $1,916,250
Source: CoStar Group; Economic & Planning Systems
Assumption
see Table 4
[1] per CoStar Group data.
30667
Item # 2.

Table 12
Other General Fund Revenue Item Estimates
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse /
Revenue Source Multifamily Multifamily Office R & D Industrial Distribution Hotel Business License Tax $7.68 per Employee $0 $0 $10,032 $5,016 $1,505 $463 $614 Motor Vehicle In-Lieu $0.45 per Resident $218 $437 $0 $0 $0 $0 $0 Franchise Fees $43.91 per Employee / Resident $21,341 $42,681 $57,382 $28,691 $8,607 $2,648 $3,513 Licenses, Permits, and Fines $78.88 per Employee / Resident $38,338 $76,675 $103,086 $51,543 $15,463 $4,758 $6,311 Total Annual Other Revenues $131 per Employee / Resident $59,897 $119,793 $170,500 $85,250 $25,575 $7,869 $10,438 Source: Economic & Planning Systems
Factors Applied to Estimate
Prototype Revenues1
[1] See Table 5 for revenue factors and Table 4 for total service population by land use. 30768
Item # 2.

Table 13
General Fund Expenditure Estimates
City of Milpitas Fiscal Benefits of Employment Lands Study; EPS #211034 Mid-Rise High-Rise Class A Office / Light Warehouse /
Expenditure Source Multifamily Multifamily Office R & D Industrial Distribution Hotel General Government $6.62 per Service Pop. $3,217 $6,433 $3,537 $1,768 $530 $163 $217 Economic Development $2.81 per Service Pop. $1,368 $2,736 $1,504 $752 $226 $69 $92 Building Safety & Housing $21.25 per Service Pop. $10,329 $20,658 $11,357 $5,678 $1,703 $524 $695 Engineering $7.21 per Service Pop. $3,503 $7,005 $3,851 $1,926 $578 $178 $236 Finance $6.71 per Service Pop. $3,260 $6,519 $3,584 $1,792 $538 $165 $219 Fire $214.14 per Service Pop. $104,073 $208,146 $114,425 $57,212 $17,164 $5,281 $7,005 Human Resources $3.24 per Service Pop. $1,572 $3,145 $1,729 $864 $259 $80 $106 Information Technology $5.73 per Service Pop. $2,784 $5,569 $3,061 $1,531 $459 $141 $187 Planning $3.05 per Service Pop. $1,484 $2,968 $1,632 $816 $245 $75 $100 Police $289.08 per Service Pop. $140,493 $280,986 $154,468 $77,234 $23,170 $7,129 $9,456 Public Works $70.47 per Service Pop. $34,249 $68,497 $37,655 $18,828 $5,648 $1,738 $2,305 Recreation & Community Services $16.73 per Service Pop. $8,133 $16,266 $8,942 $4,471 $1,341 $413 $547 Total Annual Expenditures $647 per Service Pop. $314,464 $628,929 $345,743 $172,872 $51,861 $15,957 $21,166 Source: Economic & Planning Systems
[1] See Table 6 for cost estimates and Table 4 for total service population by land use.

Factors Applied to Estimate
Prototype Expenditures1
30869
Item # 2.

APPENDIX D:

Glossary of Terms
30970
Item # 2.

Glossary of Terms
 Gross Land Area. This is the total land area associated with a development measured in acres. It includes not only the building itself, but also parking and landscaping areas, as well as roads and other supporting areas.
 Gross Area. This is the total square footage of any buildings for lease. It includes both the occupied areas – such as apartment square footage/ office suite square footage – as well as common areas, such as elevators and corridors, as well as mechanical and storage areas.  Efficiency Ratio. The efficiency ratio represents the ratio, often presented as a percentage, between the Net Area (defined below) and the Gross Leasable Area.  Net Area. The net area represents the leased area that is specifically for the tenant, such as apartment size or office suite etc. The net area is equal to the gross area multiplied by the efficiency ratio.
 Parking Spaces. This represents the number of parking spaces associated with a building.

The number of spaces is often defined by the required parking ratio that provides the number of parking spaces that must be provided for every 1,000 gross square feet of space.  Gross Revenue. Gross revenues, sometimes referred to as full service gross (FSG), represents the gross revenues expected to be paid by the tenant. This can be expressed as an annual lease payment per net square foot per year as well as a total annual gross revenue for the full net area leased.
 Operating Expenses. The building owner/ landlord receives the gross revenues but also must directly pay a broad range of building operating expenses, including janitorial, building maintenance, insurance, property taxes, and utilities. These are estimated as a percentage of gross revenues.
 Commissions. Leasing commissions represent the percentage of rent that is passed on to real estate agents in connection with the building lease.  Vacancy Rate. The vacancy rate represents the average percentage of the net leasable area that is vacant at any point in time.
 Capitalized Value. The capitalized value represents the estimated value/ sales price of a building/ development. It is typically calculated based on: (1) annual net operating income (annual revenues minus annual operating expenditures); and, (2) the capitalization (cap) rate which represents the observed ratio between building sales prices and net operating incomes in different market areas.
 Building Construction Cost. Building construction represents the direct cost of constructing the building often expressed on a cost per gross area basis.  Parking Cost/Site Work. Parking costs represent the direct cost of constructing parking spaces (whether surface or structured), while site work consists of preparing the site for construction (e.g. grading).
31071
Item # 2.

Appendix D
Glossary of Terms
October 7, 2021
Page D-2
 Tenant Improvements. Beyond the costs of constructing the building, tenants will often require additional improvements inside their office suite for example. This can include costs of carpeting, interior configurations, kitchens, and other unique features. Landlords typically contribute to these costs.
 Commercial Housing Linkage Fee. A fee paid by commercial development to help fund affordable housing.
 TADIF Fee. This is the Transit Area Development Impact Fee, an impact fee established under the Mitigation Fee Act that portions a proportionate share of transit area public improvement costs (e.g. sewer, water, transportation, and parks) to new development.  Other Permits & Fees. In addition to the TADIF, the City and other agencies charge other fees and permit charges.
 General & Administrative. General and Administrative costs are the general day-to-day/ overhead operations costs to the developer.
 Financing Costs. These represents the construction financing costs associated with the use of construction loans while developing buildings.
 Contingency. A contingency is included in development pro formas to account for cost overruns/ unforeseen cost items.
 Profit Margin. The profit margin represents the level of profit a developer will require in order to consider taking the risks associated with the development. 31172
Item # 2.

APPENDIX E:

Residual Land Value Analysis
31273
Item # 2.

Table 1a - Baseline Scenario
Class A Office Pro Forma (Midrise, 1.0 FAR)
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.00 F.A.R. 217,800
Elevation 5 stories
Efficiency Ratio 90%
Net Area 196,020
Parking Spaces 3.3 parking space per 1,000 sq.ft.

Structured/Podium Parking 75% of parking spaces 545
Surface Parking 25% of parking spaces 182
Total Parking Spaces 726

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $51.00 /net sq. ft./yr. $45.90 $9,997,020 (less) Operating Expenses 25.0% ($11.48) ($2,499,255)
(less) Commissions 2.5% ($1.15) ($249,926)
(less) Vacancy Rate 5.0% ($2.30) ($499,851)
Subtotal, Annual Net Operating Income $30.98 $6,747,989 Capitalized Value (2) 6.25% cap rate $480.85 $104,728,782

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $325.00 /GLA sq. ft. $325.00 $70,785,000 Parking Cost/Site Work $40,000 /structured space $100.00 $21,780,000 Parking Cost/Site Work $5,000 /surface space $4.17 $907,500 Total Direct Costs $429.17 $93,472,500
Indirect Costs
Tenant Improvements $40.00 /net sq. ft. $36.00 $7,840,800 Legal, Insurance & Inspections 3.0% of direct costs $12.88 $2,804,175 Architecture & Engineering 7.0% of direct costs $30.04 $6,543,075 Commercial Housing Linkage Fee (3) $8.00 /net sq. ft. $7.20 $1,568,160 TADIF Fee $42.52 /net sq. ft. $38.27 $8,334,770
Other Permits & Fees (4) 3.0% of direct costs $12.88 $2,804,175 General & Administrative 2.5% of direct costs $10.73 $2,336,813 Financing Costs 5.0% of direct costs $21.46 $4,673,625
Total Indirect Costs 39.5% of direct costs $169.45 $36,905,593 Subtotal, Direct and Indirect Costs $598.61 $130,378,093 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $29.93 $6,518,905 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $94.28 $20,534,550 Total Costs $723 $157,431,547
RESIDUAL LAND VALUE ($241.98) ($52,703,000)
Per Acre ($10,540,600)
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 31374 Item # 2.

Table 1b - Improved Scenario
Class A Office Pro Forma (Midrise, 1.0 FAR)
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.00 F.A.R. 217,800
Elevation 5 stories
Efficiency Ratio 90%
Net Area 196,020
Parking Spaces 2.4 parking space per 1,000 sq.ft.

Structured/Podium Parking 75% of parking spaces 392
Surface Parking 25% of parking spaces 131
Total Parking Spaces 523

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $65.00 /net sq. ft./yr. $58.50 $12,741,300 (less) Operating Expenses 25.0% ($14.63) ($3,185,325)
(less) Commissions 2.5% ($1.46) ($318,533)
(less) Vacancy Rate 5.0% ($2.93) ($637,065)
Subtotal, Annual Net Operating Income $39.49 $8,600,378 Capitalized Value (2) 5.75% cap rate $666.14 $145,084,629

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $325.00 /GLA sq. ft. $325.00 $70,785,000 Parking Cost/Site Work $40,000 /structured space $72.04 $15,690,000 Parking Cost/Site Work $5,000 /surface space $3.00 $653,750 Total Direct Costs $400.04 $87,128,750
Indirect Costs
Tenant Improvements $40.00 /net sq. ft. $36.00 $7,840,800 Legal, Insurance & Inspections 3.0% of direct costs $12.00 $2,613,863 Architecture & Engineering 7.0% of direct costs $28.00 $6,099,013 Commercial Housing Linkage Fee (3) $8.00 /net sq. ft. $7.20 $1,568,160 TADIF Fee $0.00 /net sq. ft. $0.00 $0
Other Permits & Fees (4) 3.0% of direct costs $12.00 $2,613,863 General & Administrative 2.5% of direct costs $10.00 $2,178,219 Financing Costs 5.0% of direct costs $20.00 $4,356,438
Total Indirect Costs 31.3% of direct costs $125.21 $27,270,354 Subtotal, Direct and Indirect Costs $525.25 $114,399,104 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $26.26 $5,719,955 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $82.73 $18,017,859 Total Costs $634 $138,136,918
RESIDUAL LAND VALUE $31.90 $6,948,000
Per Acre $1,389,600
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 31475 Item # 2.

Table 2a - Baseline Scenario
Class A Office Pro Forma (Midrise, 1.5 FAR)
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.50 F.A.R. 326,700
Elevation 8 stories
Efficiency Ratio 90%
Net Area 294,030
Parking Spaces 3.3 parking space per 1,000 sq.ft.

Structured/Podium Parking 100% of parking spaces 1,089
Surface Parking 0% of parking spaces 0
Total Parking Spaces 1,089

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $51.00 /net sq. ft./yr. $45.90 $14,995,530 (less) Operating Expenses 25.0% ($11.48) ($3,748,883)
(less) Commissions 2.5% ($1.15) ($374,888)
(less) Vacancy Rate 5.0% ($2.30) ($749,777)
Subtotal, Annual Net Operating Income $30.98 $10,121,983 Capitalized Value (2) 6.25% cap rate $480.85 $157,093,172

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $325.00 /GLA sq. ft. $325.00 $106,177,500 Parking Cost/Site Work $40,000 /structured space $133.33 $43,560,000 Parking Cost/Site Work $5,000 /surface space $0.00 $0
Total Direct Costs $458.33 $149,737,500
Indirect Costs
Tenant Improvements $40.00 /net sq. ft. $36.00 $11,761,200 Legal, Insurance & Inspections 3.0% of direct costs $13.75 $4,492,125 Architecture & Engineering 7.0% of direct costs $32.08 $10,481,625 Commercial Housing Linkage Fee (3) $8.00 /net sq. ft. $7.20 $2,352,240 TADIF Fee $42.52 /net sq. ft. $38.27 $12,502,156
Other Permits & Fees (4) 3.0% of direct costs $13.75 $4,492,125 General & Administrative 2.5% of direct costs $11.46 $3,743,438 Financing Costs 5.0% of direct costs $22.92 $7,486,875
Total Indirect Costs 38.3% of direct costs $175.43 $57,311,783 Subtotal, Direct and Indirect Costs $633.76 $207,049,283 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $31.69 $10,352,464 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $99.82 $32,610,262 Total Costs $765 $250,012,009
RESIDUAL LAND VALUE ($284.42) ($92,919,000)
Per Acre ($18,583,800)
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 31576 Item # 2.

Table 2b - Improved Scenario
Class A Office Pro Forma (Midrise, 1.5 FAR)
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.50 F.A.R. 326,700
Elevation 8 stories
Efficiency Ratio 90%
Net Area 294,030
Parking Spaces 2.4 parking space per 1,000 sq.ft.

Structured/Podium Parking 100% of parking spaces 784
Surface Parking 0% of parking spaces 0
Total Parking Spaces 784

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $65.00 /net sq. ft./yr. $58.50 $19,111,950 (less) Operating Expenses 25.0% ($14.63) ($4,777,988)
(less) Commissions 2.5% ($1.46) ($477,799)
(less) Vacancy Rate 5.0% ($2.93) ($955,598)
Subtotal, Annual Net Operating Income $39.49 $12,900,566 Capitalized Value (2) 5.75% cap rate $666.14 $217,626,944

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $325.00 /GLA sq. ft. $325.00 $106,177,500 Parking Cost/Site Work $40,000 /structured space $95.99 $31,360,000 Parking Cost/Site Work $5,000 /surface space $0.00 $0
Total Direct Costs $420.99 $137,537,500
Indirect Costs
Tenant Improvements $40.00 /net sq. ft. $36.00 $11,761,200 Legal, Insurance & Inspections 3.0% of direct costs $12.63 $4,126,125 Architecture & Engineering 7.0% of direct costs $29.47 $9,627,625 Commercial Housing Linkage Fee (3) $8.00 /net sq. ft. $7.20 $2,352,240 TADIF Fee $0.00 /net sq. ft. $0.00 $0
Other Permits & Fees (4) 3.0% of direct costs $12.63 $4,126,125 General & Administrative 2.5% of direct costs $10.52 $3,438,438 Financing Costs 5.0% of direct costs $21.05 $6,876,875
Total Indirect Costs 30.8% of direct costs $129.50 $42,308,628 Subtotal, Direct and Indirect Costs $550.49 $179,846,128 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $27.52 $8,992,306 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $86.70 $28,325,765 Total Costs $665 $217,164,199
RESIDUAL LAND VALUE $1.42 $463,000
Per Acre $92,600
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 31677 Item # 2.

Table 3a - Baseline Scenario
Class A Office/R&D Pro Forma
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.00 F.A.R. 217,800
Efficiency Ratio 90%
Elevation 5 stories
Net Area 196,020
Parking Spaces 2.3 parking space per 1,000 sq.ft.

Structured/Podium Parking 50% of parking spaces 249
Surface Parking 50% of parking spaces 249
Total Parking Spaces 498

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $45.00 /net sq. ft./yr. $40.50 $8,820,900 (less) Operating Expenses 25.0% ($10.13) ($2,205,225)
(less) Commissions 2.5% ($1.01) ($220,523)
(less) Vacancy Rate 5.0% ($2.03) ($441,045)
Subtotal, Annual Net Operating Income $27.34 $5,954,108 Capitalized Value (2) 6.00% cap rate $441.96 $96,258,071

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $295.00 /GLA sq. ft. $295.00 $64,251,000 Parking Cost/Site Work $40,000 /structured space $45.73 $9,960,000 Parking Cost/Site Work $5,000 /surface space $5.72 $1,245,000 Total Direct Costs $346.45 $75,456,000
Indirect Costs
Tenant Improvements $30.00 /net sq. ft. $27.00 $5,880,600 Legal, Insurance & Inspections 3.0% of direct costs $10.39 $2,263,680 Architecture & Engineering 7.0% of direct costs $24.25 $5,281,920 Commercial Housing Linkage Fee (3) $8.00 /net sq. ft. $7.20 $1,568,160 TADIF Fee $42.52 /net sq. ft. $38.27 $8,334,770
Other Permits & Fees (4) 3.0% of direct costs $10.39 $2,263,680 General & Administrative 2.5% of direct costs $8.66 $1,886,400 Financing Costs 5.0% of direct costs $17.32 $3,772,800
Total Indirect Costs 41.4% of direct costs $143.49 $31,252,010 Subtotal, Direct and Indirect Costs $489.94 $106,708,010 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $24.50 $5,335,401 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $77.16 $16,806,512 Total Costs $592 $128,849,923
RESIDUAL LAND VALUE ($149.64) ($32,592,000)
Per Acre ($6,518,400)
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 31778 Item # 2.

Table 3b - Improved Scenario
Class A Office/R&D Pro Forma
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 1.00 F.A.R. 217,800
Efficiency Ratio 90%
Elevation 5 stories
Net Area 196,020
Parking Spaces 2.3 parking space per 1,000 sq.ft.

Structured/Podium Parking 50% of parking spaces 249
Surface Parking 50% of parking spaces 249
Total Parking Spaces 498

REVENUE ASSUMPTIONS
Gross Revenue (FSG) (1) $57.50 /net sq. ft./yr. $51.75 $11,271,150 (less) Operating Expenses 25.0% ($12.94) ($2,817,788)
(less) Commissions 2.5% ($1.29) ($281,779)
(less) Vacancy Rate 5.0% ($2.59) ($563,558)
Subtotal, Annual Net Operating Income $34.93 $7,608,026 Capitalized Value (2) 6.00% cap rate $564.72 $122,996,424

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $295.00 /GLA sq. ft. $295.00 $64,251,000 Parking Cost/Site Work $40,000 /structured space $45.73 $9,960,000 Parking Cost/Site Work $5,000 /surface space $5.72 $1,245,000 Total Direct Costs $346.45 $75,456,000
Indirect Costs
Tenant Improvements $30.00 /net sq. ft. $27.00 $5,880,600 Legal, Insurance & Inspections 3.0% of direct costs $10.39 $2,263,680 Architecture & Engineering 7.0% of direct costs $24.25 $5,281,920 Commercial Housing Linkage Fee (3) $4.00 /net sq. ft. $3.60 $784,080 TADIF Fee $0.00 /net sq. ft. $0.00 $0
Other Permits & Fees (4) 3.0% of direct costs $10.39 $2,263,680 General & Administrative 2.5% of direct costs $8.66 $1,886,400 Financing Costs 5.0% of direct costs $17.32 $3,772,800
Total Indirect Costs 29.3% of direct costs $101.62 $22,133,160 Subtotal, Direct and Indirect Costs $448.07 $97,589,160 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $22.40 $4,879,458 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $70.57 $15,370,293 Total Costs $541 $117,838,911
RESIDUAL LAND VALUE $23.68 $5,158,000
Per Acre $1,031,600
Assumption
Economic & Planning Systems, Inc. 9/20/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_091921.xlsx 31879 Item # 2.

Table 4 - Baseline Scenario
Light Industrial Pro Forma
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 0.50 F.A.R. 108,900
Efficiency Ratio 90%
Elevation 3 stories
Net Area 98,010
Parking Spaces 0.5 parking space per 1,000 sq.ft.

Structured/Podium Parking 0% of parking spaces 0
Surface Parking 100% of parking spaces 58
Total Parking Spaces 58

REVENUE ASSUMPTIONS
Gross Revenue (NNN) (1) $35.00 /net sq. ft./yr. $31.50 $3,430,350 (less) Operating Expenses 5.0% ($1.58) ($171,518)
(less) Commissions 2.5% ($0.79) ($85,759)
(less) Vacancy Rate 5.0% ($1.58) ($171,518)
Subtotal, Annual Net Operating Income $27.56 $3,001,556 Capitalized Value (2) 6.00% cap rate $445.59 $48,525,159

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $195.00 /GLA sq. ft. $195.00 $21,235,500 Parking Cost/Site Work $40,000 /structured space $0.00 $0 Parking Cost/Site Work $5,000 /surface space $2.66 $290,000 Total Direct Costs $197.66 $21,525,500
Indirect Costs
Tenant Improvements $20.00 /net sq. ft. $18.00 $1,960,200 Legal, Insurance & Inspections 3.0% of direct costs $5.93 $645,765 Architecture & Engineering 7.0% of direct costs $13.84 $1,506,785 Commercial Housing Linkage Fee (3) $4.00 /net sq. ft. $3.60 $392,040 TADIF Fee $0.00 /net sq. ft. $0.00 $0
Other Permits & Fees (4) 3.0% of direct costs $5.93 $645,765 General & Administrative 2.5% of direct costs $4.94 $538,138 Financing Costs 5.0% of direct costs $9.88 $1,076,275
Total Indirect Costs 31.4% of direct costs $62.12 $6,764,968 Subtotal, Direct and Indirect Costs $259.78 $28,290,468 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $12.99 $1,414,523 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $40.92 $4,455,749 Total Costs $314 $34,160,740
RESIDUAL LAND VALUE $131.90 $14,364,000
Per Acre $2,872,800
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 31980 Item # 2.

Table 5 - Baseline Scenario
Warehouse/ Distribution Pro Forma
Milpitas Employment Lands, EPS #211034
Item Per Bldg. Sq.Ft. Total

DEVELOPMENT PROGRAM
Gross Land Area (acres) 5.0
Gross Leasable Area 0.40 F.A.R. 87,120
Efficiency Ratio 90%
Elevation 1 story
Net Area 78,408
Parking Spaces 0.5 parking space per 1,000 sq.ft.

Structured/Podium Parking 0% of parking spaces 0
Surface Parking 100% of parking spaces 46
Total Parking Spaces 46

REVENUE ASSUMPTIONS
Gross Revenue (NNN) (1) $21.00 /net sq. ft./yr. $18.90 $1,646,568 (less) Operating Expenses 5.0% ($0.95) ($82,328)
(less) Commissions 2.5% ($0.47) ($41,164)
(less) Vacancy Rate 5.0% ($0.95) ($82,328)
Subtotal, Annual Net Operating Income $16.54 $1,440,747 Capitalized Value (2) 5.75% cap rate $278.98 $24,304,775

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $85.00 /GLA sq. ft. $85.00 $7,405,200 Parking Cost/Site Work $40,000 /structured space $0.00 $0 Parking Cost/Site Work $5,000 /surface space $2.64 $230,000 Total Direct Costs $87.64 $7,635,200
Indirect Costs
Tenant Improvements $20.00 /net sq. ft. $18.00 $1,568,160 Legal, Insurance & Inspections 3.0% of direct costs $2.63 $229,056 Architecture & Engineering 7.0% of direct costs $6.13 $534,464 Commercial Housing Linkage Fee (3) $4.00 /net sq. ft. $3.60 $313,632 TADIF Fee $0.00 /net sq. ft. $0.00 $0
Other Permits & Fees (4) 2.5% of direct costs $2.19 $190,880 General & Administrative 2.5% of direct costs $2.19 $190,880 Financing Costs 3.0% of direct costs $2.63 $229,056
Total Indirect Costs 42.6% of direct costs $37.38 $3,256,128 Subtotal, Direct and Indirect Costs $125.02 $10,891,328 Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $6.25 $544,566 Profit Margin (% of direct and indirect costs) (5) 15.0% of all costs $19.69 $1,715,384 Total Costs $151 $13,151,279
RESIDUAL LAND VALUE $128.02 $11,153,000
Per Acre $2,230,600
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 32081 Item # 2.

Table 6
Residential Rental (Midrise) - Baseline Scenario
Milpitas Employment Lands, EPS #211034
Item Total

DEVELOPMENT PROGRAM
Land Area 2 acres 87,120
Total Units 180 units
Elevation 7 stories
Total Building Area 1,200 per unit 216,000
Percent On-Site BMR 15%
Net Residential Unit Area 80% 172,800
Podium Parking Spaces 1.20 parking space per unit 216

REVENUE ASSUMPTIONS
Gross Rental Revenue
Market Rate (1) $3.75 /nsf per month $6,609,600
Affordable (80% of AMI) $2.76 /nsf per month $858,470
(less) Vacancy 5.0% -$373,404
(less) Operating Expenses (Residential) (2) 26.5% -$1,979,039 (less) Capital Reserves $0.50 /nsf -$86,400
Residential NOI $5,029,228
Effective Capitalized Value (3) 4.25% cap rate $118,334,782 (less Cost of Sale) 3.0% of capitalized value -$3,550,043 Net Value $114,784,738

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $260 /gsf $56,160,000
Site Work $10 /land sq.ft. $871,200
Total Direct Costs $57,031,200
Parking Construction Cost $40,000 per space $8,640,000
Direct Cost (including Parking) $65,671,200
Indirect Costs
Soft Costs (4) 15.0% of DPC $9,850,680
TADIF Fee $40,487 per unit $7,287,660
Other Development Fees (5) 2.5% of DPC $1,641,780
Carrying and Financing Cost 5.0% of DPC $3,283,560
Total Indirect Costs 33.6% of DPC $22,063,680
Total Direct and Indirect Costs $87,734,880
Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $4,386,744 Profit Margin (% of direct and indirect costs) (6) 15.0% of direct and indirect costs $13,160,232 Total Costs $105,281,856
RESIDUAL LAND VALUE $9,503,000
Per Acre $4,752,000
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 32182
Item # 2.

Table 7a - Baseline Scenario
Residential Rental (Highrise)
Milpitas Employment Lands, EPS #211034
Item Total

DEVELOPMENT PROGRAM
Land Area 2 acres 87,120
Total Units 360 units
Elevation 12 stories
Total Building Area 1,200 per unit 432,000
Percent On-Site BMR 15%
Net Residential Unit Area 80% 345,600
Podium Parking Spaces 1.20 parking space per unit 432

REVENUE ASSUMPTIONS
Gross Rental Revenue
Market Rate (1) $3.75 /nsf per month $13,219,200
Affordable (80% of AMI) $2.76 /nsf per month $1,716,941 (less) Vacancy 5.0% -$746,807
(less) Operating Expenses (Residential) 26.5% -$3,958,077 (less) Capital Reserves $0.50 /nsf -$172,800
Residential NOI $10,058,456
Effective Capitalized Value (2) 4.25% cap rate $236,669,563 (less Cost of Sale) 3.0% of capitalized value -$7,100,087 Net Value $229,569,477

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $300 /gsf $129,600,000
Site Work $10 /land sq.ft. $871,200
Total Direct Costs $130,471,200
Parking Construction Cost $40,000 per space $17,280,000 Direct Cost (including Parking) $147,751,200
Indirect Costs
Soft Costs (3) 15.0% of DPC $22,162,680
TADIF Fee $40,487 per unit $14,575,320
Other Development Fees (4) 2.5% of DPC $3,693,780
Carrying and Financing Cost 5.0% of DPC $7,387,560
Total Indirect Costs 32.4% of DPC $47,819,340
Total Direct and Indirect Costs $195,570,540
Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $9,778,527 Profit Margin (% of direct and indirect costs) (5) 15.0% of direct and indirect costs $29,335,581 Total Costs $234,684,648
RESIDUAL LAND VALUE ($5,115,000)
Per Acre ($2,558,000)
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 32283
Item # 2.

Table 7b - Improved Scenario
Residential Rental (Highrise)
Milpitas Employment Lands, EPS #211034
Item Total

DEVELOPMENT PROGRAM
Land Area 2 acres 87,120
Total Units 360 units
Elevation 12 stories
Total Building Area 1,200 per unit 432,000
Percent On-Site BMR 15%
Net Residential Unit Area 80% 345,600
Podium Parking Spaces 1.20 parking space per unit 432

REVENUE ASSUMPTIONS
Gross Rental Revenue
Market Rate (1) $3.90 /nsf per month $13,747,968
Affordable (80% of AMI) $2.76 /nsf per month $1,716,941 (less) Vacancy 5.0% -$773,245
(less) Operating Expenses (Residential) 26.5% -$4,098,201 (less) Capital Reserves $0.50 /nsf -$172,800
Residential NOI $10,420,663
Effective Capitalized Value (2) 4.25% cap rate $245,192,059 (less Cost of Sale) 3.0% of capitalized value -$7,355,762 Net Value $237,836,298

DEVELOPMENT COSTS
Direct Costs
Building Construction Cost $300 /gsf $129,600,000
Site Work $10 /land sq.ft. $871,200
Total Direct Costs $130,471,200
Parking Construction Cost $40,000 per space $17,280,000 Direct Cost (including Parking) $147,751,200
Indirect Costs
Soft Costs (3) 15.0% of DPC $22,162,680
TADIF Fee $40,487 per unit $14,575,320
Other Development Fees (4) 2.5% of DPC $3,693,780
Carrying and Financing Cost 5.0% of DPC $7,387,560
Total Indirect Costs 32.4% of DPC $47,819,340
Total Direct and Indirect Costs $195,570,540
Contingency (% of direct and indirect costs) 5.0% of direct and indirect costs $9,778,527 Profit Margin (% of direct and indirect costs) (5) 15.0% of direct and indirect costs $29,335,581 Total Costs $234,684,648
RESIDUAL LAND VALUE $3,152,000
Per Acre $1,576,000
Assumption
Economic & Planning Systems, Inc. 8/5/2021 Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Model\RLV\211034ProFormas_073021.xlsx 32384
Item # 2.

