Sunnyvale Town Center

Sunnyvale Town Center was a two-level shopping mall located in Sunnyvale, California, USA. It opened in 1979 on the site of much of the city's downtown, and was anchored by Macy's, Montgomery Ward, and later, J.C. Penney. Target moved in when Montgomery Ward closed. By the early 2000s, the mall had failed financially and only the Target and Macy's (closed in 2019) stores remained open. Work on a mixed-use development to replace the mall was stalled by a legal dispute from 2009 to 2015 and as of July 2016, when a new agreement was reached modifying the plans for the site, most of the buildings are still incomplete.

Sunnyvale Town Center
Sunnyvale Avenue entrance in 2005, after closure of the mall
LocationSunnyvale, California, USA
Address200 S Mathilda Ave, Sunnyvale, CA 94086
Opening date1979 (1979)
Closing date2018
DeveloperThe Hahn Company
ManagementDowntown Sunnyvale Mixed Use LLC" (DSMU) and Downtown Sunnyvale Residential LLC (DSR)
OwnerDowntown Sunnyvale Mixed Use LLC" (DSMU) and Downtown Sunnyvale Residential LLC (DSR)
No. of stores and services236
No. of anchor tenants3
Total retail floor area250,000 sq ft (23,000 m2)
No. of floors2
Parking7,692

History

The mall opened in 1979 on a 36-acre site[1] bounded by Mathilda Avenue, Washington Avenue, Sunnyvale Avenue, and Iowa Avenue and comprising most of Sunnyvale's downtown, except for one block of its main street, Murphy Avenue.[2][3] The City Council took the decision to build the mall in June 1976; demolition began in 1977 and included Sunnyvale Plaza, a twenty-year-old retail development.[4] After a campaign by local resident Fern Ohrt, six redwood and cedar trees that had surrounded the first Sunnyvale city hall and had been donations from residents were preserved in an open space at the center of the mall.[4][5][6]

The passage of Proposition 13 in 1978 reduced property taxes that the City of Sunnyvale had expected to use to pay off the bonds issued for construction of the Town Center, and also reduced interest rates paid by the developer. The fact that a third anchor tenant, J. C. Penney, was not obtained until 1992 further increased the city's difficulty in recouping the cost of the mall.[4]

Over the years, the development went through a series of owners who either defaulted on loans or were sued for breach of contract. During that time, the mall fell into decline with changing tastes of shoppers and the emergence of newer and larger competitors. By 2002, the mall, then known as WAVE (Walking and Village Entertainment), was largely untenanted except for the three anchor stores, Macy's, Penney's, and Target, and the city decided to replace it with a modern version of a traditional downtown, including stores, restaurants, a movie theater, and high-rise apartment buildings.[2] Redwood Square was to be a central plaza incorporating the redwood trees.[5] Finally, in 2007, new entities named "Downtown Sunnyvale Mixed Use LLC" (DSMU) and "Downtown Sunnyvale Residential LLC" (DSR) took over the mall. DSMU and DSR were partnerships between Silicon Valley developer Peter Pau's Sand Hill Property Co. (which owned about 5%), and RREEF, a real-estate management business owned by Deutsche Bank (which owned the remaining 95%).[7] DSMU/DSR's goal was to redevelop the mall into a high-end retail, residential and office development similar to San Jose's successful Santana Row.[8][9]

DSMU/DSR took out a loan of $108.8 million from Wachovia Bank; Wachovia was later acquired by Wells Fargo.[10] By June 2009, with the mall demolished and Target having been replaced by a new store but the other new buildings incomplete, DSMU/DSR defaulted on the loan. Pau said that the decision to default was made by RREEF without his consent.[10] After the default, Wells Fargo started foreclosure proceedings. A foreclosure auction in August 2011 attracted no bidders, so Wells Fargo took possession of the property itself.[1][8] The bank then attempted to sell the land to another developer, but this attempt was thwarted by a lawsuit from Pau,[10] and further development continued to be stymied by litigation between Pau and Wells Fargo.[11][12][13][14] In May 2012, the City of Sunnyvale issued a press release accusing Pau of having filed "delaying lawsuits that have served little purpose other than to hold the project hostage",[10][15] and claiming that "a nationally-recognized development team was set to come in and finish the project in 2011 ... until the barrage of lawsuits blocked their entry".[15] In February 2013, further appeals were filed by both Pau and Wells Fargo; Pau's attorney estimated that the appeals would delay resolution of the case by at least two years.[16]

Current status

As of January 2015, apart from Target and Macy's the only active tenants on the site were Apple and Nokia, which have occupied new office space along Mathilda Ave.[16] The remaining retail and entertainment space were still under construction and the residential units were all unfinished.

