The Vallco Mall project in Cupertino, also called Vallco City Center, has become a flashpoint for pro-housing and anti-housing sentiment on the peninsula. The question over wether an empty mall will be allowed to become housing has inflamed tensions in Cupertino and become a test case for State housing law.

The project was finally approved in 2018 after nearly four years of back and forth including failed ballot measures in support of and in opposition to the project. The developer, worried about community backlash, simultaneously pursued approvals under Cupertino’s discretionary process and the ministerial process under SB 35. They received approvals for the project through both processes. The opponents of the project immediately filed a referendum and gathered signatures to reverse the discretionary approvals.

Now, in 2019, the Cupertino City Council is significantly less favorable towards the project, with several Council Members having run specifically on stopping it. The referendums to reverse the discretionary approvals gathered the requisite number of signatures and after a legal battle over their eligibility three referendum resolutions were heard by the Cupertino City Council on May 9th.

The three resolutions under consideration would rescind the development agreement between Cupertino and the developer and repeal the general plan and zoning amendments passed for the project. After a lengthy public comment period at the May 9th City Council meeting, the City Council opted to bypass the ballot and approve all three resolutions on the spot. For a normal project this would have been a catastrophic turn of events. However, in this case the project was also approved through the ministerial process mandated by SB 35. As a result, rescinding the permits/approvals has little effect.

The project is not entirely immune to attack. The approval under SB 35 is also being attacked by opponents. They allege that because the project appears on a list of underground fuel tank sites, maintained by the CA Department of Toxic Substances Control, it is not eligible for streamlining under SB 35.

SB 35 contains a specific provision that denies eligibility to sites that are listed by the Department of Toxic Substances Control on their component of the “Cortese List.” The law requires the maintenance of these lists and also requires that they be revised. It is clear that the list was built but not clear that the list was maintained properly. The project site does appear on the list but this does not reflect the remediation that was carried out on the site. The soil on the site has been tested repeatedly and no issues have been found.

This case represents a serious test for SB 35. The intent of the law was to provide a faster and more secure path for developers to use to get their projects approved. In return developers are expected to provide large amounts of affordable housing. In this case, over 1000 BMR units. Undermining the relative security of the ministerial approval process would send a message that the tradeoff is not worth the effort. This would be an unfortunate obstacle to a good law.

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