Controversial Vallco project can continue under SB 35, judge rules

Cupertino’s controversial Vallco Shopping Mall redevelopment is set to move forward after a Santa Clara County Superior Court judge on Wednesday ruled against a group of residents opposing the project.

Judge Helen Williams instead ruled in favor of the city of Cupertino, which approved Palo Alto-based developer Sand Hill Property Co.’s Vallco Town Center development in 2018 based on a housing development streamlining law known as Senate Bill 35. The project is set to bring 2,400 residential units, nearly 2 million square feet of office space and another 400,000 square feet of retail in place of the nearly empty mall along Wolfe Road.

Sand Hill has been working to redevelop the site since purchasing the mall in late 2014, though it has struggled to find consensus with residents and elected officials about what should rise on the approximately 58-acre property.

Residents, known as “Friends of Better Cupertino,” had challenged whether the project qualified under the bill and claimed the city should not have approved the development.

But Williams dismantled those arguments in her decision Wednesday, ruling that the residents had not presented a compelling case showing the project didn’t comply with the law. She added that even if the development proposal fell outside the scope of SB 35 requirements, the state law does not mandate cities deny such developments.

“The Court’s Order upholds the city’s ministerial approval of the Vallco SB 35 project,” City Attorney Heather Minner said in a statement Wednesday. “The city continues to process and issue permits to prepare the Vallco site for development.”

The lawsuit marks one of the first legal decisions published based on challenges to SB 35, a law adopted in 2018 authored by Sen. Scott Wiener (D-San Francisco) meant to speed up housing development.

SB 35 comes with a slew of requirements around what types of developments qualify, as well as strict requirements for developers who use the law, including that 50 percent of the homes built be considered “affordable.” But it also has language meant to protect developers from lawsuits that could delay developments that qualify.

The decision Wednesday reinforced that, though the ruling does not constitute a legally binding precedent because it was made in a trial court, according to J.R. Fruen, a Cupertino attorney who has advocated for more growth in the city with an organization known as Cupertino For All.

Even so, he expects that other judges will likely lean on the determination in the future.

“Judges look around at what other judges have done with the same law and they, general speaking, are averse to reinventing the wheel when the reasoning is sound,” he said. “She has spent 62 pages of ink … that explains what SB 35 does, what its fundamental mechanisms are, and I would expect other judges to follow that reasoning because it is highly, highly persuasive.”

A ruling on the matter would become a legally binding precedent for the state if the decision is appealed and an appellate court issues a decision, Fruen said.

Petitioners who are part of the Friends of Better Cupertino include Cupertino Planning Commission Chair Kitty Moore, as well as Ignatius Ding and Peggy Griffin.

Moore said in an email that the judge’s ruling “strikes at the heart of the problem with the new law,” citing a portion of the decision where Williams states that because cities aren’t required to deny a project that doesn’t comply with SB 35, petitioners can’t challenge whether the criteria for SB 35 were a reason to legally deny the project.

Sand Hill, meanwhile, issued a statement Wednesday announcing the decision would allow “the major revitalization project to continue moving forward.”

“We can now put our full focus on moving the project forward for the future of the city of Cupertino, including how best to do so considering the complex challenges that COVID-19 has brought on all of us,” Reed Moulds, managing director for Sand Hill, said. “It is time to set aside our past disagreements and come together in cooperation of building a better and more sustainable future for Cupertino.”

The lawsuit allows for the developer and city to recoup the costs of the suit, according to the ruling. That dollar amount is set to be worked out in the coming weeks.

Contact Janice Bitters at [email protected] or follow @JaniceBitters on Twitter.