City of Sunnyvale
Agenda Item
23-0682 Agenda Date: 7/10/2023
REPORT TO PLANNING COMMISSION
SUBJECT
Forward Recommendation to the City Council:
Proposed Project: Downtown Specific Plan Amendment Initiation to study changes to the development intensities and standards for Block 18 of the Downtown Specific Plan to allow an increase to the allowable maximum office square footage of 205,000 square feet and increase the maximum allowable building height from 75 feet to 85 feet.
File #: PLNG-2023-0306
Location: Downtown Specific Plan Block 18 (bounded by W. Washington Avenue, S. Sunnyvale Avenue, W. Iowa Avenue and S. Mathilda Avenue)
Zoning: DSP/18 (Downtown Specific Plan, Block 18)
Applicant / Owner: STC Venture Block LLC and related entities (applicant and owner) Environmental Review: The project is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378(a).
Project Planner: Shétal Divatia, (408) 730-7637, [email protected]
REPORT IN BRIEF
General Plan: Downtown Specific Plan
Existing Site Conditions: Completed: Residential, Retail, Cinema, parking. Under Construction:
Office and Residential (Sub-block 3, north central area). Surface Parking Lot and Construction Staging Area (Sub-block 6, northeast corner).
Surrounding Land Uses
North: Retail and Residential
South: Residential and Office
East: Residential and Office
West: Residential and small commercial sites
Issues: Consistency with the Downtown Specific Plan, ground floor retail, transition to Sunnyvale Avenue, and potential amendments to the approved Development Agreement (DA).
Staff Recommendation: Recommend to City Council Alternatives 1 and 2: 1) Initiate a Downtown Specific Plan Amendment study to consider amending Block 18 of the Downtown Specific Plan to increase the allocated office use square footage by 205,000 square feet above the maximum office square footage; and increase the maximum building height from 75 feet to 85 feet for Sub-block 6; evaluate the development standard for the transition of the buildings on Sunnyvale Avenue; consider Amendments to the current Development Agreement between the City and STC LLC (Cityline); and, find that the action is exempt from the California Environmental Protection Act (CEQA) pursuant to CEQA Guidelines Section 15378(a); and 2) Accept applications for a Downtown Specific Plan Amendment and Development Agreement amendments after January 1, 2024.
BACKGROUND
General Plan Amendment Initiation (GPI) and Specific Plan Amendment Initiation (SPI) requests are
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considered on a quarterly basis through a recommendation from the Planning Commission and then action by the City Council. The process for considering a Specific Plan Amendment (SPA) begins with a written request from a property owner or applicant. If the City Council approves the SPI, a formal application for a SPA can be filed by the property owner/applicant. Council policy is to schedule public hearings for development applications after approval of a GPA/SPA. Exceptions to this policy may be authorized by Council.
DSP Overview
One purpose of the DSP is to strengthen the mix of land uses through a series of districts. The DSP states that “promoting a mix of uses in the districts is a key feature of the future downtown as it creates a lively street scene, increases walkability, reduces dependence on the automobile, and provides for higher density housing in proximity to mass transit.”
The Downtown Specific Plan (DSP) area comprises roughly 125 acres (160 acres including streets), generally bounded by the Caltrain tracks to the north, Carroll Street/Bayview Avenue to the east (boundary line varies), Olive Avenue to the south and Charles Street to the west. Preparation of the Downtown Specific Plan (DSP) was initiated in the mid-1980s and the first plan was adopted in 1993. The DSP was comprehensively updated in 2003; amended twice in 2013 to remove the carriage/frontage road on the west side of Mathilda and later to add Blocks 21, 22 and 23; and comprehensively updated again in 2020 to reflect Downtown Sunnyvale’s evolving mixed-use character. More recently in 2023, the City Council amended Block 20 of the DSP to allow modest increases in residential units and office square footage, and associated modifications to design guidelines and development standards for the block.
Additional development potential and building height are possible in the DSP area through the use of local and state density bonus programs or through the provision of community benefits.
