In 2001, a need was identified to establish an updated common vision for the downtown and create a plan that physically integrates the different areas into a unified downtown. A Stakeholders Committee was convened to work with staff, economic and architectural consultants to create an updated Downtown Plan that addresses these goals. In April 2002, City Council conceptually approved the Committee’s recommended Downtown Design Plan and directed staff to prepare the Environmental Impact Report, consider specified land use alternatives and conduct an extensive public outreach process.

The Downtown Design Plan has several goals, including improvement of the mall, protecting existing residential neighborhoods, promoting opportunities to live, work and shop, and improving the pedestrian experience. The Downtown Design Plan proposes certain land use changes, pedestrian improvements and street connections to implement these goals. The major land use changes include:

• Replacing office uses on the west side of Mathilda Avenue with high density residential
• Creating a new mixed use district in the Town and Country area that emphasizes residential uses over ground-floor retail
• Intensifying office uses along the east side of Mathilda Avenue continuing south to El Camino Real
• Decreasing the allowable residential density in eastern adjacent areas and properties facing Washington and McKinley (Blocks 4 and 6).
• Changing height limitations for all blocks except 2, 3 and 7 through 12 (see Attachment 5).

The plan also proposes new streetscape designs with wider sidewalks and pedestrian amenities, as well as a new plan to "de-mall" the mall with open-air pedestrian connections and reintroduction of some of the original street grid.

An Environmental Impact Report was prepared for this project. The EIR analyzed thirteen different areas, including aesthetics, noise, traffic, public services and cultural resources. The EIR made determinations regarding levels of significance and proposed mitigation measures to reduce the level of environmental impact. The EIR determined that the project would have significant unavoidable impacts on the areas of Air Quality and Transportation.

Subsequent to Council review of the Downtown Design Plan, staff held five outreach meetings and used brochures, web pages and newspaper articles to reach the community with information about downtown planning efforts. Some residents expressed concerns that the plan was not in keeping with their desired character of Sunnyvale and that the proposed building heights and intensities would negatively affect their quality of life. Other residents were comfortable with the density being placed in the center of town. Almost all community members spoke of a desire to see new development occur and create a lively, interesting place for Sunnyvale’s downtown.

In order to address some of the concerns expressed, alternative land uses and heights were considered in the Environmental Impact Report (EIR). In addition, the Stakeholders Committee reconvened in order to address some of the concerns they heard from the wider public. At a meeting on May 1, 2003, the Stakeholders recommended that heights in the downtown be limited to four stories or less except for the Town and Country area. They also recommended reduced densities in the 100 block of Charles/Mathilda and lowering the mall further with the exception of future mid-block movie theaters.

The purpose of the public hearing is to determine the adequacy of the Final EIR and to consider adopting General Plan Amendments to implement various aspects of the Downtown Improvement Program Update, including provisions related to land use densities and building heights. Based on Council’s decision regarding the General Plan Amendments, staff will prepare the appropriate Zoning Code changes and a new Downtown Specific Plan and return to the Commission and Council (currently scheduled for late August and mid-September) for final action on those items. The Specific Plan will incorporate building design, streetscape design and infrastructure improvements which are not part of the general land use decisions that will be made at this hearing.

Staff concurs with the Stakeholders' revised recommendation. This revised plan achieves the appropriate balance between goals of a revitalized and active downtown with the community’s desire for lower heights and intensities. Staff recommends adoption of the land use categories as put forth in the 2002 Downtown Design Plan with the following modifications (Please see pages 21- 22 for a detailed table of staff’s recommendation):

1. Lowering maximum height to 75 ft. in the Town and Country area, thus reducing the number of residential units.
2. Lowering maximum height to 75 ft. in Block 18a (see map on pg. 4), thus reducing the total office square footage permitted.
3. Lowering mall height in Block 18 to 60 ft. with the exception of the movie theaters which may be up to 80 ft. and increasing the total number residential units allowed from 200 to 300.
4. Leaving Block 13 with its current Downtown Specific Plan designation of office and high density residential with a maximum height of 50 ft.
5. Lowering the maximum density in Block 17 to Low Medium Density (7-14 du/acre) with an associated height of 30 ft.
6. Removing Block 20 from the plan, leaving heights at the maximum current allowance of a mixture of 30 and 50 ft.
7. Lowering the density in the adjacent residential sites to the east from High Density Residential to Low-Medium Density Residential (see map) with an associated height of 30 ft.

In 2001, a need was identified to establish an updated common vision for the downtown and create a plan that physically integrates the different areas into a unified downtown. The existing Downtown Specific Plan was established nearly ten years ago and many of the initial stakeholders were no longer part of the downtown. With the exception of the Mozart buildings, the downtown retail core, especially the mall, has not been redeveloped and many of the areas within the mall have become vacant. It was time to examine the plan and address current conditions as well as look for improved connections within the downtown.

On July 10, 2001, the City Council approved the appointment of a Stakeholders Advisory Committee to work with architectural and economic consultants in the preparation of the Downtown Design Plan. This committee was made up of residents, property owners and business owners in the downtown area. The committee had six meetings as well as a special public forum in order to create a comprehensive plan for the area. In February 2002, the Committee voted to approve a Downtown Design Plan and forward it to City Council with recommendations for implementation.