APPENDIX F:

Innovation District Scenarios
32485
Item # 2.

Z:\Shared\Projects\Oakland\211000s\211034_Milpitas Employment Lands\Deliverables\Narrative Summaries\211034_Phase1_Narrative_21.09.21.docx Table F-1. Innovation District Scenarios: Land Use by Parcel Current
Area Acres BPRD1 Allowed Uses Scenario 1 Scenario 2 Scenario 3 Scenario 4 Existing TASP Area
Great Mall Adjacent
Area A 2.7 BPRD‐R Non‐Resi. Commercial/Retail (55%) + Vacant (45%) Commercial/Retail Class A Office (60%) + Housing (40%) Class A Office Area B14.7 Non‐Resi.

Area B1 (Stratford) 3.6 BPRD‐H Non‐Resi. Assembly ‐ School Commercial/Retail Class A Office Class A Office Area B2 (Lightwave) 4.3 BPRD‐R Non‐Resi. Class B Office Class A Office/R&D Class A Office (60%) + Housing (40%) Class A Office Area B3 (Marriott Hotel) 3.2 BPRD‐HNon‐Resi. Hotel Commercial/Retail Hotel Hotel Area B4 (Marriott Hotel) 3.6 BPRD‐H Non‐Resi. Hotel Class A Office Hotel Hotel Subtotal 17.4
East TASP
Area C 3.3 BPRD‐H Resi + Non‐Resi. Industrial (46%) + Warehouse/Distribution (54%) Commercial/Retail Class A Office Class A Office Area D4.8 BPRD‐H Resi Industrial (77%) + Warehouse/Distribution (23%) Commercial/Retail Class A Office Class A Office Area E2.2 BPRD‐R Resi Warehouse/Distribution Commercial/Retail Class A Office (60%) + Housing (40%) Class A Office Subtotal 10.3
Total Existing TASP Area 27.7
Additional Metro SP Employment Area
North of Montague Expressway
Area F 4.5 BPRD‐H Non‐Resi. Warehouse/Distribution Hotel Class A Office/R&D Class A Office/R&D Area G 5.4 BPRD‐H Non‐Resi. Class B Office Commercial/Retail Class A Office/R&D Class A Office/R&D Area H7.0 BPRD‐L Non‐Resi. Assembly ‐ Church Warehouse Industrial Class A Office/R&D Subtotal 16.9
South of Montague Expressway
Area I 13.4 BPRD‐H Non‐Resi. Industrial (20%) + Warehouse/Distribution (80%) Commercial/Retail (77%) + Open Space (23%) Class A Office/R&D (77%) + Open Space (23%) Class A Office (77%) + Open Space (23%) Area J2.0 BPRD‐L Non‐Resi. Warehouse/Distribution Warehouse Industrial Class A Office/R&D Area K5.6 BPRD‐L Non‐Resi. Warehouse/Distribution Warehouse Industrial Class A Office/R&D Area L1.0 BPRD‐L Non‐Resi. Industrial Warehouse Industrial Class A Office/R&D Area M4.2 BPRD‐L Non‐Resi. Warehouse/Distribution Warehouse Industrial Class A Office/R&D Area N3.6 BPRD‐L Non‐Resi. Vacant Warehouse Industrial Class A Office/R&D

29.8 Total Add'l Empl. Lands 46.68
TOTAL INNOVATION DISTRICT 74.38
(1) BPRD‐L: 1.0‐2.5 FAR. Allows for lower density office, R&D, warehouses, hotels, and industrial. Office‐supportive commercial retail uses are conditionally permitted.

BPRD‐H: 1.0‐2.5 FAR. Allows for higher density office, R&D, commercial/retail, and hotels.

BPRD‐R: 1.0‐5.0 FAR. Minimum of 1.0 FAR of office and R&D. Additional residential is allowed up to 5.0 FAR total. Allows office, R&D, commercial/retail, hotels, and residential. 32586
Item # 2.

CITY OF MILPITAS

AGENDA REPORT
(AR)
Item Title: Receive a Presentation on the Draft Milpitas Metro Specific Plan (Update of 2008 Transit Area Specific Plan)
Category: Community Development
Meeting Date: 10/12/21
Staff Contact: Ned Thomas, Planning Director, 408-586-3273 Kevin Riley, TASP (Metro) Manager 408-586-3292
Recommendation: 1. Receive a presentation from staff and consultants

2. Receive public comments

3. Provide feedback and direction on the Draft Milpitas Metro Specific Plan, Subsequent Environmental Impact Report, and current project timeline Background:

Over the past few months, City staff and the Metro Plan consultant team have been preparing draft chapters of the Milpitas Metro Specific Plan (Metro Plan), which is an update of the Transit Area Specific Plan (TASP) adopted in 2008, in alignment with policy direction received from the Council earlier this year. The drafting and editing process of the six chapters that comprise the Metro Plan has been an iterative process with several rounds of review and editing by the consultants and staff from various City departments. Following the Council study session on October 12th, comments and direction received from the Council may result in further editing prior to completion of the document, which will then be presented in formal public hearings to the Planning Commission for its recommendation and to the City Council for adoption.

Preparation of the Draft Subsequent Environmental Impact Report (SEIR) is concurrently underway and, when completed, will be released for a 45-day public review period, as required under the regulation and guidance of the California Environmental Quality Act (CEQA). Written responses will be prepared for all written comments received during the public review period, and the written comments and responses will comprise the Final SEIR, which must be certified by the Council prior to adopting the Metro Plan.

At the Council study session on October 12th, the staff presentation will conclude with a progress report on the timeline of the Metro Plan and the next steps in the process. The information memo attached to this Agenda Report provides an overview of the draft Metro Plan and ongoing work on the SEIR.

Analysis:

In several study sessions held during 2020 and 2021, the Council received presentations from the Metro Plan consultants and held discussions regarding existing conditions, draft policy guidance and notable economic opportunities for new development in and around the Great Mall and a proposed Innovation District. These two areas are key elements of the Metro Plan based on their proximity to the recently opened Milpitas Transit Center. The Metro Plan seeks to take full advantage of the proximities of various land uses – residential, retail, commercial, office, research and development, and hotel – to transit and to each other, thus promoting a unique and complete neighborhood in Milpitas, all generally within a ½ mile walk of the Milpitas Transit Center.

The area also has excellent access to VTA light rail, Interstate 680, and Interstate 880. 32687
Item # 2.

The Metro Plan will provide an updated vision and policies to guide further development and transformation of the area around the Milpitas Transit Center. The Plan calls for development of additional housing, retail, commercial, and office development at greater densities and intensities over the next 20 years and provides a flexible regulatory framework to ensure successful implementation. Consistent with Council direction in the new Milpitas General Plan, the Metro Plan enlarges the planning area by nearly 70 acres from the original TASP area and calls for a new Innovation District with employment uses that take advantage of proximity to the Transit Center. Even so, the new Specific Plan for the overall area will be more concise and generally more focused than the original TASP, as much of the land area of the original plan has been developed and is not expected to see significant change during the lifespan of the 20-year Metro Plan.

The presentation and discussion will provide an opportunity for Council and the public to see and discuss a preliminary version of the complete document. The combination of the various chapters is intended to present the City’s vision for the nearly 500 acres of the Metro Plan and provide a practicable and implementable policy document that developers and builders can use to test the viability of proposed projects and to build them. In addition to laying out a buildable development scenario, the Metro Plan identifies the public infrastructure needed to make the area a vibrant and livable neighborhood of homes, jobs and services. Future work will evaluate and adjust the level of impact fees paid by new development based on the basic infrastructure program identified in the new Metro Plan.

Policy Alternatives:

This is an informational item for Council consideration, feedback and direction, and provides a first look at the whole of the Milpitas Metro Specific Plan.

Fiscal Impact:

This is an informational item. As such, there is no fiscal impact.

California Environmental Quality Act:

This report represents ongoing work on the Milpitas Metro Specific Plan; a Subsequent Environmental Impact Report (SEIR) is being prepared for consideration and certification prior to the Metro Plan adoption.

Recommendation:

1. Receive a presentation from staff and consultants;

2. Receive public comments;

3. Provide feedback and direction on the Draft Milpitas Metro Specific Plan, Subsequent EIR, and current project timeline.

Attachments:

1. Informational report from Urban Field Studio

2. Draft Milpitas Metro Specific Plan
32788
Item # 2.

Milpitas Metro Specific Plan Draft Policies 1
Agenda Report Attachment prepared for the
City of Milpitas City Council Admin Draft Presentation on October 12, 2021 Milpitas Metro Specific Plan Draft
Prepared by Urban Field Studio and M-Group
Project Status
The Draft Milpitas Metro Specific Plan (MMSP or Metro Plan) will be presented at the meeting on October 12, 2021, which has been a work in progress since the project kicked off in March 2020, just before the COVID-19 pandemic shelter-in-place orders were made. The project team has been productive virtually, all the while holding team meetings, community meetings, and official meetings online. Milpitas City Council has met multiple times during the planning process to provide input and direction on the framework of the Plan. The Draft Milpitas Metro Plan has six chapters and will be completed by the end of the year.

The final Metro Plan will be addressed with the 2007 Transit Area Specific Plan (TASP) Environmental Impact Report and Subsequent Environmental Impact Report that is currently being drafted. If adopted, the projects consistent with the plan qualify for a statutory exemption under the California Environmental Quality Act (CEQA). The TASP Update Scope originally included a Supplemental EIR, but as the expanded scope of the MMSP was realized, that changed to a Subsequent EIR which is more detailed than a Supplemental EIR. The EIR Completion and conclusion of the project is scheduled for June 2022.

Milpitas Metro Specific Plan Chapters
Chapter 1 is the project introduction. This chapter covers the geographical and City policy context for the Metro Area. The Milpitas Metro Specific Plan (MMSP) renames and replaces the Transit Area Specific Plan (TASP) and expands the geographic area of the Plan. The Plan will require General Plan Land Use Map Amendments, Revision of the Zoning Map, Zoning Ordinance Amendments, and new Zoning Districts. The MMSP is also prepared in coordination with the Midtown Specific Plan.

Chapter 2 addresses Land Use and Density. The vision and goals for the Great Mall, Innovation District, and Tango Subdistricts are major focus areas of the Plan. Zoning changes and land use capacities are described in this chapter. Housing is a key component of the new plan, and so are Office, Light Industrial, Retail, and Hotel. The capacity presented is additive to the TASP.

Chapter 2 also covers parks and open space. The plan uses the 3.5 acre/1,000 residents parks ratio established in the General Plan and proposes a new “level of service” rating to evaluate the quality of public space. Developers are required to provide communal open space and publicly accessible open space. The parks in the area will be more urban in nature, designed for flexible use, and will provide a greater variety of activities.
32889
Item # 2.

Milpitas Metro Specific Plan Draft Policies 2
Chapter 3 covers Site and Building Design Standards and Guidelines, which address the larger scaled urban, mixed-use development desired for the area. The design of buildings in the area will be distinctive for the region with a strong emphasis on human-scaled design, which will establish a sense of place for the Metro neighborhood.

Chapter 4 is about Mobility and Circulation, and the connections needed to complete the Metro Area. The plan includes improvements to the Great Mall Parkway, the expansion of the pedestrian and bicycle network through McCandless and Tango subdistricts, and a future street grid in the Great Mall subdistrict. Draft Plan policies emphasize pedestrian and bicycle safety and a reduction in Vehicle Miles Travelled and carbon emissions. Parking for vehicles now includes a maximum requirement and a new minimum bicycle parking requirement.

Chapter 5 updates the Infrastructure needed to support a high quality of life in the Metro Area, which includes much of the District Wide Infrastructure for storm drainage, flooding, water, technology, sewer, and solid waste. The plan also addresses services like Fire and Emergency Response, Police, Schools, Libraries, and Child Care. This chapter will guide development of a new Basic Infrastructure Plan (BIP) that will be the basis for adopting updated impact fees on new development in the Metro Plan area.

Chapter 6 is about the Implementation of the plan, and the way to fund the future investments in public infrastructure and improvements called for in the plan. The City has several tools at its disposal to pay for the basic infrastructure and capital improvements, which include district specific fees and citywide fees, or through the use of special programs.

Major Themes
The presentation on October 12 will cover the major themes related to the Plan’s Vision to create a more complete transit-oriented neighborhood. The urban character of the area differs from the rest of Milpitas, which has a suburban pattern.

The greatest changes of Land Uses and Densities occur in the Great Mall and Innovation District Subdistricts.

The Great Mall is a major part of this plan, as it was largely left alone in the TASP and previously zoned only for Commercial. The MMSP provides more options for the Great Mall by zoning for more land uses, including housing and envisioning the transformation of the surface parking lots and auto-factory design into a walkable, transit-oriented development pattern. New publicaccessible open spaces and plazas are also planned for this Subdistrict and will create a sense of place by anchoring the subdistrict and providing gathering spaces for residents, workers, and visitors. The team recently met with representatives from Simon to discuss the Draft Plan ideas for the Great Mall.

The proximity to the Milpitas Transit Center and recent initiation of BART service is an advantage to the commercial vision for the City of Milpitas. An Innovation District centered around the key intersection of S. Milpitas Blvd. and Montague Expressway near 680 with new streets and direct roadway connections to the Transit Center is an important opportunity for Silicon Valley 32990
Item # 2.

Milpitas Metro Specific Plan Draft Policies 3
businesses. New land uses that emphasize Business Park, Research, and Development are key to protecting these lands for when the market is ready to take advantage of the prime location. There have also been discussions about annexing a San Jose-owned parcel adjacent to the Innovation District and 680. The team has also recently met with VTA to discuss the parcels adjacent owned by VTA that are in the Plan Area.

The transit-oriented nature of this transit-rich area requires a focus on making it easier to walk, bike, and connect to transit within the district. The public realm is a major theme for the Metro Plan. Improvements to pedestrian and bike trails, the introduction of new streets, more walkable scaled streets, and the network of parks and open spaces are significant public investments that will be supported by the new development envisioned in the Plan.

The multi-modal focus of the Transportation policies is also appropriate in this transit-rich area.

The trade-off of cars for pedestrian safety is important, and so is the proximity of uses next to each other. A shift away from the personal vehicle and auto-centric, suburban pattern was the essence of the vision for the Transit Area Specific Plan and continues with the Milpitas Metro Specific Plan.

Next Steps
● The Draft MMSP Comment period is open through November 1st, 2021. ● A Community Open House will be held by Zoom on October 25 from 6-8pm and online from October 25 through November 8th. We are encouraging participation in the survey for a prize. Staff review and comment will also be required by November 8th. ● The Final MMSP will be prepared and will be heard by the Planning Commission, who will provide a recommendation to the City Council in early 2022. ● The SEIR Notice of Preparation Review Period is between September 15-October 18, 2021.
● A Scoping Meeting for the MMSP SEIR was held on September 30, 2021. ● The Draft SEIR will be prepared for review in February 2022. ● The overall Project, including Plan adoption and SEIR completion, will conclude prior to June 2022.
33091
Item # 2.

MILPITAS METRO

SPECIFIC PLAN
Public Draft October 2021

CITY OF MILPITAS
33192
Item # 2.
ii
The Milpitas VTA Light Rail Station is an
elevated station above Great Mall Parkway
in the Milpitas Metro Area. There are
two stations in the area, one connecting
to Milpitas BART and the other to
the Great Mall.
33293
Item # 2.
iii
City Council
Richard Tran, Mayor
Carmen Montano, Vice Mayor
Evelyn Chua, City Council Member
Karina R. Dominguez, City Council Member
Anthony Phan, City Council Member
Planning Commission
Steve Tao, Chair
Bill Chuan, Vice Chair
Tim Alcorn, Commissioner
Steve Belong, Commissioner
Mercedes Albana, Commissioner
Larry Ciardella, Commissioner
Alexander Galang, Commissioner
City Staff
Steven G. McHarris, City Manager
Ashwini Kantak, Assistant City Manager
Ned Thomas, Planning Director
Jessica Garner, Planning Manager
Jay Lee, Principal Planner
Kevin Riley, Milpitas Metro Manager
Elaine Marshall, Deputy Public Works Director
Steve Erickson, Engineering Director
Steve Chan, Traffic Engineer
Harrison Siddiqui, Principle Engineer
Sharon Goei, Director of Building
Safety and Housing
Adam Marcus, Housing Manager
Renee Lorentzen, Recreation and Community
Services Director
Tegan McLane, Community Engagement and
Inclusion Administrator/Assistant Director of
Recreation and Community Services
Consultant Team

URBAN FIELD STUDIO
Jane Lin, AIA, Founding Partner
Frank Fuller, FAIA, Partner
Courtney Ferris, Urban Planner/Designer
Luke Ivers, Designer

M-GROUP
Christina Paul, AICP, Principal Policy Planner
Asher Kohn, AICP, Associate Planner
Erin Tou, Associate Planner
Candice Ji, Assistant Planner

LEXINGTON PLANNING
Jean Eisberg, AICP, Planning Specialist

ECONOMIC AND PLANNING SYSTEMS (EPS)
Teifion Rice Evans, Managing Principal
Ashley Boots, Associate

W-TRANS
Mark Spencer, PE, Senior Principal
Brian Canepa, TDM-CP, Principal
Barry Bergman, AICP, Senior Planner

BKF ENGINEERS
Dan Schaefer, PE, Principal
Norman Dyer, Land Use Planner

WEST YOST
Elizabeth Drayer, PE, Vice President
ICF
Greta Brownlow, PhD, CEQA Compliance
Project Director
Heidi Mekkelson, Principal
Leo Mena, Environmental Planner

ACKNOWLEDGMENTS
33394
Item # 2.
iv

TABLE OF CONTENTS

1. INTRODUCTION 1

1.1  Transit Area Specific Plan to Milpitas Metro 3

1.2  Plan Context 5

1.3  Plan Boundary 5

1.4  Area Background 5

1.5  Impacts of the Transit Area specific Plan 9

1.6  Relationship to Other Plans/Programs 12

1.7  Regulatory Compliance 15

1.8  Community Engagement 16

1.9  Plan Vision 20

1.10  Plan Build Out 27

1.11  Basic Improvement Program (BIP) and Transit Area Development Impact Fee (TADIF) 30

1.12  Subsequent Environmental Impact Report (SEIR) 31

1.13  Milpitas Metro Plan Framework 32

2. LAND USE AND PUBLIC SPACE 35

2.1  Land Use Development Framework 36

2.2  Great Mall Subdistrict 45

2.3  Innovation District 52

2.4  Piper Subdistrict 54

2.5  McCandless Subdistrict 55

2.6  Tango Subdistrict 55

2.7  Land Use Policies 57

2.8  Parks and Public Spaces Framework 63

2.9  Existing and Proposed ParkS Open Space Strategy 66

2.10  Public Space Policies 67

2.11  Private On-Site Common Spaces 72

3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 75

3.1  Site Design Standards and Guidelines 75

3.2  Buildings Design Standards and Guidelines 88

4. MOBILITY AND CIRCULATION 101

4.1  PLANNING CONTEXT 101

4.2  Approach 109

4.3  Mobility and Circulation Policies 115
33495
Item # 2.
v

5. INFRASTRUCTURE 131

5.1  Storm Drainage 132

5.2  Flooding 135

5.3  Water Supply and Distribution System 136

5.4  Sewer 139

5.5  Solid Waste 142

5.6  Technology 143

5.7  Fire Protection and Emergency Response 144

5.8  Police Services 145

5.9  Schools 147

5.10  Libraries149

5.11  Child Care 150

6. IMPLEMENTATION 153

6.1  Updates to the General Plan and Zoning 154

6.2  Coordination with the Midtown Specific Plan 154

6.3  ENTITLEMENT PROCESS 154

6.4  GREAT MALL 157

6.5  INNOVATION DISTRICT 159

6.6  PHASING 160

6.7  ENVIRONMENTAL REVIEW (CEQA)161

6.8  PUBLIC INFRASTRUCTURE AND INVESTMENTS 162

6.9  FUNDING STRATEGY 163

6.10  IMPLEMENTATION ACTIONS 165
33596
Item # 2.
vi
TABLES

1. INTRODUCTION 1
Table 1-1.  Development in the TASP 9
Table 1-2.  Development Capacity Comparison to TASP 27
Table 1-3.  Employment Generation 29

2. LAND USE AND PUBLIC SPACE 35
Table 2-1.  Land Use Classification with description, allowed density, maximum height, and allowed zoning districts 38
Table 2-2.  Zoning District Setbacks 43
Table 2-3.  Private On-Site Common Space Requirements for Residential Development 73

3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 75

4. MOBILITY AND CIRCULATION 101
Table 4-1.  Traffic Volumes 105
Table 4-2.  Bicycle Parking Requirements 126
Table 4-3.  Vehicular Parking Requirements 126
Table 4-4.  Parking Reduction Point System 127

5. INFRASTRUCTURE 131
Table 5-1.  Student Generation Rates 146
Table 5-2.  Projected Student Enrollment 147

6. IMPLEMENTATION 151
Table 6-1.  Great Mall Development Capacity 156
Table 6-2.  Implementation Plan 163
33697
Item # 2.
vii

FIGURES

1. INTRODUCTION 1
Figure 1-1. Regional Context 2
Figure 1-2. City Context 4
Figure 1-3. Plan Area Boundary 5
Figure 1-4. Development Since the Transit Area Specific Plan (2008) 10 Figure 1-5. Community Engagement Timeline Graphic 17
Figure 1-6. Properties Yet to be Developed from the Transit Area Specific Plan (2008). 28

2. LAND USE AND PUBLIC SPACE 35
Figure 2-1. Annexation Areas 36
Figure 2-2. Land Use 40
Figure 2-3. Areas of Change 42
Figure 2-4. Subdistricts 45
Figure 2-5. Existing and Proposed Parks 60

3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 75 Figure 3-1. Tango Subdistrict Connections 77
Figure 3-1. Sidewalk Zones on Shopping Streets 79
Figure 3-2. Passageway 83

4. MOBILITY AND CIRCULATION 101
Figure 4-1. Existing Roadways 104
Figure 4-2. Existing Barriers 105
Figure 4-3. Transit Network 106
Figure 4-4. Level of Traffic Stress 108
Figure 4-5. Existing and Proposed Bicycle Facilities 110 Figure 4-6. Circulation Network 114
Figure 4-7. Great Mall Parkway Street Section 116
Figure 4-8. Great Mall Parkway and Main Street Intersection 117 Figure 4-9. Great Mall Parkway and McCandless Intersection 118 Figure 4-10. Montague Expressway and Trade Zone Boulevard 119 Figure 4-11. Shopping Street. 120
Figure 4-12. Shopping Street with Transit. 121
Figure 4-13. Local Neighborhood Street. 122
Figure 4-14. Larger Local Neighborhood Streets. 122
Figure 4-15. Typical Trail Section 123
33798
Item # 2.
viii

FIGURES

5. INFRASTRUCTURE 131
Figure 5-1. Milpitas Metro Specific Plan Drainage Sub-Basins (Source: Storm Drain Master Plan) 134 Figure 5-2. FEMA-Designated Special Flood Hazard Areas135 Figure 5-3. Existing Water Distribution System (Source: 2021 Water Master Plan) 136 Figure 5-4. Water Infrastructure Improvements (Source: 2021 Water Master Plan) 137 Figure 5-5. Milpitas Metro Specific Plan Location (Source: Sewer Master Plan) 140

6. IMPLEMENTATION 151
Figure 6-1. Great Mall Subareas 154
33899
Item # 2.
ix
This photo taken in 2020 shows housing
construction next to the VTA Light Rail Station
at the Milpitas Transit Center, which is connected
with a pedestrian bridge. The Metro Plan
supports the completion of the neighborhood
transformation in to a transit oriented community.
100 339
Item # 2.

CHAPTER 1. INTRODUCTION 1

1. INTRODUCTION

1.1. Transit Area Specific Plan to
Milpitas Metro

1.2. Plan Context

1.3. Plan Boundary

1.4. Area Background

1.5. Impacts of the Transit Area specific
Plan

1.6. Relationship to Other Plans/
Programs

1.7. Regulatory Compliance

1.8. Community Engagement

1.9. Plan Vision

1.10. Plan Build Out

1.11. Basic Improvement Program (BIP)
and Transit Area Development
Impact Fee (TADIF)

1.12. Subsequent Environmental Impact
Report (SEIR)

1.13. Milpitas Metro Plan Framework
The Milpitas Transit Area Specific Plan (TASP),
adopted in 2008, is being updated and renamed
the Milpitas Metro Specific Plan (Metro Plan
or Plan). The long-term focus of this work is to
transform this area from industrial and autooriented to a vibrant transit-oriented community.

This plan establishes a vision for the ongoing
evolution of the Metro Plan Area into an active,
complete, and connected neighborhood.

This Introductory chapter covers the history and
planning context of the Metro Plan Area. This
chapter includes discussion of the community
engagement efforts that ensure the Metro Plan
reflects a shared community vision. The Plan
vision, which provides a framework for policies
and strategies in subsequent chapters, and the
anticipated development buildout supported
by land use changes are described in further
detail. Finally, this chapter ends with a high-level
overview of funding sources for infrastructure and
service improvements in the Plan Area and the
environmental impact of the Metro Plan.
101 340
Item # 2.
2 CHAPTER 1. INTRODUCTION
Figure 1-1. Regional Context
102 341
Item # 2.

CHAPTER 1. INTRODUCTION 3

1.1 TRANSIT AREA

SPECIFIC PLAN TO

MILPITAS METRO
In the late 2000’s, the Milpitas Metro Plan
Area (Metro Area) was a largely industrial area
characterized by wide, fast-moving arterial
streets, rail crossings, culverted streams,
and the presence of Great Mall, a regional
shopping center located in a former Ford
manufacturing plant.

The City of Milpitas and the Milpitas community
saw the opportunity for change in this area,
catalyzed by major transit connections along
the Santa Clara Valley Transportation Authority
(VTA) light rail, the planned Bay Area Rapid
Transit (BART) station, and the ongoing growth
of Silicon Valley as well as the broader San
Francisco Bay Area.

Seizing this opportunity, the City developed a
transformative vision for the wider transit area,
captured in the Transit Area Specific Plan
(TASP), which was adopted in 2008. The TASP
planned for 7,577 residential units, 2,240,000
square feet of retail space, and 1,050,000 square
feet of office space to be built by 2020.

Change occurred. Much of the TASP vision
became a reality, including the development of
the newly opened Milpitas Transit Center, new
housing, parks, a grocery store, and other shops.

By 2019, 92 percent of the planned residential
units were under development. As the district
neared its planned residential capacity, the City
began a process to update the TASP, now named
the Milpitas Metro Specific Plan (Metro Plan or
MMSP). The renaming highlights the area’s focal
point at the Milpitas Transit Center, a regional
destination that is an emerging metropolitan
center for the City of Milpitas and the South
Bay Area Region.

With roughly half of the Plan Area redeveloped,
the Metro Plan encourages the completion of
the transit oriented neighborhood. The longterm focus of both the TASP and Metro Plan is to transform this area from an industrial and
auto-oriented neighborhood to a vibrant transitoriented community. This plan update sets forth a vision, policies, and an implementing
framework to complete the evolution of the area
surrounding the Milpitas Transit Center to make it
a complete neighborhood.

The Metro Plan addresses the urban district with
a focus on the Great Mall, the Innovation District,
and the remaining connections and sites that will
make this emerging area into an attractive and
convenient neighborhood over the next 20 years.

Postcard of the Ford assembly plant in 1955.
103 342
Item # 2.
4 CHAPTER 1. INTRODUCTION
Figure 1-2. City Context
104 343
Item # 2.

CHAPTER 1. INTRODUCTION 5

1.4.1 Industry and Integration
Incorporated as a city in 1954, Milpitas
experienced rapid expansion and has grown
to become an industrial hub and residential
community in Silicon Valley. In 1955, the Ford
Motor Company moved its operations from
Richmond to Milpitas. In the 1950s, suburban
single family homes were built to house the Ford
factory workers. The homes in the Sunnyhills
neighborhood were the first racially-integrated
community in the United States. Milpitas
continues to be home for a racially diverse and
growing population.

1.2 PLAN CONTEXT
The City of Milpitas is located in northern Santa
Clara County with the City of Fremont to the
north, the City of San Jose to the west and south,
and unincorporated Santa Clara County to the
east, as seen in Figure 1-1. The Metro Plan Area
encompasses properties within the southern end
of the city. Located south of the City’s Midtown
Plan, the Metro Plan is centered around the
Milpitas Transit Center and marks the entrance
into the city from the south (Figure 1-2).

1.3 PLAN BOUNDARY
The Metro Plan Area expands beyond the TASP
Area to include additional parcels on Main Street
and between the Milpitas Transit Center and
Highway 680, which the General Plan establishes
as an Innovation District. Refer to Figure 1-3 for a
map of the Plan’s boundary changes.

The Metro Plan Area is organized into five
subdistricts, which are generally separated by
major street corridors (Figure 2-4). The location
and characteristics of the subdistricts are
described in further detail in Chapter 2: Land Use
and Public Space.

1.4 AREA BACKGROUND
The Metro Area has a long history at this critical
regional crossroad. The Southern Pacific Railroad
and the Western Pacific Railroad, which still exist
and established the community as a key regional
shipping point.

