SUNNYVALE MOVES TO CONTROL REDEVELOPMENT PROJECT

SUNNYVALE, Calif. – The City of Sunnyvale has moved to take control of the Sunnyvale Town Center mall redevelopment project.  The project has been stalled since early this year when Fourth Quarter Properties, the developer, failed to restart work following the 2005 holiday season.

Under the terms of the development agreement – known as the Disposition and Development and Owner Participation Agreement (DDOPA) – the City has the option to acquire the project land if there is a default by the developer. The City of Sunnyvale notified Fourth Quarter Properties in March 2006 of a breach of the DDOPA, and Fourth Quarter Properties was given 60 days to cure the breach.

To cure the breach, the developer must explain why deadlines were missed, provide certain documents that were not filed on time with the City, and provide a new construction schedule that is acceptable to the City. Despite continued discussions between the developer and the City, Fourth Quarter Properties has yet to cure the breach.

Meeting in closed session, the Sunnyvale City Council decided it was time to take control of the redevelopment project. Fourth Quarter Properties was notified last Friday (August 11) of the City’s intent to move forward under the terms of the DDOPA to purchase the land. By purchasing the land, the City will gain the control needed to seek a new developer for the redevelopment project.

The DDOPA requires fair market value be paid for the land if the City opts to purchase it. The agreement spells out how the value is to be determined, and specifically states the value of the land is not to include any valuation based on tax breaks or other benefits granted to the project by the City. The City of Sunnyvale does not intend to become the permanent land owner and operator of the new downtown area; instead, the City’s goal is only to acquire the land to expedite the selection of a new developer who is capable and willing to redevelop the area.