In April 2002, City Council directed staff to initiate environmental review on the Downtown Design Plan and conduct an extensive outreach program with the public. This report discusses the feedback from the community, major goals and issues for the Downtown Plan and staff and the Stakeholders’ recommendations for land uses and heights in the downtown. Once a decision is made on the intensities and heights in the downtown, staff will prepare amendments to the Specific Plan and Zoning Code to incorporate those changes and address building design features, infrastructure improvements and specific development standards in more detail. The Specific Plan and Zoning Code amendments are currently scheduled for the Planning Commission and Council’s consideration in late August and mid-September.

The following existing City policies relate to the proposed downtown General Plan amendments.

Policy C1.2 Encourage nodes of interest and activity, such as parks, public open spaces, well planned development, mixed use projects, and other desirable uses, locations and physical attractions.

Action Statement C1.2.1 Promote downtown as a unique place that is interesting and accessible to the whole City and the region.

Action Statement 2.5A.2d. Continue to identify and adopt methods of preserving historic resources and special districts.

Action Statement 2.5A.3f. Strengthen the downtown as the visual as well as functional focus of Sunnyvale.

Action Statement 2.5A.3g. Consider design features that help locate the downtown district and emphasize the roadways and intersections leading downtown.

Action Statement 2.5D.2b. Continue to provide courtyards and public plazas around City buildings and encourage at least one large plaza downtown.

The Community Development Strategy is an administrative document used by staff to allocate resources to meet general plan goals and budget outcomes. This Strategy that was finalized in February 2003 and includes goals for:

• Retaining and attracting retail services
• Preserving service businesses
• Provide opportunities and incentives for the construction of new residences

The California Environmental Quality Act (CEQA) states that for every project that could have a potentially significant impact on the environment, an Environmental Impact Report must be prepared. The initial environmental evaluation identified potentially significant impacts that could be triggered by this project, ranging from Aesthetics to Transportation and Traffic. In July 2002, Wagstaff and Associates was hired to prepare an Environmental Impact Report.

The purpose of an Environmental Impact Report is to require public agency decision makers to consider the environmental implications of a project. The document provides an objective analysis of potential environmental impacts of the proposed project, a list of mitigation measures to reduce the significance of the impacts and a more general analysis of project alternatives designed to reduce environmental impacts.

The EIR is not intended to be an exhaustive list of all potential impacts on the community. State Law stipulates specific categories and criteria which determine the presence of an "environmental" impact and its significance. For example, while the EIR may address the environmental effects on air quality, it does not address impacts on community character. Community character, while outside the purview of the EIR, is an important issue that can be addressed through staff analysis and policy-making by the Planning Commission and City Council.

The Final Environmental Impact Report (FEIR) consists of the Draft EIR; comments and recommendations received on the Draft EIR; a list of persons, organizations and public agencies commenting on the Draft EIR; and a response of the Lead Agency (the City) to significant environmental points raised in the review and consultation process.

Areas of potential environmental impacts include:

Specific criteria are discussed and included for each of the sections (e.g.: Land Use, Transportation and Parking, Public Services, etc.) in the EIR. The EIR identifies those impacts that are expected to be "significant" and corresponding mitigation measures warranted to eliminate or reduce those impacts to less than significant levels. If a particular impact cannot be mitigated to a less-than-significant level, the EIR identifies that impact as "unavoidable."

• June 18, 2002 – City Council approved the budget request to hire Wagstaff and Associates to prepare the Downtown EIR.
• August 5, 2002 - A public scoping meeting was held in the Council Chambers at City Hall.
• September 27, 2002 - the Notice of Preparation was mailed to the neighboring cities, state and other public agencies requesting input on the scope of the EIR.
• April 1, 2003 - the Draft EIR was issued for public review and comment.
• April 10, 2003 – a public outreach meeting was held to provide an overview on the content and findings of the Draft EIR. Public comment on the DEIR was accepted as formal comments.
• May 13, 2003 – a Joint Study Session was held with the Planning Commission and City Council on the findings in the EIR.
• May 16, 2003 – the comment period for the Draft EIR ended.

At the end of the 45-day public review and comment period (April 1, 2003 – May 16, 2003), thirteen letters were received commenting on the EIR. The Final EIR contains copies of those letters and prepared responses as well as clarifications and corrections to the Draft EIR. The Final EIR includes, by reference, the document titled Draft EIR. The FEIR was distributed to the Planning Commission and City Council on May 30, 2003.

The project evaluates three areas in the downtown; the Downtown Specific Plan (DSP) area, the area within the Redevelopment Area boundaries (inclusive of the DSP area) and "eastern adjacent sites" located just outside the Specific Plan Boundaries (see map on page 2). As the project evaluates not only changes to the Specific Plan, but also to the Redevelopment Plan and possible reductions in residential densities of adjacent eastern properties, the EIR encompasses this larger area and is described in the more general terms of "Downtown Improvement Program Update".

