Frequently Asked Questions
What is the official title of the property?
The property being developed can be referred to as the Sunnyvale Town Center or Downtown Sunnyvale. The new site is not necessarily a mall. The official title has yet to be made permanent.
Who Owns Town Center Mall?
The Mall is privately owned by Stanley Thomas, principal equity investor of Forum Development Group of Smyrna, GA. He acquired the property out of bankruptcy from its prior owner, Sunnyvale, LLC, on April 5, 2005. The City does not own the Mall and cannot take action to demolish it or rebuild it.
City Council has approved a plan which preserves independently-owned Macy's and Target, but demolishes the enclosed mall between the two department stores. Murphy Avenue is extended south from Washington Avenue to Iowa Avenue, and McKinley Avenue is joined through the site between Mathilda and Sunnyvale Avenues. The proposed new development is open-air, with a half-million square feet of new shops, restaurants and 16-screen cinema complex lining the new and existing public streets, in the form of a traditional, pedestrian-oriented downtown. Above the shops are 292 for-sale housing units and 275,000 square feet of office space. Central to the project is a new "Redwood Square" that preserves the six majestic redwood trees which have existed on the site since the old City Hall was constructed in the 1920s.
What kinds of shops and restaurants will there be in the new Town Center? Will it be generally expensive like Santana Row or more mid-range?
The shops and restaurants will be a wide variety, but in general they will be a mid-range for prices. When leases are signed with future tenants, the public will hear about it, but not until then.
What is the impact of this redevelopment on taxes?
Perhaps the most misunderstood aspect of redevelopment is its impact on taxes. Redevelopment does not increase taxes. It redirects property tax monies generated by new developments within the project area to the redevelopment agency for reinvestment in the project area.
Yes. They are open now and will remain open throughout the construction period. All the restaurants and shops in the 100 Block of S Murphy and in the Town and County Shopping Center will also remain open throughout this period.
How Will the New Development Protect and Benefit Existing Businesses?
Because the Mall is located within a redevelopment area, the Redevelopment Agency can impose certain requirements upon the developer. Among those things which the developer must do to protect and benefit existing businesses are the following:
What are the basics of redevelopment?
The most important redevelopment tool, granted in the State Constitution, is tax increment financing. Under this tool, all increases in property taxes within the redevelopment project area go to the redevelopment agency "to pay the principal of and interest on loans, moneys, advances to or indebtedness… incurred by the redevelopment agency to finance or refinance… the redevelopment project."
Here is how it works in a hypothetical case. When this hypothetical redevelopment project begins, the uses in the area are generally physically and economically distressed and generated property tax income of only $300,000. A redevelopment plan is prepared wherein private developers would be encouraged to invest $200 million in new development, yielding $2 million in annual property taxes. The difference between the before and the after tax income, $1.7 million, is the tax increment generated by the redevelopment project.
All of the tax increment flows to the redevelopment agency for reinvestment in the project. A projected future annual tax increment income of $1.7 million would allow the redevelopment agency to borrow approximately $19 million today, the principal and interest for which would be paid back over 20 years at $1.7 million per year. During this period, all taxing bodies (city, county, school district) would continue to receive their share of the base property tax of $300,000, and would share in the new property tax of $1.7 million beginning in the twenty-first year.
The basic premise of the law is that the property would remain blighted if it were not for the investment by the redevelopment agency. Without redevelopment, property tax income for the area would remain at $300,000, and the City would live with a blighted area, which could cause adjacent properties to become blighted. It is only because of the investment by the redevelopment agency that private developers invest in redeveloping in the area (in this case a private investment of about $200 million). The extra property taxes generated by the new development are then used to reimburse the agency for its investment.
The City and other taxing bodies do not lose money, because the extra tax dollars would not exist if it were not for the redevelopment. These taxing bodies could actually realize an increase in tax revenue due to the positive effect of the redevelopment on surrounding properties.
The redevelopment agency is independent of the city which formed it; therefore, its debt is not a burden on local taxpayers. According to the State Constitution, the redevelopment agency must have debt in order to collect and utilize tax increment funds are only available to redevelopment agencies for investment in redevelopment projects. They are not available to cities or other taxing bodies to support general fund services such as police and fire.
Send your questions by e-mail to downtown@ci.sunnyvale.ca.us or you can call the Downtown Redevelopment hotline at (408) 737-4900 and leave a message. You will receive an answer within five business days.
Sand Hill 24-Hour Hotline: (408) 554-2946
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