Letter to Andrew Faber desk itemg O Id far b 1300 Cloy Street, Eleventh Floor
lipman oauad, catioria 94612
attorneys 510 836-6336
M David Kroot August 10, 2018
Lynn Hutchins
Karen M. Tiedemann
Thomas H. Webber
Dionne Jackson Mcleon
Michelle D. Brewer
Jennifer K. Bell
Andrew Faber
Berliner Cohen LLP
10 Almaden Boulevard, Eleventh Floor
San Jose, CA 95113
Robert C. Mills Re: 21265 Stevens Creek Boulevard (Westport Cupertino) Application
Isobel L. Brown
Jomes T. Diamond, Jr. Dear Mr. Faber:
Margaret F. Jung
Heather J. Gould
William F. DiCamillo
Amy DeVaudreuil
Barbara E. Kautz
irico Williams Orcharton
Luis A. Rodriguez
Rafael Yaqui6n
Celia W. Lee
Dolores Bastian Dalton
Joshua J. Mason
Eric S. Phillips
Elizabeth R. Klueck
Jeffrey A. Streiffer
Daniel S. Maroon
Justin D. Bigelow
Nahal Hamidi Adler
Aileen T. Nguyen
San Francisco
415 788-6336
Los Angeles
213 627-6336
San Diego
619 239-6336
Goldfarb & Lipman LLP
Our firm represents the City of Cupertino ("City") in connection with KT Urban, Inc.'s
(the "Applicant") application for a development pennit, architectural and site approval,
tentative map, tree removal, and environmental assessment (the "Application") to
develop 21267 Stevens Creek Boulevard as a mixed use project with 204 residential
units and 20,000 square feet of commercial space (the "Project").
On May 16,2018, your submitted the Application to the City on behalf of the
Applicant. On June 12, 2018, the City sent the Applicant a letter of incompleteness,
highlighting many areas where the Application failed to provide required information
for the City to begin processing the Application. On July 13, 2018, the City received
your letter in response providing additional detail about the Project and updating the
Application.
We have reviewed the Application and your letters to the City. This letter identifies
areas where additional information is required from the Applicant before the City can
determine that the Application is complete. In addition to the items discussed below,
other City departments may identify other areas where the current Application is
deficient and what additional information is required before the Application can be
accepted as complete.
In addition, your two letters make a number of assertions regarding the requirements of
the Housing Accountability Act (Government Code§ 68559.5) and State Density Bonus
Law (Government Code§ 65915), and this letter is intended to clarify state law
requirements as applied to the Project.
1. Housing Accountability Act Requirements.
Under the Housing Accountability Act, if a proposed "housing development project"
confonns to all applicable "objective general plan, zoning, and subdivision standards
and criteria," the City may not "disapprove the project," nor may it "impose a condition
that the project be developed at a lower density" unless it makes specific findings
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su p p o rt e d b y a p re p o n d e ra nce o f th e ev iden ce. (G ov 't Code $ 65589.5(6).) A "housing
development project" includes mixed use projects where at least two-thirds of the project's
square footage is designated for residential use. (Id. at§ 65589.5(h)(2).)
Here, the Application proposes approximately 392,790 square feet ofresidential use for 204
units and 20,000 square feet of commercial use; because more than two-thirds of the Project's
square footage would be designated for residential use, we agree that the Project is considered a
"housing development project" for purposes of the Housing Accountability Act. Therefore, once
the Application is complete, the City will provide the Applicant with written documentation of
any inconsistencies between the Application and the City's applicable plans, programs, policies,
ordinances, standards, and requirements within 60 days after the Application is complete. (Id. at
§ 65589.5(j)(2)(A)(ii).)
Consistent with the Housing Accountability Act's requirements, if the City determines that the
Project is consistent with the City's objective standards, it would not deny the Project or impose
conditions reducing its density without making the findings required under Government Code
Section 65589.5(j). However, contrary to the assertions in Mr. Farber's two letters, nothing in
the Housing Accountability Act prevents the City from evaluating the Project for consistency
with the General Plan, the Heart of the City Specific Plan, and other applicable sources of
development standards. Furthermore, provided that the City does not deny the Project or impose
conditions reducing its density without making appropriate findings, nothing prevents the City
from imposing conditions of approval on the Project to bring it into conformance with applicable
planning standards, even if some of the standards are subjective in nature.
Regardless, before the City can evaluate the Project for consistency, the Application must be
completed. As discussed below, the Application is not yet complete, and the Applicant must
provide the City with additional information so that the City can evaluate the Project for
consistency. Additionally, review under the California Enviromnental Quality Act must be
completed before the City makes a decision on the project.
2. Density Bonus Application Requirements.
As an initial matter, the Application mistakenly claims that it requires a density bonus to develop
204 units. Although the Housing Element identifies a "realistic capacity" of 200 units for the
Project site, this figure is not a limitation on development, but rather an estimate for purposes of
demonstrating that the City has adequately zoned land to accommodate its share of regional
housing needs. Likewise, the General Plan's allocation of 200 units can be exceed by applying
for a use permit, provided that the project is consistent with the maximum density allowed in the
General Plan and zoning code.
The Project site's General Plan and zoning designations permit a maximum base density (prior to
any density bonus) of 30 dwelling units per acre, but the Application proposes a density of just
25.8 dwelling units per acre: less than is permitted on the site without need for a density bonus.
Therefore, the Application does not need to request any bonus units. Instead, the Application
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sh o u ld b e re v ise d to in cl u d e a u se perm it fo r th e fo ur un its th at are w ithin the perm itt ed density
fo r th e site b u t ab o v e th e G en e ra l P lan 's all ocation .
