City Council and Authorities Concurrent
May 19, 2026

Item # 7
1 May 19, 2026
Declaration of Property as Exempt Surplus Land and Approval of Exclusive Negotiation Agreement with Valley Oak Partners for a Potential Land Exchange of the City Hall Civic Center Campus (1405 Civic Center Drive, APN 224-25-074) for the Agnews Office Park and Historic Site (4220 Network Circle, APNS 216-33-022 and 097-08-114) and Direction on the Formation of Community Advisory CommitteeGeneral BusinessItem 7, RTC 26-566May 19, 2026 •Welcome•Background•Aging Civic Center FacilitiesDeferred Maintenance & Facility Investment Needs•Growing Space & Operational NeedsDispersed operations and currently leasing satellite facilities •September 2025, the City received a proposal to exchange the current City Hall Civic Center campus for a portion of the Agnews/Oracle campus. •Since September 2025, staff have met with the City Council in closed session to discuss the transaction, toured the site with labor union reps, and launched an effort to explore the feasibility of the land exchange and other alternatives.2 1 2
Item # 7
2 May 19, 2026
•Background…•Tonight’s Discussion and Proposed ActionsProvide an Overview of the ProposalDiscuss Proposed Exclusive Negotiation AgreementOutline Timeline & Due DiligenceFiscal and Facility StudiesCost of Alternative City Hall Options Recommendation to establish a Community Advisory CommitteeObtain City Council Feedback and Receive Public Comment 3 Civic Center Project Team •City Manger’s Office: Elizabeth Klotz, Reena Brilliot, and Elycia Knight•Community Development Department: Afshan Hamid, Lesley Xavier, and Nimisha Agrawal •Real Estate Advisors: Century Urban Team – Ken Rich, Bryant Sparkman, and Cameron Sardi •Legal: Alexander Abbe, Jennifer Beyers, and Burke Williams Sorensen Team – Anna Shimko and Eric Phillips4 3 4
Item # 7
3 May 19, 2026
Elizabeth KlotzAssistant City Manager5
Overview and Project Proposal•Valley Oak Partners (VOP) is in contract with Oracle to purchase a portion of Oracle’s campus, located on the site of the former Agnews State Hospital.•On September 20, 2023, VOP submitted an application to the City to develop 584 housing units under the Builder’s Remedy and the City informed VOP that it is not subject to Builder’s Remedy.•In April 2024, the City and VOP began discussing an alternative land swap proposal. Discussions emerged during broader conversations regarding the Agnews site. A potential opportunity was identified to: –Evaluate a future civic center location –Preserve historic assets –Evaluate redevelopment of the current City Hall campus –Consider long-term civic and community goals 6 5 6
Item # 7
4 May 19, 2026
What is the Proposal Being Evaluated?•Agnews Campus -Possible acquisition and reuse of portions of the Agnews campus for:•Future civic operations •Adaptive reuse of existing structures •Preservation of historic resources •Expanded civic functions •Existing City Hall Site -Potential housing development7 •The property is located at 4160 Network Circle, Santa Clara, CA 95054, totaling approximately 26.9 acres with 288,420 square feet of buildings.•It includes 15 acres within the Historic Easement Area, containing four buildings (1-4) totaling about 49,500 sq. ft. (the “Historical Area”).•An additional 12 acres east of the Historic Area includes five buildings (5-9) totaling 238,969 sq. ft. (the “Additional City Parcel”).Subject Properties (Agnews)81234567897 8 Item # 7
5 May 19, 2026
Subject Properties (City)•The property at 1405 Civic Center Drive, Santa Clara, CA 95050 totals approximately 10.3 acres.•It includes buildings totaling about 126,000 square feet which includes the Berman Building (IT Bldg). Note: Civic Center Park is not included in their proposal. 9 Civic Center Complex10.3 Acre Parcel Outlined in Yellow 10 9 10
Item # 7
6 May 19, 2026
Purpose of an ENAAn ENA Allows the City to Evaluate Before Deciding•Provides a structured process to study a complex proposal before making commitments •Allows the City to determine whether the proposal is feasible, financially sound, and in the public interest•An ENA allows the parties to conduct due diligence, property and title analysis, technical analysis, cost evaluation, environmental review, and negotiation of possible terms. •It preserves the City’s ability to decide later whether to proceed.11 Proposed ENA•The proposed ENA includes the following key terms:–Negotiation period commencing when ENA is signed and terminating on June 1, 2027, subject to up to six months extension.–Exclusive negotiation – neither party may negotiate with another party, including Oracle, regarding the sites.–City cost recovery from VOP of all non-staff costs to negotiate the transaction.–Due diligence period for first six months of negotiation period during which either party may terminate the agreement.–No obligation to transact for either party.–Exposure for default of agreement by either party limited to termination of agreement (except for negotiation with Oracle, which carries potential additional penalties and damages).–Milestone schedule for negotiations, approvals and closing of transaction.•City retains flexibility to terminate on any grounds on 30 days’ notice12 11 12
Item # 7
7 May 19, 2026
City Hall Relocation Evaluation Criteria•Facility condition and operational needs•Capital improvement costs•Long-term costs and lifecycle value•Location within the City and public access•Community priorities and future civic needs13 City Hall Options Evaluation1.Proposed Transaction 2.Cost to Renovate Existing City Hall –Life span of existing facility vs.modernize aging facilities while remaining on-site3.Cost to Rebuild Civic Campus -Construct a new or expanded civic center to meet long-term needs4.Cost to Redevelop Existing Sites -Repurpose civic land for housing, mixed-use, public space, or community benefit, such as downtown5.Cost for Adaptive Reuse / Repurposing -Convert existing buildings within the City for civic use14 13 14