For the purposes of analysis, the EIR considers all potential buildout allowed under the proposed plan compared with existing development. For this reason, the growth increment is greater than the difference between what is allowed under the existing Downtown Specific Plan and the proposed Downtown Design Plan. This is a more conservative approach that is intended to identify all potential impacts that could occur over the course of development.

The project results in a total growth increment (build out in 2020) of the following:

(Please see page 2-3 of the EIR for a detailed project data table).

The environmental review includes the following potential actions and permits:

1. Amendment to the City of Sunnyvale General Plan to designate appropriate land uses, intensities and heights.
2. Amendment to the 1993 Downtown Specific Plan to achieve consistency with the City of Sunnyvale General Plan amendments and address building design, infrastructure improvements and proposed streetscape design.
3. Amendment of the Sunnyvale Municipal Code to reflect the City of Sunnyvale General Plan and Downtown Specific Plan amendments.
4. Amendment to the Sunnyvale Downtown Redevelopment Plan to achieve consistency with the other project components, extend the redevelopment plan’s financial limits, and reestablish the City of Sunnyvale Redevelopment Agency’s eminent domain authority over non-residential property for another 12 years.

CEQA requires that alternatives to the proposed project be incorporated into the document. The basic intent of this section of the document is to evaluate alternatives that would meet the goals of the project yet reduce or eliminate significant impacts. The discussion of alternatives gives a more general analysis of how project changes could reduce impacts. While it is not precluded by CEQA to do a more detailed analysis, most communities have found that the more generalized analysis of alternatives provides sufficient information to make a decision. For resources that can be quantified, such as traffic and air quality, a total for the project area is provided for comparison. For example, a detailed traffic analysis of individual intersections and freeway segments was done for the proposed project, but a more general total trip generation calculation was prepared for the alternatives. Generalized comparisons on relative differences are made for resources that are more qualitative, such as land use and aesthetics.

This section of the FEIR considers the following six alternatives:

Alternatives 1 through 4 address physical differences from the project description. Alternatives 5 and 6 are specific to potential future Redevelopment Agency activity. Table 2.4 (page 2-38 of the Draft EIR) provides a comparative matrix of the impacts associated with the alternative projects. The analysis found that while all of the alternatives considered had a general reduction in environmental impacts, all project scenarios also had the same significant unavoidable impacts. Alternative 3 was determined to have the least detrimental environmental effects.

The Planning Commission and City Council can approve an alternative project or a modified alternative project through policy decisions after certification of the FEIR. Any range of land use may be considered, provided the scope of environmental review sufficiently addresses the new alternative.

The FEIR identified significant impacts in areas of air quality and transportation that could not be feasibly mitigated, and are therefore unavoidable.

Traffic and Transportation: Traffic impact analysis identified several areas of significant impact, both on local intersections and freeway segments in the region. To clarify the discussion, the traffic analysis differentiated between impacts that would occur under the existing plan versus impacts that would only occur with the proposed project. Due to the region-wide scope of the traffic impacts, most of the impacts identified would occur regardless if the new project were implemented or not. These impacts must be included as the EIR is required to analyze all potential development over existing, not just the incremental difference between currently allowed development and proposed allowed development.

Two master plans for addressing traffic issues are underway. One is the City’s Transportation Strategic Program (TSP), which has identified all impacted roadways in the City, planned mitigation measures and proposed fees to cover the cost. The other is the Countywide Deficiency Program developed by the VTA, which addresses region-wide traffic impacts and off-setting improvements on regional freeways.

The Draft EIR states that all City intersection impacts will be sufficiently mitigated through the implementation of the TSP. However, one intersection at Homestead Road and De Anza Boulevard is located within the City of Cupertino, outside of Sunnyvale’s jurisdiction. The City of Cupertino has stated that they do not have sufficient funds at this time to make the necessary improvements; therefore this becomes a significant unavoidable impact.

The Draft EIR also states that the Countywide Deficiency Plan would be sufficient mitigation for any potential impacts on freeway segments. As this is a regional plan, it could adequately address the regional impacts of highway traffic. During the 45-day review period, comments were raised regarding the adequacy of this mitigation. As the Deficiency Plan is outside City control, it was questioned whether we can ensure that this mitigation will take place to allow development in the downtown. Although adoption of the Deficiency Plan is a budgeted work item for the VTA, at this time there is no certainty as to when the Plan will be adopted. Until such time as the Plan is adopted, the Project’s impacts on specified freeway segments will not be mitigated and should be considered a significant unavoidable impact.

Air Quality: These traffic-related impacts associated with the project will result in an increase in regional air emissions. Emissions of criteria pollutants generated by the operation of the proposed project would exceed applicable thresholds for organic gases, nitrous oxide and particulate matter and increase total air pollutant emissions in the region. Possible mitigation measures such as TDM programs, improvements to sidewalks and construction of bicycle facilities would assist in reducing this impact. However, taken together they cannot sufficiently reduce the impact to a less-than-significant level, creating an unavoidable project and cumulative impact.