The Milpitas Metro Boundary expands on the TASP
Boundary (gray dashed) and incorporates some of the
areas that are currently part of the Midtown Specific
Plan, which is in the process of being updated.

Figure 1-3. Plan Area Boundary
105 344
Item # 2.
6 CHAPTER 1. INTRODUCTION
many years, recent development, including at
the Milpitas Transit Center and along major
arterials, has included more locally-serving retail
and dining spaces, including a grocery store on
Great Mall Parkway.

1.4.2 Regional Retail
Milpitas’s retail core was historically located along
Main Street, north of the Metro Plan Area. As
the city developed, local and regional shopping
centers emerged throughout the city. One of the
biggest of these shopping centers is the Great
Mall. After nearly three decades of operation,
the Ford assembly plant closed in 1983. The
site, including the old assembly buildings, was
transformed into the Great Mall of the Bay
Area, which opened in 1994. The Great Mall,
owned by national retailer and developer Simon
Property Group, is a 1.4 million square feet
indoor outlet shopping mall, the second largest
in northern California. It is a regional shopping
destination that includes a variety of factory
and outlet retailers from a range of national and
international brands, as well as Home Depot,
Century Theaters Multiplex, Dave and Busters,
and Legoland Discovery Center.

The site will continue to evolve as shopping and
lifestyle preferences change and development
opportunities arise. While there was little retail
in the Plan Area outside the Great Mall for
The Great Mall in the 1990s. (Photo by Dave Cowl)
Photographs from “The Great Mall holds a
great Ford secret”. https://www.hemmings.
com/stories/2016/11/16/the-great-mall-holds-agreat-ford-secret 106 345
Item # 2.

CHAPTER 1. INTRODUCTION 7

1.4.3 Commercial Development at
the Crossroads of Silicon Valley
The City of Milpitas is located north of San Jose
and east of Mountain View along Highway 237,
and is part of Silicon Valley. Tech companies
and related high-skilled manufacturing
businesses have been locating in Milpitas
since the mid-1980s. Milpitas is often referred
to as the “Crossroads of Silicon Valley” with
most of its 13.63 square miles of land situated
between two major freeways (I-880 and
I-680), State Route 237, and County-managed
Montague Expressway.

Single story, light industrial business parks
were the predominant land use prior to the
transformation planned with the TASP. The TASP
planned for commercial and office spaces, but
the market focus over the last several decades
has not resulted in the full realization of this
vision. To preserve land for future employment
uses, the Metro Plan establishes a framework for
significant office and research & development
(R&D) development in the Innovation District.

1.4.4 Regional Transit
While Milpitas has been a major transportation
hub for decades, regional transit planning in the
2000s increased the importance of the Milpitas
Metro Area. The extension of VTA and BART
lines into the area meant that it would be more
regionally connected than any other part of the
City of Milpitas. VTA completed construction of
the Tasman East Extension in 2004, extending
the regional light rail transit system and adding
Great Mall/Main and Montague stations in
Milpitas. A new Milpitas BART station, which
has been constructed, was proposed at the
intersection of Montague Expressway and
Capitol Avenue. The TASP was developed to
anticipate new development around the Milpitas
Transit Center and respond to the continued
growth of Silicon Valley by transforming a lowdensity industrial area into a mixed-use, transitfriendly area.

Single-story office development on McCandless
Avenue that was constructed before 2008. (TASP)
The BART extension of the Warm Springs/
South Fremont line through Milpitas began
construction in 2015 and opened for service in 2020.
(The Mercury News)
107 346
Item # 2.
2006
2019
Aerial images of the Metro Area in 2006 and 2019. (Google Earth) 108 347
Item # 2.

CHAPTER 1. INTRODUCTION 9
The majority of early townhome projects were
located away from major vehicular corridors.

Subsequently, dense mid-rise residential and
mixed-use projects were built and entitled along
Capitol Avenue, Montague Expressway, and Main
Street in the Innovation District, McCandless,
and Tango subdistricts. New development where
significant mixed use was realized includes
“The District” across from the Great Mall on
McCandless Drive, which includes neighborhood
retail, urban scaled residential, and a hotel
around a public gathering space.

1.5.2 Commercial Development
Commercial development envisioned under the
TASP has not been fully realized. As of 2019, only
a limited amount of the commercial development
planned has been built. Examples of commercial
development include retail, office, and hotel
land uses. Several notable new commercial
developments in the Plan Area include a
completed grocery store and ground floor retail

1.5 IMPACTS OF THE

TRANSIT AREA SPECIFIC
PLAN
The Transit Area Specific Plan (TASP) was
adopted in 2008, just before the Great Recession.

Redevelopment in the area was slow to arrive,
but as market conditions approved residential
projects or increasing intensity were proposed,
improved and constructed throughout the Plan
Area, resulting in a striking urban transformation.

Table 1-1 summarizes the housing, office, retail
and hotel development that was planned for
under the TASP, and the amount of entitled
development as of 2019.

1.5.1 Residential Development
By 2019, much of the residential capacity of the
TASP was reached (Figure 1-4). Early projects in
the TASP Area featured townhouses in the Piper/
Montague, McCandless/Centre Pointe, and Trade
Zone/Montague Subdistricts (now the Piper,
McCandless, and Tango subdistricts respectively).

Table 1-1. Development in the TASP
Land Use
Existing
Development in
2008
TASP
Planned New
Development
Total TASP Planned
Development
(columns 1+2,
Projected for 2020)
Entitled by
2019
Dwelling Units 468 7,109 7,577 6,955
Office (sf) 52,780 993,843 1,050,000 10,630
Retail (sf) 1,970,000 287,075 2,240,000 186,500
Hotel (rooms) 292 350 642 175
109 348
Item # 2.
10 CHAPTER 1. INTRODUCTION
Figure 1-4. Development Since the Transit Area Specific Plan (2008) 110 349
Item # 2.

CHAPTER 1. INTRODUCTION 11
on Montague Expressway directly across from
the Transit Center; ground floor retail in mixed
use development along Great Mall Parkway
and Capitol Avenue; and an entitled hotel at
The District.

The market conditions have favored residential,
but the proximity to freeways and public transit
makes this area ideal for commercial office
development as part of an Innovation District.

Commercial retail in the area is well represented
at the Great Mall, which is a significant regional
retail destination and hosts outlets and
entertainment. Neighborhood serving retail
spaces are being built at the ground floor to
serve the local population’s daily needs.

1.5.3 Public Investment
Public investment projects include new
infrastructure and maintenance of existing
infrastructure that serve the Metro Area, such
as publicly-owned roads, parks, utility lines,
and public services, including fire, police, and
school funding. These projects are typically
funded through fees collected from new
private development.

Since the TASP’s adoption in 2008, the most
significant public investment in the Plan Area
is the Milpitas Transit Center, which includes a
BART station, bus station, and light rail station.

The fees collected from new housing also helped
to fund three new parks in the Piper, Tango,
and McCandless subdistricts; a pedestrian
overcrossing on Montague Expressway; and
a new extension of S. Milpitas Boulevard.

Streetscape improvements were also made as
The Edge Apartments: New high-density mixed-use
development directly across Montague Expressway
from the Milpitas Transit Center.

Capitol 650: New high density residential
development at Montague and Great Mall Parkway.

Townhouses in the McCandless Subdistrict.
111 350
Item # 2.
12 CHAPTER 1. INTRODUCTION
part of new development. There are still several
projects planned that have yet to be built.

Additional public investments include
improvements to Montague Expressway
coordinated by Santa Clara County’s Roads
and Airports Department and the expansion
of Milpitas Unified School District’s facilities.

In anticipation of the new population planned
under the TASP, the School District built Mabel
Mattos Elementary School in the McCandless
Subdistrict. Phase 1 has been completed, and
Phase 2 is being redesigned to accommodate
more capacity.

1.6 RELATIONSHIP TO

OTHER PLANS/PROGRAMS
The Milpitas Metro Specific Plan was developed
in the context of other citywide plans, Specific
Plans, and topic area plans. The plans referred to
include the following:

1.6.1 General Plan 2040
The General Plan 2040, adopted in 2021, is the
City’s guiding land use and policy document that
provides a framework for future development
in the City through 2040. The Milpitas Metro
Specific Plan is recognized in the General Plan
as an urban transit-oriented development that
provides critical opportunities for regional job
growth. The General Plan 2040 provides highlevel goals and policies for the Metro Plan Area, which envision the Plan Area as an attractive,
walkable, urban area with a mix of land uses that
minimizes vehicle trips and facilitates increases in
employment densities.

This visioning for the transit area is expanded
upon and implemented through the Milpitas
Metro Specific Plan, which provides a detailed
land use and design framework to guide private
development and public investment.

1.6.2 Transit Area Specific Plan
(TASP)
The 2008 Transit Area Specific Plan (TASP) was
adopted to create attractive high-density urban
neighborhoods with a mix of land uses around
the light rail stations and future Milpitas Transit
Center. The 2008 TASP also aimed to create
pedestrian connections and design streets
and public spaces that supported a lively and
attractive street character and a distinctive
identity for each subdistrict.

While the TASP’s flexible zoning along with
market conditions has supported development
focused on housing and placemaking, some
placemaking work has not yet been implemented
and TASP has not yet attracted significant
workspace development.

The City now seeks to:
• Complement housing with
workspace development;
• Create additional capacity for housing
development, particularly dense, affordable,
and affordable-by-design housing;
• Attract small and large office/ research &
development (R&D)/ creative/ co-working and
other workspaces to the TASP;
112 351
Item # 2.

CHAPTER 1. INTRODUCTION 13
• Consider the “Manufacturing South Area” as
a focused “Innovation District” for a broad
range of new workspaces;
• Encourage landowners/ developers of
remaining large sites to consider workspace
development; and
• Assess opportunities to integrate workspaces
into mixed-use residential developments.

The Milpitas Metro Specific Plan updates and
replaces the original 2008 TASP and vision for
the area. This plan will shape the continued
transformation of this area from industrial and
auto-oriented to a vibrant transit-oriented
community that includes housing, retail,
entertainment, commercial and park spaces,
and a safe and attractive pedestrian and
bicycle network.

In particular, the Milpitas Metro
Specific Plan aims to:
• Strengthen connective infrastructure;
• Build sense of place and cohesion;
• Incorporate feasible
commercial development;
• Foster jobs/housing balance; and
• Establish a strong policy and land use
framework to support future Housing
Elements and future housing development.

1.6.3 Citywide Objective
Standards
Citywide Objective Design Standards provide
design standards and guidelines for all
multifamily development in the City of Milpitas,
as well as other development as relevant.

Existing standards include setbacks and height
limits. These design standards ensure highquality development that is visually compatible with the surrounding area. The City of Milpitas is
currently developing additional Objective Design
Standards for residential development, including
residential-only and mixed-use development.

When complete, these standards will apply in the
Metro Area as they do elsewhere in the City.

In addition to the citywide Objective Standards,
the Milpitas Metro Specific Plan sets forth
additional Plan Area specific design guidelines
and standards that ensure building and site
designs enhance the pedestrian realm. Planspecific standards have been developed to supplement other municipal design documents.

1.6.4 Midtown Specific Plan/
Milpitas Gateway-Main Street
Specific Plan
The Midtown Specific Plan guides the
development in the Main Street/ Calaveras
Boulevard area of Milpitas, which is generally
north of the Milpitas Metro Plan Area, and
is anticipated to be renamed as the Milpitas
Gateway-Main Street Specific Plan. The specific
plan provides strategies and policies to guide
the development of the City’s industrial and
commercial core into a mixed-use, high-density,
transit oriented community. Several parcels
located at the southern end of the plan area
along Main Street have been incorporated into
the Milpitas Metro Specific Plan Area.
113 352
Item # 2.
14 CHAPTER 1. INTRODUCTION

1.6.5 Parks and Recreation Master
Plan
The Parks and Recreation Master Plan is a
strategic planning document that provides
a long-term vision for the city’s parks and
recreational facilities. The Park and Recreation
Master Plan inventories existing park facilities and
establishes a framework for expanding the city’s
park and recreational network and programming
to meet future needs. The Milpitas Metro Specific
Plan’s open space policies were developed in
conjunction with the Parks and Recreation Master
Plan’s development process to ensure that open
space and recreational facilities in the Plan Area
meet the needs of residents, workers, and visitors
in a manner that is consistent with the City’s
overarching vision for the park system.

1.6.6 Bicycle/ Pedestrian and Trails
Plan
The Bicycle, Pedestrian, and Trails Plan provides
a vision and action plan for improving the
city’s bicycle and pedestrian network. The
plan seeks to improve bicycle and pedestrian
connectivity to destinations, integrate active
transportation networks with transit, and
improve the safety and accessibility of the
network. The Bicycle, Pedestrian, and Trails Plan
also identifies priority areas for infrastructure
improvements within the Milpitas Metro
Specific Plan Area, which are reflected in the
Metro Plan’s policies and programs. This plan
provides conceptual and technical guidance that
informs the Milpitas Metro Specific Plan’s active
transportation network.

1.6.7 Urban Water Management
Plan
The Urban Water Management Plan is a water
supply planning tool that guides long-term
water supply decisions to ensure that the City is
able to meet future water supply needs. Given
population growth in Milpitas and heightened
drought risks as the result of climate change,
sustainable water management planning is critical
to ensuring adequate water supply. The Urban
Water Management Plan provides water supply
and demand projections and establishes a per
capita water use goal. The Milpitas Metro Specific
Plan has been developed in coordination with the
Urban Water Management Plan to ensure that
the City’s water supply and distribution system
has the capacity to support the projected growth
in the Plan Area.

1.6.8 Climate Action Plan
The Climate Action Plan is in the process of
being updated and is expected to be completed
by 2022. The Climate Action Plan is the City’s
strategy for achieving carbon neutrality by 2045.

This plan includes greenhouse gas reduction
strategies and climate adaptation goals and
actions that will build citywide resiliency. The
Milpitas Metro Specific Plan implements the
Climate Action Plan by ensuring that new
development is not only aligned with citywide
energy efficiency and emission reduction goals,
but also serves as an early example of the
implementation of critical policies. Development
in the Milpitas Metro Specific Plan will lead
the charge on addressing sustainability goals
and will set a precedent for development
elsewhere in the city.
114 353
Item # 2.

CHAPTER 1. INTRODUCTION 15

1.6.9 Housing Element
The City is in the process of developing
the Housing Element for the 6th Regional
Housing Needs Allocation (RHNA) cycle. The
Housing Element establishes the framework
for accommodating current and future housing
needs in the city. Policies and actions in this
document will ensure a diverse supply of housing
that is affordable to households of all income
levels. The Housing Element is slated to be
completed and adopted by the City Council
in January 2023.

1.6.10 Urban Forest Management
Plan
The Urban Forest Management Plan presents
an inventory of the City’s trees and provides
guidelines for tree management, including
priorities for maintenance and recommendations
for new tree plantings to increase the City’s urban
forest. New park and street tree plantings in the
Plan Area will be guided by strategies discussed
in the Urban Forest Management Plan.

1.7 REGULATORY

COMPLIANCE
The Milpitas Metro Specific Plan has been
prepared in compliance with California
Government Code Section 65450 through
65457 and the requirements of the California
Environmental Quality Act (CEQA). The Milpitas
Metro Specific Plan guides all development
within the Plan Area and will require amendments
to the Zoning Ordinance to ensure consistency
and to implement the development regulations
and land uses established in this Specific Plan.

The Milpitas Metro Specific Plan is adopted
under the authority of the City’s Zoning
Ordinance, which designates specific plans
as a tool to guide land use and development
consistent with the General Plan.
115 354
Item # 2.
16 CHAPTER 1. INTRODUCTION

1.8 COMMUNITY

ENGAGEMENT
The development of the Milpitas Metro Specific
Plan has been guided by robust community
engagement with regional public stakeholders,
private developers, residents in the Plan Area
and City as a whole, as well as City decision
makers. Stakeholders have been engaged
throughout the process to ensure that the Plan’s
development reflects the community’s priorities.

Community engagement opportunities included:
• Website. The Milpitas Metro Specific Plan
website was created at the start of the
planning process. The website provided
updates on the status of the Plan and
opportunities for community engagement.

Community members were able to join the
Milpitas Metro Specific Plan mailing list and
leave comments about the Plan.
• City Council Meetings. The Milpitas City
Council has been regularly engaged since
the early visioning process. In additional
to holistic check-ins, study sessions to
develop the framework for land use, mobility
and circulation, the public realm, and the
Innovation District were held. City Council
members responded to policy frameworks
and gave feedback which was incorporated
into the Milpitas Metro Specific Plan. City
Council also reviewed the Draft Plan and
approved the Final Plan and environmental
documentation.
milpitasmetro.org: The project website contained a
library of the information, FAQ, and links to project
materials and engagement events.

The Milpitas Metro Specific Plan process included
regular presentations and engagement with City of
Milpitas City Council.
116 355
Item # 2.

CHAPTER 1. INTRODUCTION 17

1.8.1 Existing Conditions Phase
Community concerns and priorities were
identified and used to guide the preliminary
approaches to the Plan update.
• Map-Based Public Survey. This map-based
online survey was released at the beginning
of the planning process and collected
316 responses. Respondents were asked
to identify destination and service needs
in the Plan Area, such as open space and
retail, as well as where they would like to
see future commercial, office, and housing
development. The results from the survey
informed conceptual ideas for the Milpitas
Metro Specific Plan, which were presented to
the City Council.
• Stakeholder Interviews. Interviews were
conducted with 24 different stakeholder
groups, including the Chamber of
Commerce, Milpitas Unified School District
(MUSD), Santa Clara Valley Transportation
Authority (VTA), private commercial and
housing developers, and city departments,
to identify priorities and concerns for
development in the Metro Area.

Source: Esri, Maxar, GeoEye, Earthstar Geographics, CNES/Airbus DS, USDA, USGS, AeroGRID, IGN, and the GIS User Community
Map-based surveys and digital whiteboards were
tools used to document and record feedback
about the Plan.

Figure 1-5. Community Engagement Timeline Graphic
117 356
Item # 2.
18 CHAPTER 1. INTRODUCTION

1.8.2 Plan Framework Phase
In the Plan Framework phase, the community
provided feedback on conceptual land use and
transportation connection ideas.
• Community Meeting. An interactive
community meeting was held online
on September 30, 2020 to assess the
community’s attitudes towards conceptual
ideas on land use and pedestrian and bicycle
connections in the Plan Area. Attendees
answered polling questions throughout the
presentation and were able to give additional
comments and have questions answered
during the Q&A and open comment period.
• Online Open House. An asynchronous Open
House was available on the project website
for 3.5 weeks in October 2020 following the
community meeting. This was an opportunity
for community members who were unable
to attend the community meeting to learn
about the Metro Plan and provide input.

Materials presented were the same as for the
community meeting. A survey that mirrored
the polling questions asked during the
community meeting gathered a combined
total from the meeting and open house of
101 participants.

Online Open House results for questions about Road
Design, Walking, and Biking, and a word cloud of
important considerations for the Metro Area.
118 357
Item # 2.

CHAPTER 1. INTRODUCTION 19

1.8.3 Draft Plan Phase
In this last phase, community members were
invited to review and provide comments on the
Public Draft of the Metro Plan and corresponding
Environmental Impact Review (EIR) before the
Plan was presented to City Council for adoption.
• Community Meeting: Draft Plan. A
community meeting and an asynchronous
online open house were held following the
completion of the Public Draft of the Milpitas
Metro Specific Plan. Community members
were given the opportunity to respond to
the draft Milpitas Metro Specific Plan and
voice any feedback they would like to see
incorporated into the Plan.
• CEQA Review. The City prepared a Notice
of Preparation (NOP), which provided an
overview of the Milpitas Metro Specific Plan.

The City held a scoping meeting to inform
public agencies and members of the public
about the Project and the CEQA process
in September 2021. Public comments on
the scope of the EIR, per the California
Environmental Quality Act (CEQA), were
accepted through mid-October. Following
the completion of the Draft EIR, public
agencies and members of the public were
given an additional opportunity to provide
comments on the document.

The Milpitas Metro Plan started with a team workshop
in March 2020, prior to the COVID-19 pandemic. All
subsequent meetings and community outreach were
conducted online.
119 358
Item # 2.
20 CHAPTER 1. INTRODUCTION

1.9 PLAN VISION
The Milpitas Metro Specific Plan envisions
vibrant, connected subdistricts with active public
spaces and affordable housing surrounding
the Milpitas Transit Center. The Milpitas Metro
identity as an urban, future-forward, inclusive,
and world-class competitive district will
distinguish itself from other areas in the City and
South Bay Region.

The Metro Plan considers what transit riders and
visitors see when they visit the Milpitas Transit
Center for the first time. The Plan considers
everyday experiences of people commuting and
living in the area by expanding neighborhood
services and the variety of retail in the area, as
well as through the creation of space for jobs
near transit.

The Metro Area will be strengthened by urban
design standards that ensure high quality
building design and public realm to create
visually memorable structures. The sense of place
and identity will also be enhanced by public art
and landmark features. Public investment in the
public realm will help to strengthen the spatial
understanding of the Metro Area and the social
and cultural image of the area.

The Metro Area Plan features urban housing
and a bustling Innovation District in addition to
a range of retail and entertainment options at
the Great Mall.

This Metro District will be competitive with
other major transit nodes in the region when
it becomes a place that celebrates a walkable
lifestyle with convenient places to live and work

1.8.4 Feedback Highlights
Pedestrian and bicycle connectivity and safety
were primary concerns throughout the Plan
Area and particularly from the neighborhoods
to the Milpitas Transit Center. Respondents also
reported high demand for more neighborhood
retail services, including cafes, restaurants,
grocery stores, and open space.

Key takeaways from the community engagement
efforts included the following:
• Top priorities for the Metro Plan should be
providing open space, fun destinations, and
safer streets.
• Pedestrian and bicycle connectivity are
generally higher priorities than addressing
vehicular traffic.
• More retail activity is highly desirable.
• There are concerns about safety/crime
issues, too much housing, and increases in
traffic congestion.

The community provided input to address
connectivity challenges in the Plan Area. 72
percent of participants at the Community
Meeting and Open House expressed that
pedestrian and bicycle connections are a higher
priority than vehicular traffic speed. There was
also an interest in limiting car access by building
new pedestrian- and bicycle-only connections
in the Tango Subdistrict. The top three types
of open spaces identified by the community
included plazas/ courtyards, farmers’ markets/
community fairs/ event spaces, and trails.
120 359
Item # 2.
21 MILPITAS METRO PLAN VISION
The Milpitas Metro Plan Vision is “to create a more complete neighborhood.” A complete neighborhood includes neighborhood services, a variety of retail, a balance of jobs and housing, with jobs near transit, affordable and market rate housing, safe and attractive multimodal connections, a variety of shared public spaces, and a strong sense of place with memorable architecture and landmarks.

To provide both affordable
and market rate housing
To provide safer and more
attractive multimodal
connections for
walking and biking
To provide a greater variety
of shared public spaces
To enhance the sense
of place and identity
of the Metro Area with
visually memorable
structures and buildings
To create a more
complete neighborhood
To expand neighborhood
services and the
variety of retail
To create and expand
available space for
jobs near transit
121 360
Item # 2.
22 CHAPTER 1. INTRODUCTION
with a wide range of neighborhood services and
transit options just steps away. Milpitas Metro
neighborhoods will be multimodal-friendly
with safe routes for bicycles and pedestrians
that connect housing to activity centers, such
as retail services, office uses, and the Milpitas
Transit Center.

Pedestrian-friendly streets will support mixed-use
development that will house local communityserving retail and restaurants and high-density housing that is affordable for a range of income
levels. Commercial and office uses near the
Milpitas Transit Center will create a nexus of
activity in the core of the Metro Area.

The Metro Plan calls for shared public spaces
to provide a variety of recreational and
contemplative environments for residents,
workers, and visitors. Large plazas, creek trails,
and small parklets will provide a balance of open
space opportunities for community members to
enjoy outdoor space in this vibrant urban area.

The area has transformed greatly over the last
decade, but is not yet complete. The Plan
will complete mobility connections and bring
more commercial uses and related housing to
complete the transformation of the area.

1.9.1 Great Mall Parkway
The Great Mall Parkway is the central corridor
of the Metro Area and a gateway to Milpitas.

Transit riders will be arriving on Great Mall
Parkway below grade on BART, at grade on bus,
and above grade on VTA Light Rail. Great Mall
Parkway is well-traveled and wide road that has
the capacity for more transportation modes and a
transformation of character.

It is possible to provide a more welcoming
environment for pedestrians and cyclists without
reducing the number of vehicle travel lanes on
Great Mall Parkway by narrowing the central
median, which is up to 40 feet wide in some
areas. Adding protected bike lanes, a generous
street side pathway in a linear park, and activity
at the base of street-facing buildings will make
the Great Mall Parkway look and feel more like
a “Great Parkway” and serve the area better.

The above grade light-rail tracks are a significant
landmark for the area but not yet celebrated
as a defining feature. Enhancing the light rail
structure with public art would help visitors
identify the area.

1.9.2 The Great Mall
Retail is changing. The Milpitas Metro Specific
Plan envisions that the Great Mall will transform
itself over time from an indoor mall into a
vibrant neighborhood offering lifestyle retail and
entertainment on a walkable street grid. The
opening of the Milpitas Transit Center across
Montague Expressway from the Great Mall brings
new regional access within walking distance
of the Great Mall Subdistrict, which includes
multiple ownerships. The Great Mall is an
important asset in the area, with regional-serving
entertainment, outlet shopping, and a large
format retail. The Metro Plan provides options for
the future evolution of this property by allowing
more land uses and more density.

The Metro Plan envisions jobs and housing,
especially portions of the subdistrict nearest
122 361
Item # 2.

CHAPTER 1. INTRODUCTION 23
transit, with a central gathering space, walkable
street grid, and new development along Great
Mall Parkway to reflect the scale of development
on the other side of the street.

1.9.3 The Innovation District
The Innovation District is envisioned as an
employment destination featuring modern office
and R&D buildings. The Innovation District is
located in the area directly east of the Transit
Center, just past Berryessa Creek and around
the intersection of Montague Expressway and
S. Milpitas Boulevard. The opening of the
Milpitas Transit Center with the Milpitas BART
station changes the outlook for the Innovation
District area by giving it access to the BART
system and providing regional connections to
other parts of the Bay Area. A new roadway
will be built over Berryessa Creek, providing
direct connections from the eastern part of this
subdistrict to S. Milpitas Boulevard Extension and
the Transit Center.

1.9.4 Public Realm and Streetscape
The public realm includes the spaces shared by
everyone in the community, which include open
spaces, parks, streets, and public amenities. The
successful development of the public realm is
the result of public investment and contributions
from private developers. Milpitas’ public
infrastructure program, funded by the Transit
Area Development Impact Fee (TADIF) and
Citywide funds, will provide many of the public
amenities planned for in this document.

Public realm improvements near the Milpitas
Transit Center include open spaces, streetscape
improvements, and new pedestrian overhead bridges.
123 362
Item # 2.
24 CHAPTER 1. INTRODUCTION
The Milpitas BART Station was opened in June 2020. This station is part of the Phase I extension of BART to San Jose and is the second to last station, with Berryessa Station as the end of the line.

The Edge Apartments: New highdensity residential development on Montague Expressway near the
Milpitas Transit Center.

Anton Aspire Apartments:

New high-density residential
development in the
Tango Subdistrict.

Townhouses: New townhouse
development in the
McCandless Subdistrict.
124 363
Item # 2.

CHAPTER 1. INTRODUCTION 25
Private development further contributes to the
public realm with the construction of streetscape
and amenity features that serve the public. Newly
developed mixed-use and multifamily projects
have enhanced and will continue to improve the
public realm with parks, pathways, and generous
streetscape improvements that support the
pedestrian experience.

The design of the public realm is important
because it is integral to a sense of place. The
public realm is a place where social interaction
can take place and where the neighborhood’s
vibrancy is on display. New neighborhood
parks throughout the Metro Area in the Piper,
McCandless, and Tango subdistricts were built
as a result of the TASP. The park proposed in the
Tango Subdistrict will be expanded beyond the
original TASP concept. New publicly accessible
parks in the Innovation District and Great Mall
subdistricts are also planned. The City has
been purchasing land to establish the parks in
the Metro Area with funds collected from new
development in the area. New development
has also been providing publicly accessible
amenities and on-site improvements that make
the area more livable.

The public realm, through a network of pathways,
helps to connect the area and provide access
between subdistricts and to transit. The
public investment from the TASP has brought
significant improvements to the Metro Area. The
improvements include a pedestrian overcrossing
over Montague Expressway. Additionally S.

Milpitas Boulevard Extension, McCandless
Boulevard, Main Street, and internal roads are
all streets that the City of Milpitas improved
as Complete Streets in the Metro Area. Santa
Clara County was responsible for improvements
to Montague Expressway with landscaping,
new street lighting, and sidewalks. These
improvements are critical to the connectivity of
the neighborhood.

The necessary connections in the Metro Area are
not yet complete. It is important for additional
improvements outlined in this plan complete the
connections that surround the Transit Center. The
Metro Plan continues to require development
standards and streetscape improvements that
have made the TASP so successful.