The California Court of Appeals rejected Pau's two appeals in January and May 2015.[17][18] Pau filed an appeal to the California Supreme Court,[19] which declined to review the decision on August 12, 2015, effectively ending the litigation.[20] On November 18, 2015, Wells Fargo announced that it intended to sell the mall to an ownership group made up of J.P. Morgan Asset Management, Sares Regis Group and Hunter Properties. That announcement triggered a 20-day review period during which the Sunnyvale City Council evaluated the proposed ownership group. On December 10, 2015, the Council voted to acknowledge that the new ownership group met the necessary criteria, effectively allowing the sale to proceed.[21][22]

In July 2016, the city announced an updated agreement with the developer under which the project would be modified: some two-story retail buildings around Redwood Square, for which only the steel framing was erected, would no longer be built, but the project continues to include high-rise residential, restaurant, and retail components and a movie theater.[23] In September 2016, the new development team closed escrow and took possession of the project,[24] with a groundbreaking scheduled for October 2016 [25] In October 2017, the city announced that AMC Theatres had agreed to lease the theater space for a 12-screen movie theater.[26]

In January 2019, Macy's announced that it would close its Sunnyvale Town Center store in March 2019, as part of a plan to close 8 stores nationwide.[27] The store building had previously been sold; the site will be redeveloped as part of the rebranded CityLine Sunnyvale development, set to open in 2020.[28]

Nearby developments

The Town and Country Village retail buildings across Washington Avenue from the site were demolished by the end of April 2010[29] and in 2013–14 were replaced with mid-rise apartment buildings with ground-floor retail, developed by BRE and Carmel Properties.[30]

References
  1. Wilson, Alia (2011-08-18). "No bidders for Sunnyvale Town Center means project in hands of Wells Fargo". Sunnyvale Sun. Retrieved 2011-08-11 – via San Jose Mercury News.
  2. Hoff, Nick (2002-09-21). "When suburban goes urban". InTheFray Magazine. Retrieved 2010-03-02.
  3. Mullins, Robert (2005-02-25). "Developers bid for site of failed Sunnyvale shopping center". Silicon Valley / San Jose Business Journal. Archived from the original on 2007-12-03.
  4. Ignoffo, Mary Jo (1994). Sunnyvale: From the City of Destiny to the Heart of Silicon Valley. Local History Studies. 35. Cupertino: California History Center & Foundation. pp. 81–85. ISBN 9780935089172.
  5. Koning, Ben; Metz, Anneke; Sunnyvale Historical Society (2010). Sunnyvale. Images of America. Charleston, South Carolina: Arcadia. ISBN 9780738574356.
  6. "How trees survived Silicon Valley". San Jose Mercury News. 2010-04-29.
  7. Parsons, Scott (March 2007). "Sunnyvale Town Center - The Unauthorized Guide". Bigmallrat.com. Archived from the original on 2010-03-22.
  8. "Sunnyvale's Town Center Goes on Sale" (broken link). Bay Citizen.
  9. Simonson, Sharon (2007-02-07). "New owner, revised plans OK'd for Sunnyvale's downtown". Silicon Valley Business Journal.
  10. "Tensions Flare Over Stuck Sunnyvale Project". Wall Street Journal.
  11. Conrad, Katherine (2009-04-10). "Sunnyvale Town Center on hiatus". Silicon Valley / San Jose Business Journal. Retrieved 2010-03-02.
  12. Conrad, Katherine (2010-01-29). "Sunnyvale Town Center gets buttoned down as options are weighed". Silicon Valley / San Jose Business Journal. Retrieved 2010-03-02.
  13. Carney, Tiffany (2010-01-20). "Stalled Sunnyvale Town Center is focus of city's five-year plan". Sunnyvale Sun. Retrieved 2010-03-02.
  14. "Sunnyvale Town Center". Campanellacorporation.com. Retrieved 2010-03-02.
  15. "Sunnyvale Town Center Update" (PDF) (pdf). City of Sunnyvale. 2012-05-24.
  16. Simonson, Sharon (2013-02-26). "New Appeals Threaten to Stall Sunnyvale Town Center Redevelopment For Years". The Registry. p. 2. Retrieved 2016-07-12.
  17. "Downtown Sunnyvale Residential v. Wells Fargo Bank CA6" (PDF) (pdf). Court of Appeal of the State of California. 2015-01-20.
  18. "Downtown Sunnyvale Residential v. Wells Fargo Bank CA6" (PDF) (pdf). Court of Appeal of the State of California. 2015-05-19.
  19. Donato-Weinstein, Nathan (2015-05-19). "Sunnyvale Town Center ruling deals blow to Pau's Sand Hill; appeal mulled". Silicon Valley Business Journal.
  20. Donato-Weinstein, Nathan (2015-08-13). "Sunnyvale Town Center officially for sale as litigation cloud lifts". Silicon Valley Business Journal.
  21. "Proposed New Development Team Achieves Key Town Center Milestone" (PDF) (pdf). City of Sunnyvale. 2015-12-10.
  22. Kezra, Victoria (2015-12-18). "Sunnyvale Town Center's new owners get council's vote of confidence". Sunnyvale Sun – via San Jose Mercury News.
  23. Kezra, Victoria (2016-07-09). "Sunnyvale Town Center: Updated agreement could lead to completion before 2021". San Jose Mercury News.
  24. Druzin, Bryce (2016-09-29). "Sunnyvale Town Center deal closes for $100 million". Silicon Valley Business Journal.
  25. "Downtown Development".
  26. Avalos, George (2017-10-31). "AMC Theaters strikes deal for downtown Sunnyvale 12-screen cinema". San Jose Mercury News.
  27. Hanbury, Mary (January 10, 2019). "Macy's is closing eight stores early this year — here's the full list". Business Insider. Retrieved January 10, 2019.
  28. Robertson, Michelle (January 16, 2019). "Another Bay Area Macy's set to close". San Francisco Chronicle.
  29. Dugan, John (2010-12-30). "Sunnyvale says so long to 2010". San Jose Mercury News.
  30. Wilson, Alia (2013-04-30). "Restaurants coming to downtown Sunnyvale". Sunnyvale Sun – via San Jose Mercury News.

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