Discussion: Significant air quality and traffic issues have been longstanding in the region and it is not atypical for both of these areas to have significant unavoidable impacts. Both the Bay Area Air Quality Management District (BAAQMD) and the Valley Transportation Authority (VTA) have adopted policies and programs for local communities to assist in mitigating these impacts. These policies support intensified land use near public transit such as buses and trains and mixed uses that reduce dependence on the automobile. From a regional perspective, these "Smart Growth" policies and "Best Practices for Land Use and Transportation" are considered preferable as they reduce environmental impacts in the long term. The Downtown Plan implements these policies and is supported by both the BAAQMD and the VTA (see FEIR, comment letters).

The "Downtown Improvement Program Update Project Mitigation Monitoring and Reporting Program for Significant Impacts" is required by CEQA to ensure implementation and monitoring of all mitigation measures. A Monitoring Program identifies the mitigation measure, who is responsible for implementation, monitoring schedule and who is responsible to do the monitoring. All of the monitoring responsibilities will be handled by the City of Sunnyvale Community Development Department, Public Works Department and Public Safety Department. The monitoring plan will occur during the extent of new development in the downtown.

Section 15093 of the CEQA Guidelines defines the three requirements that relate to overriding considerations (Attachment 4).

• CEQA requires the decision-making agency to balance, as applicable, the economic, legal, social, technological, or other benefits of a proposed project against its unavoidable environmental risks when determining whether to approve the project. If the specific economic, legal, social, technological, or other benefits of a proposed project outweigh the unavoidable adverse environmental effects, the adverse environmental effects may be considered "acceptable."
• When the lead agency approves a project which will result in the occurrence of significant effects which are identified in the Final EIR but are not avoided or substantially lessened, the agency shall state in writing the specific reasons to support its action based on the Final EIR and/or other information in the record. This "statement of overriding considerations" shall be supported by substantial evidence in the record. (Guideline 15091)
• If an agency makes a statement of overriding considerations, the statement should be included in the record of the project approval and should be mentioned in the Notice of Determination (NOD). This statement does not substitute for, and shall be in addition to, findings required pursuant to section 15091.

Both Air Quality and Traffic impacts have been identified as significant and unavoidable. In order to implement any aspect of the proposed Downtown Plan, a Statement of Overriding Considerations must be made.

Testimony is sometimes received during the public hearing process relating to "significant new information." For the purposes of an EIR, new information is considered "significant" when the following would apply:

• A new substantial environmental impact resulting from the project is identified;
• A substantial increase in the severity of an environmental impact is identified;
• A new feasible project alternative or mitigation measure is identified but that the project proponent refuses to adopt;
• The Draft EIR is so fundamentally and basically inadequate in nature that public comment of the draft was, in effect, meaningless.

The "rule of reason standard" is applied to judicial review and EIR contents. The courts do not hold an agency to a standard of absolute perfection, but rather require only that an EIR show that an agency has made an objective, good-faith attempt at full disclosure. The scope of judicial review does not extend to correctness of an EIR’s conclusion, but only the EIR’s sufficiency as an informative document for decision makers and the public. Legal adequacy is characterized by:

• All required contents must be included;
• Objective, good-faith effort at full disclosure;
• Perfection is not required;
• Reasonable treatment of issues is required;
• Minor technical defects are not necessarily fatal;
• Disagreement among experts is acceptable.

In accordance with the California Environmental Quality Act (CEQA), the FEIR must be certified as a complete and accurate assessment of environmental impacts before action can be taken on the actual project. The Planning Commission and City Council are asked to consider the content of the FEIR to determine the adequacy of the analysis, mitigation measures and overriding considerations for the topics discussed. The FEIR is not a discussion of the merits of the project. If it is determined that the content of the FEIR is adequate, the City Council may certify the document. If it is determined that the FEIR is not adequate, the Planning Commission or City Council may state those areas of discussion where the document is deficient and require that additional analysis be prepared prior to certification.

Staff believes that the proposed FEIR meets the requirements of CEQA both in content and format. Any changes to the mitigation measures in the FEIR may affect the accompanying determination of significance. The deletion or alteration of a mitigation measure may result in a determination of a significant unavoidable impact where a less than significant impact was determined as originally mitigated. Should there be an action to certify the document with changes to mitigation measures proposed by the FEIR, then revised findings to the Statement of Overriding Considerations may need to be prepared.

The Planning Commission may proceed with recommendations on other actions even if the Commission recommends additional work on the FEIR. No project related actions shall be taken (by the City Council) until the FEIR is certified. As noted earlier, certification of the FEIR does not approve or deny any element of the project.

City staff began a significant outreach effort in the summer of 2002 to both inform the public about the Downtown Design Plan and receive input on the content. The following methods were used:

• A 3-D model was built to represent the changes that could take place under the Downtown Design Plan. This model was brought to all of the outreach meetings and has been stationed in the Library since the fall of 2002. This location in the Library provided flexible viewing hours and high visibility.
• Quarterly Report articles described the public outreach process and the plan in the Summer 2002 and Spring 2003 Quarterly Reports.
• An information brochure was enclosed in the Summer 2002 Quarterly Report and was distributed at the City One-Stop and Library.
• Comment cards were enclosed in the Summer 2002 Quarterly Report asking community members for their ideas of an "ideal" downtown. Approximately 150 responses were received and posted on the City’s Downtown website.
• Utility bill stuffers were enclosed in the November/December mailing to inform community members of the downtown plan.
• A banner at Wolfe Road has been posted at various times from June 2002 – to March 2003 announcing the downtown plan and providing contacts for more information.
• Presentations at residential and business community group meetings were given upon request.