1.9.5 Urban Form
The new urban form of buildings in the Milpitas
Metro Area make it stand out from the rest of
Milpitas. Well-designed, tall buildings can help
establish a sense of place for the City of Milpitas.

Taller buildings signify the City’s importance, and
their physical form establish landmarks to help
people orient themselves.

The Metro Plan landmarks that define its
character will include taller new development,
the linear park along Great Mall Parkway,
public art on the light rail structure and
bridges, and inviting trails over creeks and
recreation pathways.

A bicycle- and pedestrian-focused urban form is
necessary to complete the transit connectedness
for the Metro Area and to make it easier to travel
without a private vehicle.
125 364
Item # 2.
26 CHAPTER 1. INTRODUCTION

1.9.6 Wayfinding
Wayfinding is the experience of an individual
making their way through an unfamiliar
environment. The identity of the neighborhood
and how to navigate it is most explicitly
expressed through wayfinding signage. Clues
in the structure of the city itself also help orient
people in the environment, but in a more
implicit way.

Consistent signage will help people understand
that they are in the Metro Area. The use of
consistent terminology and graphics across a
range of mediums will build a distinctive sense
of place and projects a consistent image for
the area while encouraging increased rates of
active transportation by helping people identify
alternative routes. Milpitas Metro branded
signage is envisioned to be integrated with
citywide branding and will set a welcoming,
energetic tone for the community. Signage
can also help express Milpitas Metro’s diverse
neighborhoods and unique character. The
design for signage should be easy to identify
and tailored to the needs of pedestrians,
bicyclists, transit riders, and low speed
electric vehicles as well as automobiles and
trucks. Signage in Milpitas Metro should be
integrated into the City’s branding, signage, and
wayfinding program.

1.9.7 Urban Destinations and Retail
Mix
The attractions in the Metro Plan area currently
include the Great Mall’s regional-serving
shopping and entertainment, neighborhood
parks, and emerging neighborhood retail in
the McCandless Subdistrict. The Metro Plan
envisions the evolution of the Great Mall as a
regional destination with a greater variety of
uses; the McCandless Subdistrict as an emerging
local destination for neighborhood services and
gathering; the Innovation District as a regional
employment destination; and the local parks as
destinations connected by a trail network for the
residents in the area, which will include a linear
park on Great Mall Parkway. The envisioned
attractions will strengthen the area and make it
more livable.

The Metro Plan envisions retail concentrated into
nodes along Shopping Streets within subdistricts,
where ground floor retail will be highly visible and
economically viable.

1.9.8 Leading-Edge Sustainability
Milpitas has a citywide goal of cutting
greenhouse gas emissions by nearly 50 percent
from 2005 levels by 2030 and reaching carbon
neutrality by 2045. To reach these targets, the
city has taken a holistic approach to reduce
emissions, particularly in the transportation sector
and energy usage in buildings.

The majority of development in the city is
expected to be in the rapidly growing Metro
Area. Sustainability strategies implemented in the
Metro Plan will have a big impact on the City of
Milpitas and greater environment. The Metro Plan
126 365
Item # 2.

CHAPTER 1. INTRODUCTION 27
implements the Climate Action Plan and contains
policies that will increase the sustainability of
the area through building standards that reduce
emissions and increase reliance on renewable
energy sources; transportation strategies that
manage automobile usage and promote lowand zero-carbon transportation options; targeted strategies to reduce waste; and landscaping
requirements to ensure reductions in water use.

1.10 PLAN BUILD OUT
Since 2008, the Plan Area has experienced
significant change and development. The TASP
resulted in approximately 92 percent of all
planned-for residential to be built or entitled by
2019; however, commercial, office, retail, and
hotel development largely lagged behind. Table
1-2 summarizes the build out of the TASP and the
anticipated build out generated by the Milpitas
Metro Specific Plan.

Many of the early projects in the Plan Area
included townhouses in the Piper Subdistrict,
the McCandless Subdistrict, and along Trade
Zone Boulevard. More recent projects include
several denser residential and mixed-use projects
located along Great Mall Parkway, Main Street,
and Montague Expressway.

While significant development has occurred in
the Plan Area, several large sites have not been
redeveloped or intensified in accordance with
the TASP, including the Great Mall, three VTAowned sites, and properties in the Innovation District. Figure 1-6 identifies the properties that
have not been developed or redeveloped (beige)
since the TASP was adopted, and proposed
expansion areas (blue).

Table 1-2. Development Capacity Comparison to TASP
Land Use
Existing
Development
in 2008
TASP
Planned New
Development
Total TASP
Planned
Development
(columns 1+2,
Projected for
2020)
Entitled
by 2019*
Additional
Projected for
Milpitas Metro
Specific Plan by
2040
Dwelling Units 468 7,109 7,577 6,955 7,000
Office (sf) 52,780 993,843 1,050,000 10,630
3,000,000
(includes 500,000
sf of industrial)
Retail (sf) 1,970,000 287,075 2,240,000 186,500 300,000 Hotel (rooms) 292 350 642 175** 700
*Entitled, under construction, or constructed/occupied
**2021 amendments to Lot 3 in Lyon Living’s The Fields development will reduce the hotel room count from 175 to 162 and reduce the entitled housing unit count from 1,955 to 1,889 units. 127 366
Item # 2.
28 CHAPTER 1. INTRODUCTION
Metro Plan Extension Areas
TASP Planned but Not Developed
Reserved for Public Use
The remaining parcels include additions to the Plan Area, infill sites throughout the area, and the Great Mall.

Figure 1-6. Properties Yet to be Developed from the Transit Area Specific Plan (2008). 128 367
Item # 2.

CHAPTER 1. INTRODUCTION 29
The Metro Plan’s build out is determined by
considering the capacity of the remaining
undeveloped parcels for more commercial and
residential development. The Innovation District
is a largely undeveloped area that will support
office and industrial growth in the next 20 years.

Of the 3,000,000 square feet of new office space
projected in the Plan Area, 2,500,000 square feet
will be accommodated in the Innovation District.

Great Mall is another site that is critical to future
development. This site is expected to support the
remaining anticipated office space, a substantial
amount of multifamily housing, and the bulk
of new retail.

1.10.1 Jobs/Housing
Milpitas Metro continues to be a major
opportunity site for housing development in
Milpitas. The City’s next Housing Element is due
in January 2023, and the process to develop it
has begun. Housing staff have been involved
in the Milpitas Metro Specific Plan’s planning
process to ensure that this plan aligns with
citywide housing strategies.

The currently calculated draft capacity for
additional residential units in Milpitas Metro is
5,000-7,000 total, with 2,000-4,000 units on the
Great Mall site, and 3,000 units on other sites.

When the Housing Element is developed, the
City will determine which sites to include in the
Housing Element.

There is an opportunity for the Great Mall
Subdistrict to have a higher diversity of retail,
housing, and employment. The regional draw
for the area will be strengthened by the Milpitas
Transit Center. The Metro Plan will treat the Great
Mall Subdistrict as an opportunity site for transitoriented development much like what has been planned around it. It is also a site that could
accommodate neighborhood amenities that
would complete the Metro Area.

The Milpitas Metro Plan envisions the
development of not only housing, but also
commercial office and R&D uses that will serve
as employment hubs and balance Milpitas’
housing provision with local employment.

Projected job generation by land use is
summarized in Table 1-3.

Table 1-3. Employment Generation
Land Use Employment Density
Assumptions MMSP Development Potential New Jobs Generated Retail 350 square feet per job 300,000 square feet 857
Office (sf) 260 square feet per job 2,500,000 square feet 9,615 Hotel 1 room per job 700 rooms 700
Industrial/R&D 450 square feet per job 500,000 square feet 1,111 129 368
Item # 2.
30 CHAPTER 1. INTRODUCTION
The TASP has facilitated substantial residential
development. Between the Plan’s adoption and
2019, over 90 percent of the planned 7,577
dwelling units had been entitled, permitted,
or built by 2019. Approximately 30 percent of
the new units are townhouses and 70 percent
are multi-family developments. At the point
of pulling building permits, all but the original
468 units existing at the time of the TASP
adoption have or will pay the TADIF residential
fee providing substantial funding towards the
transportation, parks, and utility projects included
in the BIP. Only new development pays impact
fees under the specific plan requirements.

As of 2019, residential fees have generated
the large majority of the development fee
revenue and have resulted in the completion
of three parks: Bob McGuire Park in the Piper
Subdistrict, McCandless Park in the McCandless
Subdistrict, and August Rathbone Park in the
Tango Subdistrict. Other improvements that have
been completed include subdistrict connections,
a public plaza by the Milpitas Transit Center,
multiple privately-owned public spaces, and trail
improvements along Penitencia Creek. TADIF
revenues for TASP infrastructure/ improvements
funding has also been augmented by grants and
other funding sources.

The Milpitas Metro Specific Plan builds upon
the original vision of the 2008 TASP by focusing
on making a more complete neighborhood.

The Milpitas Metro Specific Plan aims to build
a stronger identity for the area, encourage
complementary land uses, develop connections
between the different subdistricts in the Plan
Area, and expand open space opportunities. The
Milpitas Metro Specific Plan is expected to result

1.11 BASIC

IMPROVEMENT PROGRAM
(BIP) AND TRANSIT AREA

DEVELOPMENT IMPACT

FEE (TADIF)
The 2008 TASP envisioned a broad range of
public infrastructure and improvements to
serve and support the new TASP development.

The City identified and estimated costs for the
required improvements in its Basic Improvement
Program (BIP). The BIP included investments
in road improvements and traffic mitigation
improvements (33 percent of total net costs),
sewer and water facility improvements (20
percent), and parks and community facilities
(47 percent).

The City established the Transit Area
Development Impact Fee (TADIF) to ensure new
TASP development contributed proportionately
and appropriately to the BIP costs. Fees were
established for residential development on a perunit basis and for non-residential development (on a per building square foot basis). As is typical
for development impact fee programs, the fee
levels have been adjusted through time based
both on automatic cost-indexed increases as
well as more comprehensive updates. The most
recent fee adjustment, which occurred in 2019,
was progressively phased in with the full updated
fee levels in place as of November 2020 and
provided below:
• Residential - $40,487 per unit
• Retail - $26.49 per square foot
• Office - $42.52 per square foot
130 369
Item # 2.

CHAPTER 1. INTRODUCTION 31
the Milpitas Metro Specific Plan project and
changes in circumstances in the project area
since certification of the 2007 EIR, the SEIR fully
evaluates certain topics, including transportation,
air quality/greenhouse gas emissions, noise,
population and housing, land use, public
services, and utilities. Other topics included
in the CEQA Checklist, such as biological and
cultural resources, have been scoped out of the
full SEIR analysis, as the Milpitas Metro Specific
Plan (i.e., the revised project) would not result
in new or more significant impacts related to
these resource topics. As supported by recent
CEQA case law, the SEIR analysis focuses on the
potential impacts of the changes to the project
and does not reassess the project as a whole.

Accordingly, the SEIR examines the revised
project in the context of the 2007 EIR focusing
on the changes to environmental impacts and
mitigation that would result from the revisions
to the project.
in some refinements to the BIP, and the TADIF
is expected to remain as the primary source of
public infrastructure/ improvement funding from
new development. The Milpitas Metro Specific
Plan recommends that the TADIF be updated
to account for the new infrastructure and
development planned for and described herein.

The TASP also created a Community Facilities
District (CFD) that utilizes a portion of the Plan
Area’s property tax revenues to supply a fund
for services and maintenance of certain public
improvements, such as certain police and fire
protection services, public lighting, storm
protection, and hazardous cleanup. In this way,
the General Fund is not negatively affected by
residential development in the Metro Area while
still benefiting from the new revenues generated
by non-residential development.

1.12 SUBSEQUENT

ENVIRONMENTAL IMPACT

REPORT (SEIR)

UPDATE IN FINAL PLAN TO ENSURE

CONSISTENCY WITH CEQA WORK
The Milpitas Metro Specific Plan is accompanied
by a Subsequent Environmental Impact Report
(SEIR) to assess and mitigate, as feasible, the
impacts of the Milpitas Metro Specific Plan
project. As noted above, the Milpitas Metro
Specific Plan would replace the Milpitas TASP,
for which a prior Environmental Impact Report
(EIR) was prepared. The 2007 Draft EIR (2007
EIR) was prepared to analyze, at a program level,
the environmental impacts of implementation
of the TASP. Given the expanded scope of
131 370
Item # 2.
32 CHAPTER 1. INTRODUCTION

1.13 MILPITAS METRO

PLAN FRAMEWORK

1.13.1 Plan Organization
Chapter 1 provides background context on the
Metro Plan and includes an overview of the Plan’s
vision. Chapters 2 through 5 of the Plan contain
goals and policies that respond to the Milpitas
Metro Specific Plan’s overarching vision statement
and direct future development in the Plan Area.

Goals in each chapter will be achieved by the
subsequent policies which provide concrete
actions that guide implementation. Chapter 6
contains the implementation and funding plan to
make the plan vision a reality. The Milpitas Metro
Specific Plan consists of the following chapters:
• Chapter 1: Introduction provides
background information on the Milpitas
Metro Specific Plan, explains the Plan’s
relationship with other municipal regulatory
documents, establishes the Plan Vision, and
projects expected plan build out.
• Chapter 2: Land Use and Public Space
establishes the land use and open space
strategy for the Plan Area.
• Chapter 3: Site and Building Design
Standards and Guidelines includes the
Milpitas Metro Specific Plan’s strategy
for activating the public realm, including
sidewalks and pathways, and provides
guidance on building design in the Plan Area.
• Chapter 4: Mobility and Circulation
describes strategies to create a
multimodal network, reduce vehicle miles
traveled through transportation demand
management policies, and decrease
automobile dependency.
• Chapter 5: Infrastructure describes the
public infrastructure and services needed to
support growth in the Plan Area.
• Chapter 6: Implementation details the
implementation of the Milpitas Metro
Specific Plan by the City of Milpitas, including
funding sources and time frames for public
infrastructure projects.
• Appendix includes supporting documents
that provide additional background
information on the Milpitas Metro Specific
Plan, such as the market study.

1.13.2 Plan Horizon
The Milpitas Metro Specific Plan is a planning
document that embodies the vision for the
neighborhoods around the Milpitas Transit
Center for the next 20 years. It shall be prepared,
adopted, and amended in the same manner as a
General Plan. The Metro Plan may be adopted by
resolution or by ordinance and may be amended
or repealed as often as deemed necessary by the
legislative body.
132 371
Item # 2.
33 133 372
Item # 2.
34 CHAPTER 2. LAND USE AND PUBLIC SPACE
Residential development completed in 2020
in the McCandless Subdistrict (top) and the
Tango Subdistrict (bottom).
134 373
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 35

2.1. Land Use Development
Framework

2.2. Great Mall Subdistrict

2.3. Innovation District

2.4. Piper Subdistrict

2.5. McCandless Subdistrict

2.6. Tango Subdistrict

2.7. Land Use Policies

2.8. Parks and Public Spaces
Framework

2.9. Existing and Proposed ParkS Open
Space Strategy

2.10. Public Space Policies

2.11. Private On-Site Common Spaces
vision, including non-residential and affordable
housing development, have not yet come
to fruition. The policies in the Milpitas Metro
Plan are written to encourage development
of the land uses that are needed to complete
the neighborhood.

Finally, this chapter addresses the need for
parks and shared open spaces in Milpitas Metro.

Complementing urban development with a
variety of functional open spaces is essential to
making the area more livable. Policies for Parks
and Public Spaces establish a framework for
a network of spaces that will serve the area’s
population as it grows.

The Milpitas Metro Area is a dense urban
environment that supports transit use and
balances a mix of uses at higher densities
and intensities of development to sustain
commercial activity and an interesting and vibrant
streetscape. The Milpitas Metro Specific Plan
seeks to enhance the evolution of the area from
what was allowed under the TASP by planning for
higher densities to establish the Plan Area as a full
and complete urban center.

The next era of development envisioned
by the Milpitas Metro Specific Plan aims to
align incentives to expand neighborhood
retail and services, generate jobs and attract
employment uses, support the development and
implementation of the City’s Housing Element,
expand housing affordability, and increase the
quantity and quality of shared public spaces.

2. LAND USE AND PUBLIC
SPACE
This chapter establishes the land use framework
and public space strategy for the Milpitas Metro
Plan Area to support complete and connected
subdistrict. This chapter identifies the goals
and policies, land use designations, and zoning
regulations identified for the Plan Area.

This chapter also provides an overview of the
vision for the subdistricts. The Plan does not
establish consolidated sets of policies for each
subdistrict. Instead, the Plan provides universallyapplicable policies, and where necessary subdistricts are referenced to identify specific
policies and improvements in those areas.

Most of the housing envisioned by the TASP has
been developed. This should be celebrated.

However, other aspects of the original TASP
135 374
Item # 2.
36 CHAPTER 2. LAND USE AND PUBLIC SPACE
development buildings with exceptional access
to regional transit and highways. Residential uses
will not be allowed in this subdistrict, primarily
east of Berryessa Creek.

In order to support the development of the
Innovation Districts, the City of Milpitas is
discussing a potential annexation of a parcel
located between the Innovation District and
Highway 680 with the City of San Jose (Figure
2-1). The character of the parcel is more similar to
the surrounding uses in Milpitas. If incorporated,
this parcel will become part of the Innovation
District and support office park and light
industrial development.

2.1 LAND USE

DEVELOPMENT

FRAMEWORK

2.1.1 Land Use Strategy
The Milpitas Metro Plan revises land use densities
originally established by the TASP to respond to
current market conditions and community vision
for the area, to better sustain commercial activity
and to foster a vibrant streetscape environment.

The Milpitas Metro Specific Plan builds on the
TASP by refining land use designations, and
adding new land uses to better address the Great
Mall subdistrict, Innovation District, and remaining
infill parcels. Land uses support the concentration
of higher density development towards the
Milpitas Transit Center and larger street arterials,
and opportunities for denser development
throughout the district.

Encouraging a mix of uses is critical to creating a
more complete neighborhood and ensuring the
vibrancy of the area. Mixed-use buildings create
destinations that organically facilitate community
interaction and reduce traffic during the workday
by providing jobs and essential services within
walking and biking distance of homes. A vibrant
pedestrian-friendly street environment will be
achieved by continuing to focus retail uses along
designated Shopping Streets.

The land use strategy acknowledges the dynamic
character of this rapidly changing area and market
conditions by preserving land for employment
uses. Building off of the direction in the General
Plan, the Milpitas Metro Specific Plan establishes
the Innovation District as a future employment
hub of office campuses and research and
Figure 2-1. Annexation Areas
136 375
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 37
advisory only, and indicates provisional City
expectations. For certain land use classifications
in and adjacent to the Innovation District that
allow mixed-use development, a minimum
commercial FAR is required to ensure that
parcels do not develop as residential-only.

These land uses include Boulevard Very High
Density Mixed Use and Business Park Research &
Development, Residential.

Maximum heights are defined for each subdistrict
using potential number of stories and/or
maximum feet. Where both stories and feet
are provided, the maximum height in feet may
not be exceeded.

2.1.3 Land Use Classifications
To fulfill the land use vision, the Milpitas
Metro Specific Plan establishes eight land use
classifications that are specific to the Plan Area,
as shown in Table 2-1. These classifications
are illustrated in the Land Use Map in Figure
2-2 and include:
• Residential Retail High Density Mixed
Use (RRMU). Supports vertically mixed-use
development that have ground floor retail
and active uses with residential or office uses
on upper floors.
• Boulevard Very High Density Mixed Use
(BVMU). Supports high-density housing,
retail, and small-format employment.
• Multi-Family High Density Residential
(MFH). Supports medium-density residential
development such as stacked flats
and apartments.

2.1.2 Land Use Densities
Milpitas Metro is a unique district in Milpitas.

While other areas of the city are characterized
largely by low-rise development, the Metro
District is a dense, transit-oriented hub. In
order to foster the evolution of the district into
a complete neighborhood, the Metro land use
framework offers density incentives to residential
mixed-use development. The highest permitted
densities are located along major corridors and in
the Innovation District. Densities and intensities
are reduced on parcels farther from the corridors
and closer to existing residential neighborhoods.

Table 2-1 specifies density and floor area ratio
(FAR) ranges for each land use classification:
• Residential Development: Intensities
are determined on a dwelling unit per
acre basis when a project consists of
residential uses only.
• Non-Residential Development: Densities are
calculated based on FAR.
• Mixed-use with Residential Development:

FAR is used for all portions for mixed-use
projects, including residential and nonresidential portions.

Development densities and intensities are
calculated per parcel, as opposed to gross
acreage. This is intended to ensure the type of
development built more accurately reflects the
vision expressed in the Plan.

For mixed-use projects, Floor Area Ratio (FAR)
is used and a range is stated to indicate the
anticipated density of the project. In the case
of mixed-use projects any stated density is
137 376
Item # 2.
38 CHAPTER 2. LAND USE AND PUBLIC SPACE
Land Use
Classification Allowed Density Maximum Height Active Use Requirements Allowed
Zoning
Districts
Residential Retail
High Density
Mixed Use (RRMU)
Mixed Use1: 1-2.5
FAR
Residential Only:
40-85 units/ac
85 feet
Within 60 feet of adjacent
existing residential zoned
parcels, building height
shall be stepped down
to be the same max
height plus 10 feet of the
adjacent parcel.

Ground floor retail
and active uses are
required on 80 percent
of the ground floor
facade along any
Shopping Street.

Metro High
Density Mixed
Use (MXD2-
Metro)
Boulevard Very
High Density
Mixed Use (BVMU)
Mixed Use1
: 2.5-5.0
FAR
Residential Only:
85-250 units/ac
275 feet
50 percent of base
footprint above 85 feet
and 25 percent of base
footprint to a maximum
height of 275 feet tall
Ground floor retail
and active uses are
required on 80 percent
of the ground floor
facade along any
Shopping Street.

Metro Very High
Density Mixed
Use (MXD3-
Metro)
Multi-Family
High Density
Residential (MFH)
Residential:
30-40 units/ac
75 feet N/A
Metro MultiFamily High
Density
Residential (R3-
Metro)
Multi-Family Very
High Density
Residential (VHD)
Residential:
40-85 units/ac
35-85 feet N/A
Metro MultiFamily Very
High Density
Residential (R4-
Metro)
Urban
Residential (URR)
Residential: 70-120
units/ac
6 stories and 75 feet N/A
Metro Urban
Residential (R5-
Metro)
Table 2-1. Land Use Classification with description, allowed density, maximum height, and allowed zoning districts
1 On Housing Element opportunity sites, upper story non-residential uses are prohibited. 138 377
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 39
• Business Park Research & Development,
Higher Density (BPRD-H). Allows for
higher density office, R&D, office-supportive
commercial retail, and hotels.
• Business Park Research & Development,
Residential (BPRD-R). Supports office, R&D,
office-supportive commercial retail, hotels,
and residential.
• Multi-Family Very High Density
Residential (VHD). Allows high-density
residential development, such as multi-story
apartments and condos.
• Urban Residential (URR). Allows very highdensity, residential-only development, such as multi-story.
• Business Park Research & Development,
Lower Density (BPRD-L). Allows for lower
density office, R&D, warehouses, and
hotels. Office-supportive commercial retail
uses are allowed.

Land Use
Classification Allowed Density Maximum Height Active Use Requirements Allowed
Zoning
Districts
Business Park
Research &
Development,
Lower
Density (BPRD-L)
Non-residential: 1.0-

2.5 FAR
N/A
Ground floor retail
and active uses are
required on 80 percent
of the ground floor
facade along any
Shopping Street.

Innovation
District Lower
Density (INND-L)
Business Park
Research &
Development,
Higher
Density (BPRD-H)
Non-residential: 1.0-

2.5 FAR
N/A
Ground floor retail
and active uses are
required on 80 percent
of the ground floor
facade along any
Shopping Street.

Innovation
District Higher
Density (INND-H)
Business Park
Research &
Development,
Residential (BPRD-R)
Mixed-use: 1.0-

5.0 FAR; minimum
of 1.0 FAR
of office or R&D
275 feet
Ground floor retail
and active uses are
required on 80 percent
of the ground floor
facade along any
Shopping Street.

Innovation
District
Residential
(INND-R)
139 378
Item # 2.
40 CHAPTER 2. LAND USE AND PUBLIC SPACE
Figure 2-2. Land Use
140 379
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 41
Density (BPRD-L); Business Park Research
& Development, Higher Density (BPRD-H);
and Business Park Research & Development,
Residential (BPRD-R). These land use
classifications support research and development
activities, offices, high tech, hotels, retail services, and education uses. The classification addresses
the eastern portion of the Innovation District
and the southern portion of the Great Mall
Subdistrict. BPRD-L occurs further from the Transit
Center near the freeway and BPRD-H occurs
near the intersection of Montague Expressway
and South Milpitas Boulevard and parcels near
the Milpitas Transit Center. BPRD-L and BPRD-H
allow only non-residential uses to encourage
clustering of shopping and employment uses,
provide opportunities for large-footprint
buildings and adequate parking, and to prevent
encroachment by residential uses. Mixed-use
developments can include limited residential uses
in BPRD-R if minimum non-residential densities
requirements are met.

The Metro Plan maintains two General Plan
land use designations: Public Facilities (PF)
and Permanent Open Space (POS). The Public
Facilities designation applies to parcels owned
by public agencies and are intended to be
accessed by the public, including schools and
transit centers. Areas that are intended for
parks, waterways, creek corridors, and trails
are designated as Permanent Open Space.

Development in these areas is limited to
structures that support open space uses, such as
park facilities, restrooms, and signage.

This framework locates residential mixed-use
development with commercial at the ground
floor along the major corridors. This is intended
to cluster pedestrian-oriented retail and personal
services in proximity to high-density residential
populations, as well as making them convenient
to employment sites. These parcels are
permitted to develop with higher densities and
taller building heights as incentives to provide
commercial uses. Designated “Shopping Streets”
identify locations where ground-floor commercial
uses will be required, as shown in the Circulation
Network Map (Figure 4-6). Building frontages on
Shopping Streets must include retail and active
ground-floor uses. Active uses are uses that
encourage pedestrian activity, including storefront
retail and personal services, ground-floor office,
or residential shared amenities, such as a lobby,
gym, or conference room.

Medium- to high-density residential land
use classifications provide opportunities for
residential-only buildings within the interior of
subdistricts. With a range of height and density
standards, these residential classifications allow
for transitions to lower density areas outside the
plan boundaries.

The City is developing Housing Opportunity
Zones (HOZ), which will designate opportunity
areas for increased housing densities. Proposed
development projects in the HOZ will be eligible
for additional densities provided that they comply
with City requirements including design standards
and affordable housing requirements.

Three new land uses have been developed to
support the evolution of the Innovation District:

Business Park Research & Development, Lower
141 380
Item # 2.
42 CHAPTER 2. LAND USE AND PUBLIC SPACE
While the MMSP updates all land uses in the
Plan Area, most development changes are
anticipated in several key areas indicated on
the Areas of Change Map (Figure 2-3). These
highlighted parcels were not redeveloped under
the TASP and are expected to redevelop over the
next 20 years.

2.1.4 Zoning
The Milpitas Metro Specific Plan establishes eight
new zoning districts that implement the Metro
Area’s land uses. The two mixed use zoning
districts and three residential-only zoning districts
are similar to the existing MXD2, MXD3, R-3,
R-4, and R-5 zones contained in the City’s zoning
code. Density and height regulations for the new
zoning designations shall be consistent with the
corresponding land use standards established in
Table 2-1. Table 2-2 contains additional setback
requirements for each zone.

Parking minimums are also associated with each
of these zones, and are generally lower in the
Metro Area compared to other areas of the city
due to closer proximity with transit. Many of the
trips in the Metro Area are anticipated to be
made by foot, bike, or transit due to the dense
mixed-use, transit-rich environment. For offstreet parking requirements, refer to Table 4-3 in Chapter 4: Mobility and Circulation.

Figure 2-3. Areas of Change
142 381
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 43
Zoning District Front Setback
Minimum
Rear Setback
Minimum
Side Setback
(interior) Minimum
Side Setback
(street side),
Minimum
Metro High
Density Mixed Use
(MXD2-Metro)
0 feet min,
20 feet max
10 feet;
15 feet when
abutting residential;
20 feet for portions of
buildings over 60 feet
or 4 stories tall
0 feet;
10 feet when abutting
residential use and for
portions of buildings
over 60 feet or
four stories tall
0 feet
Metro Very High
Density Mixed Use
(MXD3-Metro)
12 feet min,
20 feet max
15 feet;
20 feet when
abutting residential;
30 feet for portions of
buildings over 60 feet
or 4 stories tall
10 feet;
15 feet when
abutting residential;
20 feet for portions of
buildings over 60 feet
or 4 stories tall
12 feet min,
20 feet max
Metro MultiFamily High
Density Residential
(R3-Metro)
20 feet
Single story: 30 feet
2-2.5 story: 35 feet
3-3.5 story: 40 feet
Single story: One
side 5 feet min,
total of 12 feet
2-2.5 story: One
side 10 feet
min, total 25 feet
3-3.5 story: One
side 12 feet
min, total 30 feet
10 feet
Metro MultiFamily Very High
Density Residential
(R4-Metro)
8 feet min,
20 feet max
from the back
of the sidewalk
10 feet 10 feet
8 feet min,
15 feet max
from the back
of the sidewalk
Metro
Urban Residential
(R5-Metro)
12 feet min,
20 feet max
from the back
of the sidewalk
15 feet; 20 feet
for building over 3
stories which abut
residential uses
15 feet
20 feet for building
over 3 stories which
abut residential uses
12 feet min,
20 feet max
from the back
of the sidewalk
Table 2-2. Zoning District Setbacks
143 382
Item # 2.
44 CHAPTER 2. LAND USE AND PUBLIC SPACE

2.1.5 Affordable Housing Approach
The Milpitas Metro Specific Plan aims to increase
the amount of affordable housing in the Plan Area
through the implementation of both citywide
policies and the Milpitas Metro Specific Plan
vision and policies, and through support of the
Housing Element.

