Sunnyvale wants to preserve retail space in an underserved community, but the city will have to convince developers the investment is worthwhile.
The Sunnyvale City Council voted unanimously Tuesday, with Councilmember Murali Srinivasan absent, to approve a retail preservation program for two aging retail centers slated to be turned into townhomes. The program would allow the developers to skirt affordable housing requirements if they add more commercial space. The initial proposals don’t include enough retail to sustain the neighborhoods, councilmembers and residents said.
Community Development Director Trudi Ryan said developers aren’t adding as much retail because there’s less financial incentive compared to housing. Since both sites’ development plans haven’t been finalized yet, Ryan said it’s possible this program could convince developers to increase their planned retail space, though that’s not a guarantee.
“In my conversations with the developers of both of those sites, they expressed interest in this program, but they have not made a commitment,” Ryan said at the meeting. “It’s an incentive, it’s not a requirement, and they’re still evaluating whether or not it’s financially worthwhile for them.”
Qualifications for the retail preservation program require the aging retail spaces, dubbed “village centers,” to be a certain distance away from other retail, a certain size and north of El Camino Real. Only two meet all the criteria: Fair Oaks Plaza and Lakewood Shopping Center. Both locations are in North Sunnyvale, a historically underserved community.
Residents have been sounding the alarm over the plans to eliminate retail, saying the proposals would turn North Sunnyvale into a food desert.
While councilmembers voiced unilateral support for maintaining retail in North Sunnyvale, city officials stressed they can’t outright deny the proposal. State laws, such as Senate Bill 330, make it easier to build affordable and moderately priced housing by limiting local government control.
City Attorney Rebecca Moon said denying the development would open the city up to potential lawsuits, which the city would likely lose.
“We need to do our best to preserve retail, to prevent food deserts,” District 6 Councilmember Eileen Le told San José Spotlight. “I am willing to go to bat for that, but I don’t think it’s feasible to go to court.”
Councilmembers said the original intention of village centers was to create walkable, mixed-use communities. There are seven village centers throughout the city, though not all of them have proposed redevelopments in the pipeline
The city council will update the Village Center Master Plan later this spring to protect retail space at other sites, particularly at the intersection of Mathilda Avenue and Maude Road, which is also in North Sunnyvale. The master plan was scheduled to be revised in early April, but was delayed. District 5 Councilmember Richard Mehlinger said it’s important to update the plan sooner rather than later to prevent other village centers from receiving similar proposals.
Residents were split on whether to support the program during public comment, some saying the program’s voluntary basis wasn’t reassuring enough. Lenora Erblich, whose family has lived next to Fair Oaks Plaza for more than 60 years, said the redevelopment would uproot community gathering spaces by removing the area’s small businesses.
Himanshu Sethi, who also lives near Fair Oaks Plaza, wanted the city council to reject the program. He said the city needs to find more ways to handle developments that displace small businesses and impairs the neighborhood’s ability to access resources like grocery stores.
“The city council’s not doing enough to listen to the community,” Sethi told San José Spotlight. “I don’t think they’re exploring their options efficiently enough.”
Contact B. Sakura Cannestra at [email protected] or @SakuCannestra on X.
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