In addition to the above outreach, staff held 5 public meetings on either the Downtown EIR or the content of the plan itself.

* Not including staff, consultants, Planning Commission or City Council. Most members of the Planning Commission were in attendance at all public meetings except for the scoping meeting.

A variety of noticing techniques was used to advertise the above meetings. At minimum:

• Individual Notices to a mailing list of approximately 2,500 people that included property owners, businesses, and residents located in and within 300 ft. of the Downtown improvement area. Sign-in sheets were made available at all community meetings and at the library and interested community members were added to the mailing list.
• Newspaper Notices in both the Sunnyvale Sun and the San Jose Mercury News.
• Website Banner and Articles with links from the home page.
• KSUN Television where both meeting notices and tapings of the actual meetings were shown approximately 28 times.

For the larger community outreach meetings in September and November, information was also included in:

Study Sessions: In addition to the public meetings, staff conducted two Study Sessions on the EIR with the Planning Commission on April 14, 2003 and May 27, 2003, as well as a Joint Study Session with both the Commission and City Council on May 13, 2003. At the May 27, 2003 study session, a question was asked regarding the downtown population. 2000 Census data indicates an existing population of approximately 1,570 in the project area with an average household size of 1.84 people.

Staff received a significant amount of public input, primarily through testimony taken at public meetings and through the comment cards distributed in the Quarterly Report. The comment card asked citizens to state what their "vision for downtown Sunnyvale." Staff received 150 responses which could primarily be grouped into 5 categories:

• Types of Stores – This was the biggest response category received. Some responses requested well-liked chains (such as Crate and Barrel) while most of the responses indicated a desire to preserve small businesses in the downtown. There was a desire for family-friendly restaurants, breakfast places, sewing shops, etc. (29 responses, 19%)
• Pedestrian-Friendly Features – This focuses on public spaces within the downtown and how to make the Downtown more pleasant and walkable. Suggestions included streets closed to cars, bike paths, easy access to mass transit, benches and wide pathways and sidewalks. (24 responses, 16%)
• Concerns about Community Character – A significant number of respondents wrote regarding concerns about the intensity of development proposed under the Design Plan. These respondents felt that the buildings were too tall and that a small-town, quaint atmosphere should be preserved and is more in keeping with Sunnyvale’s character. Responses pointed to Los Altos, Los Gatos and Palo Alto as ideal downtowns. (21 responses, 14%)
• Public Amenities – This category includes places which are not strictly commercial enterprises but also gathering spots for the community. These include performing arts theaters, parks and open spaces, museums, post office, schools, farmer’s markets etc. (16 responses, 10%)
• Concerns about Traffic and Parking – Community members expressed a desire for plentiful and free parking as well as no traffic noise or congestion (15 responses, 10%)

The remainder of the responses (45 responses, 31%) was a mix of topics and questions about such things as landscaping techniques, requests for performances by certain groups, and scheduling of mass transit, etc.

At the public outreach meetings, many residents spoke to concerns with the 100 ft. height of buildings along the east side of Mathilda and in the Town and Country area and a more general concern with preserving a small-town "suburban" character of Sunnyvale. Several residents spoke in support of the density due to both its proximity to mass transit and the fact that it preserves outlying neighborhoods from higher-density projects.

A group called the Friends of Sunnyvale came out in opposition to the plan. Their primary concerns indicated height and density, as well as incorporating more public places into the downtown such as a performing arts theater and a town green at the center of the existing mall. Their organizational efforts were very effective in getting the word out about the planning efforts for the downtown. Staff had several meetings with the leaders of the Friends of Sunnyvale to better understand their concerns and also incorporate their proposed plan into the EIR as a project alternative (Alternative 4).

Staff has also received 22 letters or emails from the public in the last year. The comments were a mix of ideas ranging from support to the plan to opposition to any new development. These letters, though too numerous to include as an attachment to the staff report, have been provided in a separate packet to the Planning Commission and City Council and copies are available for public review at the City One-Stop and Library.

The vision statement in the Design Plan is: "An enhanced, traditional downtown serving the community with a variety of destinations in a pedestrian-friendly environment." The goals of the plan include:

• Improving the mall
• Protecting existing residential neighborhoods
• Capitalizing on Murphy Avenue
• Improving street character
• Promoting downtown housing opportunities

The Downtown Design Plan proposes certain land use changes, pedestrian improvements and street connections to implement these goals. The major land use changes include:

• Replacing proposed office uses on the west side of Mathilda Avenue with high density residential
• Creating a new mixed use district in the Town and Country area that emphasizes residential uses over ground-floor retail
• Intensifying office uses along the east side of Mathilda Avenue continuing south to El Camino Real
• Decreasing the allowable residential density in eastern adjacent areas and properties facing Washington and McKinley (Blocks 4 and 6)

The plan also proposes new streetscape designs with wider sidewalks and pedestrian amenities, as well as a new plan to "de-mall" the mall with open-air pedestrian connections and reintroduction of some of the original street grid.