The TASP was successful in generating new
market rate housing, including smaller transitoriented units that were affordable by design.

However, it did not generate the anticipated
amount of housing that is typically subsidized for
households earning below the area median
income (AMI).

In 2018, the City of Milpitas adopted
an inclusionary housing ordinance that
requires 15 percent of new housing to be
affordable at below-market rates. In general,
these units must be built within individual
development projects, though a developer
can request that the City Council approve
off-site development or an in-lieu impact
fee payment. The citywide policies in the
existing General Plan Housing Element and
future Housing Elements that aim to expand
Zoning District Front Setback
Minimum
Rear Setback
Minimum
Side Setback
(interior) Minimum
Side Setback
(street side),
Minimum
Business Park
Research &
Development,
Lower Density
(BPRD-L)
0 feet 10 feet min 10 feet min 0 feet
Business Park
Research &
Development,
Higher Density
(BPRD-H)
0 feet 10 feet min 10 feet min 0 feet
Business Park
Research &
Dvelopment,
Residential
(BPRD-R)
10 feet min,
20 feet max
10 feet min 10 feet min
10 feet min,
15 feet max
144 383
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 45
affordable housing are and will be the major
policy drivers on affordable housing and will apply
to the Milpitas Metro Specific Plan Area.

In accordance with Milpitas’ inclusionary housing
goals and policies, the Milpitas Metro Specific
Plan will also require at least 15 percent of
new housing to be affordable at below-market
rates. Additionally, the Plan envisions a series
of neighborhoods that will be “affordable by
design” due to their excellent access to highquality transit and multimodal access, higher density design, small to moderate unit sizes, and
low parking ratios. Additionally, through future
Housing Elements, the City will define affordable
housing sites and establish Housing Opportunity
Zones that support the development of affordable
housing, which is likely to include sites within the
Metro Plan Area.

2.1.6 Subdistricts
The Metro Plan is organized into five subdistricts
which have unique characteristics and support
different land uses (Figure 2-4).

These subdistricts are reoriented and reorganized
from the original TASP subdistricts to better
define them as cohesive neighborhoods,
typically bounded by major streets and centered
around a common open space area or business
district. This section qualitatively describes each
neighborhood; identifies recent changes as a
result of development and implementation of
the TASP; anticipates where new development
is expected; and describes circulation, park, and
infrastructure improvements that are documented
in other chapters of the Milpitas Metro
Specific Plan.

2.2 GREAT MALL

SUBDISTRICT
The Milpitas Metro Specific Plan envisions
repositioning the Great Mall Subdistrict, which
includes the Great Mall itself, from a retailonly shopping center to a new transit-oriented high-density mixed-use neighborhood with a
finer-grain street grid and signature public open
spaces. Given the site’s proximity to the Milpitas
Transit Center and the potential of Great Mall site
evolution, this subdistrict has a high opportunity
for growth and the potential to transform into
an transit oriented district that is committed to
advancing sustainability and equity goals through
high performance targets in areas such as access
and mobility, community health, and energy
The Milpitas Metro Subdistricts redefine
subdistricts in the TASP.

Figure 2-4. Subdistricts
145 384
Item # 2.
46 CHAPTER 2. LAND USE AND PUBLIC SPACE
Illustration of the transformation of the Great Mall Parkway.

The vision for the Great Mall subdistrict as a transit-oriented high density, mixed-use neighborhood. This view is at Great Mall Parkway and McCandless Drive, looking through new development at the edges of the subdistrict to the Great Mall itself.
146 385
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 47
This illustrative Plan of the Great Mall Subdistrict demonstrates the vision for this subdistrict with a concept that includes part of the original mall remaining, residential infill at the north of the site, urban scaled buildings along Great Mall Parkway, commercial buildings that tie into the Innovation District located closest to the Milpitas Transit Station, a central public gathering place and linear park, and a walkable street grid.

Infill residential and
connection to Main
Street neighborhoods
Improved connection to the
VTA Great Mall LRT Station
with a redesign of the Main
Street and Great Mall Parkway
Intersection Design.

Commercial
development to tie into
the Innovation District
Urban development reflecting the
scale across Great Mall Parkway
Central Public
Gathering Place
147 386
Item # 2.
48 CHAPTER 2. LAND USE AND PUBLIC SPACE
usage. The Great Mall Subdistrict also has the
potential to support a performing arts center,
which could draw both local and regional visitors,
given its location and accessibility from transit.

The subdistrict was largely unaddressed in the
2008 TASP and is currently zoned for general
commercial use, which prohibits residential uses.

The suburban character of the subdistrict has
low building form and looks underdeveloped in
comparison to the transit-oriented neighborhoods
that have grown up around it. To provide
flexibility and capacity for change, this subdistrict
now includes land uses that support highdensity mixed use throughout the majority of the subdistrict while maintaining parcels close
to the Milpitas Transit Center as commercial
and retail only.

The potential evolution of the Great Mall will be responsive to the local market and property owner needs and expertise.

This subdistrict is bound by Great Mall Parkway
and Main Street to the west, the BART rail tracks
to the east, and Montague Expressway to the
south. The Subdistrict includes the Great Mall,
owned by Simon Property Group, and, the parcels
at the edge of the Great Mall site along Great
Mall Parkway and Montague Expressway that
are owned by a variety of owners. For planning
purposes the Great Mall subdistrict is divided into
distinct development pads, and each has been
assigned development capacity. These pads may
be individually identified as opportunity sites in
the Housing Element.
148 387
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 49

2.2.1 Great Mall Subdistrict
Priorities
The priorities for this area are:
• A walkable public street grid that is built with
the phases of development that occur within
the subdistrict. Streets would divide large
parking lots into walkable blocks and streets
that can be activated by the uses around them
• A central outdoor gathering space, and
supporting publicly accessible open spaces
that build a sense of place. These spaces will
be the new amenities that anchor the entire
district and would provide social gathering
spaces for residents, workers, and visitors.
• Higher density mixed use development
located close to the Great Mall Parkway and
across from the Milpitas Transit Center where
the urban scape is the most appropriate
• A mix of ground floor commercial space
and housing for a variety of opportunities to
live, work, and play near transit. Dedicated
Shopping Streets with ground floor retail
and services located parallel to Great Mall
Parkway and extending into the Great
Mall site that provide a lively and active
sidewalk experience.
• New pedestrian and bicycling connections
along Great Mall Parkway between both
VTA Light Rail Stations and connections to
adjacent neighboring areas to the north
with opened streets, to the east with
bridges across barriers, to the south with a
dedicated cycletrack and linear park, and to
the west with improved Great Mall Parkway
pedestrian safety.

Walkable street grid.

Open space network with central plaza.

Mixed-Use development with higher densities near
the Transit Center.

Concentration of new development near transit.

Illustrative graphics show the possibilities for the Great Mall Subdistrict and not what is proposed.
149 388
Item # 2.
50 CHAPTER 2. LAND USE AND PUBLIC SPACE

2.2.2 Great Mall
The Great Mall stretches from parking lots located
close to the Transit Center to neighborhoods
north of the site that are associated with Main
Street. The structure of the Great Mall, originally
developed in the 1960s as a major Ford auto
factory, is 1.4 million square feet and one to two
stories tall, with one multi-level parking garage on
the north side of the mall.

The Great Mall continues to be a major Milpitas
attraction and a highly successful location for
retail. However, retail is evolving, and there is
currently high potential for “lifestyle” retail,
fitness, entertainment or a central gathering
space to be the anchor for this regional
destination. In addition, there is an excellent
opportunity to provide housing and establish a
strong employment base with direct access to
transit within this subdistrict.

The evolution of retail will mean that there are
complementary and additive changes to the
site over time, and that we might anticipate
redevelopment in phases. The City of Milpitas
will partner with the owner of this site to establish
a development plan for the property when
appropriate. Refer to Figure 6-1 in Chapter 6:

Implementation for development pads on the
Great Mall site that will support the phased
evolution on the parcel.
• In the first phase, redevelopment at the Mall
may include development of the surface
parking lots around the site. It may start
at the northern end of the site where new
development could blend with the existing
residential neighborhood that borders the
subdistrict. Access at the northern end would
improve access from Main Street to the Great
Mall and Milpitas Transit Center.
• A mid-term phase could involve redeveloping
the southern end of the site, closest to the
Milpitas Transit Center, the Innovation District
and hotels along Montague Expressway. This
could involve replacement of any portion of
the existing Great Mall structure to continue
to transform the site into a more urban
walkable block structure.
• In the long-term the Mall could be replaced
with a variety of new uses, including retaining
and reformatting substantial and profitable
retail commercial uses.
150 389
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 51
mobility at the intersection of Great Mall Parkway
and Main Street and incorporate existing and
planned pedestrian overcrossings from the LRT
station. This addition could be key to the success
of the Main and Great Mall Parkway intersection,
which is fraught with long, complicated,
and uncomfortable walking conditions. A
concept for improving this intersection and
a plaza at the Great Mall subdistrict is further
illustrated in Chapter 4.

2.2.4 Commercial Properties at
Montague Expressway and Great
Mall Parkway
The southern portion of the Great Mall Subdistrict
includes several commercial priority parcels that
are ideal for high-density office, R&D, officesupportive retail, and hotel uses between the Great Mall site and Montague Expressway.

These parcels extend the Innovation District by
preserving and encouraging employment land
uses close to the Milpitas Transit Center while also
providing a gateway experience to the arriving
commuters and visitors.

2.2.3 VTA Bus Station
The sites at the edge of the Great Mall Subdistrict
have potential for redevelopment. One key site
located on Great Mall Parkway is the former
VTA Bus Station, which was relocated to the
new Milpitas Transit Center in June 2020. VTA
has indicated it is likely that they will pursue
redeveloping this site to include a significant
amount of affordable housing and support their
goal of 35 percent affordable housing across their
property portfolio. This site is at a critical location in the subdistrict and could serve as a figurative
bridge between recent mixed-use development
at Great Mall Parkway and McCandless Drive and
anticipated redevelopment on the Great Mall site.

Redevelopment of the VTA site could improve
The former VTA Bus Station is now an opportunity site.

VTA owns another opportunity site next to the new
VTA Bus Tansfer Station at the Milpitas Transit Center. 151 390
Item # 2.
52 CHAPTER 2. LAND USE AND PUBLIC SPACE

2.3 INNOVATION

DISTRICT
The Innovation District is a mixed-use, office, R&D
and light industrial subdistrict located on the east
side of the Plan Area. The subdistrict includes
the Milpitas Transit Center and the crossroads of
Montague Expressway and S. Milpitas Boulevard.

It is bound by I-680 to the east and Capitol
Avenue to the west.

The vision for the Innovation District of a new
center for innovation and technology in Silicon
Valley. The highest-density employment uses
will be ideally located closest to transit, services
and housing, and the construction of a vehicular
bridge over Berryessa Creek will provide a direct
connection to the rest of the Metro Area. New
streets and sidewalks located south of Montague
Expressway will connect employment centers
to Milpitas Boulevard and the Milpitas Transit
Center. A new park and creek trails, which will
provide workers with outdoor recreational space,
are planned along Berryessa Creek. The strategy
for the Innovation District is focused primarily on
the employment uses and supportive services that
make the Metro area a complete neighborhood.

There are three primary areas in the
Innovation District:
• The Milpitas Transit Center, which includes the
Milpitas BART station and VTA bus stops, is
in the western part of the Innovation District.

The sites closest to the Milpitas Transit
Center are owned by VTA and potentially
include housing, with commercial uses at the
base buildings. Mixed-use development in
this area will provide housing opportunities
that complement the employment uses in
this subdistrict.

A view from one of the upper levels of commercial office buildings looking upon the street extending over Berryessa Creek into the Innovation District.
152 391
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 53
Illustrative Plan of Innovation District and potential development around the Milpitas Transit Center.

The focal point of
commercial development at
Montague Expressway and
South Milpitas Blvd.

A bridge connecting to A new park
Milpitas Transit Center
Potential VTA Transit
Oriented Development
153 392
Item # 2.
54 CHAPTER 2. LAND USE AND PUBLIC SPACE
• Sites near the intersection of Montague and
S. Milpitas Boulevard are a central part of
the Innovation District, an area that extends
from the Great Mall past Berryessa Creek
towards I-680. These sites are zoned Business
Park Research & Development, Higher
Density (BPRD-H) and intended to preserve
employment lands by prohibiting residential
uses and supporting primarily office and
industrial uses.
• Along the easternmost portion, at the edge
of I-680 are sites that are both freeway and
transit accessible. These areas are anticipated
to be R&D or industrial uses that are not
as dense as envisioned for the center of
the subdistrict and are zoned Business
Park Research & Development, Lower
Density (BPRD-L)
These land uses will accommodate business
parks, high-density office buildings, research
and development facilities, light manufacturing
parks, and light industrial areas that provide for a
variety of employment opportunities and services
for Milpitas and the region. Uses that support
businesses including health and fitness centers,
restaurants and cafés, limited convenience retail,
and day care facilities will also be encouraged to
complement the campus-like development.

Given the high development potential for the
Innovation District and its anticipated density,
the feasibility of integrating high performance
sustainability measures through the creation
of an EcoDistrict, described in policy LU 1.5
below, will be explored. The Innovation District is
conveniently located within walking distance of
the Milpitas Transit Center and will support new
higher density development which could provide
an opportunity for advancing sustainability
measures related to accessibility, energy use, and
resource management.

2.4 PIPER SUBDISTRICT
The Piper Subdistrict is the most built-out
subdistrict in the Plan Area. The Metro Plan
modifies the subdistrict by changing the land
use of properties near the intersection of South
Milpitas Boulevard and Montague Expressway
to BPRD-H, which does not allow residential
use, and reassigning these properties to the
Innovation District.

This Piper subdistrict is bounded by the BART
tracks to the west, Milpitas Boulevard to the
east, and Montague Expressway to the south.

The subdistrict includes Bob McGuire Park at the
center of the subdistrict, surrounded by MultiFamily Residential High Density and Multi-Family Aerial view of the Piper Subdistrict.
154 393
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 55
of school construction is expanding to
accommodate projected new development in
the area. McCandless Park, a centerpiece of the
McCandless subdistrict has been completed
as the largest park in the Metro Area, and will
serve the school and public through a joint-use
agreement. McCandless Park is bordered by
Penitencia Creek East Channel where a trail and
pedestrian bridges are planned to connect across
the creek and beyond.

The last part of this subdistrict to redevelop is
a stretch along Montague Expressway between
McCandless Avenue and Houret Court. This
Plan established the framework for a new street
pattern in the southern portion of the subdistrict
that could ultimately provide access between
McCandless Drive and Montague Expressway, via
Houret Court. Houret Court will be redesigned
as a part of that connection to make the adjacent
parcels more feasible for mid-rise residential
development and to facilitate access for
mixed-use retail commercial development at
McCandless Drive.

2.6 TANGO SUBDISTRICT
The Milpitas Metro Plan’s focus in the Tango
Subdistrict is to better connect and complete
the internal circulation for the subdistrict and
connect it to the Milpitas Transit Center which is
adjacent to it, across Capital Avenue at S. Milpitas
Boulevard Extension.

The name of the subdistrict is a combination of
the names of two cul-de-sacs in the subdistrict,
Tarob Court and Sango Court, that do not
currently connect within the subdistrict. Barriers,
such as South Penitencia Creek - East Channel
Residential Very High Density. A pedestrian
overcrossing connects the Piper Subdistrict to the
Milpitas Transit Center. The direct connectivity to
the Milpitas Transit Center has made it attractive
for developers to propose high density residential
projects and build mixed-use development in the
Piper Subdistrict.

2.5 MCCANDLESS

SUBDISTRICT
The McCandless Subdistrict is mostly built out
and is a visible result of planning from the TASP.

This original subdistrict included the residential
neighborhood south of Great Mall Parkway
and west of Montague Expressway and has
been expanded to include several additional
residential parcels on Main Street. The expansion
of the subdistrict to Main Street will increase the
development potential for high-density residential
parcels to the Plan Area. These areas are closely
connected on Great Mall Parkway and close to
the Great Mall VTA Light Rail Station.

The subdistrict is characterized by highdensity mixed-use development along larger, busier streets and lower density townhouse
development in central area. A signature part
of the subdistrict is a neighborhood serving
commercial district at The Fields with a Trader
Joe’s grocery store, retail, and a public gathering
place, a block from the intersection of Great Mall
Parkway and McCandless Drive.

Further down McCandless Drive, Mabel Mattos
Elementary School has been constructed
following the identification of the site for
school use in the TASP. The second phase
155 394
Item # 2.
56 CHAPTER 2. LAND USE AND PUBLIC SPACE
along Trade Zone Boulevard. While there has
been some development, the Tango Subdistrict is
still transitioning from business park and industrial
uses to “transit-oriented” as envisioned in the
TASP. The remaining parcels in the subdistrict are
located south of the creek and are envisioned
to be higher density housing with some
neighborhood-serving commercial services within
walking distance to the Milpitas Transit Center.
divide the subdistrict. Large arterial streets -
Montague Expressway, Capitol Avenue, and Trade
Zone Boulevard that surround the subdistrict are
also barriers to connectivity and circulation within
the Metro Area.

Several residential and mixed-use buildings have
been developed following the TASP, including the
higher density apartments on Capitol Avenue and
townhouses in the southern part of the subdistrict
Illustrative Plan of the McCandless and Tango Subdistricts Districts.

Pedestrian bridge connects
the interior of the Tango
Subdistrict with the Milpitas
Transit Center
Future planned
pedestrian bridge
connects Tango
and McCandless
subdistricts across
Montague Expressway
Residential
development
on Main Street
Residential development
on Houret Court
Transit-oriented residential
development on Sango
and Tarob Courts are
connected with new streets
around the park
156 395
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 57

2.7 LAND USE POLICIES
LU 1. Mix of Uses. Provide a mix of land uses,
including residential; neighborhood-serving,
local, and regional retail and entertainment
destinations; commercial; office; research
and development facilities; parks; and public
facilities, to create a complete neighborhood.

LU 1.1. Establish the Land Use Classifications
outlined (Table 2-1) and the Land Use Map
(Figure 2-2) to identify areas appropriate
for residential, commercial, mixed use,
office, and industrial development. Retail
commercial uses shall be concentrated
in a pedestrian-oriented pattern,
further described with development
standards (Chapter 3).

LU 1.2. Update the General Plan to establish
the Metro Plan’s boundaries to include
parcels on Main Street and parcels east of
Berryessa Creek as identified in the Plan
Area Boundary map (Figure 1-3).

LU 1.3. Convert transit facilities into high
density mixed use if they are not
needed for transit.

LU 1.4. Within each subdistrict, no more
than 20 percent of new development
can be permitted without 20 percent of
planned park/open space area being
dedicated to that use.

LU 1.5. Explore the feasibility of creating an
EcoDistrict in the Innovation District and/
or the Great Mall Subdistrict: a vibrant,
mixed-use neighborhood committed
to advancing sustainability, resilience,
Development fees are paying for a new
pedestrian bridge, parks, and new streets to
connect to the heart of the Tango Area. In 2020,
the City of Milpitas bought key parcels in the
subdistrict that will be developed as roadways,
pathways, and parks to complete the Tango
Subdistrict with a connection to the Milpitas
Transit Center. A planned pedestrian bridge
across Montague Expressway will connect
the McCandless Subdistrict with the Tango
Subdistrict along the Penitencia Creek Trail.

When completed, this pedestrian and bicycle
network will provide safe connections to the
Milpitas Transit Center and to employment in the
Innovation District. The circulation strategy in this
area is described in more detail in the Mobility
and Circulation Chapter (Chapter 4).
157 396
Item # 2.
58 CHAPTER 2. LAND USE AND PUBLIC SPACE
Figure 4-6, to support nearby uses, reduce
automobile dependence and support
alternative modes of transportation. Refer
to LU 6: Retail and Active Ground Floor
Uses for guidance on desirable retail uses
and design of street frontages.

LU 3. Housing Diversity and Affordability.

Provide transit-oriented housing that is
accessible and affordable for a range of
household types and income levels.

LU 3.1. At least 15 percent of the planned
5,000 to 7,000 new housing units in
Milpitas Metro should be affordable,
as regulated by the City of Milpitas’
Inclusionary Housing Ordinance.

LU 3.2. Accommodate housing for a range
of housing types, income levels, and
rental and ownership models, including
the following:
• Live/work units
• Group housing
• Co-living
• Senior housing
• Student housing
LU 3.3. Establish development intensities
in Table 2-1 that support transit
ridership, home-to-work convenience,
neighborhood retail and active open
spaces. Set minimum densities to prevent
the underutilization of sites.
and equity through targeting a variety
of performance areas, such as access
and mobility, appropriate development,
community health and well-being, energy,
water, and materials management.

LU 1.6. Consider establishing or supporting
the establishment of a performing arts
center in the Great Mall Subdistrict.

LU 2. Transit Orientation. Capitalize on the
transit orientation of the Plan Area to support
transit ridership, reduce traffic congestion
and greenhouse gas emissions, and
support livability.

LU 2.1. Arrange the highest density areas
supported by strong pedestrian and
bicycle access ways and along the major
corridors and transit-adjacent areas.

LU 2.2. Accommodate hotels in designated
locations along major arterials that
maximize access and visibility; are close
to higher intensity businesses, shopping,
entertainment, and dining; and enjoy
good access to BART and light rail.

LU 2.3. Establish a strong pedestrian and
transit orientation throughout the Plan
Area and limit development design that
prioritizes automobile access. Policies
defining development design are found
in Chapter 3: Site and Building Design
Standards and Guidelines.

LU 2.3.1. Drive through formats
are not allowed.

LU 2.4. Concentrate neighborhood retail uses
along Shopping Streets, as designated in
158 397
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 59
uses and prohibiting housing in the
Innovation District.

LU 5.2. Promote the development and
appeal of flexible office and research
and development uses in the Innovation
District by ensuring strong connections
to transit and the rest of the Metro Area.

For street connection standards and
guidelines, refer to Chapter 4: Mobility
and Circulation.

LU 5.3. Office and R&D buildings in the
Innovation District should be highly
adaptable to accommodate the needs of
research-oriented sectors such as applied
sciences and creative industries with
specialized manufacturing.

LU 5.4. Encourage supporting food and
beverage and neighborhood convenience
retail in the Innovation District and in close
proximity to other employment facilities.

Office-supportive services should be
located on the ground floor and in social
hubs of the development where they can
be directly accessed by the public.

LU 5.5. Office spaces throughout the Metro
Area, and particularly in the Innovation
District, are encouraged to be designed
as incubators, accelerators, maker
spaces, shared working spaces, and
labs associated with innovation-driven
economies. Large format high employee
based offices are permitted.

LU 5.6. Support small-format offices
(generally less than 5,000 square feet)
within residential mixed-use buildings
LU 3.4. Refer to Section 2.11 Private OnSite Common Spaces for requirements regarding the provision of publicly
accessible open space.

LU 3.5. Encourage the development of
affordable housing using frameworks
established by the City, such as a Housing
Opportunity Zone designation.

LU 3.6. When determining the density or
unit count of non-traditional housing
configurations, such as dormitories,
co-living, or Single-Room Occupancy
buildings, three bedrooms may be
counted as the equivalent of one unit.

LU 4. Hotel. Allow hotels in mixed-use,
commercial or research and development
areas to encourage vitality and support
local businesses.

LU 4.1. Hotels are an allowed use in the
Business Park Research & Development,
Lower Density; Business Park Research
& Development, Higher Density; and
Business Park Research & Development,
Residential districts.

LU 4.2. Hotels may be designed to
be converted into to residential
rental properties
LU 5. Office. Preserve employment lands that
accommodate a range of office and light
industrial uses, including small businesses,
larger offices, and R&D and technology uses.

LU 5.1. Create a well-connected, dynamic
office and R&D employment destination
by concentrating office and light industrial
159 398
Item # 2.
60 CHAPTER 2. LAND USE AND PUBLIC SPACE
Figure 2-5. Existing and Proposed Parks
160 399
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 61
outside of the Innovation District, where
retail is not required, and through coworking configurations.

LU 5.7. Commercial office uses and
commercial infill development are
encouraged near Great Mall Parkway,
Montague Expressway, and the Milpitas
Transit Center to create a more mixed
and complete neighborhood with the
opportunity for employment. Office
should be located close to transit and
major streets.

LU 5.8. All office buildings and the supporting
public spaces around them should be
designed to stimulate connectivity,
collaboration, and innovation.

LU 6. Retail and Active Ground Floors. Support
a mix of neighborhood and regional serving
retail and active ground floors that are
compatible with surrounding land uses and
are economically viable, as seen in the Land
Use Map, Figure 2-2.

LU 6.1. Refer to 3.2 Buildings Design
Standards and Guidelines for
additional guidance.

LU 6.2. Retail and active ground floors are
required on frontages along Shopping
Streets. Refer to Chapter 4: Mobility
and Circulation for additional standards
regarding Shopping Streets.

LU 6.3. Ground floor retail uses shall
encourage activities and foot traffic at the
street frontage and may include uses such
as restaurants, retail shopping, serviceoriented uses, small offices, medical clinics, gyms, and other similar uses.

LU 6.4. Prohibit drive-through establishments
and other new automobile prioritized
uses such as gas stations or car-oriented
convenience stores.

LU 7. Public Services. Expand infrastructure
and public services in parallel with
new development.

LU 7.1. Consider locating a Police
Substation in the Innovation District in
proximity to the Milpitas Transit Center.

Refer to Land Use Map, Figure 2-2 for
approximate location.

LU 7.2. Consider developing a reuse
facility in the Innovation District, in the
nearby industrial district or elsewhere in
the City that makes building materials
available to customers, and acts as
an outlet for reusable items otherwise
destined for landfill.

LU 8. Community Spaces. Locate shared public
spaces within each subdistrict to be easily
accessible for residents.

LU 8.1. Refer to Section 2.10 Public Space
Policies for public space policies
and guidelines.
161 400
Item # 2.
62 CHAPTER 2. LAND USE AND PUBLIC SPACE
An illustration of a creek trail along South Penitencia Creek - East Channel in the Tango Subdistrict. The pedestrian bridge and Tango District Park can be seen in the background.

Some examples of Open Space Typologies that are envisioned for the Milpitas Metro Area. 162 401
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 63

2.8.1 Relevance to Other City Plans
Providing open space that is safe, convenient,
and is equitably accessible is a key tenet of the
General Plan. General Plan Goal PROS-1 sets a
citywide goal to “Provide a diversified and high
quality public park and trail system that provides
recreational opportunities for all residents.” The
goals and subsequent strategies and actions
contained in this chapter are intended to
enhance and expand the citywide park and trail
systems to maximize the recreational value of
public amenities.

The City’s Parks and Recreation Master Plan
(2021) establishes a long-term vision and
strategy for the provision and programming
of parkland and other public spaces across
the City. The Master Plan evaluates existing
park and recreational facilities and provides a
policy framework for the City to respond to new
opportunities and meet the changing needs of
residents, workers, and visitors.

The Milpitas Metro Specific Plan’s vision of
providing a greater variety of shared public
spaces is consistent with the Parks and Recreation
Master Plan’s overall vision, goals, and policies.

The intent of this chapter is to implement the
Parks and Recreation Master Plan and provide
additional detail and discussion for parks planning
within the Milpitas Metro Area. Developers should
refer to the Parks and Recreation Master Plan for
additional park guidelines not contained in the
Milpitas Metro Specific Plan.

2.8 PARKS AND PUBLIC

SPACES FRAMEWORK
Open space is a critical component in dense
urban communities where residents have limited
to no private outdoor space and public open
spaces become an extension of their homes.

These spaces support social gatherings and
recreational opportunities as well as places for
quiet contemplation. Well-designed public
spaces can also contribute to placemaking and
be used to define the character and aesthetics of
a neighborhood. In addition to social and health
benefits, open spaces also have environmental
benefits. Landscaping, parks, and gardens can
help with stormwater management, reduce the
heat island effect in urban areas by providing
shade, and provide additional habitats for
pollinators and other wildlife.

Open space is both a highly desired amenity
and a limited resource in the Metro Area.

Parks and other shared public spaces provide
residents, workers, and visitors with recreational
opportunities and can improve overall community
health. Given the scarcity of undeveloped land
that can be used for parkland, the Metro Plan
uses a combination of acreage of open space and
quality of open space to meet park demands. A
variety of park typologies will be used to create a
varied open space experience that will meet the
different needs of the diversity of the people who
live, work, and play in the Metro Area.
163 402
Item # 2.
64 CHAPTER 2. LAND USE AND PUBLIC SPACE
are meeting their maximum potential in providing
residents and workers with flexible and usable
space. This type of value system prioritizes the
variety of experiences, access and proximity
to experiences, and a comprehensive range of
spaces. The Recreational Value System strives to
provide a more holistic picture of the City’s park
systems and illuminate future park opportunities.