Commercial uses such as retail, restaurant, and other similar uses may be substituted for allowable office square footage, provided the use is allowed in the Downtown Specific Plan District, subject to being publicly accessible and approval of a miscellaneous plan permit.
As part of the 2020 Downtown Specific Plan (DSP) amendments (RTC No. 20-0726) the allowable land uses were modified for DSP Blocks 1, 1a, 18 and 22 and the development standards were revised to be more objective and in keeping with higher intensity development. Links to staff reports referenced in this document can be found in Attachment
7. DSP Block 18
Block 18 of the Downtown Specific Plan (approximately 38 acres) is bound by Washington Avenue on the north, Sunnyvale Avenue on the east, Iowa Avenue on the south and Mathilda Avenue on the west. The largest portion of DSP Block 18 is owned by STC Venture LLC and its related entities (this area is often referred to as CityLine). Other properties include the Bank of the West site, Target, and the two completed office buildings on Mathilda Avenue. Interior streets of Block 18 are Aries Way, Taaffe Street, Murphy Avenue, McKinley Avenue and Booker Avenue.
Completed development on Block 18 consists of a variety of land uses, including retail, office, entertainment, housing, open space and parking. In 2006 the site was approved with a different mix of uses which were partially constructed by the prior owner. STC Venture LLC acquired their portion of Block 18 in 2015 and have been finishing up various components of the Sub-blocks based on the DSP as well as prior and subsequent Planning approvals and agreements with the City.
The DSP further divides Block 18 into six subdistricts (see map in Attachment 4). The new development in Sub-blocks 1 (except for the Bank of the West site), 3, and 6 are referred to as Phase II of CityLine.
Development Agreement (DA) Overview
At the same hearing that the City Council approved the DSP amendments in 2020 a Development Agreement (DA) (RTC No. 20-0724) with STC Venture LLC (owners of a large portion of DSP Block 18) was also approved. The DA is enabled due to DSP provisions to increase residential units, office space and building height and applies to primarily Sub-blocks 1, 3, and 6
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A DA sets out benefits to the property owners and to the City. The DA benefits to the property owner include an increase in office square footage, an increase in residential units and an increase in the height limit. The height and conceptual building massing are illustrated in Attachment F to the DA. The DA benefits to the City include: contribution to the Community Benefit fund, additional affordable units, all electric appliances, publicly accessible park space, a community room, and other features.
The DSP and the DA allow the development for DSP Block 18 as shown in the table below. Commercial land uses in the DSP refer to retail, retail services and similar uses and are distinct from office uses.
Specific Plan Amendment Initiation (SPI) request
STC Venture LLC submitted a SPI request on April 27, 2023, requesting the following modifications for the DSP and DA for CityLine’s portion of Block 18 (see Attachment 2):
· Increase the allowable office use square footage by 205,000 square feet above the maximum office square footage of 974,801 for a total of 1,179,801.
Conceptual Plans
STC Venture LLC has outlined their concepts for their final phase of development within DSP Block
18. Sub-block 3 North
· Convert 22,103 square feet of flex (commercial) space to office space.
Sub-block 6
· Construct a 200,000 square foot office on north half of Sub-block 6. · Locating office in this area would result in consolidating the remaining residential units (~300) to the south half of the block.
· Increase the maximum building height from 75 feet to 85 feet on the northern half of the block (the DA allows 85 feet on the southern half with appropriate step-backs).
See Attachment 4 for map of the Downtown Specific Plan area and Attachment 5 for the Block 18
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overall conceptual site plan.
EXISTING POLICY
The General Plan is the primary policy document that guides the physical development of the City.
When used together with a larger body of City Council policies, it provides context and direction for decision-making on City services and resources. The 2017 adopted Land Use and Transportation Chapter within the General Plan created an integrated set of policies to guide land use, development, and transportation choices with a horizon year of 2035. Specific Plans and other area plans provide a finer level of detail than the General Plan, particularly for land use and development standards.
Typically, these plans have unique design goals and standards for the area.