1. Creates a great public place.
2. Strengthens the tax base and increases prosperity.
3. Increases retail services to the community.
4. Uses "smart growth" principles.
5. Protects surrounding residential neighborhoods.

1. Creates a Public Place: The primary function of the downtown is to be the identified "center" of the community. The downtown should be the main public center not necessarily geographically, but certainly in terms of quality and character. The mix of uses, improved streetscapes and public plaza contribute to a lively and interesting downtown that capture an important part of Sunnyvale’s identity.

2. Strengthen the Tax Base: In order to provide public services to the community, the City depends on the tax revenues generated by businesses in the City. One of the most important public revenue generators of business is taxable sales, of which one percent goes to the City’s General Fund (the remaining 7.25 percent of sales tax goes to the State, Valley Transportation Authority and Santa Clara County). To protect the integrity and long-term viability of public services, the City must strive to maintain a stable tax base. This plan pursues that goal with a strong mix of retail and office businesses in the downtown area.

3. Increase Retail Services to the Community: One of the key components of a successful downtown is its ability to achieve and maintain a proper balance of local and national retail businesses. National chain stores typically have the advantage of brand identity, size, merchandising sophistication and substantial marketing resources to draw shoppers to their location. However, it is the City’s mix of local businesses that helps give the downtown its special flavor, character, and distinct identity. The Downtown Plan calls for renovation of existing retail areas which will support and expand the variety of retail services provided to the community while maintaining local businesses.

4. Using Smart Growth Principles: Most communities across the Bay Area are looking for strategies to deal with the inevitable growth in population. One technique which is the most environmentally sensitive is "smart growth," which means concentrating higher-intensity mixed use development in strategic places served by mass transit. This approach creates a pedestrian-friendly area which regionally reduces traffic, noise and air quality impacts while taking advantage of the transportation and other public infrastructure that is already in place. The other benefit of this approach is the reduction of impacts on established residential neighborhoods. By concentrating higher-intensity development in one location, pressure to rebuild other areas and corresponding potential impacts on these lower-density neighborhoods is reduced.

5. Protection of Adjacent Residential Neighborhoods: This plan protects adjacent residential neighborhoods in four ways. As discussed in the paragraph above, the concentration of higher intensity uses in the central downtown area reduces development pressure on outlying neighborhoods, protecting these areas from significant construction and corresponding impacts. Secondly, this plan proposes reductions in height at the edges of the Downtown Specific Plan area that buffer these adjacent neighborhoods from the visual impacts of taller buildings. Reductions in height are proposed for Blocks 4, 5, 6 and 13a as well as the western sides of Blocks 14-17 which face Charles Street. Third, the plan proposed gateway markers at the beginning of residential neighborhoods to create boundaries and discourage cut-through traffic and commercial parking. And lastly, the plan proposes an increased parking ratio for new residential development in the downtown area to further discourage spill-over parking.

During the public outreach process, the following concerns were expressed:

1. This plan is not compatible with a suburban character.
2. The proposed buildings are too tall and impact privacy and views of the residents of Sunnyvale.
3. Too much development creates negative impacts on traffic and air quality.
4. The City should protect small businesses during and after redevelopment occurs.
5. There is a need for a large public gathering space such as a town green at the center of the downtown.

1. Character of Sunnyvale: This plan proposes taller buildings and more intense uses than anywhere else in Sunnyvale. The goal of the plan is to propose something different than what can be found in other retail centers along El Camino Real and in shopping areas throughout the city. Most downtowns include elements which are by their very nature "urban" with building edges at the sidewalk and concentrated parking areas, as opposed to larger surface parking lots, increased landscape areas and low-scale buildings with large setbacks that are more typical of suburban retail development. Some of the benefits of this plan include the lack of typical suburban features that discourage pedestrian access and the type of intensity that makes a lively and active downtown. However, staff understands this comment to primarily be concerns with the height and size of the proposed buildings being out of scale with other surrounding development.

2. Height of Buildings: The buildings along the east side of Mathilda Avenue and in Town and Country would be the tallest in the plan at 100 ft., similar to the shortest Mozart building. These buildings are significantly taller than the surrounding development and could create a visual impact on adjacent residential areas through privacy, shadow, light and glare effects. After the construction of the Mozart buildings, nearby residents had issues with lighting that have since been resolved through curfew times and reduction in number of lights. Many residents feel that these future buildings are too tall and that the negative impacts from their height and size outweigh any potentially beneficial "gateway" features these buildings might provide.

3. Increased Traffic and Noise: While the new downtown is intended to attract residents and businesses, this attraction will cause traffic and attendant air quality impacts on primarily the major arterials (Mathilda Avenue and El Camino Real) and highways, but to a lesser extent the surrounding smaller streets. Some residents are concerned about how traffic congestion will affect their quality of life in the downtown area. This issue requires careful balancing, as any redevelopment will cause additional traffic impacts. However, most businesses, property owners and residents agree that some degree of redevelopment needs to occur to make the downtown an attractive place.