2.8.3 Existing Park System Park
Acreage and Location
The Milpitas Metro Area is home to the following
publicly accessible park amenities:
• Bob McGuire Park. Located in the
housing development east of the Great
Mall, this popular three-acre park includes
four tennis courts, an amphitheater,
playgrounds, and a field.
• McCandless Park. Conveniently located
next to Mabel Mattos Elementary School and
adjacent to the creek walking trails, this fouracre park is under construction and will be completed in 2021.
• Augustus Rathbone Park. This small 0.7-
acre neighborhood park is located in the
Tango District. It contains playgrounds and
grassy open space.
• Creek Trails. The trails that run adjacent
to Penitencia Creek are popular outdoor
recreational destinations for residents.

2.8.2 Determining Park Demand:

Acres Ratio vs. Recreation Value
System
Cities have traditionally calculated open space
demand based on an acre to population ratio due
to high cost of land against return in recreational
value. Thus, areas with higher populations require
more parks to be built. Requiring a particular
number of acres of parkland creates a challenge
to also provide sufficient funding for constructing
and maintaining park amenities and might result
in open spaces with limited amenities and limited
or deferred maintenance. The General Plan
establishes an overall goal of 3.5 acres of open
space per 1,000 residents in the Milpitas Metro
Area. The Milpitas Metro Specific Plan maintains
this ratio as a standard, but provides additional
nuance by using the Recreational Value System to
quantify a public space’s level of service.

Relying solely on a ratio of open space acres
to population can create challenges for cities
to adequately evaluate the quality of existing
park spaces and to identify recreational needs.

Additionally, dense urban areas where the need
for public open space is higher due to the lack of
private open spaces tend to have a shortage of
space due to the competition for land.

The City’s Parks and Recreation Master Plan
establishes a Recreational Value System to
maximize recreational opportunities, capacity,
and experiences. The Recreational Value
System provides a quantitative system for
evaluating existing and proposed public parks
on their capacity to provide social gathering,
contemplative, and active recreational
opportunities. This system will ensure that parks
164 403
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 65
the pedestrian experience and landmark
open spaces. The evolution of the Great
Mall presents an opportunity for public
plazas and flexible spaces that can support
community events.
• Innovation District. A publicly accessible
park is planned in the Innovation District
adjacent to Berryessa Creek and the new
roadway connection to S Milpitas Boulevard
Extension. The proposed park is designed to
provide recreational opportunities for workers
and provide open space in a subdistrict that
currently lacks park space

2.8.4 Park System Needs
The planning process for the Milpitas Metro
Specific Plan included multiple outreach efforts
which engaged over 400 people. The need for
additional public outdoor spaces in the Milpitas
Metro Area was identified as a top priority by
community participants. The community’s top
three preferences for types of public space
included places to gather, contemplative spaces,
and recreational spaces. More specifically,
the top three preferences were for plazas and
courtyards, farmer’s markets and community
event spaces, and trails.

There are several opportunities for additional
open space in the Milpitas Metro Area, including
the following.
• Tango District Park. The City has secured
land for a new public park in the Tango
District north of the existing August
Rathbone Park. This proposed park will be
designed to be flexible to meet a diversity
of different users and will add additional
recreational open space to this growing
residential neighborhood.
• Creek Trails. Improvements to the Penitencia
Creek Trail are being guided by the Bicycle,
Pedestrian, and Trails Plan. The existing
creek trails will be expanded to connect to
a larger citywide trail network to provide
residents, workers, and visitors with more
recreational access.
• Great Mall. As the city responds to changing
economic markets, Great Mall and the area
around it are anticipated to evolve into vibrant
mixed-use areas that are centered around
165 404
Item # 2.
66 CHAPTER 2. LAND USE AND PUBLIC SPACE
by a private developer. Privately-owned
public spaces must be designed to be easily
accessed by the public from sidewalks or
pathways and should be clearly marked
as public spaces. These spaces have the
same function as publicly-owned parks and
plazas but are owned and maintained by a
private party.
• Private Communal Spaces: Private communal
spaces are recreational or outdoor spaces
that are accessible to residents living within
a residential community but are not open to
the general public. These spaces may include
balconies, porches, rooftop gardens, gyms,
and other communal spaces that can only be
accessed by residents in a particular building
complex or community.

2.9.2 Open Space Network
The addition of public open space in the Milpitas
Metro Area is a critical component to making
the neighborhood more complete. The Milpitas
Metro Specific Plan will create a connected
network of public spaces by integrating new
public spaces into the area and enhancing
the quality of existing open space. Bike and
pedestrian connections, including trails and
sidewalks, are part of the open space network
and will also increase accessibility to parks and
other public space destinations.

Public space can come in a variety of different
forms and sizes, including sports fields, plazas,
parklets, courtyards, walking trails, and rooftop
gardens. The Milpitas Metro Specific Plan utilizes
different scaled public space and emphasizes
partnership with private developers to meet the

2.9 EXISTING AND

PROPOSED PARKS OPEN

SPACE STRATEGY

2.9.1 Open Space Typologies
The Milpitas Metro Specific Plan relies on several
different open space typologies to achieve parks
and open space goals. In the urban setting that
is envisioned for Milpitas Metro, open spaces
will look different than much of what exists now
in the City of Milpitas. Parkland could include
pocket parks, plazas, playgrounds, paseos,
squares, performance venues, dog parks, and
urban recreational spaces. With people living
in smaller units without private yards, these
shared open spaces will serve as the backyard for
the community.

Given the land constraints of the Milpitas Metro
Area, public parks alone may be inadequate for
meeting the open space needs of residents and
workers. Adequate open space will be ensured
by evaluating public parks and privately-owned
public spaces based on the Recreational Value
System, while private communal space will be
enforced through required minimums per unit.
• Public Parks: Public parks and spaces are
owned and managed by the City and are
accessible to the general public. Examples
of public parks in the Milpitas Metro Area
include Bob McGuire Park and Augustus
Rathbone Park.
• Privately-Owned Public Spaces: Privatelyowned public spaces are recreational or outdoor spaces that can be accessed by the
general public and are owned and managed
166 405
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 67

2.10 PUBLIC SPACE

POLICIES
PPS 1. Access. Ensure safe, broad, and equitable
access to urban public spaces, such as parks,
trails, and rooftop gardens.

PPS 1.1. Establish connections to parks and
open spaces from the street and trail
network that are easy to access.

PPS 1.2. Ensure that at least three sides
of a park shall be accessible by
pedestrians and bicyclists via a sidewalk,
pathway, or trail.

PPS 1.3. The parks adjacent to Penitencia
Creek and Berryessa Creek shall be
designed to provide trailheads for
accessing the citywide creek trail system.

PPS 1.4. Distribute public spaces to
maximize accessibility from residential
neighborhoods, workplaces, and
commercial areas.

PPS 1.5. Create multiple smaller public urban
spaces throughout the plan area rather
than a single large park, locating at least
one park in each subdistrict within walking
distance from housing.

PPS 1.6. Locate small neighborhood-serving
parks away from major thoroughfares, such
as Montague Expressway.
outdoor needs of residents and workers. The
Milpitas Metro Specific Plan will provide highquality public space that maximizes recreational experiences within the space constraints of this
urban environment.

2.9.3 Guiding Principles
The policies for public space are guided by the
following principles:
• Require that phased projects prioritize the
development of public amenities to serve
new populations.
• Require residential and mixed-use projects to
develop and maintain private public spaces
that are accessible to residents and the
general public.
• Use a hybrid model of an acres ratio
and the Recreational Value System to
assess public space facilities and identify
opportunities for growth.
• Ensure that each subdistrict will ultimately
include open space with amenities suitable
to serve the uses and activity within or
planned for the area.
167 406
Item # 2.
68 CHAPTER 2. LAND USE AND PUBLIC SPACE
as place to walk dogs, take children
to play, etc.;
• Parks with sports fields;
• Urban plazas and courtyards
with landscaping, paving,
benches and trees;
• A community center where City
recreation programs and classes
can be offered;
• Staging areas along the trail network
where people can access the
trail system; and
• Parks along creeks where people
can enjoy passive recreation in a
creek setting.

PPS 2.3. Parks in the Great Mall Subdistrict
shall be a minimum of 1 acre in area.

PPS 3. Recreational Value. Enhance and expand
public open space facilities based on the
Recreation Value System provided by the
Parks and Recreation Master Plan.

PPS 3.1. Use the Recreational Value System
to guide existing and future park
improvements to ensure all parks provide
a diversity of active, contemplative, and
social gathering experiences.

PPS 3.2. Provide private open space to
supplement public open space in
meeting the outdoor and recreational
needs of residents.

PPS 3.3. Private development must provide
on-site open space at a rate of 100
PPS 1.7. Locate parks and outdoor gathering
spaces adjacent to higher density
residential development to provide a
visual and activity amenity for housing,
as well as to ensure safety through
casual surveillance.

PPS 1.8. Activate parks to the extent feasible,
by orienting development entrances to
face onto parks and trails to enhance
access and safety.

PPS 1.9. Consider including publicly
accessible open space as part of the
development of City-owned parcels
along Main Street.

PPS 1.10. Refer to M 8.5 for parking
requirements for publicly accessible parks.

PPS 2. Public Space Typologies. Provide a
variety of different sized public spaces,
including urban parks, neighborhood parks,
community parks, plazas, and pathways that
are appropriately scaled for their surroundings
and support different activities.

PPS 2.1. Support a range of activities within
parks that meet the active and passive
recreation needs of Milpitas Metro Area
residents and workers.

PPS 2.2. Provide for a range of activities
within the parks, including: walking,
jogging, picnicking, bicycling, arts and
exercise classes for both children and
adults, sports playing fields and courts,
and flexible pop-up spaces. Provide:
• Passive recreation parks near housing
that provide a visual amenity as well
168 407
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 69
Signage shall be compliant with
wayfinding and signage guidelines and
standards contained in Chapter 3: Site and
Building Design Standards and Guidelines.

PPS 5. Public/Private Partnership. Work
with property owners to develop public
parks and open spaces as a part of
development projects.

PPS 5.1. Activate the Great Mall Subdistrict
with flexible urban public open spaces that
support a range of purposes, including
social gatherings.

PPS 5.2. Consider a range of ownership and
maintenance options when developing
open spaces within larger developments.

Ownership and maintenance of publicly
accessible open spaces will be negotiated
between the developer and the City on
project-by-project basis.

PPS 5.3. Development agreements that
maintain public access to privately
owned parks are prohibited from
installing private single access gates
from a single homeowner’s property into
the public space.

PPS 5.4. Permit applications for public
improvements must identify location
of, funding for, and ownership of
identified public or publicly-accessible
improvements on or adjacent to each
site, including roadways, parks, trails,
sidewalks, and other similar improvements,
as agreed upon with the City.

PPS 5.5. Require developers to submit a
soils report for all publicly accessible
square feet per unit. Refer to Section

2.11 Private On-Site Common Spaces for
additional details on private on-site open
space requirements. If developments are
unable to provide the required private
open space, they may pay an in-lieu fee
as described in Chapter 1 Section 9 of
the Municipal Zoning Code on a projectby-project basis.

PPS 3.4. Ensure that parking at parks and
community centers are monitored and
parking time limits are enforced to ensure
the availability of parking for facility users.

PPS 4. Trails and Paths Network. Design the
citywide trail system (as described in M 5)
as an asset of the Plan Area’s open space
network in addition to the system’s circulation
role to connect subdistricts and residential
neighborhoods with transit, shopping,
and employment.

PPS 4.1. Complete a pedestrian and bicycle
network that connects trails and pathways
with pedestrian bridges, enhanced
pedestrian-friendly environments,
and bicycling enhancements to
create a loop that connects the entire
Milpitas Metro Area.

PPS 4.2. Refer to trail policies in SD 12 in
Chapter 3: Site and Building Design
Standards and Guidelines for guidance on
the design of the trail network.

PPS 4.3. Develop and locate signage along
the creek trails to educate trail users
on the importance of preserving native
vegetation, habitats, and resources.
169 408
Item # 2.
70 CHAPTER 2. LAND USE AND PUBLIC SPACE
PPS 6. Programming. Program parks and
public open spaces to provide a variety of
both temporal and ongoing experiences
and opportunities for community events
and education.

PPS 6.1. Coordinate with the Recreation
and Community Services Department
to activate parks and plazas with
community events and allow residents
and non-residents to rent out public
spaces for events in compliance with
citywide policies.

PPS 6.2. Encourage pop-up markets, food
trucks, and other temporary events that
activate the open space and encourage
community gatherings.

PPS 6.3. Renew and develop park facilities to
foster education about and engagement
in the natural world.

PPS 6.4. Where there is strong public support
to manage and maintain them, establish
community gardens and edible landscapes
within the neighborhood parks that will
provide education, access to healthy
foods, and economic support for the
local food system.
improvements. The developer shall be
responsible for remediating contaminated
soils to acceptable standards as defined
by the California Department of Toxic
Substances Control.

PPS 5.6. Require privately-owned public
spaces to be clearly visible and
directly connected to the street or
pedestrian pathways.

PPS 5.7. Developers may provide at
least one of the following types of
public open spaces as part of their
development project:
• Park
• Plaza
• Garden
• Public sitting area
PPS 5.8. Require all existing and planned
privately-owned public spaces to include
a sign that is adjacent to a major public
sidewalk and trail and is easily visible from
the street and adjacent trails that states
the space is open to the public.
170 409
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 71
PPS 8. Plazas. Plazas should serve as
destinations for community members of all
ages, income levels, and abilities, and should
be safe, inclusive, and welcoming.

PPS 8.1. Require developer to fund and
construct a new public plaza at the Great
Mall. Ownership and maintenance of the
plaza will be negotiated between the
developer and the City.

PPS 8.2. Refer to BD 12 in Chapter 3: Site and
Building Design Standards and Guidelines
for guidance on the design of plazas.

PPS 9. Landscaping. Provide drought-tolerant
landscaping and shade trees that contribute
to a comfortable pedestrian experience and
maximize environmental benefits.

PPS 9.1. Landscape and maintain all waterway
riparian areas where creek trails provide
a public presence. All plants and trees
located adjacent to public rights of way
or in publicly-accessible areas shall be
locally-sourced native, drought-tolerant, or
water conserving species.

PPS 9.2. Require development projects to
include on-site vegetated stormwater
treatment and landscaping and shade
trees at a rate of one tree per 5,000 square
feet of the residential building footprint
and one tree for every 10,000 square feet
of developed lot area for non-residential
or mixed use development to reduce heat
island effect.

PPS 9.3. Require native species to be planted
along creek corridors. Private property
owners shall replace invasive and nonPPS 7. Community Gardens. Include Community Gardens for community
wellness and benefit.

PPS 7.1. Make food services available
on/at community-level parklands to
benefit residents, park visitors, and
the environment.

PPS 7.2. Encourage naturally occurring
biological pest control.

PPS 7.3. Adopt cultural practices that
include cultivating, pruning, fertilizing,
maintenance and irrigation practices that
reduce pest problems.

PPS 7.4. Encourage use of alternate plant
species or varieties that resist pests.

PPS 7.5. Limit monoculture plantings
where possible.

PPS 7.6. Require community gardens to be
consistent with Community Rules and
Regulations, which emphasizes:
• No parking in or outside of the
garden is allowed.
• Only flowers, fruits, vegetables, and
herbs may be grown in the plots.

Animal husbandry is not allowed. Only
plant species that do not present a
danger to others and that produce
edible food may be grown. No illegal
plants are allowed.
171 410
Item # 2.
72 CHAPTER 2. LAND USE AND PUBLIC SPACE

2.11 PRIVATE ON-SITE

COMMON SPACES
Communal and public outdoor spaces are
essential elements of residential development.

All residential developments and developments
with residential components are required to
provide a mix of common and private space.

Table 2-3 summarizes the minimum on-site open
space that shall be provided and examples of
open space types that can be used to fulfill these
requirements are described below.

2.11.1 Common Shared Spaces
Description. Common shared spaces are areas
that are intended for common use by residents
of the building. Plazas and open space areas
intended for common use should have clearly
defined visual and physical connections that
promote a comfortable transition from the public
to the private realm.

Requirements. The provision and design of
personal open spaces must comply with the
following standards.

CSS–1. At least 30 percent of the total on-site
open space provided must be common
shared spaces.

CSS–2. At least 5 percent of the total open
space provided should be accessible to the
non-residents.

CSS–3. Developments within mixed-use zones
that provide at least 50 percent of their units
at or below 80 percent AMI are not required
to provide public-serving open space.
native species with native plants and
trees when significant re-landscaping or
remodeling occurs.

PPS 9.4. Require development projects
to rehabilitate areas where vegetation
is displaced or disturbed by
the development.

PPS 9.5. Daylight existing creeks and
waterways, supporting permeable creek
beds where practical in collaboration with
regional water management agencies.

PPS 9.6. Identify opportunities to expand the
use of plants, including those listed by the
Santa Clara Valley Urban Runoff Pollution
Prevention Program, in the planning area.

PPS 9.7. Expand shade tree coverage
in the Plan Area, particularly in areas
underserved by street trees.

PPS 10. Recreation and Cultural Centers.

Enhance Milpitas Metro as a recreational and
cultural destination.

PPS 10.1. Promote the establishment of
a community and regionally-focused
performing and visual arts center.
172 411
Item # 2.

CHAPTER 2. LAND USE AND PUBLIC SPACE 73

2.11.2 Private Open Spaces
Description. Private open spaces, such as patios
and balconies, are outdoor spaces that are
only accessible to the residents of an individual
unit. Private open spaces are required not only
because they provide access to the outdoor
environment but also because they provide visual
interest to the design of buildings. Boundaries
between private open spaces and shared
walkways and communal spaces should be clearly
delineated and private open spaces should
be designed to ensure privacy and provide a
sense of enclosure.

Requirements. The design of private open
spaces must comply with the following standards.

POS–1. Private open space must be at least 6
feet in width, length, or depth to ensure that
the space is large enough to be usable.

POS–2. Examples of private open space that
can be built include, but are not limited
to balconies, private yards, terraces,
decks, and porches.

POS–3. Private open space construction,
irrigation and planting must be completed
before the occupation of a building.

CSS–4. A maximum of 20 percent of landscaped
areas that are at least 5 feet wide is
allowed to count towards on-site open
space requirements.

CSS–5. Types of shared spaces that can be used
to fulfill this requirement include but are
not limited to:
• Courtyards
• Gardens
• Play areas
• Outdoor dining
• Recreation amenities
• Rooftop amenities
• Landscaping
CSS–6. Common open space construction,
irrigation and planting must be completed
before the occupation of a building.

Minimum Requirement Common Shared
Space
Accessible to the
Public
Required OnSite Open Space 100 square feet per unit Minimum of 30% of total open space
Minimum of 5% of
total open space
Table 2-3. Private On-Site Common Space Requirements for Residential Development 173 412
Item # 2.

Higher density residential development
on Capitol Avenue near the Milpitas
Transit Center.
174 413
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 75 This chapter implements the Plan’s vision by
establishing policies that relate to the layout
of sites and architectural design of buildings.

Underlying the design standards is the intent of
creating an exceptional and interesting sense of
place, which can be achieved through building
design, signage, public art, and other design
features. Site and building design guidelines
are critical to enhancing the lasting value of
the public realm. Several site design elements,
such as wayfinding signage and public art,
will be developed through the City’s Business
Improvement Program (BIP) and would not be
constructed by the developer. These publicly
funded projects are identified in Chapter 6:

Implementation.

The chapter is organized starting at a site scale
and moving to the building scale. The following
policies are particular to the Milpitas Metro
Specific Plan Area and additional to the Citywide
Building Standards and Design Guidelines for
residential projects.

3.1 SITE DESIGN

STANDARDS AND

GUIDELINES
The site design policies focus primarily on the
public realm, whether publicly or privately owned
or developed, which includes all places and
spaces that are accessible to everyone, including
streets, lanes, squares, plazas, courtyards,
sidewalks, trails, parks, and open spaces. The
majority of the public realm will fall within Cityowned/ controlled rights of way. These guidelines are intended to provide private development with
information about design consistency. Private
development will be responsible for some of the
design and construction of the amenities within
the public realm. Policies that guide the design
of the public realm strengthen the sense of place
and walkability with features that enhance the
Metro district identity and weave together the
varied elements of the district.

SD 1. Blocks. Blocks shall be limited in length
to encourage an interconnected, walkable
urban fabric.

SD 1.1. Maximum Block Length. The
maximum block length is 400 feet
between street centerlines on rights

3.1. Site Design Standards and
Guidelines

3.2. Building Design Standards and
Guidelines

3. SITE AND BUILDING

DESIGN STANDARDS AND

GUIDELINES
175 414
Item # 2.
76 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES District to provide a walkable and bicycle
friendly street grid. These new streets
include three types: pedestrian retail
street, neighborhood street, and trails.

SD 2.3. Travel Lane Dimensions. Singledirection travel lanes shall be 9-11 feet wide. Ten feet is generally adequate.

SD 2.4. Low-Volume Streets or Access
Roads. 2-way streets or access roads with
low or medium volumes of traffic may
benefit from the use of a dashed center
line with narrow lane widths or no center
line at all. In such instances, the City
may allocate additional right-of-way to
bicyclists or pedestrians while permitting
motorists to cross the center of the
roadway when passing.

SD 2.5. Parking Lane Dimensions. Parking
lanes shall be 7-9 feet wide.

SD 2.6. Street Development and
Ownership. Developers of parcels with
edges that abut a new street shall install
complete street improvements to the
centerline of the street as part of the
development. The street right-of-way will
then be transferred to City ownership
and maintenance unless developed as
a private street. Developers of parcels
through which a proposed street runs
are responsible for the development
and ongoing maintenance of the public
right-of-way and shall provide an access
of way that are intended for vehicular
use. Ideally, walkable block lengths are
300 feet or less.

SD 1.2. Mid-block Passages. Publicly
accessible mid-block pedestrianaccessible passages are required for building facades longer than 300 feet to
ensure a walkable scale. These mid-block
passages must lead to a public amenity
and through to another public street to
make large blocks more walkable.

SD 2. Circulation and Access Requirements.

New streets shall include an easement for
public access and shall be considered rights
of way, whether they are owned by a public or
private entity.

SD 2.1. Walkability. New streets shall
prioritize walkability and pedestrian safety
through human-scaled streetscape design
as well as provide vehicular access.

SD 2.2. Street Grid. New public streets shall
be carefully planned and constructed in
the Great Mall Subdistrict and Innovation
Streets, Trails and Passageways. Streets,
trails, and passageways shall be designed to
safely and comfortably support multimodal
mobility, engaging transitions to the private
realm, and ease of access to destinations
throughout Milpitas Metro.
176 415
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 77 to the Milpitas Transit Center and
adjacent neighborhoods. The publiclyfunded pathway and pedestrian bridge that connects to S. Milpitas Boulevard
Extension shall be designed for
Emergency Vehicle Access but restricted
from through traffic. A pedestrian pathway
shall connect northward from the end of
Tarob Court with the creek trail and at
midblock on Tarob Court with Journey
Way. New street and sidewalk extensions
are required at Jubilee Street to meet
Sango Court and from Sango Court to
meet Tarob Court to complete connectivity
in this subdistrict. Refer to Figure 3-1 for
easement to the right-of-way.

SD 2.7. Multimodal Streetscape. A
protected bike lane and linear park shall
be provided on Great Mall Parkway
to improve the walking and bicycling
experience and transform the corridor into
a multi-modal streetscape. Refer to Figure
4-7 for the proposed street section on
Great Mall Parkway.

SD 2.8. Tango Improvements. New public
pathways and streets shall be carefully
planned and constructed in the Tango
Subdistrict to provide clear and efficient
pedestrian and bicycle connectivity
Figure 3-1. Tango Subdistrict Connections
177 416
Item # 2.
78 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES proposed connections.

SD 2.9. Trail Improvements. Trail
improvements and new trails shall be
provided along both sides of Berryessa
Creek and South Penitencia Creek East
Channel to improve connectivity to the
Milpitas Transit Center and between
subdistricts. All trail improvements must
be designed in partnership with Valley
Water. Trails are envisioned as providing
minimum 8-foot-wide multi-weather
pathways that can also accommodate
maintenance vehicles, and landscaping
minimally on the outside edge of
trails away from water channels. Trails
should be lit with pedestrian-scale, fully
downward-shielded lighting.

SD 2.10. Houret Court. Vehicle circulation
and pedestrian pathways off of
Houret Court shall be redesigned to
provide access to McCandless Drive
and McCandless Park. This includes
redesigning a portion of the existing
cul-de-sac to permit through traffic while
continuing to accommodate existing
driveways and access points.

SD 2.11. Emergency Access. Development
projects on South Main Street that are
adjacent to the railway must provide a
vehicular easement at the rear of the
site adjacent to the railway in order to
facilitate Fire Department access and
access to rear parking facilities.

SD 2.12. Loading Zones. Truck and
freight loading is prohibited in the
public right-of-way.

SD 3. Sidewalks. Design the streetscape
to enhance the pedestrian experience
and provide as much connectivity among
neighborhoods and open space amenities
throughout the district as possible.

SD 3.1. Dimensions. Sidewalks must be a
minimum of 6 feet wide without obstacles
of any kind and must include a minimum
of eight feet of vertical clearance without
obstructions.

SD 3.2. Curb Cuts. The sloped portion
of any ramps and curb cuts shall not
extend into the pedestrian circulation
pathway (sidewalk).

SD 3.3. Sidewalk Clearance. Street
furniture, utility poles, street lighting,
traffic signs, street trees, mailboxes and
signage may not obstruct the pedestrian
pathway on sidewalks.

SD 3.4. Location of Utilities. Where
practical, manholes, vaults, and other
utility access points should be located out
of the sidewalk area.

SD 3.5. Location of Mailboxes. Mailboxes
shall be located adjacent to internal site
circulation or inside buildings. Mailboxes
178 417
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 79 oriented toward Shopping Streets.

SD 4.2. Loading Areas. Loading and service
entrances for ground floor retail must not
be visible on Shopping Streets.

SD 4.3. Preferred Commercial Uses.

Shopping Streets include retail and service
establishments; food and beverage, such
as restaurants; cafes; bars and brew pubs;
co-working spaces; art and craft studios;
gyms; and other similar uses. Office
uses are permitted if operations provide
products or services to the public in a
manner similar to retail sales (e.g. travel
and real estate businesses).

SD 4.4. Decorative Elements. On streets
with commercial frontages, businesses
are encouraged to provide decorative
elements (e.g. landscaping, potted plants,
patios, architectural elements, etc.) that
activate the public streetscape, visually
enhance the building frontage, identify
building entrances, and generally engage
the public realm, without constricting the
flow of pedestrian traffic.

SD 4.5. Signage. Signage along Shopping
Streets shall be provided at both a
pedestrian and vehicular scales and
orientations. All signage shall be
consistent with City and local wayfinding
and branding systems.

SD 5. Frontage Zone. A Frontage Zone is a
shall not be located on primary roadways.

SD 4. Shopping Streets. Ground floor retail
is required along Shopping Streets. The
sidewalk on Shopping Streets has a frontage
zone, a pedestrian pathway, and an amenity
zone. Shopping Streets also include a multiuse street zone for on-street parking, loading, parklets, landscaping, or other pedestrian
amenities. Shopping Streets are described
in further detail in Chapter 4: Mobility
and Circulation.

SD 4.1. Orientation. Ground floor retail
storefronts and entrances must be
Figure 3-1. Sidewalk Zones on Shopping
Streets
179 418
Item # 2.
80 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES width, the frontage zone can be reduced
to augment widths of the walkway and
amenity zones. If there is insufficient
frontage zone space to accommodate
private uses such as cafes and sidewalk
displays, additional area should be
taken from the private realm rather than
constrain the function or character of the
walkway and amenity zones.

SD 5.7. Paving Treatments. Paving within
the private frontage should be compatible
with that in the Pedestrian Zone. Variation
may occur where permanent private retail
amenities such as outdoor eating area
perimeter railings occur. Large paved
plaza areas on private property are not
covered by this policy. Examples of areas
appropriate for unique paving may include
plazas, paseos, and deeply set back
building entries.

SD 5.8. Small Plazas. Small plazas are
encouraged where the building and
storefront entryway is setback. Plaza areas,
music performance areas, and other
gathering spaces are encouraged.

SD 6. Amenity Zone. Amenity zones shall be
located between the street and the Pedestrian
Zone and provide amenities contributing
to pedestrian comfort, convenience,
safety and interest, and support positive
social interaction.

SD 6.1. Consolidated Elements in the
transition entry zone located on private
property or on the outside edge of the clear
sidewalk area adjacent to the ground floor
building frontage that supports adjoining
commercial uses by accommodating features
and activities, such as outdoor dining.

SD 5.1. Pedestrian Access. An unobstructed
pedestrian walkway at least 5 feet
wide must be maintained in frontage
zones at all times.

SD 5.2. Private Furnishings. Private
furnishings are permitted in the frontage
zone. Furnishings may include seating,
tables, planters, and art.

SD 5.3. Sidewalk Cafes. Sidewalk cafes are
encouraged within the frontage zone.

Such uses must comply with all applicable
local, state, and federal regulations for
permitting, accessibility, and health issues.

