Subject: Can Vallco compete with Valley Fair and even surpass it?
To: City Council <citycouncil@cupertino.org>, "City of Cupertino Planning Dept." planning@cupertino.org
[Please include this in Vallco EIR comment.]
In order to revitalize Vallco successfully, we need to understand why Vallco has been struggling in the first place.
This
article below compares the history between Vallco and Valley Fair to
shed some light on the difference: Vallco has been operated by a string
of inexperienced owners or owners who would prefer to turn it into
something else more profitable to them.
As Greensfelder said in the Retail Strategy Report done in March 2014 for GPA:
"…while
its competitors renovated…Vallco languished with incomplete
development, defaults from prior ownerships, prolonged and unrealized
redevelopment plans, management changes and other setbacks."
Does
Sand Hill has the ability to revitalize Vallco? Or would Sand Hill just
be another one of those inexperienced owners who have no idea how to
run a successful shopping center?
------------------------------
The following article appears in Oct. 23 Cupertino Courier/Silicon Valley Community Newspaper.
------------------------------
The following article appears in Oct. 23 Cupertino Courier/Silicon Valley Community Newspaper.
(a scan of the paper)
https://drive.google.com/file/------------------------------
Can Vallco compete with Valley Fair and even surpass it?
The location? Similar access to freeways.
The size? Similar. 1.3 million square feet versus Valley Fair‘s 1.5 million square feet.
Average
household income? Vallco sits closer to more affluent communities in
the west. The economy is among the strongest in the nation with a
growing population. Shopping malls around Vallco are booming.
It is impossible to revitalize Vallco without learning the true causes behind Vallco’s struggles.
The
reason Vallco has floundered is because it had a string of
inexperienced owners who do not know what it takes to operate a
successful shopping center. Some are developers more interested in
building housing or more profitable alternatives. Others either suffered
financial troubles, unrelated to Vallco, or simply neglected it.
Can
Sand Hill Properties (SHP) break the cycle? Given that SHP defaulted on
a loan of merely $108 million dollars in Sunnyvale Town Center. Given
that the retail space of most SHP’s projects are no more than 150,000
square feet.
Comparing
and contrasting the list of owners of Vallco and Valley Fair, one can
easily see that the two malls have dramatically different fates. One is
an abused and neglected orphan and the other is a well-invested,
well-maintained and cherished child.
Valley
Fair has had two owners since 1986, The Hahn Company and Westfield
Corp, both specialize in operating shopping centers. Westfield Corp.
operates 38 shopping centers in the United States and abroad. They
actively manage the centers by attracting top retailers and eliminating
underperforming ones. They host concerts, fashion shows, festivals, and
other events to attract customers. They continue to invest hundreds of
millions of dollars to renovate the malls they operate.
Meanwhile,
Vallco has bounced from from one inexperienced owner to another. One
renovation attempt in 2005 started out by closing the lower level of the
mall and ended with 24 percent occupancy. Some retailers claimed rent
was raised and many shops were driven out.
Around
the same time, the 2005 General Plan was amended and residential and
hotel uses were added to the Vallco area, most likely under the
influence of developers. Then, a part of Vallco was rezoned for--
condominiums. In 2006, a citizens’ referendum—Measure D—overturned the
rezoning. Soon after, Vallco was sold off in 2007 and the new owner went
bankrupt in 2008. In 2009, Son Son Co., a Vietnamese food processing
company, bought Vallco with $64 million cash. No more investment since
2009, according to Vallco’s management.
Vallco
is an ill-nourished and even abused child, who has the potential to
shine with the care of an experienced operator of retail centers. SHP
has a unique chance to reinvent Vallco as a one-of-a-kind
state-of-the-art successful regional shopping center to surpass Valley
Fair and Stanford Shopping Center. Vallco could not only become one of
the best shopping centers in the Bay Area, but also bring in millions of
sales tax dollars to diversify the tax base in Cupertino.
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