15. Office allocation GPCity of Cupertino
10300 Torre Avenue
Cupertino, CA 95014
(40$} 777-330$
Fax: (408) 777-3333
CUPERTINO
Community Development
Department
Summary
Agenda Item No. ~ J
Agenda Date: October 21, 2008
SUBJECT
Consider taking up the question of incxeasuig office space and hotel allocation as part of
a General Plan Amendment.
RECOMMENDATION
Initiate a discussion on haw to best proceed: with analysis related to a potential increase
u1 office space and hotel room allocation numbers.
BACKGROUND
Attached are two letters from Apple Inc. an+~ Hewlett Packard, asking the City Council
to initiate a discussion related to the cap on office allocation in Cupertino. This issue
was brought up by Apple at the September 16th City Council meeting when the South
Vallco Master Plan was approved.. At that time, the Council was not ready to refer this
issue to the Housing Element process.
General Plan Policy 2-20 establishes develoi+ment allocation to "Provide sufficient
development opportunities for these areas i~z order to enhance their distinct character
and functions, ~vhile maintaining the desired transportation levels of service." The
Cupertuzo General Plan, adopted by the Citq Council on November 15, 2005 Iists six
strategies to achieve that goal, including #5, "Allocation Review". It states, "Review
allocations of the development priorities periodically to ensure that the development
priorities meet City needs and goals."
Currently, the remaining allocation for offic+~ development is 466,627 square feet. This
reflects all reductions to date for completed and/or entitled projects. The number
i~icludes the 150,000 square. feet set aside for "coaporate headquarters". See attadtment
D for a breakdown u1 the amount of square .Footage by area.
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Office Allocation
Page 2 of 3
ANALYSIS
Any future office projects will further draw down on the total remaining allocation. For
projects in areas with no allocation remaining, drawing from other areas is allowed by
the general plan, but must be approved by the City Council. This would likely occur as
a proportional reduction across all of the areas v. just one area.
Currently, there are several potential office projects that could draw down on the
existing 466,627 square feet over the next few years. They include:
1. Apple's new campus in the North Vallco area
2. HP's potential expansion of their existing campus
3. Sand Hill Property's "Main Street" mixed project which includes 100,000 to
200,000 square feet of new office space.
While precise numbers for additional office allocation needs for these and other future
projects have yet to be determined, staff believes that the number in the range of 800,000
to 1,000,000 square feet. Currently there is approximately 12,000,000 square feet of
commercial/office development. Consequently, this change would equal
approximately 6 to 8 percent increase in building area over the remaining twelve year
built-out of the current General Plan.
Additionally, there is very little hotel allocation remaining (78 rooms) beyond the 600+
rooms earmarked for Cupertino Square through a Development Agreement. Future
hotel projects can proceed using a foi-znula that converts commercial/retail space to
hotel rooms. This was recently done with the approval of a I1ote1 at The oaks shopping
center. However,~it would be useful to anticipate future 1lotel needs for other parts of
the city that don't draw down on the City's retail allocation. Retail allocation overall
sits at over 377,521 which should be adequate zultil the next General Plan process.
Future hotel allocation needs are likely to be in the neighborhood of 600 roams. There
are currently two hotel projects in the planning phase -10165 N. De Anza at Alves with
138 rooms, and as many as 250 rooms at Main Street Cupertino. It is generally true that
hotels generate less peak hour trips, and have the additional benefit of generating
Transit occupancy Taxes for the City.
Having the discussion about development allocations within the Housing Element
process appears to make sense because increased office allocation has an effect on the
amount of houshlg that ultimately needs to be considered. It also consolidates the
number of general plan amendments, makes the cornmuxtity process more cohesive,
and streamlines environmental review.
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Office Allocation
Page 3 of 3
COUNCIL OPTIONS
The City Council may consider the following alternatives:
underway.
2. Itlitiate a separate General Plan amendment to address this issue.
3.. Do not authorize review of the office and hotel allocations.
1. Include this discussion as part of the Housing Element process, already
Regardless of the alternative chosen, t:lere will be significant costs related to
environmental review, including traffic analysis, which should be borne by the three
major potential applicants listed above. Costs are estimated to at $200,000 to $300,000.
Staff believes that this review can be conducted within the tixneframe set aside for the
Housing Element Update.
Enclosures:
Exhibit A -Letter from Apple Inc.
Exhibit B -Letter from Hewlett Packard
Exhibit C -- General Plan page 2-16
Exhibit D -Remaining Office Development Allocation by Area_
Prepared by: Gary Chao, City Planner
Submi
~Teve I'1aseCK1
Director of Community Development
G: \Plaru~ing\PDREPORT\CC\2008\OfficeSpaceAllocation.DQC
Approved by:
David W. Knapp
City Manager
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Exhibit A s
October 7, 2008
The Honorable Dolly Sandoval
Mayor
City of Cupertino
7 0300 Torre Avenue
Cupertino, CA 95014-3255
Dear Mayo, S v~:
l write to respectfully request that you place a discussion of increasing the office
space allocation in Cupertino on the next City Council agenda. -
Apple has been headquartered in Cupertino since its founding, and has forged a
unique and close relationship with the city. As you know, Apple has decided to
invest and grow in our city, and has purchased over 50 acres in the Vallco area to
build our new campus. We hope to move this process forward but have
identified a few issues that are impeding our progress.
