Transfer of Three Downtown Parking
Garages from the RDA Successor
Agency to the City of Sunnyvale
Prepared by
Rebecca Moon, City Attorney
Oct. 28, 2025
2RTC 25-0960 10/28/25
Proposed Actions
Introduction
Adopt Resolutions of the City Council and the Successor Agency Approving a Compensation Agreement to:
• Allow the Transfer of Certain Properties Used for Public Parking from the Successor Agency to the City, and
• Authorize the City Manager to Take All Actions Necessary to Implement the Compensation Agreement
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The Properties: Three Downtown Parking Garages
PD-2 or E, “Orange”
Block 2, Lot 4
225 S. Taaffe St.
PD-1 or F, “Pear”
Block 1, Lot 3
325 S. Taaffe St
.
PD-5 or AMC/WF, Penney’s
Block 5, Lot 2
330 S. Murphy Ave.
• Owned by the former Sunnyvale Redevelopment Agency, now called the Successor Agency to the Former Redevelopment Agency • Leased and maintained by the developer STC Venture (Cityline) 4RTC 25-0960 10/28/25
Garage Locations
Downtown Specific
Plan (DSP) map
Block 18 ▢
(“Town Center”)
RDA Garages .
Note: Subblocks 1-6 of the
DSP are also known as
Blocks 1-6 of the Town Center
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1940s – 1950s
California Redevelopment Act
• 1945: California Redevelopment Act allows local governments to form Redevelopment Agencies (RDAs) to address community blight. • 1951: California authorizes use of “tax increment financing” to fund redevelopment.
Increased property tax assessments generated by redevelopment are funneled back into RDAs to support redevelopment activities. 6RTC 25-0960 10/28/25
Sunnyvale Redevelopment Agency
• 1957: Sunnyvale forms an RDA and defines a redevelopment area bounded by Washington, Mathilda, Iowa, and Sunnyvale Avenues. • 1976: The RDA uses eminent domain and private sales to acquire privately owned parcels in the redevelopment area, then conveys 24 acres to the developer of the Sunnyvale Mall, Ernest W. Hahn. • 1979: The Sunnyvale Town Center Mall opens. The RDA constructs a parking garage on RDA-owned property along Mathilda/Taaffe. 1950s – 1970s
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The Sunnyvale Town Center Mall
• By the early 1990s, the Town Center
Mall was struggling financially.
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1990s – early 2000s
Sunnyvale Redevelopment Agency
• 1999: The Mall is sold to American Mall Properties (AMP), except for Macy’s, Penney’s, and Montgomery Ward, which are separately owned. • The RDA and AMP enter into an agreement to expand the Mall. • The City and AMP agree to a land swap by which the RDA acquires the surface parking lots next to Macy’s and Penney’s.
• 2002: AMP declares bankruptcy without starting the Mall improvements.
The RDA completes construction of the parking garage next to Penney’s. 9RTC 25-0960 10/28/25
1990s Town
Center Map
Macy’sThe Mall
Ward’s
(Target)
Penney’s
Parking Garage
RDA owned
after 1999
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2000s
Further Redevelopment Efforts
• 2004: Forum/Fourth Quarter
Purchases the Penney’s building, essential to recreate the street grid. Project defaults without breaking ground.
• 2007: Downtown Sunnyvale Mixed Use LLC (DSMU), a joint venture of developer Peter Pau (Sand Hill Properties) and Deutsche Bank. Construction halts in 2009 during the “Great Recession.” Litigation between DSMU and its lender stalls the project until 2015. Meanwhile, two RDA parking garages on Taaffe are completed. 11RTC 25-0960 10/28/25
2007 Parcel
Map
▢ RDA Parcels
in 2007
Three parking
garages on Blocks
1, 2, and 5
Macy’s parking
lot on Block 6,
later transferred
to STC Venture in
2018.
Garage
Garage
Garage
Macy’s
Lot
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State Abolishes Redevelopment Agencies
• In 2012, state enacts legislation to dissolve RDAs and redirect “tax increment” from RDAs to the “taxing entities” such as schools. • Upon dissolution, the Sunnyvale RDA’s property automatically transferred to a new entity called the Successor Agency. • The City Council serves as the board of the Successor Agency. • The Successor Agency assumed all liabilities and enforceable obligations of the former RDA.
• Successor Agency receives cost reimbursement via the “Recognized Obligation Payment Schedule” (ROPS) overseen by the Santa Clara County Oversight Board.
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2015-Present: Cityline Project
• 2015: Previous developer’s litigation
finally concludes, allow the Successor
Agency to transfer the project to a new
developer.
• Dec. 2015: the Successor Agency
approves transfer of the project to
STC Venture LLC, a joint venture of
Sares Regis Group and Hunter
Properties (Cityline).
• 2019: The Macy’s parking lot (“Block 6”)
is transferred to STC.
• 2020: Cityline projects approved
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Successor Agency Status
• The Successor Agency cannot be dissolved as long as it owns property. • As long as the Successor Agency exists, the Santa Clara County Oversight Board will continue to oversee its activities. • Other property owned by the Successor Agency has either been transferred to the City (e.g. Plaza del Sol) or to STC Venture. • Until recently, Santa Clara County, on behalf of the “taxing entities” wanted a compensation agreement to share future revenue from the Taaffe St. garages as a condition of recommending a transfer. • Contractually dedicated private parking in the Taaffe St. garages means the transfer would not be exclusively for public use. 15RTC 25-0960 10/28/25
Proposal
• County will recommend approval of a “compensation agreement” that requires no monetary compensation or future revenue sharing. • Successor Agency will transfer the three garages to the City. The City will be response for cleanup of existing PCE contamination on Block 5. • PCE contamination from former drycleaners was discovered in 2007 on Blocks 5 and 6 and underwent aggressive remediation. • Monitoring will continue for foreseeable future. Costs on Block 5 are shared 50-50 with STC Venture. Possible future costs for equipment replacement, additional monitoring or mitigation. • As part of the compensation agreement City will be reimbursed for cost of a 10-year environmental insurance policy.
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PCE Remediation and Monitoring Cost History
Fiscal Year RDA/SA's Share
FY 16/17 $136,589
FY 17/18 $153,297
FY 18/19 $79,963
FY 19/20 $10,645
FY 20/21 $7,718
FY 21/22 $7,664
FY 22/23 $8,005
FY 23/24 $14,818
TOTAL (17 years) $8,404,257
Fiscal Year RDA/SA's Share
FY 07/08 $600,000
FY 08/09 $2,376,947
FY 09/10 $3,416,492
FY 10/11 $682,170
FY 11/12 $37,661
FY 12/13 $437,874
FY 13/14 $295,358
FY 14/15 $67,409
FY 15/16 $74,647
Remediation →
efforts begin Developer
assumes all
costs for Block 6
Successor
Agency sharing
monitoring
costs for Block 5
←
17RTC 25-0960 10/28/25
Recommendation
Adopt Resolutions of the City Council and the Successor Agency Approving a Compensation Agreement to:
• Allow the Transfer of Certain Properties Used for Public Parking from the Successor Agency to the City, and
• Authorize the City Manager to Take All Actions Necessary to Implement the Compensation Agreement
Assignment of existing Successor Agency agreements to the City