SD 5.4. Vertical Clearance. Awnings,
canopies, and umbrellas used within the
frontage zone should provide a minimum
vertical clearance of 8 feet and should not
project into the vehicular right of way.

SD 5.5. Width. Where installed, an ideal
minimum frontage zone width is 1.5
feet. A frontage zone is not needed if
the sidewalk corridor is adjacent to a
landscaped space or public plaza.

SD 5.6. Constrained Frontage Zones. In
the event there is insufficient right-of-way
180 419
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 81 Amenity Zone. Features such as public
utilities and street furniture shall be
consolidated in the Public Amenities Zone
to keep them from becoming obstacles in
the Pedestrian Zone. This includes, but is
not limited to street trees, planting strips,
street furniture, bicycle parking, signal
poles, pedestrian scaled street lighting,
signal and electrical cabinets, signs,
parking meters, fire hydrants, transit
shelters, and kiosks.

SD 6.2. Setback from Curb. To the degree
feasible, elements within the Public
Amenity Zone should be set back at least
3 feet from the face of the street curb to
avoid conflict with on-street parking (e.g.
car doors, passenger loading, etc.), but
no less than 1.5 feet.

SD 6.3. Seating. Benches and seating areas
should typically be located in mid-block
locations where there is less potential
conflict with pedestrian traffic flow. Short
walls that are 18-24 inches tall with a
minimum width of 12 inches are allowed
to provide informal seating.

SD 6.4. Street Trees. Street trees shall
be planted in the Amenity Zone at
a maximum of 30 feet apart. Street
trees shall be selected from Milpitas’s
Approved Street Trees list. No more
than one species shall be planted per
block in planters between the street and
the sidewalk. Trees should be the same
species on both sides of the street on
each block. Specimens may be more
varied adjacent to buildings.

SD 6.5. Unified Design Identity. Provide a
continuity of streetscape features along
the length of a street. At a district scale,
coordinated design, type, color and
material of street furniture contribute to a
sense of community identity, and reflect
and strengthen the local character.

SD 7. Multi-Use Street Zone. The Multi-use
Street Zone is typically used for on street
parking but could also be a place next to
travel lanes that is used for loading, parklets,
extensions of landscaping, and other
pedestrian amenities.

SD 7.1. On-Street Parking and Loading
Zones. On-street parking and
loading zones may be marked with
a painted curb. However, a curbless
street with differentiated paving from
typical streets is also allowed and
encouraged to provide a pedestrianprioritized environment.

SD 8. Parklets. Public spaces can be provided
in the street right-of-way in place of existing
parking spaces near any food and beverage
establishment. These types of spaces are
typically called “parklets.”
SD 8.1. Length. The minimum length for a
181 420
Item # 2.
82 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES parklet and its required safety features
is 20 feet. While there is no maximum
length for a parklet, proposals that use
more than 2 parking spaces (more than 40
feet) will require additional review.

SD 8.2. Width. In locations with parallel
parking, the maximum parklet width is 6
feet, measured from the curb. A 1-foot
setback shall be provided from the edge
of an adjacent bike lane or vehicle travel
lane. A wider parklet may be possible on
streets with back-in angle parking.

SD 8.3. Buffer. A minimum 4-foot buffer is
required on both ends of the parklet. This
means that the smallest parklet structure
would be 12 feet long. If the parklet is at
a corner, the buffer is not required, but
the parklet should leave at least 5 feet
between your parklet and the stop bar at
an intersection.

SD 8.4. Wheel Stops. Wheel stops shall
be installed at the back of the buffers to
prevent parking too close to the parklet.

SD 8.5. Dining. The extension of the
sidewalk for public seating and dining is
allowed in all on-street parking zones.

SD 8.6. Seating. Seating and gathering
spaces should be provided in parklets to
extend the visible pedestrian realm and
establish public space on both sides of
the sidewalk. Seating areas should be
protected from traffic with highly visible
barriers and must be approved by the
Public Works Department.

SD 8.7. On-Street Bike Parking. On-street
bike parking is allowed and encouraged
next to parklets. Provide at least 4 feet of
space on either end of the rack to give
bikers space to use the rack.

SD 8.8. Extended Landscaping. Bulb-outs,
bioswales, pocket gardens, and other
features that extend the pedestrian realm
should be explored to enhance walkability
and the streetscape.

SD 9. Great Mall Parkway Complete Streets
Improvements. Great Mall Parkway between
Montague Expressway and Main Street
shall be transformed into a complete street
by narrowing travel lanes and the central
median and adding protected bicycle lanes
and a linear park with a minimum width of
20 feet, next to a sidewalk with a minimum
width of 20 feet. This corridor requires
building entrances and active ground floor
uses to orient towards Great Mall Parkway.

Refer to Figure 4-7 for the cross section of
Great Mall Parkway and street amenities that
should be included.

SD 10. Neighborhood Streets. Neighborhood
streets include a planting strip, sidewalk, and
landscaped setback.

SD 10.1. Active Frontages. Neighborhood
182 421
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 83 Street typologies are referenced in Figure
4-6. Active frontages are required (where
indicated). Active uses can be storefront
commercial, live/ work, ground floor
office, or ground floor residential shared
amenities, such as a lobby, gym, or
conference room.

SD 10.2. Landscaping. Landscaping in the
planting strip may include low bushes
and street trees and must be clear
of the sidewalk.

SD 11. Passageway Design. Opportunities
for new mid-block connections, such as
pedestrian paseos, pedestrian paths,
or other pedestrian routes should be
considered to break up long block length
and enhance pedestrian connectivity. These
public accesses extending to the rear of
a development should be configured as
a paseo with active uses and building
entries. A paseo is defined as a narrow
lane that can accommodate light service
traffic and pedestrian circulation but has
the characteristics of a pedestrian walkway
with regard to pavement, furnishings,
lighting, and signage.

SD 11.1. Width. Passageways shall include
a minimum of 12 feet wide unobstructed
pedestrian clearance and a buffer of
a minimum of 10 feet on either side
for a minimum of 32 feet between
building faces.

SD 11.2. Visibility. Passageway should be
visible from adjacent buildings and welllit for safety.

SD 11.3. Accessibility. All mid-block
Figure 3-2. Passageway
183 422
Item # 2.
84 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES SD 12.2. Relationship to Development.

When appropriate, trails should
relate to adjacent development. This
could be defined as an access point,
complimentary landscape palettes, or
shared public space.

SD 12.3. Multi-use Trails. Multi-use trails
intended for pedestrians and bicyclists
shall be a minimum of 10 feet wide.

SD 12.4. Landscaping. Shade trees along
trails should be placed an average of 30
feet on-center at the edges of parcels
along the multi-use path.

SD 12.5. Lighting. Adequate lighting shall
be provided along trails for safety at night.

SD 13. Special Conditions along Rail Lines. Any
development projects, parks, or pedestrian
trails built directly adjacent to a rail line (i.e.
sharing a property boundary, not separated
from the rail line by a roadway) shall build
continuous fencing or solid walls between the
development and the rail line to ensure that
there will be no pedestrian access to the line.

Fencing shall be designed to deter graffiti
and trespassing.

SD 14. Access. Refer to Citywide Standards
for Loading/ Service, Mail/ Delivery, Waste
Removal, and Public Safety.

SD 15. Publicly Accessible Open Spaces.

Publicly accessible open spaces allow
opportunities for recreation, socialization,
connections shall encourage public use for
all members of the community.

SD 11.4. Uses. Passageways can be used
for outdoor dining, gathering spaces
and children’s play areas. A clear
pathway should be maintained through
the passageway for accessibility and
incidental emergency vehicle access,
though these passageways may not
be considered adequate for required
emergency vehicle access, which must be
designed in conference with emergency
service providers.

SD 11.5. Passageway Elements.

Landscaping, seating, tables, potted
plants, artworks, bicycle racks, kiosks and
textured or decorative paving should
be considered to promote passageway
activity and create visual interest.

SD 11.6. Utility and Trash Enclosures.

All utilities located in the passageway
should be screened.

SD 12. Trails. Recreational trails are part of a
connective network that includes the Transit
Center. Trails are multi-use and support nonmotorized recreational activities. Refer to Figure 4-15 for additional guidelines.

SD 12.1. Coordination. All creek-side trail
construction shall be coordinated with
Valley Water and include considerations
for flood control.
184 423
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 85 socializing in big and small groups,
performance, recreation, events, and pets.

Refer to the City’s Parks and Recreation
Master Plan and Chapter 2: Land Use and
Public Space for additional descriptions
on different types of open spaces
and amenities.

SD 15.4. Accessibility. Spaces should be
designed to be accessible to the highest
possible number of users. They should be
accessible from a public sidewalk and be
inviting to the public. Public plazas shall
be constructed with ADA-compliant ramps
and tactile warning strips at the crosswalks.

Extra attention should be paid to how
mobility-impaired and sight-impaired
individuals will navigate these spaces.

Clear, direct pedestrian routes that are at
least 5 to 8 feet wide are required through
gathering space. Equipment and facilities
such as tables, trash cans, restrooms,
and drinking fountains should allow for
universal access, including people of all
ages and ability levels.

SD 15.5. Design of Open Space. Open
spaces may be any combination of
hardscape (paving) and softscape (planted
area). Plazas should be designed with
durable materials. Spaces should be
designed to be multi-functional and
make the most of every square foot and
accommodate flexible programming and
activities. Design elements that extend
reflection, and other activities. These spaces
must be located and designed to provide a
high level of utility and contribute to the local
sense of place.

SD 15.1. Location/ Access Requirements
SD 15.1.1. Location. A publicly
accessible open space is required in
every subdistrict.

SD 15.1.2. Great Mall Subdistrict. A publicly
accessible central gathering place for
the district must be located in the Great
Mall Subdistrict
SD 15.1.3. Accessibility. Publicly accessible
open spaces must be accessible at all
times and entry may not be controlled
through fencing or gates.

SD 15.1.4. Privately Owned Spaces.

Privately owned public spaces may be
provided in addition to public spaces.

SD 15.2. Size. Parks must be a minimum of 1
acre in size, unless otherwise agreed to by
the City. Privately-developed open space
that is applying for full or partial waiver of
open space related fees or requirements
must receive City approval.

SD 15.3. Types of Open Space. Open
spaces may include plazas, squares,
gathering places, paseos, passageways,
trails, and parklets. The types of open
space desired provide amenities for
185 424
Item # 2.
86 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES experiences such as fountains, sculptures,
landscaping, and/ or artwork should
be provided as an integral part of the
landscape design. Lighting should be
thoughtfully placed within any fountains
and around plaza furniture to provide
ambiance and promote safety.

SD 16. Public Art. Public art helps to define
community identity and contributes to a
stronger sense of place. Public art can provide
a sense of belonging for district residents and
a landmark for visitors.

SD 16.1. Art and Transit. Work with VTA
and community groups to promote public
art on VTA light-rail infrastructure and
take advantage of the special overhead
arrangement of the light rail in Milpitas.

Engage with local artists, architects,
engineers, and VTA to collaboratively
integrate public art into infrastructure and
facilities, such as on columns, underside
of light rail tracks, and on road median, to
create a unique sense of place.

SD 16.2. Location. Public art should be
provided at all publicly accessible places,
especially along pathways to the Transit
Center. Public art should be displayed
in areas with high levels of pedestrian
traffic and be easily visible and accessible
to the public.

SD 16.3. Appeal and Function. The
design of public art is encouraged to be
a community spaces’ hours of use and
months of use should be used, such as
lighting and weather protection.

SD 15.6. Edge Treatment. Community
gathering places shall be framed by
placing a building or strong edge on
at least two sides, preferably more.

Where open spaces cannot be framed
by buildings, an active use, architectural
elements, or significant landscaping can
be used to create a sense of enclosure.

Shared building entrances should be
oriented to adjacent open spaces,
where possible.

SD 15.7. Seating. A variety of seating
opportunities shall be provided. This
should include moveable and fixed seating
as well as seat walls, steps, boulders,
and other multi-use objects. Seating
should allow for both social interaction
and private relaxation; be placed along
pathways and within or near gathering
spaces; and be comfortable yet durable.

SD 15.8. Landscaping. Landscaping must
be designed using a unique landscape
palette, one that incorporates plants at
a variety of heights and with a range of
visual textures, colors, and blooming
habit. Open spaces should include native,
drought-tolerant plantings that are inviting
to local wildlife.

SD 15.9. Special Features. Unique
186 425
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 87 usage by providing navigational and
safety signage for the public trail that
demonstrate the connectivity in the
system. Trail signage may list the trail
system’s amenities, including seating,
bicycle racks, planting, and other
site furnishings.

SD 17.3. District Signage. Provide
streetlight banners and entry signs at
major intersections and corridor access
points, near transit, and on Great Mall
Parkway and Montague Expressway.

District signage should be placed at major
intersections and corridor access points
where pedestrians, bikers, and drivers will
be making route decisions.

SD 17.4. Universal Design. Wayfinding
signage should be accessible by a wide
range of users, including people of all
ages and ability levels.
interactive and serve all ages. Art should
be used to create landmarks and establish
a unique local sense of place, and may
also be used as a wayfinding element or
integrated into functional street furniture,
such as benches, planters, and tables.

SD 16.4. Municipal Code. On-site artwork
shall be included per the City’s public
art requirements (Chapter 20 of the
Municipal Code).

SD 17. District Branding, Signage, and
Wayfinding. Develop and install attractive,
consistent District Branding, Signage, and
Wayfinding that builds off the City of Milpitas’s
branding and wayfinding.

SD 17.1. Wayfinding Signage Design.

Design signage that enhances and
highlights opportunities for public transit,
walking, and cycling by providing a
cohesive and legible physical and virtual
navigation system. Provide consistent
navigational information for pedestrians.

Information may include regional maps,
directional signage, walk and bike distance
and mileage to destinations, local maps,
community guides, mile markers, and
interpretive signage. Signage should be
coordinated with nearby public art to
heighten the entry experience and create
a cohesive look and sense of place for the
Milpitas Metro Area.

SD 17.2. Trails Signage. Promote trail
187 426
Item # 2.
88 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES SD 1.2. Unique Identity. Buildings are
encouraged to have their own identity and
use contemporary methods to define the
character of the district.

SD 1.3. Architectural Variation. Design
creativity and variation in built form and
architectural expression is embraced,
including variation in building massing,
form, and facade articulation for the
purpose of visual interest.

BD 2. Mid-Rise Multi-Family and MixedUse Buildings. The compact development anticipated around transit will include midrise and high-rise multi-family and mixed-use buildings in the Milpitas Metro District.

SD 2.1. Compliance with Objective
Design Standards. Mid-rise and highrise multi-family residential buildings shall follow Citywide objective design
standards for Massing and Form, Facade
Design, Ground Floor Design, Building
Elements, Usable Open Space, and
Special Conditions.

SD 2.2. Sustainability. Mid-rise multi-family
and mixed-use buildings shall comply
with Sustainability design standards and
guidelines in BD 12.

3.2 BUILDINGS DESIGN

STANDARDS AND

GUIDELINES
The following standards and guidelines guide
building design in the Metro Plan Area, which are
additional to design standards and guidelines
that apply citywide. The Metro building design
standards and guidelines ensure that these
urban mixed-use buildings are pedestrian-scaled,
support a high-quality urban realm, and foster a
unique sense of place.

BD 1. Distinctive and Innovative Architecture.

Milpitas Metro is centered around the Transit
Station and is envisioned as an urban transitoriented neighborhood. The Metro Area is distinctive because the type of development
is denser and streets are designed to support
multiple modes of travel in contrast with other
areas in the city. Milpitas Metro’s regional
connectivity within Silicon Valley makes this
a particularly important place for innovation,
which should be reflected in the architectural
design of buildings in the Metro Area.

SD 1.1. City Review. The City of Milpitas
will review the design of new buildings
to ensure that they promote high-quality
design, are well-crafted and maintained,
use high-quality building materials, are
environmentally sustainable, and are
attentive to the design and execution of
building details and amenities.
188 427
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 89 internal function of the building and
employing variations in the building
facades that provide more visual relief,
such as streetwall indents and recessed
building planes, deep entry and window
openings, balconies, window bays, varied
horizontal treatment (i.e. a roof, cornice
or parapet), and piers at corners and
structural bays.

SD 3.6. Articulated Facades. Facade design
should include high quality materials,
windows, solar control devices, and
other design elements to provide a wellarticulated building. Long building façades shall use modulation and articulation to
create break up long street walls. Provide
visual interest and variation on major
facades by utilizing at least two of the
following architectural elements: recesses;
awnings; colonnades; pronounced
BD 3. Commercial and Mixed-Use Buildings.

Commercial buildings should be designed
as signature, distinctive, and innovative
reflecting the research and development that
is occurring within them and the prestige of
companies that occupy them.

SD 3.1. Site Specific Design: Site specific
building design is encouraged. There
should be differences between buildings
depending on their location. Buildings
are encouraged to demonstrate identity
within each phase.

SD 3.2. Flexibility of Use and Design:

Office/ R&D buildings should be designed
to be flexible and adaptable through use
of modularity. The module will influence
the structural system design.

SD 3.3. Universal Access: Universal access
best practices should be integrated into all
building designs.

SD 3.4. Noise Management: Noise from
loading areas, emergency supply
areas, and equipment should be
mitigated to not disturb users of nearby
public open spaces.

SD 3.5. Massing: Massing should vary and
remain flexible until specific projects are
identified and their program requirements
are understood. Applicants should
consider segmenting the building into
smaller masses that correspond to the
Articulated facades - Architectural features and changes in massing are used to create visual interest on the
building facade.
189 428
Item # 2.
90 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES SD 4.2. Amenities. Site development for
places of employment should include
generous gathering spaces, comfortable
and attractive outdoor environments,
and amenities that support multi-modal
transportation. Whenever possible, make
outdoor amenities available to the public.

BD 5. Material Guidelines. Building materials
must be selected to contribute to a highquality urban realm and low carbon footprint.

SD 5.1. Finishes. High-quality, durable
exterior finishes should be utilized.

BD 5.1.1. Mitigate Glare. Façade materials
should serve to mitigate visual glare
from both diffused interior lighting and
reflected exterior sources.

BD 5.1.2. Exterior Materials. Preferred
exterior wall materials include: glass,
concrete, precast concrete, aluminum
and high quality metal panels,
composite panels, stone, and stucco.

BD 5.1.3. Glass Materials. Preferred glass
types include: clear glass, frit glass,
sandblasted glass, spandrel glass, and
channel glass. Glazing should provide a
high degree of light transmittance and
be non-reflective.

BD 5.1.4. Roofing Materials. Preferred
roofing materials include: vegetated
roofs, high-albedo built-up roofs, highalbedo single-ply roofing, metal, slate, entrances; projections; step-backs;
changes in height, floor level, and roof
form; window reveals; cornice treatments;
parapets; and changes in color or material.

SD 3.7. Height: Office/ R&D Buildings are
expected to be five to ten stories in height
and may include variable roof lines.

SD 3.8. Safety at Exit Doors: Minor entry
and exit door alcoves on the building
exterior are discouraged when they do not
share space with active visual surveillance
such as primary entries or active
pedestrian circulation.

SD 3.9. Equipment Screening: Screening
should be incorporated into the overall
architectural character of the building
and should screen all mechanical
equipment, including rooftop and groundlevel equipment.

BD 4. Landscaping. Plantings shall be used to
activate building facades, soften building
contours, highlight important architectural
features, screen less attractive elements,
provide shade, and add color, texture, and
visual interest.

SD 4.1. Climate Appropriate Planting and
Materials. Landscape materials should
be of high quality and suitable for the Bay
Area climate. In order to reduce water
consumption, naturalized and low-wateruse plant species are preferred. 190 429
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 91 BD 6. Building Base and Orientation. The
design of the lower floors of mid-rise and
high-rise buildings affects the public realm
and pedestrian environment. The role of
the base building is to frame the public
realm and adjacent open spaces, articulate
entrances, and assist in the creation of
an attractive and animated public realm
which provides a safe, interesting, and
comfortable pedestrian experience. The
ground floor should be designed to be an
attractive and animated public realm which
provides a safe, interesting, and comfortable
pedestrian experience.

SD 6.1. Framing Open Space. The base of
towers must be designed to form and
enhance open spaces and sidewalks at the
ground level.

SD 6.2. Minimizing the Perception of
Mass. The building base should provide
a change in color, massing, recess or
projection to differentiate the base, which
can be at minimum the ground floor level
to reduce the perception of mass along
the street frontage. Buildings must step
back after the first 3-5 floors.

SD 6.3. Building Entrances. The base of
buildings must place active ground floor
uses and primary building entrances
along their primary facades oriented to
adjacent streets, parks, and open space.

The main entrance may not face a parking
terracotta tile, concrete tile, composite
concrete tile, skylights, solar collectors,
and photovoltaics.

SD 5.2. Carbon Storage. Require building
materials that store carbon (e.g. wood,
calcium carbonate-based cementitious
substances, synthetic limestone) in all nonresidential construction.

BD 5.2.1. Concrete. Concrete
materials must be low-carbon in all
viable applications.

BD 5.2.2. Metal-Frame Windows.

Metal-frame windows must be
thermally broken.

BD 5.2.3. Wood-Frame Windows. Woodframe windows must have metal or fiberglass cladding on the exterior.

BD 5.2.4. Prohibited Window Materials.

Vinyl-frame windows and doors
are not allowed.

BD 5.2.5. Functional Architectural Features.

Extraneous building elements that
cannot be functionally justified, such as
faux deep walls, window embrasures,
and false facades are prohibited.
191 430
Item # 2.
92 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES with ramps and stairs as required for entry.

BD 7. Ground Floor Design. The ground floor of
a commercial building delivers an important
sense of design to the adjacent streets and
other uses, as serves as a transition area
between public spaces and the interior of
the building. These ground floor guidelines
aim to help maximize the function of
the ground floor.

SD 7.1. Active Uses. Locate active ground
floor uses along the primary facade. Active
ground floor uses include retail, office,
live/ work, and residential common spaces
such as mail rooms, bike rooms, communal
kitchens, community rooms, conference
rooms, social gathering areas (porches/
patios), and lobbies. In commercial
buildings, gathering areas such as
auditoriums, meeting rooms, cafeterias,
reception areas, and shared work spaces
should be located on the first floor to
encourage interaction with sidewalks,
public areas, and plazas.

SD 7.2. Open Space and Pedestrian
Access. Ground floor interest may also
be achieved by introducing plazas,
courtyards, walkways, and alleys that allow
access through development and create
visual breaks in the facade.

SD 7.3. Commercial Mix. Vertical mixeduse in mid-rise and high-rise buildings lot. Multiple entrances for buildings are
encouraged from the side and/ or rear
streets. Exit door alcoves on the building
exterior are encouraged to share space
with primary entries and active pedestrian
circulation where possible.

SD 6.4. Primary Entrance Enhancements.

Primary entrances can be enhanced
with extra detailing, framing, awnings
and signage to provide visual interest,
wayfinding, and weather protection.

SD 6.5. Transparency. Follow objective
design standards for glazing transparency
for Commercial and Residential Frontages.

The intent is that it is easy to see activity at
the ground floor to provide visual interest.

SD 6.6. Solar Orientation. Consider
orienting buildings to be south-facing
to maximize passive solar heating and
cooling for sites greater than five acres
in the Innovation District and Great
Mall Subdistrict.

SD 6.7. Lobby Design: Primary entry
lobbies should be designed to provide
visual interest, orientation, and a sense
of welcome from streets, public rights of
way and plazas.

SD 6.8. Ground Floor Façade: All ground
floors of office/ R&D buildings should
provide colonnades or similar identifying
design elements and should be integrated
192 431
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 93 BD 7.7.2. Restaurant Considerations.

Where food and beverage retail is
anticipated, grease traps are required.

SD 7.8. Placement of Upper-Level
Lobbies. Lobbies for commercial office
or residential uses above the ground floor
shall be oriented to ensure continuous and
uninterrupted retail and other active uses
along the ground floor.

SD 7.9. Parking Layout. On-site parking shall
be provided at the rear of the site and
above the ground floor, wherever possible.

Structured parking is preferred and should
be screened from the primary street; no
parking shall be allowed along the main
frontage of buildings.

BD 7.9.1. Flexibility of Ramps. Ramps from
the ground floor to upper parking levels
should be designed in a way that can
be adaptable for future conversion of
parking spaces to usable space.

BD 7.9.2. Curb Cuts. Parking access shall
use the minimum feasible curb cuts and
may be a minimum of 12 feet wide and
accommodate ingress and egress.

BD 7.9.3. Access. Parking entry points are
preferably accessed from nearby lanes
or side streets rather along the primary
frontage where conditions apply.

BD 7.9.4. Separated Pedestrian Entrances.

Pedestrian entries to parking garages
is encouraged. Mixed-use buildings
throughout the district may include ground
floor neighborhood retail.

BD 7.3.1. City of Milpitas Design Standards
for Commercial Frontages apply.

These addresses transparency, weather
protection, provisions for setback
design, depth of use, floor-to-floor
heights and more.

SD 7.4. Maximize Leasability. Design ground
floor retail spaces to accommodate
leasable features.

SD 7.5. Efficiency of Space. Locate demising
walls around columns in larger retail
spaces to maximize the efficiency of the
space and minimize small gaps between
columns and walls. Provide a minimum of
5 feet between walls and columns.

SD 7.6. Space Considerations. Provide a
space with a minimum of 60 feet in depth
for a minimum of 50 percent of the space,
and a minimum of 40 feet in depth any
remaining space.

SD 7.7. Ground Floor Height. Ground floor
retail must have a minimum of 18 feet floor
to floor height to be leasable.

BD 7.7.1. Interchangeable Storefront.

Provide interchangeable storefront
systems to accommodate
changes in tenants.
193 432
Item # 2.
94 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES BD 8. Stand Alone Parking Structures. These
design standards and guidelines are additional
to citywide design standards.

SD 8.1. Concealed. All parking garages
should be concealed as much as possible
from public view. Whenever feasible,
parking should be either located below
ground, wrapped behind buildings,
located on the interior of blocks where it is
screened from public view.

SD 8.2. Design for Conversion. The design
of parking structures shall be designed for
future conversion to other uses. Parking
floors shall not be sloped and parking
circulation should be designed in a way
that anticipates its removal.

SD 8.3. Facade. Where structured parking
is visible to the public realm, the design
of the facade shall be treated in a similar
manner as the adjacent buildings. The
facade shall not repeat the sloping
floor lines of interior parking ramps
on the facade.

SD 8.4. Street Access. Vehicular access to
parking structures should be provided
primarily from side (i.e. secondary) streets
to reduce conflicts with pedestrians and
minimize interruptions to the continuity
of the primary street facade. Signage for
public parking shall be clearly marked and
visible from the street.
should be separate from vehicular
entrances and located along major
pedestrian connections where they are
easily seen and conveniently accessed
as a pedestrian or cyclist. They should
be designed to be as open and visible
as possible, incorporating adequate
lighting to promote a feeling of
security and comfort.

BD 7.9.5. Bicycle Parking. Bicycle parking
shall be located at the ground floor in a
conveniently accessible location near a
shared pedestrian entrance to a multifamily or mixed-use building.

SD 7.10. Flood Elevation for Residential
Mixed-Use Buildings. The lowest floor
of all new residential construction located
in the floodplain shall be built at least
one foot above the Base Flood Elevation.

For buildings located within Zone AO
as identified in the Federal Emergency
Management Agency’s (FEMA) Flood
Insurance Rate Map (FIRM), the lowest
floor must be built at least one foot above
the number identified on the FIRM.

SD 7.11. Flood Elevation for NonResidential Buildings. The lowest floor of non-residential construction in
the floodplain can be built at the Base
Flood Elevation.
194 433
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 95 near entrances and exits and secured and
weather protected.

BD 9. Rooftop Design. Roofs of buildings and
parking structures may be used as shared
spaces. Rooftops may also include green
roof systems, alternative forms of energy
production, and rainwater catchment systems.

SD 9.1. Multifunction Roofs: Roof designs
should consider systems such as vegetated
roof covers (green roofs), alternative
forms of energy production, and rainwater
catchment systems.

SD 9.2. Materials and Amenities. The
standard roofing materials must have a low
albedo, cool roof system or finish. Rooftop
amenities that provide vegetation,
generate energy, or are designed as
shared amenities are an exception to the
standard design.

SD 9.3. Screening. Screening should
be incorporated into the overall
architectural character of the building.

Rooftop mechanical equipment must
not be visible from the street and must
be visually screened from public view
and next to shared spaces like rooftop
gardens and patios.

SD 9.4. Natural Lighting. Roofs are
encouraged to utilize skylights to maximize
natural lighting within buildings.

SD 8.5. Vehicular Entry. At grade entries
facing the street shall be no more than
20 feet wide and recessed a minimum of
three feet from the facade
SD 8.6. Pedestrian Entry. An at grade
pedestrian entry, including a walking
path to the public pedestrian circulation
network, shall be provided on each
street frontage.

SD 8.7. Lighting. Structured parking shall
be designed such that interior lighting
shall be fully shielded and automobile
headlamps shall not be visible from
adjacent buildings, parcels, streets, public
parks, publicly accessible outdoor space or
designated open space area.

SD 8.8. Tandem Parking. Parking
configurations may utilize tandem parking
for more efficient use of space, provided
that both parking spaces are used by the
same tenant or otherwise conform to a site
parking plan approved by the City.