B o th S ta te D e n sity B o n u s L a w an d th e C up ert in o M u n icip al C od e (C h apter 19 .56) perm it
p roje c ts to re q u e st in ce n ti v es o r con cessio n , w aiv ers, an d p ark in g redu ction s in additi on to bonu s
u n its. B e c a u se th e P rojec t w ou ld not b e con sisten t w ith th e C ity 's objectiv e heigh t and slo p e line
sta n d a rd s, th e A p p li ca tio n re qu ests a w aiv er fo r th ese stan dards. In addition , th e A ppli catio n
re q u e sts th e C ity w a iv e its re qu ire m ents th at affo rd ab le un its b e disp ersed thr o u gh out an entire
p ro je c t.
U n le ss sp e c ifi c fi n d in g s ca n be m a d e, th e C ity m u st w aiv e "any dev elop m ent stan dard th at w ill
h a v e th e effe c t o f p h y sica ll y precl u din g th e co n stru ctio n o f a dev elopm ent [ qu ali fy in g fo r a
d e n sity b o n u s] at the densities or with the concessions or incentives permitted." (Id. at§
65915(e)(l) (emphasis added).) Because the proposed Project is consistent with the density
pennitted on the site, and no concessions that conflict with the City's development standards
have been requested, the Project is not eligible to request a waiver.
As an alternative, the Project proposes enough affordable housing to qualify for one incentive or
concession under Government Code Section 65915( d). Should the Applicant prefer to propose a
concession rather than a waiver, the Applicant must provide reasonable documentation to
demonstrate that the requested incentive or concession would "result in identifiable and actual
cost reductions ... to provide for affordable housing costs." (Id. at§ 65915(d)(l)(A).) A pro
forma analysis is one method of documenting identifiable and actual cost reductions that provide
for affordable housing costs Consistent with Government Code Section 65915(a)(2), which
pennits the City to require "reasonable documentation" from the Applicant to demonstrate
eligibility for requests under the state density bonus law.
If the Application establishes eligibility for a concession, it would then be able to request a
waiver for a development standard that would physically preclude development with the
permitted concession. At that time, the Application must be revised to demonstrate eligibility for
any requested waivers. Consistent with Government Code Section 65915(a)(2), Cupertino
Municipal Code Section 19.56.060.B.9 requires that an application requesting a waiver provide
plans showing how the generally applicable standard would physically preclude construction of
the development at the density or with any incentives or concession to which the project is
entitled. In addition, an application must include a site plan that designates the location of
proposed affordable units and density bonus units and the type, size, and construction scheduling
of affordable and market-rate units. (CMC $ 19.56.060.B.2.) These requirements are necessary
to establish that a project meets the legal standard to qualify for waivers.
Until the Applicant provides an Application that meets the standards of Cupertino Municipal
Code Section 19.56.060, the Application cannot be considered complete.
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3. Information required by the City's BMR Housing Mitigation Program Procedural
Manual.
Cupertino Municipal Code Section 19.172.030 requires that the City adopt implementation
procedures for the City's Below Market Rate (BMR) Housing Mitigation Program, and such
procedures are documented in the BMR Housing Mitigation Program Procedural Manual (the
"BMR Manual"). BMR Manual Section 2.3.3 identifies the contents of an Affordable Housing
Plan, which must be provided in connection with a development application.
Among other items, the Affordable Housing Plan must demonstrate how the Project complies
with the BMR Manual's affordability requirements. The BMR Manual requires 15% of units be
made available as BMR units, and the units must be distributed throughout the project and
include a proportionate mix of unit sizes and number of bedrooms as the market rate units.
(BMR Manual§§ 2.3.4.A, 2.3.4.D.)
Here, the Application proposes 204 units, which is within the density pennitted on the Project
site with a use permit. Therefore, 15% of the 204 units, or 31 total units, must be designated as
affordable. The Application only proposes 30 affordable units, and it also proposes to cluster all
of the affordable units in a single building for senior citizens, with smaller units and fewer
bedrooms than in the market rate project.
Although providing senior housing at deeper affordability levels than are otherwise required
could be considered a benefit, because the Application requests deviations from the City's BMR
requirements, the Affordable Housing Plan must explain how the Application is equivalent to the
City's BMR Requirements in the format set forth in BMR Manual Section 7.2. Because the
Application does not include an Affordable Housing Plan that conforms to the BMR Manual, it
is not yet complete.
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Prior to resubmitting the Application, the Applicant is encouraged to meet with the City to
confirm that any resubmittal complies with City standards. Moreover, the Applicant is
encouraged to meet with the City's design consultant to review project plans. The City's design
consultant will help provide feedback that may influence any conditions of approval necessary to
bring the Project into conformity with applicable plans, policies, and development standards.
For example, the Application currently includes a tentative map application, which does not
conform to the General Plan's policies against parcelization. The General Plan discourages
parcelization because the City believes larger lots with a single-entity owner are easier to manage
and monitor for compliance with conditions of approval, and allows for a more straightforward
redevelopment process in the future. In addition, the City has more ownership residential units
than rental units, and it desires to encourage a better mix of housing tenure options within the
City.
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A ndrew Faber
A ugu st 10, 2018
Page 5
Early con sultation w ith C ity staff and the design consultant can help pro vide the Applicant with
insight as to w hat conditions of appro val m ight be likely be im posed in connection with the
Project to achieve C ity goals, pro viding the A pplicant and the C ity an opportu nity to collabora te
on a Project that com plies w ith C ity standards and that is fe asible to develop at the Applicant's
pro posed density and unit count.
V ery tru ly your s,
<Fr/-
ER IC S. PH IL LI P S
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