Key goals and policies from the General Plan and Downtown Specific Plan are listed below. A more comprehensive list is in Attachment 3.
GENERAL PLAN
COMMUNITY VISION
Citywide Vision Goals:
IX. Dynamic Downtown - To create and support a strong and attractive traditional downtown which serves as the community’s central marketplace, common gathering place and symbolic center. The vitality and attractiveness of Sunnyvale are not reflected in its Downtown today. Vacant storefronts and a shuttered mall suggest a distressed community, lacking in positive identity. It is clear that both the desire of the public and the demand of the market are to recreate a traditional downtown of shops, restaurants, offices and residences, as a common gathering place, central marketplace and symbolic center for the City of Sunnyvale.
LAND USE AND TRANSPORTATION ELEMENT
GOAL LT-12 - A BALANCED ECONOMIC BASE
Develop a balanced economic base that can resist downturns of any one industry and provides revenue for City services.
Policy LT-12.6 - Create a strong, identifiable downtown that offers regional and citywide shopping opportunities and entertainment.
DOWNTOWN SPECIFIC PLAN
The VISION for the Downtown Specific Plan area is encapsulated into a single statement:
“An enhanced, traditional downtown serving the community with a variety of destinations in a pedestrian-friendly environment.”
Land Use
GOAL A-1: A Mixed-use Center - Establish the Downtown as a cultural, retail, economic, and entertainment center of the community complemented by employment, housing, and transit opportunities.
Policy A-1.3 Encourage opportunities for small independent businesses and merchants by creating sites for independent retail and entertainment venues.
Policy A-1.8. Where appropriate, allow for additional development beyond the base allowable development in exchange for amenities that benefit the community.
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Community Form and Character
GOAL B-1: A Distinct Downtown for Sunnyvale - Develop land uses in an attractive and cohesive physical form that clearly identifies Sunnyvale’s Downtown.
Policy B-1.4. Encourage high quality design and development, while allowing for creativity and flexibility within the Downtown Sunnyvale Specific Plan Area.
Policy B-2.3. Encourage intensification of the Downtown Core while maintaining and enhancing the character of the lower density neighborhoods surrounding the Downtown.
GOAL B-3: A Pedestrian-Oriented Environment - Expand the pedestrian-oriented character of the Downtown with enhanced access to parks, open space, plazas, and community and other public realm amenities.
Policy B-3.7 Create well-activated ground floor street frontages by providing direct access to buildings from adjacent pedestrian paths and sidewalks.
ENVIRONMENTAL REVIEW
The decision to initiate a Specific Plan Amendment study does not require environmental review under the California Environmental Quality Act (CEQA) because the mere initiation of a study does not constitute a project under CEQA (CEQA Guidelines Section 15378 (a)), as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. If initiated, the subsequent Specific Plan Amendment and Special Development Permit for the project review would be subject to the provisions of CEQA.
DISCUSSION
The General Plan Amendment initiation request from the applicant would allow the study of an additional 205,000 square feet of office space and an increase of the maximum height on the northern half of Sub-block 6, from 75 feet to 85 feet. There are no proposed changes in total allowable residential units or commercial/retail square footage.
All blocks, except for Sub-block 6, have been entitled with the subsequent development approvals referenced in the DA. Construction is currently underway on Sub-block 3 (3N and 3S); construction of the remaining office building on Sub-block 1 is pending; and the remaining Phase I 19 housing units on Sub-blocks 4 and 5 (along the Iowa Avenue frontage) are approved and have yet to be built.
Sub-block 6
Sub-block 6 is approximately 4.5 acres in size and is the last remaining sub-block awaiting redevelopment and full project entitlement. Currently, the site consists of surface parking and construction trailers for the adjacent construction projects. This sub-block is bound by Washington Avenue on the north, McKinley Avenue on the south, Sunnyvale Avenue on the east, and Murphy Avenue on the west. Murphy Avenue connects to the 100 block of S.
Murphy Avenue to the north which is designated as Murphy Station Heritage Landmark District.