One factor is ensuring that adequate square footage is available to build out the
new campus. Unfortunately, the current General Plan does not have enough
commercial square footage allocated to meet the needs of Apple and the other
growing businesses of Cupertino. Fortunately, the city will be amending its
General Plan next year as part of the housing element update.
We believe that the city can address both its housing needs and its commercial
needs through this process. It will greatly aid not only Apple's future needs, but
also those of the other businesses in Cupertino.
Thank you for your consideration of this request.
Vef truly y~rs,
/ G~
. Mic ael Foulkes
Sr. Manager
State and Local Government Affairs
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Exhibit. B
® ~ Howloft-Packan# Company
1501 Page MGII Road
Palo ANo, CA 44304
www.hp.com
Bill Roberts
Director
Real Estate
Hewlett-Packard Compeny
650.857.2183 Tcl
650857.5820 Fox
bill.robe~is@hp.com
October 2, 2008
The Honorable potty Sandoval
Mayor
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014-3255
Dear Mayor Sandoval:
I am sending this letfer on behalf of the Hewlett-Packard Company to request that you
agendize a discussion with your fellow council members related to the amount of office
space currently allowable in Cupertino's General Plan.
NP has been a member of the Cupertino community for nearly forty years. {)wring this
time, the nature of our Cupertino operations has changed significantly and thus several of
our current buildings no (onge,r meet our workplace requirements. Over fhe coming
rnonihs we will be defining how to upgrade and improve our facilities. During the same
period we will also be defining our long-term growth plan in Cupertino as well as other
locations. It would be very important for us to understand how much capacity we will be
able to efficiently create at our campus location over time.
HP respecifugy requests fhe opportunity to work with the Cify of Cupertino to defermine
how our company can secure additional square footage on our North Vallco campus in
an open and expeditious manner.
Thank you for your prompt attfantion to this mafler.
Regards~~
~z
Bill Roberts
Director, Real Estate
Hewlett-Packard Company
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2'lU .LAND USE/CaMMUNITY DESIGN ~~~~ n
Allocating Development Potential 2. Neighborhood Allocation. Allocate
Development activity should be con- neighborhood residential units through -- _ _
trolled so that private development fulfills City the building permit process unless sub>
goals and priorities. There is a finite amount of division or planned unit development
new development that can take place before aPPlications are required.
traffic levels exceed the City's desired trans-
3. Major companies. Prioritize expansion
portationlevel of service. Full `build-out" is not of office space for existing major com-
u" an urgent goa . e uncommi~ed-d v~elop- -
Panies in Cupertino. Retain a pool of
ment potential from properties that are not 150,000 square feet to be drawn down
"built-out" should be reserved to meet futuxe by companies with Cupertino sales
City development needs and overall goals. Cm offices and corporate headquarters. New
a case-by-case basis, the City may allocate office development must demonstrate
development potential to private develop- that the development positively con-
menu based on the community benefits the tributes to the fiscal well being of the
project would provide. The remaining imcom-
miffed development potential will be allocated
as shown in the Development Allocation 4, Flexible Allocations. Allow flexibility
Table. Further adjustments to these allocations among the allocations assigned to each
maybe necessary to ensure that the Ciry's eco- geographical area. Allocations may be
nomic needs and goals are met. Citywide redistributed from one geographical
development potential is calculated by sum- area to another if necessary and if no
.ming the development potential from each of significant environmental impacts, par-
the City's areas. Each area bas unique develop- titularly traffic, are identified.
ment concepts applied to it to determine its .-.
potential.~Individual properties are assigned ~r, Allocation Review Review allocations
base development potential, but mostproperty ~ of the development priorities periodi-
owners will need to apply for additional.alloca- tally to ensure that the development
bons to develop their properties. priorities meet City needs and goals.
Policy 2-24: Diversity of Land Use
Maintain a city structure of Neighbor-
hoods, Commercial areas, Employment
areas and Education/ Cultural areas.
Provide sufficient development oppoltu-
nities for these areas in order to enhance
their distinct character and functions,
while maintaining the desired trans-
portation levels of service.
~a - ~•
~~~
Strategies:
6. Development Agreements. Unused
development potential committed in
development agreements may be reallo-
cated following the .expiration of each
development agreement, after a public
hearing.
Neighborhoods and
Non-Residential Centers
NEIGHBORHOODS
1.~. Citywide Development Allocation.
Allocate new development citywide in Many of Cupertinds residential neigh-
accordance with Table 2-A Develop- borhoods are distinct enclaves, such as
ment Allocation. ~ Garden Gate, Linda Vista, Monta Vista,
CITY OF CUPERTINO GENERAL PLAN
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EXHIBIT D
Remaining office development allocation bar area:
175,185
150,000
36,795
11,456
95,532
0
15,790
-18,131
466,627 square feet
N. De Anza
Corporate Headquarters
Monte Vista
Heart of the City
Vallco Park North
Vallco Park South
Bubb Road
{negative balance}
Remainin Hotel allocation b area:
764 Vallco Park South (686 committed to Cupertino Square, now Evershine)
= 78 rooms remaining .
In the example of the Oaks, the developer h;~d to convert retail/commercial square
footage into hotel allocation.
Remaining Retail allocation:
377,521 square feet
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