Sunnyvale Town Center project

Photo Jacqueline Ramseyer/Bay Area News Group/August 22, 2015
Current progress at Town Center in Sunnyvale as of Aug 22, 2015 as seen from top of parking garage facing towards Macy’s and Target.

The Sunnyvale Town Center is finally free of the lawsuits and appeals process that halted much of its development over the last few years.An announcement came Aug. 12 that the California Supreme Court denied review of the third and final case involving the downtown center.In a statement, Sunnyvale Mayor Jim Griffith expressed hope for the future of the center.”Today’s court decision is a long-awaited milestone that means our community can finally look forward to fully achieving its vision for downtown,” said Griffith. “The Town Center project is a very attractive centerpiece for development in Silicon Valley that will only add to our already thriving mix of shopping, restaurants and housing in the downtown.”This development means that Wells Fargo Bank, which took over ownership of the property in 2009 after the original owners Peter Pau and RREEF defaulted on a loan, could soon look for interested buyers who want to complete the project.Wells Fargo has already initiated the search, but the city is not involved in the selection process, according to assistant city manager Kent Steffens.”Wells Fargo Bank, the project’s owner, has let the city know it has retained a commercial real estate broker to start marketing the property,” he said. “While the city certainly expects there to be interest in the property, the city is not privy to discussions between Wells Fargo and prospective buyers.” After a buyer has been identified, though, city involvement becomes a factor.”Once Wells Fargo has identified a buyer, the city is required to review and approve the buyer based on their development experience and financing capability,” said Steffens. “The city will be hiring an independent third party consultant to review the buyer’s qualifications. The city council will make the final determination.”The 36-acre town center is located in the heart of downtown Sunnyvale and is bordered by Mathilda, Washington, Sunnyvale and Iowa avenues.Originally opened in 1979, the town center has seen many owners and developers over the years, but in 2007 it was bought and developed by a joint venture between Sand Hill Property Co. and RREEF, but the companies were forced to abandon the project in 2009 after they defaulted on a $108.8 million loan from Wells Fargo.From there, Jerry Hunt of Quattro-Realty Group received the project in October 2009, and the court denied a motion to approve sale of the property through receivership in 2011.Wells Fargo took ownership of the property at a foreclosure auction in August 2011. Sand Hill principal and founder Peter Pau subsequently sued the bank, a move that essentially halted additional development of the Town Center while a detailed and often delayed appeals process followed.Sand Hill’s lawsuit contended that Wells Fargo’s actions related to the receivership of the property and following sale were not handled properly. In December 2012, the court dismissed the first four causes of action: to set aside the foreclosure, cancel the deed of trust, slander of title and accounting errors.Pau filed for an appeal and lost on a 3-0 vote from the Sixth District Court of Appeal in October 2013, and in May this year, the Sixth District Court of Appeal issued a long-awaited opinion in the Downtown Sunnyvale LLC vs. Wells Fargo Bank case, finding in favor of Wells Fargo on all issues.The only two parcels in the town center that aren’t owned by Wells Fargo are the Macy’s and Target stores that are there now. Sand Hill bought the Macy’s in February of this year.The city is making moves in preparation for downtown development, according to Steffens.”The city has already begun a market analysis of the downtown in anticipation of the project moving forward. The market analysis will evaluate whether the mix of land uses previously approved is still viable in today’s market,” he said. “If land uses are changed from the current approved project, appropriate environmental review will be conducted including a review of potential impacts to traffic and parking.”More than anything, though, the city at long last wants to see a vibrant and thriving downtown.”Our goal is to see this project come to fruition,” said Sunnyvale city manager Deanna J. Santana in a statement. “So we have taken strategic actions and will continue to position Sunnyvale to realize the full potential of our downtown.”