The Town Centerproject is an approximately 36-acre site in the core of downtown Sunnyvale bounded by Mathilda, Washington, Sunnyvale and Iowa Avenues. Located just south
of the Historic Murphy Avenue District, the approved plans call for establishing a six-block mixed use development with emphasis on retail, restaurant and entertainment uses. The plans include supportive residential and office uses to create a vibrant daytime and nighttime environment. Attention to streetscape improvements, a central community gathering place, a walkable downtown and connectivity to adjacent land uses and transit are key goals for redevelopment of the site. The current project plans were approved
in 2007/08 and consist of reestablishing the original downtown street grid by
extending Murphy, McKinley and Frances Avenues through the project site. Approved
land uses include up to 1,000,000 square feet of retail uses (includes existing
Target and Macy’s stores), 292 residential units, 315,000 square feet of office
space, and a hotel of up to 200 rooms. This land use mix is consistent with the
Downtown Specific Plan, which designates the project area as “Block 18.”
Along with the approved land use entitlements, the project is also governed by the 2010
Amended Disposition and Development and Owner Participation Agreement (ADDOPA). The ADDOPA outlines additional
requirements of the developer related to project phasing, parking, public
improvements and other developer obligations.
The Town Center project was under substantial construction until 2010 when the severe economic downturn occurred. The project was a casualty of the recession and fell into foreclosure with Wells Fargo Bank assuming ownership of the majority of the property from the former developer, Downtown Sunnyvale LLC. (The Macy’s and Target parcels are under separate ownership and were not part of the foreclosure.) During the past four years the project stalled due to litigation between Wells Fargo Bank and Downtown Sunnyvale LLC. The litigation reached a conclusion in August 2015 when the California Supreme Court declined to review the final decision of California Court of Appeals. This action cleared the way for the bank to offer the property for sale.
Wells Fargo Bank immediately began marketing
the property to perspective buyers, which generated tremendous interest in the real
estate and development community given the prime location of the property in
Silicon Valley and the strong economic conditions in Sunnyvale. In November
2015, Wells Fargo Bank submitted a Notice of Intent to sell the property to a
to-be-formed joint venture consisting of Sares Regis Group of Northern
California, Hunter Properties, Inc., and JP Morgan Asset Management. Under the
terms of the ADDOPA (Article 6), the City is able to review the financial
capacity, development experience and business reputation of the prospective
buyers to determine if they are qualified to finance and complete the project.
The City retained two highly qualified finance and real estate firms to
thoroughly evaluate the three companies. On December 10, 2015, the City Council
reviewed the consultant’s report and acknowledged that the proposed development
team was qualified to purchase the property. View Agenda and reports.
The announced joint venture will purchase the entire property through a phased sale. The first phase of the sale, consisting of the two office buildings on Mathilda with Nokia and Apple as tenants, closed at the end of 2015. The remainder of the property is expected to close in spring 2016. The City is currently engaged in active discussions with the joint venture on development phasing, a construction schedule and pending items to complete the project.
Retail Market Assessment
The amount of commercial retail uses that are
economically viable for downtown Sunnyvale and the Town Center project
specifically, has been the subject of much discussion. To better understand the
market potential, the City obtained a real estate market expert to assess the capacity
for commercial retail uses in the Town Center project. The Market Assessment was presented to the City Council at a study session on
December 15, 2015, and will provide a basis for discussions between the City
and new development team to create a successful retail strategy and leasing
plan for the Town Center project.
Downtown Sunnyvale Continues to Thrive
New businesses now open in Downtown Sunnyvale:
Downtown Parking Map
There is plenty of free public parking in Downtown Sunnyvale. View our parking map to find the most convenient location for you.
There are no public meetings scheduled at this time.
For information on Downtown Sunnyvale projects, call the 24-hour message hotline at (408) 737-4900 or email Downtown Development.