SD 8.9. Parking Lifts. Parking lifts may be
used for more than one unit. Parking lifts
may not require backing one car out to get
to another car.

SD 8.10. Bicycle Parking. Bicycle parking is
required in all parking garages or other
approved alternative on-site locations
that serve commercial and residential
uses. Bicycle parking should be located
195 434
Item # 2.
96 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES BD 10.4. Entrances to loading facilities should
be minimized in size and designed with
visual buffers from pedestrian areas.

BD 10.5. Adequate reservoir space should
be provided for entrance of vehicles to
loading zones.

BD 10.6. Service entrances should include
either opaque or translucent garage door
panels or treat that portion of the service
yard visible from the public realm with
the architectural character employed
throughout the rest of the building.

BD 11. Special Conditions. Housing units next
to rail lines must be constructed to mitigate
negative impacts of train noise.

SD 11.1. Bedrooms Adjacent to Railways.

The acoustical exterior of bedrooms in
areas within 200 feet of rail right of ways
shall be enhanced to address the sound
of the trains.

BD 12. Sustainability. The Milpitas Metro Plan
Area is a center of development and change
in Milpitas, and will serve as an exemplar for
the implementation of sustainable building
practices in the city. Additional sustainability
policies are located in the City of Milpitas
Climate Action Plan.

SD 12.1. Energy. New buildings shall include
features that include the most impactful
methods for reducing energy uses and
greenhouse gas emissions.

SD 9.5. Universal Access. Provide universal
access to rooftop amenities.

SD 9.6. Accessibility. Provide an accessible
path to a publicly accessible restroom on
an adjacent floor or at the rooftop level
for any common outdoor open space
on the rooftop.

SD 9.7. Landscape. A minimum of 20
percent of the open space shall be
landscaped. Drought tolerant vegetation
and landscape variety are encouraged on
rooftop gardens.

BD 10. Service and Loading Areas. Service and
loading areas must be designed to efficiently
allow access to delivery points while screening
public areas from the noise and visual impacts
of these facilities.

BD 10.1. Curb cuts should be located
to minimize transit, bicycle, and
pedestrian conflicts.

BD 10.2. Loading zones should be located
away from major pedestrian routes and
intersections and shared with parking
entrances, where possible.

BD 10.3. Access to loading spaces should
include adequate space to maneuver
trucks and service vehicles into and out of
all provided spaces, and be designed so
as to facilitate access to the building while
minimizing interference with street and
sidewalk circulation.
196 435
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 97 panels on rooftops and over parking lots.

BD 12.3.5. Construction Equipment.

All off-road heavy-duty construction
equipment shall use high-performance
renewable diesel.

BD 12.3.6. Electric Outlets. All
new development shall install
sufficient exterior electrical
outlets to power electric-powered
landscaping equipment.

SD 12.4. Water. New buildings shall include
features that reduce water usage and
incorporate water recycling systems.

BD 12.4.1. Low Impact Development
and Stormwater Runoff. All projects
shall comply with State, regional local
regulations related to Low Impact
Development and Stormwater capture
and treatment, and be designed and
constructed in accordance with Low
Impact Development principals to mimic
the site’s predevelopment hydrology.

BD 12.4.2. Retention. Encourage
incorporation of water collection and
retention devices, such as rain barrels
and cisterns, into building design to
allow for water reuse.

BD 12.4.3. Runoff. Encourage incorporation
of water runoff strategies such as rain
gardens, bioretention swales, and
permeable pathways into development,
SD 12.2. Residential Electrification. All new
residential buildings shall be all-electric.

SD 12.3. Nonresidential Electrification.

All new nonresidential buildings shall be
all-electric, unless uses essential to the
key functions of the internal business,
such as manufacturing or laboratory
work, require natural gas. Kitchens and
cooking do not require natural gas. All
new nonresidential buildings shall install
electric cooking appliances, water heaters,
and space heaters.

BD 12.3.1. Solar Systems. All new
nonresidential buildings shall install
solar photovoltaic systems or
purchase electricity from a community
energy provider (e.g. Silicon Valley
Clean Energy).

BD 12.3.2. Solar Management Plan. All
new developments shall develop a
management plan for solar exposure,
including optimizing natural lighting and
managing passive heating and cooling.

BD 12.3.3. Generators. All new residential
and nonresidential buildings shall
use zero-emission generator engines
for generators with a supply of
25 kW or less.

BD 12.3.4. On-Site Energy Generation.

Encourage on-site renewable energy
generation, including the use of solar
197 436
Item # 2.
98 CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES development projects shall install on-site
recycled water systems (i.e. greywater
systems) and rainwater harvesting
systems, consistent with all State and
County Health Codes and standards
and in compliance with regional water
agency requirements.

BD 12.5. Solid Waste. Building construction
and operations shall incorporate measures
to screen waste areas from view, reduce
waste generation and maximize waste
diversion from landfills and reuse.

BD 12.5.1. Location. Waste and recycling
facilities and other services are to be
provided for all buildings in a location
that balances access, convenient pickup, and maintenance, and is screened from pedestrian zones.

BD 12.5.2. Waste Diversion. All construction
and demolition projects shall achieve a
75 percent diversion waste rate.

BD 12.5.3. Organic Waste Collection for
Residential. All multifamily residential
buildings shall provide organic
waste collection services for tenants
and employees.

BD 12.5.4. Organic Waste Collection
for Nonresidential. All nonresidential
buildings shall provide collection
containers for organic waste and
roadways, and parks.

BD 12.4.4. Low Flow. Require ultralow-flow fixtures in residential and nonresidential development.

BD 12.4.5. Retention. Encourage
incorporation of water collection and
retention devices, such as rain barrels
and cisterns, into building design to
allow for water reuse.

BD 12.4.6. Runoff. Encourage incorporation
of water runoff strategies such as rain
gardens, bioretention swales, and
permeable pathways into development,
roadways, and parks.

BD 12.4.7. Recycled Water for Industrial
Uses. Incorporate the use of recycled
water for industrial uses and landscape
irrigation where feasible, within the
parameters of State and County Health
Codes and standards and in compliance
with regional agency requirements.

BD 12.4.8. Recycled Water for Residential
and Nonresidential Uses. All new
residential and nonresidential
development shall include a separate
piping system for recycled water
(i.e. purple pipes) to be used for
irrigation and other outdoor water
uses, as feasible.

BD 12.4.9. On-site Recycled Water. All new
198 437
Item # 2.

CHAPTER 3. SITE AND BUILDING DESIGN STANDARDS AND GUIDELINES 99 recyclables in all areas where
disposal containers are provided,
except in restrooms.
199 438
Item # 2.
100 CHAPTER 4. MOBILITY AND CIRCULATION
The overhead VTA light rail at the Milpitas
Station, located near the Transit Center.
200 439
Item # 2.

CHAPTER 4. MOBILITY AND CIRCULATION 101
This chapter describes mobility and circulation
conditions in the Metro Area and sets standards
for street and roadway design to create a
balanced multimodal transportation environment.

New development will bring more residents,
workers, and visitors to the area. Standards
and guidelines in this chapter detail roadway
improvements to ensure efficient and safe
circulation for pedestrians, bicyclists, transit, and
automobiles throughout the Plan Area. Additional
transportation demand management (TDM)
policies strategically address curb space and
parking demand.

4. MOBILITY AND

CIRCULATION

4.1. Planning Context

4.2. Approach

4.3. Mobility and Circulation Policies

4.1 PLANNING CONTEXT
Because the Metro Plan Area is flanked by the
I-680 and I-880 freeways on the east and west,
respectively, and the Montague Expressway
serves as a connector between the two for
regional traffic circulation, there will be substantial traffic that passes through the area that cannot be
diminished. Similarly, Great Mall Parkway/ Capitol
Avenue is a significant east-west corridor that
carries high traffic volumes. Both of these regional
roadways pass through the area and cannot be
reduced in capacity by design, but improvements
are planned to overcome the incompatibility of
the roadway with the goals of the Metro Plan.

Particularly high traffic volumes occur during AM
and PM commute hours, but these roadways are
generally well traveled most hours of the day. The
planned infrastructure improvements are intended
to enhance safety and convenience for those
living in, working in, and visiting the Metro Area.
201 440
Item # 2.
102 CHAPTER 4. MOBILITY AND CIRCULATION
to increase safe physical activity, reduce
usage of personal vehicles, access goods
and services, employment opportunities, and
for personal travel; to provide for efficient
goods movement.
• CIR-3 Transit: Support the development
and maintenance of the public transit
system to provide integrated, accessible,
convenient, safe, equitable, health-promoting,
comfortable, and effective mobility options.
• CIR-4 Bicycle/Pedestrian/Trails: Promote,
provide, and maintain an expanded, safe,
convenient and comprehensive network of
facilities for pedestrians and bicyclists of all
ages and abilities to support walking and
bicycling as viable modes of transportation,
for recreational use, and to promote
public health.
• CIR-5 Transportation Demand Management:

Implement measures that increase transit use
and other non-motorized travel modes that
lead to improved utilization of the existing
transportation system, such as accessibility
improvements to public transit stops and
stations by walking and biking, and provide
transit stops near employment centers and
higher density residential developments and
in areas where infrastructure is lacking and
access without a car is unsafe.
• CIR-6 Sustainability: Support and expand
the City’s efforts to promote economic,
environmental and social sustainability

4.1.1 General Plan Direction
The City of Milpitas’ General Plan Circulation
Element directs the City to maintain and improve
multimodal transportation opportunities by
providing safe and efficient transportation
options that are equitably located and accessible
to all people. Through strategic transportation
solutions, the City will support a network of
transportation facilities that improves safety
and promotes an active lifestyle by increasing
opportunities for physical activity for all people.

The Metro Plan is consistent with and implements
the following six circulation goals from
the General Plan:
• CIR-1 Circulation and Transportation
Network: Provide a transportation system
that efficiently, equitably, and effectively
supports the City’s land use vision, minimizes
vehicle miles traveled (VMT), enhances
connectivity of the existing network,
and supports the use of all modes of
transportation.
• CIR-2 Complete Streets: Provide safe,
healthy, comfortable, equitable, and efficient
transportation choices for all modes of
transportation that enable people of all
races, cultures, ethnicities, religions, sexual
orientation, genders, income levels, ages
and abilities, especially people of color and
those disproportionately affected by access
to a personal vehicle, systemic transportation
inequities, racism, oppression, and poverty
202 441
Item # 2.

CHAPTER 4. MOBILITY AND CIRCULATION 103
the rail yard also limit east-west connectivity. The
Tango Subdistrict in the southern part of the Plan
Area has several cul-de-sacs that were designed
to serve local businesses. With plans to change
land uses in this subdistrict, this current lack of
connectivity is problematic as it would limit access
for future residents, impede access for emergency
vehicles, and create circuitous travel routes if
left unchanged.

The first developments in the Plan Area following
the adoption of the TASP were townhome
projects. These projects are characterized by
separated vehicular and pedestrian access to
each unit. This is made up of vehicular access to
each unit off of driveway/alleyways that lead to
two-car garages typically, and primary pedestrian
access off of shared walkways that lead to front
doors. The alleyways and walkways typically
flank either side of a row of townhome units with
landscaping along the walkway/ entry side of the
unit. No significant landscaped yard areas are
generally provided in this arrangement other than
what is available near the front entry. Access to
the development as a whole and between blocks
of buildings is usually provided via local streets
with sidewalks that serve front entries. These
developments generate vehicle trips consistent
with townhomes throughout the Bay Area and
were primarily automobile oriented insofar as they
predated the construction and opening of BART,
but nearly all are within the half-mile walkshed of
a transit station (VTA or BART).
through initiatives to reduce greenhouse
gas emissions and other air pollutants,
reduce runoff, promote public health, equity
and engage the community in an inclusive
planning process.

As part of the community outreach process for
the Milpitas Metro Plan, the community also
expressed that improving pedestrian and bicycle
connections to form a continuous network
that emphasizes safety is a higher priority than
vehicular ease of access in the Metro Area.

4.1.2 Mobility and Circulation
Conditions in the Milpitas Metro
Plan Area
The Milpitas Metro Specific Plan Area is centrally
located within the Bay Area, bounded on the west
by I-880 and on the east by I-680. Within the Plan
Area, the circulation system features multi-lane
arterial streets including Great Mall ParkwayTasman Drive, Montague Expressway, South Milpitas Boulevard, and Trade Zone Boulevard.

These streets provide access to and from the
regional highway system as well as circulate local
traffic. Connectivity and access to residential
neighborhoods, industrial sites, and other land
uses within the Metro Plan Area are provided by
lower volume, local streets.

The circulation pattern in the Plan Area also
has several barriers, including the Union Pacific
Railroad tracks, BART tracks, elevated light rail
structures, and Penitencia and Berryessa Creeks.

Just north of the Plan Area, the Great Mall and
203 442
Item # 2.
104 CHAPTER 4. MOBILITY AND CIRCULATION
Figure 4-1. Existing Roadways
204 443
Item # 2.

CHAPTER 4. MOBILITY AND CIRCULATION 105
Segment
Northbound/
Eastbound (average
vehicles per day)
Southbound/
Westbound (average
vehicles per day)
Total (vehicles per
day)
Great Mall
Parkway west of
Montague Expressway
16,179 15,188 31,367
Montague
Expressway west of
Great Mall Parkway
17,659 19,910 37,569
S. Main Street north of
Montague Expressway 9,199 10,651 19,850
Figure 4-2. Existing Barriers
Table 4-1. Traffic Volumes
205 444
Item # 2.
106 CHAPTER 4. MOBILITY AND CIRCULATION
Figure 4-3. Transit Network
206 445
Item # 2.

CHAPTER 4. MOBILITY AND CIRCULATION 107
• BART: Service runs through Milpitas every 30
minutes between the Berryessa/North San
Jose and Richmond stations.
• Bus: VTA provides bus service at the Milpitas
Transit Center that serves local and regional
routes, including lines 20, 44, 60, 66, 70,
71, 77, and 104.
• Light rail: The Milpitas Transit Center is
connected by a pedestrian bridge to the
Milpitas light rail station on VTA’s Orange Line.
• Regional bus service: Service to Alameda
County is available via AC Transit Route 217,
which connects to Fremont BART.
• Shuttle: The Altamont Commuter Express
(ACE) offers its Violet Shuttle service from
Montague Expressway/Main Street to the
Great America Station in Santa Clara.

With a limited ability to accommodate additional
vehicle traffic, completing networks of safe and
comfortable facilities for walking and bicycling
will become increasingly important for local trips
within the Plan Area, including access to work, to
shopping, and to the regional transit system.

Generally, sidewalks are present throughout the
Plan Area and bike lanes are included along
several major streets, but the environment can still
be intimidating to pedestrians and bicyclists, as
they are often in close proximity to high volume,
high speed traffic. Users are frequently required
to cross multi-lane roadways and may need to
travel circuitous routes to reach their destinations.

With 78 percent of Milpitas residents driving
alone to work and an additional 12 percent
carpooling, motor vehicles are the dominant
transportation mode in the city as well as in
the Metro Area. While driving is expected to
remain the dominant transportation mode, traffic
congestion will become increasingly challenging
as a result of local and regional growth. Great
Mall Parkway-Tasman Drive and Montague
Expressway are the two major corridors through
the area and are among the most congested
roadways in Milpitas. The City’s General Plan
estimates that several study area intersections will
be further impacted by incoming growth by the
year 2040, increasing delay for drivers.

As the local development pattern has shifted to
include more multifamily housing surrounding the
recently opened Milpitas Transit Center, and the
need for multimodal transportation options has
increased, there have been substantial changes
to mobility options for traveling to, from, and
within the Milpitas Metro Specific Plan Area. The
initiation of BART service to the Milpitas Transit
Center in mid-2020, the relocation of the VTA
bus transfer hub to the Transit Center, and the
nearby multi-station access to light rail service,
all have helped to establish Milpitas Metro as
a major transit hub, offering vastly improved
connections through the city generally, the Metro
Area specifically, and locations throughout the
Bay Area. These connections include:
207 446
Item # 2.
108 CHAPTER 4. MOBILITY AND CIRCULATION
Figure 4-4. Level of Traffic Stress
208 447
Item # 2.

CHAPTER 4. MOBILITY AND CIRCULATION 109
are improved, the City and Valley Water should
consider landscaping adjacent to trails on
the outside edges away from the creek, trail
surfaces, and lighting.

Visible changes in infrastructure for other modes
have also begun to emerge as development
following the adoption of the TASP is completed,
such as improved sidewalks with landscaping that
have been constructed as part of new residential
development. As incoming development
continues to build out these facilities and the
City pursues implementation of priority projects
identified in the Bicycle/ Pedestrian and Trails
Plan, multimodal mobility options will continue
to be strengthened throughout the Metro Area.

Refer to Figure 4-5 for existing and proposed bike
infrastructure identified in the Bicycle/ Pedestrian
and Trails Plan.

4.2 APPROACH
The Metro Plan establishes a street hierarchy
with three street typologies. Each street typology
has its own design standards that are sensitive
to surrounding land contexts to ensure that the
safety of all transportation modes are addressed.

The three street typologies are described below:
• Central Corridors are wide arterials that
support multiple lanes of traffic and include
facilities for active transportation.
• Shopping Streets are 2-lane roads that
are pedestrian-oriented and support high
levels of retail and active uses. There are
Great Mall Parkway is particularly challenging for
pedestrians. Grade-separated overpasses have
been constructed across Montague Expressway
and Great Mall Parkway to provide protected
pedestrian crossings near the BART station and
VTA light rail stations. Such facilities improve
pedestrian safety and provide an opportunity
for public art, but can only be funded in a few
strategic locations due to their high cost. A
broader approach that includes at-grade crossing
improvements will be needed.

The City’s Bicycle/ Pedestrian and Trails Plan
evaluated conditions for bicyclists using a
Bicycle Level of Traffic Stress (LTS) analysis,
which illustrates how high stress conditions limit
connectivity and access for bicyclists (Figure
4-4). While Great Mall Parkway and other heavily
traveled roadway have striped bike lanes, the
traffic conditions still result in their ranking as
high LTS streets, which are not suitable for casual
bicyclists. Without a buffer or barrier between
bicyclists and vehicle traffic, bicyclists do not
typically feel comfortable in such conditions.

In addition to sidewalks and bike lanes, off-street
paths have the potential to provide an “all ages
and all abilities” facility to improve bicycling
and walking access, both for transportation and
recreational uses. The existing paths along East
Penitencia Creek - South Channel and Berryessa
Creek have begun to make these connections
but need to be extended and enhanced with
street crossing improvements to provide more
direct and convenient routing. As these trails
209 448
Item # 2.
110 CHAPTER 4. MOBILITY AND CIRCULATION
Figure 4-5. Existing and Proposed Bicycle Facilities
210 449
Item # 2.

CHAPTER 4. MOBILITY AND CIRCULATION 111
multimodal transportation network. The efficient
use of parking resources combined with the high
level of transit service and multimodal access
options amid a diverse mix of uses can result in a
much more balanced, multi-modal environment.

An important focus of the Metro Plan is moving
beyond the more car-centric townhomes and
other low-intensity development. The remaining
housing sites not developed under the TASP are
targeted for higher densities and are generally
closer to jobs, services, and transit. The job
centers will also be closer to transit, services,
and higher density planned housing. For those
who live and work in the area, there can be a
satisfaction in the convenience of being able to
move about without driving and parking a car.

One of the goals of the Plan is to create a highquality environment for visitors and residents that provides parking where needed in the most
efficient and convenient way possible and avoids
unused spaces that are too inconvenient or
excessive. This is accomplished through strategic
siting and management of off- and on-street
parking resources. For off-street parking, this plan
proposes a “park-once” approach. This approach
emphasizes shared parking opportunities
between compatible land uses and convenient
discovery. This approach also provides quality
pedestrian connections to enable easy access to
destinations or for exploration, and incentivizes
publicly-accessible parking. Meanwhile, onstreet parking should be actively managed to help ensure the availability of spaces, prioritize
two configurations for Shopping Streets:
one with a parking lane and another with
accommodations for bike lanes and transit.
• Neighborhood Streets are local streets within
residential neighborhoods that support slower
speeds and have a pedestrian character.

For many people in Milpitas, the automobile is
the primary mode of travel, and well-managed
parking is important for both the economic
vitality of commercial uses and the prioritization
of resident needs in nearby neighborhoods.

Because of the wealth of transit options as
well as the dense mixed-use land use pattern,
the Plan promotes lifestyles that are less car
dependent and targets residents and workers
who are seeking this more urban environment.

Consequently, many of the trips in the Metro
Area are expected to be taken by transit, foot, or
bike. However, as the area continues to develop
and more housing is built at higher densities with
improved access to daily destinations, demand
for parking will still continue to increase though
at a slower rate than it would in areas with less
access to transit and less convenience to jobs,
housing, and services.

Flexible parking policies that balance demand
with goals to limit unnecessary automobile usage
will be key to ensuring an effective mobility
strategy that meets the needs of residents,
workers, and visitors, and implements the General
Plan’s charge to create strategic transportation
solutions that improve and maintain an efficient
211 450
Item # 2.
112 CHAPTER 4. MOBILITY AND CIRCULATION
parking generally means savings in construction
and maintenance costs for developers, which
can offset investments in VTA transit passes,
Clipper Cards, and the like. These requirements
combined with the required TDM measures
below allow for development to meet resident,
employee, and visitor mobility needs in the
most cost-effective fashion. Lastly, it is important
to note that California Assembly Bill 1401
(AB1401) is currently being considered by the
State Senate. If enacted as currently worded,
minimum parking requirements within a halfmile of major transit stops in Milpitas will be prohibited. The City may wish to modify some of
this plan’s recommendations if AB1401 is enacted.
[CONFIRM ON PLAN ADOPTION]

4.2.1 Transportation Demand
Management
Transportation Demand Management (TDM)
is typically categorized as a set of strategies
aimed at encouraging transit use, walking,
biking, and carpooling while reducing single
occupant vehicle trips, vehicle miles traveled,
and parking demand. TDM primarily focuses
on programmatic elements as opposed to
physical infrastructure to cost-effectively reduce
congestion and address broader community
concerns such as sustainability and equity goals.

Examples of TDM measures include, but are
not limited to, telecommuting, ridesharing,
subsidized commuter benefits, and parking
management. TDM measures are required for
all new development projects within the Metro
certain spaces for particular users, and limit
parking impacts both upon and from Milpitas
Metro properties in adjacent neighborhoods. In
practice, this means that in commercial areas, onstreet parking should be managed appropriately through mechanisms such as time limits and
pricing to achieve a peak occupancy of 85
percent on each block face. In residential areas
near commercial areas, parking permits should be
made available to residents and could potentially
be paid for through some fee mechanism related
to development or activity within the Metro Plan.

All of these activities are well worth the effort,
but will require some level of management and
oversight from the City, and fees for development
should be calibrated accordingly.

In addition to active management, effective
parking requirements are key to limiting excessive
auto congestion while allowing development
to provide enough parking to serve anticipated
market demand of each type of use. To this
end, minimum parking supply requirements
for all uses in the Milpitas Metro Specific Plan
are to be significantly reduced and maximum
requirements are intended to limit excessive
parking supply that effectively supports while
allowing for development flexibility. To encourage
less driving, options are provided for developers
to reduce parking minimums through more robust
Transportation Demand Management (TDM)
measures or through payment of in-lieu fees
that can be used to collectively finance multimodal transportation improvements. Reduced 212 451
Item # 2.

CHAPTER 4. MOBILITY AND CIRCULATION 113
within a geographic area to collectively provide
TDM services and measures to employees,
rather than each company providing services
individually. Residential projects would also be
included in the TMA, enabling local residents
to take advantage of these services and the
incentives to walk, bike, or use transit to reach
their destinations. As the formation of a TMA is
Action CIR-5b from the City’s General Plan, the
Metro Plan recommends establishing a TMA
for the Metro Area at a minimum. The TMA will
be responsible for monitoring trip reduction,
VMT targets, and services within the Plan Area.

Participation in the TMA is required of all new
development and optional for existing uses.

In addition to implementing TDM measures, the
reduction of vehicle trips resulting from those
strategies should be monitored and reported by
the TMA. The monitoring and reporting of vehicle
trips will allow participants of the TMA to more
efficiently mitigate vehicle trips, vehicle miles
traveled, and parking demand within the Milpitas
Metro Specific Plan.

Area but is also encouraged for existing uses.

The broad implementation of TDM measures
is directly tied to the site’s reduced minimum
parking requirements and an integral element to
the overall success of the area’s mobility.

A comprehensive TDM program is best
implemented when a particular organization
can serve as a mobility champion. Often, this
takes the form of a Transportation Management
Association (TMA) whose mission is to collectively
represent all uses, existing or new, within the
Milpitas Metro Specific Plan; oversee TDM
measures; and ensure their ongoing success.

General Plan Action ED-2c directs the City to
“[e]valuate the feasibility of creating business
improvement districts (BIDs), maintenance
assessment districts, and/or a transportation
management association to fund improvements
and maintenance that support economic
development.” The Metro Plan will work to
implement a TMA at the specific plan level. Over
time, the City may choose to expand the TMA to
cover other specific plan areas, neighborhoods,
or the city as a whole.

A TMA is typically a non-profit, membercontrolled organization that is established to promote commute alternatives to driving
alone. TMAs are controlled and funded through
membership with the goal of reducing vehicle
congestion. Typically, TMAs allow for businesses
of all different sizes to collectively provide
commute reduction services to a broader range
of professionals. TMAs allow multiple companies
213 452
Item # 2.
114 CHAPTER 4. MOBILITY AND CIRCULATION
Figure 4-6. Circulation Network
214 453
Item # 2.

CHAPTER 4. MOBILITY AND CIRCULATION 115
M 1.4. Street ownership and maintenance will
be negotiated between the developer and
the City on a project-by-project basis.

M 2. Central Corridor. Enhance arterial streets
- Montague Expressway, Great Mall Parkway/
Capitol Avenue, South Main Street, and
Trade Zone Boulevard - to include facilities
for active transportation: pedestrians,
bicyclists, and more. Where the City does
not control an arterial street, as in the case of
Montague Expressway, work with the relevant
agency to increase multimodal safety and
accessibility over time.

M 2.1. Central Corridors should include the
following features:
• Bike lanes and sidewalks on both
sides of the road.
• Street furnishings, including ample
seating, bike racks, waste and recycling
bins, bollards, and human-scale
street lights.
• Ground-level activity that invites Central
Corridor users into shopping streets.
• Landscaped setbacks along Great Mall
Parkway, Capitol Avenue, South Main
Street, and South Milpitas Boulevard to
buffer uses from heavy traffic.
• Raised crosswalks may be installed
where high pedestrian volumes may

4.3 MOBILITY AND

CIRCULATION POLICIES
M 1. Multi-Modal Circulation. Develop a
highly-connected street grid that prioritizes
multimodal transportation including walking,
bicycling, and transit.

M 1.1. New streets shall be located as
generally shown on the Circulation
Network Map (Figure 4-6).

M 1.2. Provide an intuitive hierarchy of streets
that includes a continuum from bustling on
boulevards and retail concentrated streets
to contemplative and neighborhoodoriented in character. These streets should follow the hierarchy and actions
provided in M 2 – M 5:
• Central Corridors
• Shopping Streets
• Neighborhood Streets
• Trails
M 1.3. New streets on the Great Mall parcel
shall be aligned in a grid pattern as shown
in Figure 4-6. Exact alignment shall be
determined by the developer and City.

Refer to Figure 4-7 in Chapter 3: Site and
Building Design Standards and Guidelines
for additional guidance on appropriate
block lengths.
215 454
Item # 2.
116 CHAPTER 4. MOBILITY AND CIRCULATION
M 2.3.1. Maintain or reduce current lane
counts and widths on Great Mall
Parkway to calm traffic, create a more
comfortable environment for nonvehicular modes, and to decrease Vehicle Miles Traveled.

M 2.3.2. Provide protected bike lanes in
both directions and a cycle track on the
Great Mall Subdistrict side of the street.

M 2.3.3. Provide a linear park and
pedestrian path along Great Mall
Parkway from Montague to Main Street.

M 2.3.4. Provide enhancements to
pedestrian crossings along Great Mall
Parkway and other major roadways
through measures including curb
extensions, traffic signal modifications,
and/or other amenities.
pose greater vehicular conflicts (such as
Great Mall Parkway).

M 2.2. Gateway Elements. Develop a
gateway experience for transit users and
street users to welcome them to the Plan
Area in concert with signage guidelines
in M 2.1 of Chapter 3: Site and Building
Design Standards and Guidelines.

Gateway elements could include public
art, landmark buildings, and unique
treatment of public spaces.

M 2.3. Great Mall Parkway. Transform
Great Mall Parkway/Capitol Avenue into
multimodal complete streets that provides
for the mobility needs and safety of
transit users, bicyclists, pedestrians, and
drivers as indicated in Figure 4-7 and by
providing the following features:

Figure 4-7. Great Mall Parkway Street Section
216 455
Item # 2.

CHAPTER 4. MOBILITY AND CIRCULATION 117
M 2.4.2. Redesign the plaza by the Light
Rail Station Elevator on the north side
of Great Mall Parkway to be more
landscaped, more usable as a public
plaza, with commercial uses oriented to
it and features that activate the plaza.