4. Protection of Small Businesses: The value of small businesses has been recognized in the plan as a vital part of Sunnyvale’s identity. However, redevelopment will at least temporarily displace some of these small businesses. In addition, nearby construction can impact the amount of foot traffic that small businesses may receive. In order to preserve small businesses, additional programs and measures may be needed during the redevelopment process.

5. Central Open Areas: Some residents expressed a desire for an open area at the center of the downtown that can serve as a gathering space for community events such as farmers markets, festivals and as an informal gathering spot. The plan proposes a plaza that is currently designed and out for bid. This feature is located at the northern edge of the downtown near the train station and Evelyn Avenue. Another smaller plaza is proposed in front of Macy’s, which could be closed off with Murphy Avenue to create an open pedestrian area for outdoor events. The plan for the mall includes opening up the center to reestablish some of the downtown street grid, but this area would be privately owned and not a public park or town green in the sense of public ownership.

Downtown Stakeholders Committee: The Stakeholders Committee reconvened on May 1, 2003 to review the issues that surfaced during the public outreach process. The Stakeholders recognized concerns regarding taller buildings and higher intensities. They also recognized that a certain amount of intensity would need to be permitted in order to encourage redevelopment. At that meeting, they modified their recommendation to limit heights in the downtown to four stories or less except for the Town and Country area. They also recommended that the 100 block of Mathilda and Charles be reduced to low-medium density residential uses and that the mall height be limited further with the exception of future mid-block movie theaters. (See Attachment 4, Letter from the Stakeholders Committee).

Staff Recommendation: Staff generally concurs with the Stakeholders' recommendation. The lowered heights along the east side of Mathilda Avenue and in Town and Country alleviate some of the visual impacts while maintaining sufficient density to encourage redevelopment. In addition, the lower overall height of the mall reduces the visual impact of the structure while allowing flexibility for construction of the movie theaters.

Staff has some general concerns about the land use principles underlying the special recommendation for Block 17. The block is close to the Evelyn overpass and will be adjacent to the proposed Evelyn loop. It is also directly across from the Mozart buildings and some arguments may be made that a medium or high density residential use is appropriate on that block considering its proximity to major arterials and mass transit. However, the lot pattern on that block is different than Blocks 14-16 with a larger number of small lots and no lots that extend through the block. It will take a much longer time for lots to aggregate, and the potential for use conflicts between existing homes and proposed development is greater than on the other blocks. For this reason, staff concurs with the recommendation to lower the density of Block 17 to low-medium density, which will maintain the existing densities and allowable heights.

Staff also recommends increasing the total number of residential units allowed in Block 18 of the plan. The potential owners of the mall have indicated a desire to construct up to 300 units in and around the mall area, while the Downtown Design Plan envisioned up to 200 units. Since staff is recommending reducing the number of units in the Town and Country area by 135 units, the increase in residential units in Block 18 is adequately addressed in the EIR. The total number of units allowed in the plan has not increased and the proximity of Town and Country to the mall means the traffic impacts would be very similar and would not require additional analysis through a separate study. Staff feels that both local and regional goals point to increasing the amount of housing where possible and this minor modification can be incorporated within the scope of the environmental review and height limits suggested by this recommendation.

This recommendation includes the following modifications to the 2002 Downtown Design Plan (see pages 21-22 for a detailed description of staff’s recommendation and Attachment 3 for a detailed comparison of land uses and heights between the 1993 DSP, 2002 DDP and Staff Recommendation):

1. Lowering maximum height to 75 ft. in the Town and Country area, thus reducing the number of residential units.
2. Lowering maximum height to 75 ft. in Block 18a (see map on pg. 4), thus reducing the total office square footage permitted.
3. Lowering mall height in Block 18 to 60 ft. with the exception of the movie theaters which may be up to 80 ft. and increasing the total number residential units allowed from 200 to 300.
4. Leaving Block 13 with its current Downtown Specific Plan designation of office and high density residential with a maximum height of 50 ft.
5. Lowering the maximum density in Block 17 to Low Medium Density (7-14 du/acre) with an associated height of 30 ft.
6. Removing Block 20 from the plan, leaving heights at the maximum current allowance of a mixture of 30 and 50 ft.

Total Residential: 1,973 units
Total Office: 944,021 sq. ft.
Total Retail: 1,367,387 sq. ft.

While this recommendation increases the total number of residential units allowed in the current Specific Plan by 624 units; it is slightly less than the total originally proposed in the 2002 Downtown Design Plan. This recommendation results in a total of 1,973 units in the Downtown Specific Plan area (340 fewer than in April 2002). The total office square footage is slightly decreased compared to the 1993 Downtown Specific Plan due to the conversion of Blocks 14-16 to residential uses for a total of 944,021 sq. ft. The retail amount is slightly increased by 58,891 sq. ft. to a total of 1,367,387 sq. ft. Please see Attachment 4 for a more detailed comparison of square footages and units.

Eastern Adjacent Sites: As part of the project description, staff also analyzed potential reduction in allowed densities for properties along Washington and McKinley Avenues to the east of the Downtown Specific Plan boundary. The concern was with maintaining existing character of the streets and reducing potential traffic and visual impacts on the outlying single family neighborhoods. These sites are made up of 24 properties, 17 of which are single family homes with typical lot sizes from 5,000 to 5,500 sq. ft. These lots are too small to develop anything other than a single family home in its current designation of R-3 (Medium Density). Because of the difficulty of lot aggregation and the potential traffic and visual impacts, staff supports reducing the general plan density from High Density Residential to Low Medium Density Residential, reducing the total possible units from 121 to 37, for a net decrease of 84 units.