Item # 7
8 May 19, 2026
Key Project Approvals 1.EIR & Other CEQA Documents inclusive of the proposed redevelopment of VOP Retained Parcel, VOP Exchange Parcel and Warburton Parcel.2.General Plan and Zoning Amendments to permit proposed development on all parcels.3.Development Agreement (if necessary) covering development on all parcels.4.Land Exchange Agreement documenting the land transaction.5.Surplus Land Act Exemption findings regarding the Warburton Parcel.15 Project Milestone Schedule16
Projected DateTask / MilestoneAugust 28, 2026City releases Project Notice of Preparation or otherwise commences CEQAprocessNovember 30, 2026Due Diligence period endsJanuary 5, 2027Draft EIR/CEQA document released for public reviewFebruary 1, 2027Parties prepare draft Land Exchange AgreementMarch 24, 2027Planning Commission hearing for recommendations on CEQA documents,Project applications and Exchange AgreementApril 6, 2027City Council hearing and action on CEQA documents, Project applications,and Exchange AgreementApril 20, 2027City Council Second Reading on Project applicationsMay 28, 2027If Exchange Agreement approved, close Land Swap transaction 15 16
Item # 7
9 May 19, 2026
Surplus Land Act•The California Surplus Land Act (SLA) is a state law that establishes procedures local governments must follow before disposing of publicly owned land.•Its purpose is to ensure surplus public land is evaluated for uses such as:–Affordable housing–Public agency use–Open space and community benefit opportunities•Under the proposal being evaluated, the current City Hall site would qualify as “Exempt Surplus Land” because state law provides an exemption when a local agency exchanges property for another property necessary for the agency’s use17 Community Engagement - CAC•Formation of Community Advisory Committee–One representative appointed by each City Councilmember–District-based representation to ensure citywide participation–Appointments anticipated at the June 9 City Council meeting•CAC Goals and Objectives –Provide community input regarding the potential City Hall relocation and land exchange concept –Identify neighborhood priorities, concerns, and opportunities –Advise on public outreach and communication strategies –Serve as a forum for community feedback and dialogue –Assist in ensuring broad and inclusive public participation 18 17 18
Item # 7
10 May 19, 2026
Process Commitments and Public Engagement 1.Maintain momentum on Council priorities including Downtown revitalization 2.CAC Engagement 3.Site Tours for Board and Commissions Representatives4.Regular Public Updates •City Manager Weekly•City Newsletter 5.Employee and Labor Groups Engagement 19 20 19
20 Item # 7
11 May 19, 2026
Recommendation1.Adopt Resolution Declaring Real Property Owned by the City to be Exempt Surplus Land and Approving an Exclusive Negotiation Agreement between the City and Agnews VOP, LLC for a Potential Land Exchange and City Hall Improvement Project which includes:a. Declaring the current City Hall property to be exempt surplus land;b. Authorizing the City Manager to sign and execute the Exclusive Negotiation Agreement in substantially the form presented, in a final form approved by the City Attorney; andc. Authorizing the City Manager to perform all other acts, and enter into other agreements or sign documents necessary to carry out the purposes of the Resolution.2.Authorize the City Manager to execute property owner authorization forms and related documents necessary to permit the submission, processing, and evaluation of development applications, entitlement applications, environmental review documents, and related materials associated with the proposed project on City-owned property, provided that such authorization shall not constitute approval of any project, land use entitlement, environmental determination, or final transaction by the City; and3.Direct staff to bring back the formation of a Community Advisory Committee, with each Councilmember appointing one representative from their district, and the Mayor an at-large appointments, with Committee formation and appointments anticipated for the June 9 Council meeting.21 QUESTIONS22
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Item # 7
12 May 19, 2026
Declaration of Property as Exempt Surplus Land and Approval of Exclusive Negotiation Agreement with Valley Oak Partners for a Potential Land Exchange of the City Hall Civic Center Campus (1405 Civic Center Drive, APN 224-25-074) for the Agnews Office Park and Historic Site (4220 Network Circle, APNS 216-33-022 and 097-08-114) and Direction on the Formation of Community Advisory CommitteeGeneral BusinessItem 7, RTC 26-566May 19, 2026 Back Up Slides 24
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Item # 7
13 May 19, 2026
VOP Builder’s Remedy Project 25
Century Urban – Real Estate & Financial Advisor •Serves as the City’s independent real estate and financial advisory consultant•Century Urban specializes in:–Public agency real estate advisory services –Public-private partnership (P3) evaluation and structuring –Complex land transactions and redevelopment strategy –Financial feasibility and valuation analysis –Strategic advisory services for civic, mixed-use, housing, and public infrastructure projects •The firm has experience advising cities, redevelopment agencies, transit agencies, universities, and other public entities on major real estate, civic facility, and development initiatives.26 25 26