The sub-block also includes a temporary public park at the northeast corner of McKinley and
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Murphy Avenues. The DA provisions for Sub-block 6 include 314 housing units and ground floor retail space with allowable building heights to 75 feet on the northern portion (per the DSP) and 85 feet was approved in the 2020 DA for the southern portion of Sub-block 6. Office uses were not included in the provisions for this sub-block.
The applicant notes that an increase in office square footage allows them to provide greater flexibility in leasing options to address market conditions (see Attachment 2 - Applicant’s SPI Request Letter). As shown in a conceptual massing diagram (Attachment 6), the proposed five-story office building would be sited at the north side of the site and second building on the southern portion of this sub-block be a residential building. Both buildings are proposed at 85 feet tall. The applicant’s letter further describes the conceptual plans to include retail on the first floor of both the office and residential components of the block; the total square footage of retail is not described.
Sub-Block 6 is the subject of soil and groundwater remediation efforts. Prior to the 1970s the area included several businesses, such as dry cleaners, that resulted in the soil and ground water contamination. Remediation efforts are ongoing. The study would evaluate how the change in land uses would affect the remediation efforts.
Staff Comment
The applicant is requesting a total of 205,000 square feet of office square footage. Their conceptual plan is to convert currently designated flex space (commercial) in Sub-block 3N to office use and to build approximately 200,000 square feet to the north side of Sub-block 6, with a building height increase from 75 to 85 feet for the total sub-block. Residential development would be clustered on the southern portion of Sub-block 6.
The DSP encourages mixed uses in Block 18 since it is the commercial core of Downtown Sunnyvale. Further it defines the uses for Sub-block 6 as “residential and ground floor commercial” (page 5-7). The DSP and the Block 18 DA establish maximums for office area, residential units and commercial/retail; minimum requirements were not established (other than the General Plan Housing Element policy to require a minimum of 75% of maximum housing density).
The DSP design standards require retail along the western edge of Sub-block 6 (Murphy Avenue).
The applicant notes that the proposed changes would allow them greater flexibility and leasing viability. Staff believes that retail use is an important aspect of Downtown Sunnyvale and that a balance of uses be maintained to consider additional office square footage. The proposed additional office square footage and building height for Sub-block 6 and the conversion of flex space to office use on 3 North can be further studied, analyzed and discussed through a Specific Plan Amendment (SPA) if the requested SPI is approved. Staff supports the proposed SPI to allow further analysis and study. The study could consider specifying a minimum retail square footage to ensure that retail uses are not minimized for this block, as it embodies the commercial core of Downtown Sunnyvale. It may also result in minor changes to design standards in the DSP and more prescriptive requirements added to the DA. Although the current trends may not be supportive of a robust office or retail market, the future needs for both these types of uses should be encouraged and supported.
If the requested SPI is approved, it would be followed by two applications: a SPA Amendment and DA Amendment. Both applications will require Environmental Review. If the SPA and DA amendments
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are adopted, the subsequent projects to construct the buildings will require Special Development Permits. Due to current workload, staff is recommending a delayed start of the study. Once commenced, the study should take about 12-18 months to complete.
The applicant has suggested that the additional office development could potentially be considered through an amendment to the Development Agreement; however, the DSP description of Sub-block 6 as “residential and ground floor commercial” suggests that the Downtown Specific Plan should be examined to determine if the addition of an office use is appropriate in this Sub-block. Also, the SPI/SPA approach allows the Planning Commission and the City Council to weigh in on whether this change is worthy of consideration.