Definition of Height: In the Stakeholders’ discussion, they recommended that height limits include all mechanical penthouses and rooftop equipment or protrusions. As part of the Zoning and Specific Plan amendments, staff will incorporate these height limits and recommend design guidelines and requirements to address any possible roof protrusions such as antennas or architectural features.

Redevelopment Agency Actions: The EIR covers several potential redevelopment agency actions, including reintroducing the power of eminent domain and extending the plan’s financial limits. At this time, the City is not recommending any changes to be made to the Redevelopment Agency.

There are three main fiscal considerations that need to be evaluated before adopting the general plan amendments. Increasing the densities in the downtown will increase the need for public services and infrastructure. Revitalizing the downtown will bring additional businesses, increasing sales tax revenue and increasing the number of jobs, all of which benefit the community. The third fiscal consideration is identifying the minimum amount of development necessary to make it financially feasible to redevelop these properties with the intended land uses.

Additional Cost of Infrastructure/Services: The increases in residential units and commercial/office square footages increases the demand for public services such as schools, parks and public safety. There are also changes in the need for new infrastructure, including water lines, sanitary sewer improvements and street modifications. All of these impacts have been analyzed in the EIR and the Specific Plan will identify the locations and extent of infrastructure improvements. Typically the City and associated government organizations collect fees for infrastructure improvements, schools, parks and other public improvements. However, ongoing costs for delivery services such as public safety and parks will be paid for through the City General Funds.

School impact fees are required by both the Sunnyvale School District and the Fremont Union High School District for new development. On-going school operations are generally funded through taxes and other state and federal contributions. The Sunnyvale School District has raised concerns about the impact this plan will have on nearby elementary and middle schools. If the plan were to fully build out, a total of 250 K-8 students would be generated (see Draft EIR p. 8-17). Staff has confirmed those generation rates with Dr. Benjamin Picard of the Sunnyvale School District as being accurate for their enrollment planning purposes. Census 2000 figures indicate approximately 105 school-age children in the project area for an average generation rate of 0.12 children/household, which is well below the ratio used in the EIR. The Downtown Specific Plan area is currently split into four different attendance areas distributing students primarily to Ellis and Cumberland Schools, with students in Block 17 going to Vargas Elementary School. Property north of Evelyn is currently in the Bishop attendance area, however, these sites are already built out and no additional impacts are expected on Bishop Elementary. Grades 5-8 would all attend the Sunnyvale Middle School. New students will be split to different schools, lessening potential impacts on any one school. In addition, the 20-year time frame will allow school officials to plan for these future enrollment changes.

Increase in Sales Tax and Jobs: The addition of housing units in the downtown will increase the foot traffic to the retail stores which is expected to have a positive impact on the sales generated by the proposed plan.

Financial Considerations to Redevelop Property: One of the main considerations that the Stakeholders Committee recognized in their meetings is the need to permit enough development to make redevelopment economically feasible for the property owner. The property owner must absorb costs that include land, public infrastructure improvements, demolition, construction, landscaping, and underground parking. To make the development financially feasible, an increased amount of building must be allowed beyond what is located on the property.

The City hired Keyser Marston Associates to advise the Stakeholders Committee and staff on the minimum density needed to make a development feasible in today’s market. For downtown development, the restrictive factor is the high cost of providing underground parking. To support the construction of this type of parking, a minimum of 4 stories of development must be allowed in most office and high density residential areas. The plan, as recommended by the Stakeholders Committee and staff meets the criteria and is considered sufficient to stimulate redevelopment.

Staff believes that the recommended modifications to the plan address concerns raised by residents regarding character and height. The reduced densities will also reduce the total traffic and noise impacts on surrounding properties and continue to meet the key goals of the Downtown Design Plan.

Staff recommendation includes the following:

1. Adopt the land uses, intensities and heights for the Downtown Specific Plan area as listed on pages 21-22 of this staff report.
2. Amend the General Plan Designation for the eastern adjacent properties from High Density Residential to Low Medium Density Residential

Staff does not recommend making any changes to the redevelopment plan at this time.

Based on the land use decisions made by the City Council, staff will return to the Commission and Council in late August and mid-September with amendments to the Zoning Code and Specific Plan.

Alternative 1.

Prepared by:

Diana O’Dell
Project Planner

Reviewed by:

Trudi Ryan
Planning Officer

Reviewed by:

Robert Paternoster
Director, Community Development

Approved by:

1. Draft General Plan Map
2. Map of Proposed Land Use Changes
3. Comparison of 1993 DSP, 2002 Downtown Design Plan and Staff Recommendation
4. Detailed Numbers Breakdown of Staff Recommendation
5. Map of Proposed Changes in Heights
6. Comparison of Proposed Heights between 1993 DSP, 2002 Downtown Design Plan and Staff Recommendation
7. Letter from the Stakeholders Committee

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