The developer of a massive residential, office and retail development at the former Vallco shopping mall in Cupertino is reducing affordable housing by 60% and office space by 25% to make the project “financially feasible.”
Sand Hill Property Company delivered a revised plan to Cupertino’s city manager Nov. 26, the day before Thanksgiving, and the city has 60 days to respond. Construction of the first buildings at the project, called The Rise, is expected to start early next year.
The controversial project — which has gone through almost a decade of litigation, referendums, revisions and lobbying in Sacramento — is crucial to Cupertino meeting goals for new housing mandated by the state. Those goals will be harder to achieve with the reduction in affordable homes at The Rise.
Cupertino must add 4,588 homes to meet state guidelines by 2031 — 1,880 of which must be deemed affordable for low-income residents.
A rendering of The Rise in Cupertino. Image courtesy of Sand Hill Property Company.
Total housing at The Rise remains unchanged from the most recent plan approved by the city in 2024 — 2,669 homes covering 4.8 million square feet. But Sand Hill wants to cut the number of below-market-rate homes from 890 to 356.
Office space would also drop from 2 million square feet to 1.5 million square feet if the city accepts the revised plan. Two office buildings will be eliminated from the project, and two office towers will shrink — one tower from 18 floors to eight and another from 12 floors to seven. Retail space is holding steady at about 225,000 square feet.
“The planning set submitted to the City entails necessary modifications to project approvals to make The Rise financially feasible and justify the investment necessary for the construction of buildings and proposed community amenities,” Reed Moulds, project executive for The Rise, wrote in a Nov. 26 post on the company’s website.
In a news release on the same day, company representatives said the revisions are “a change driven by the shift to larger family units, updated construction economics, and changes in state law.”
Sand Hill said it will soon begin construction of the first buildings at the 50-acre site, located on the south side of Interstate 280 at Wolfe Road, in 2026 following demolition, grading and installation of below-ground utilities. The initial phase, called “Town Center West,” will include housing and retail in eight new city blocks along Stevens Creek Boulevard, with first occupancy expected in 2028. The office buildings have been deferred to a later phase.
The Rise is moving forward under SB 35, a state law that streamlines construction in cities failing to meet state housing development goals, leaving Cupertino officials with limited options to object to the changes.
At a Cupertino City Council meeting on Monday, Mayor Liang Chao said Sand Hill deliberately submitted its revisions for The Rise the day before Thanksgiving to trigger a review process during the holidays — when the new plans would presumably get a less thorough examination than other times of the year.
“The timeline is very conveniently timed well to screw us,” Chao said at the meeting.
Vice Mayor Kitty Moore agreed with Chao on the project’s timeline.
“Not sure I’d say it that way, but the sentiment is there,” she said.
Moulds said the revised plan’s submission was driven by the project’s construction and permitting timelines, including deadlines needed to keep the first affordable housing building on track under its 2026 tax credit schedule.
“Because we recognize the city’s holiday workload and the importance of a thoughtful public review, we offered to begin the 60-day review period after Thanksgiving as a gesture of partnership, not unlike extensions we have given the city in the past,” Moulds told San José Spotlight. “Our intent is simple: to keep this long-planned project moving forward collaboratively so Cupertino families can benefit from new affordable homes, neighborhood-serving retail and public amenities as soon as possible.”
Even before the changes at The Rise, new home construction hasn’t been moving at the pace anticipated by city officials. Cupertino might soon fall out of compliance with state mandates.
Councilmember J.R. Fruen said this could happen in as little as two weeks and the city would only have six months to expand its housing plan.
“We owe it to ourselves to be out ahead of this, not chasing it,” Fruen said at Monday’s council meeting.
Contact Mike Langberg at [email protected].