If the City Council initiates a SPA study, the work program would include:
· Market and fiscal impact analyses
· Environmental review
o Including a review of how the project would affect groundwater and soil remediation efforts
· Potential revisions to DSP design and development standards o Review and potential update to design standards for transition from lower intensity developments to the north and east of the site
o Minimum retail requirements
· Transportation Analysis
· Parking analysis
· Airport Land Use Commission (ALUC) review of additional height/intensity · Updates to the Development Agreement that could include discussion of a range of community benefits that can be tied to the next phase of project development · Community outreach (nearby property owners/tenants, Sunnyvale Downtown Association and Sunnyvale Chamber of Commerce citywide neighborhood associations, other interested parties)
Staff further notes that there are several General/Specific Plan amendment studies already in the queue along with a number of delayed study issues. In November 2022 Council authorized GPA and SPA studies and a site on Knickerbocker and the Peery Park Specific plan with a requirement that they not commence until after the Moffett Park Specific Plan is completed. The Moffett Park Specific Plan is scheduled for City Council consideration on July 11, 2023. There are other policy items pending from the Community Development Department that also need staff attention. Staff recommends that if the SPI is approved that formal applications for a Downtown SPA and Development Agreement amendment cannot be filed until January 1, 2024.
FISCAL IMPACT
There are no fiscal impacts associated with an SPI request. All fees and costs for development processing, related special studies and consultant assistance, and CEQA analysis would be covered by the applicant. Staff recommends that a DSP amendment study include a market analysis and a fiscal impact analysis to help determine the long-term costs and benefits to the City and community.
PUBLIC CONTACT
Public contact was made through posting of the Planning Commission agenda on the City’s official notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available in the Reference Section of the City Library, the Office of the City Clerk and on the City’s
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website. A display ad was placed in the Sunnyvale Sun Newspaper. Notices were sent to property owners and tenants within 1,000 feet of DSP Block 18. The Sunnyvale Downtown Association and Sunnyvale Chamber of Commerce were also advised of this request. As of the date of staff report preparation, staff has not received any public comments on this item.
ALTERNATIVES
Recommend to City Council that City Council:
1. Initiate a Downtown Specific Plan Amendment study to consider amending Block 18 of the Downtown Specific Plan to increase the allocated office use square footage by 205,000 square feet above the maximum office square footage; increase the maximum building height from 75 feet to 85 feet for Sub-block 6; evaluate the development standard for the transition of the buildings on Sunnyvale Avenue; and consider Amendments to the current Development Agreement between the City and STC LLC (Cityline); and, find that the action is exempt from the California Environmental Protection Act (CEQA) pursuant to CEQA Guidelines Section 15378(a).
2. Accept applications for a Downtown Specific Plan Amendment and Development Agreement amendments after January 1, 2024.
3. Alternatives 1 and 2, with modifications to the study parameters or study timing.
4. Do not initiate a Specific Plan Amendment study and leave the current development capacity, land uses , and development standards in place.
STAFF RECOMMENDATION
Recommend to City Council Alternatives 1 and 2: 1) Initiate a Downtown Specific Plan Amendment study to consider amending Block 18 of the Downtown Specific Plan to increase the allocated office use square footage by 205,000 square feet above the maximum office square footage; increase the maximum building height from 75 feet to 85 feet for Sub- block 6; evaluate the development standard for the transition of the buildings on Sunnyvale Avenue; consider Amendments to the current Development Agreement between the City and STC LLC (Cityline); and, find that the action is exempt from the California Environmental Protection Act (CEQA) pursuant to CEQA Guidelines Section 15378(a); and 2) Accept applications for a Downtown Specific Plan Amendment and Development Agreement amendments after January 1, 2024.
Staff is supportive of studying and analyzing modifications to redevelopment of Downtown Sunnyvale to address changing market conditions and enable its success. The proposed modifications intensify employment uses that could infuse vitality and activity in the area.
Prepared by: Shétal Divatia, Senior Planner
Reviewed by: George Schroeder, Principal Planner
Reviewed by: Shaunn Mendrin, Planning Officer
Christine Velasquez, Economic Development Manager
Connie Verceles, Deputy City Manager
Reviewed by: Trudi Ryan, Director of Community Development Reviewed by: Teri Silva, Assistant City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Reserved for Report to Council
2. Applicant’s SPI Request Letter
3. General Plan Goals and Policies
4. Map of DSP Blocks
5. Block 18 Overall Site Plan
6. Conceptual Massing Diagram
7. Links to Reports to Council Page 8 of 8
Attachment 1