Superior Court Validates Cupertino’s Streamlined Approval of Major Affordable Housing and Office Project

On May 6, 2020, Santa Clara County Superior Court Judge Helen Williams upheld the City of Cupertino’s streamlined approval of a major housing/office project at the site of the former Vallco Fashion Mall through the recently-adopted Senate Bill 35 procedure. Wendel Rosen LLP land use attorneys Patricia Curtin, Amara Morrison and Todd Williams served as special land use counsel to the City during the processing of the project at the administrative level.  The project is thought to be the largest in the state approved via the SB 35 process.

A copy of the decision is available here: Order Denying Petition for Writ of Mandate

SB 35

SB 35, sponsored by State Senator Scott Wiener, went into effect in 2018 and provides for ministerial, streamlined approval of affordable housing projects that meet 10 qualifying standards. Codified at Government Code section 65913.4, SB 35 provides a statutory exemption from the California Environmental Quality Act and allows for approval of qualifying projects in 180 days or less without a discretionary use permit, or any public hearings or approval by elected officials (other than optional design review). For projects with over 150 units, the local agency has 90 days to determine if the project complies with the objective planning standards.  If the agency does not indicate any conflicts within 90 days, the project is deemed to satisfy the objective planning standards. (Gov. Code § 65913.4(b).) (The time is reduced to 60 days for projects with 150 or fewer units.) Any objective design review or public oversight must be completed within 180 days of application submittal for projects with over 150 units (or 90 days for projects with 150 or fewer) and cannot interfere with the ministerial approval. (Gov. Code § 65913.4(c).)

The Legislature expressly stated that the statute is to be interpreted and implemented in a manner “to afford the fullest possible weight to the interest of, and the approval and provision of, increased housing supply.” (Gov. Code § 65913.4(l).)

The Project

In March 2018, the owner of the Vallco Fashion Mall, submitted an application to the City under SB 35 for the Vallco Town Center project consisting of 2,402 apartment units (half of which would be rented at “low” or “very-low” income rates), 1.8 million square feet of office space, 400,000 square feet of retail, and 26 acres of public open space on the 50-acre site. The City staff responded within 90 days and affirmatively indicated that the project met the objective planning standards and SB 35 criteria. Staff later responded within 180 days to indicate that the project had been ministerially approved. Consistent with SB 35, no public hearings were held in connection with the project.

The Lawsuit

A citizens’ group, Friends of Better Cupertino (FBC), opposed the project and filed a petition for writ of mandate to challenge the City’s approval.  Among other things, FBC contended that the City had a ministerial duty to deny the project as being ineligible for streamlining.  Among other things, FBC claimed that the project was not eligible for approval under SB 35 because it did not meet the requirement that at least two-thirds of its square footage be designated for “residential use,” that it had disqualifying hazardous waste sites, that it exceeded height limits, and that it did not meet the City’s parkland ordinance.

The Decision

In a 62-page opinion, Judge Williams rejected all of FBC’s arguments and found that the City’s approval of the project was appropriate under SB 35.

As to the residential percentage, the Court found that the City – relying on its existing municipal code – properly found that the project met the two-thirds residential use requirement, and rejected FBC’s claim that the City should have instead followed the California Building Code, noting that nothing in the SB 35 calls for the State Building Code to be used for that calculation. Judge Williams also found that the City properly included square footage of units added by virtue of a density bonus to the overall residential use amount.

As for hazardous waste sites, the Court found that the City, relying on guidance from the California Environmental Protection Agency, correctly determined that two former underground storage tank sites were not on the current “Cortese list” of contaminated sites since they had been remediated and “closed” by the State Water Board in the 1990s. The Court also noted recent amendments to Section 65913.4 clarified this issue and supported the City’s conclusion. (Gov. Code § 65913.4(a)(6)(E).) As such, these remediated sites did not disqualify the project from relying on SB 35’s streamlined process.

Finally, the Court rejected a host of other FBC claims. It found that the City complied with the Subdivision Map Act, and properly determined that there was no height restriction because none existed in the City’s general plan. The Court upheld the City’s conclusion that the project met the City’s parkland requirements, giving deference to the City’s interpretation of its own regulations and policies to find that above-ground park areas could be counted. The Court criticized petitioners for impermissibly asking it to “supplant the City’s interpretation with their own.”

Notably, Judge Williams found that SB 35 does not affirmatively impose any duty on an agency to act on an application, only that it imposes consequences for a failure to act (i.e., a deemed determination of eligibility). The Court concluded, as a matter of law, that Section 65913.4 “does not impose a ministerial duty on an agency presented with an application for streamlined review to either undertake review or to reject the application if the agency determines that the project is ineligible because it conflicts with one or more of the enumerated objective planning standards….” The Court characterized SB 35 as providing a “carrot” for developers to build housing – streamlined review – and a “stick” for agencies that fail to work with these developers – the limitation of discretionary review.

The Court concluded that “section 65913.4 creates no affirmative duty on the part of an agency to act on an application for streamlining; nor does it create a duty to reject a nonconforming project.” As such, a mandamus action was not available to FBC to challenge whether the criteria for streamlining were satisfied, and the Court could not issue a writ directing the City to take an action it was not legally required to take.

The Takeaways

While Judge Williams’ ruling is not precedential, it is worth reviewing in the absence of any appellate decisions concerning SB 35 given its recent passage. Moreover, the decision may support the viability of SB 35’s streamlined process for other qualifying projects as well as assist local agencies’ evaluation of such projects. This decision represents an enormous victory for housing advocates and validates the Legislature’s determination to eliminate, to a great extent, barriers to approval of infill housing and mixed-use projects, namely CEQA-based challenges, exhaustive public hearing processes, and uncertain discretionary entitlement proceedings.

For questions about the processing of projects under SB 35, please contact the Wendel Rosen LLP Land Use Group.