Residential buildings, retail and restaurant space, and plazas at The Rise, a large mixed-use development on the former Barco Mall site in Cupertino.
Cupertino — A major redevelopment of the former Valco Mall in Cupertino will shift gears in a rapidly changing economy. The move is designed to increase the project’s feasibility and allow the first buildings to sprout by the end of 2024 or 2025.
The Rise, an ambitious mixed-use development, could usher in a new downtown for Cupertino, emerging from the vacant remains of the moribund Valco Mall.
To make that a reality, the project’s owners, an affiliate of busy Bay Area developer Sandhill Property Company, proposed several key changes in the development Tuesday.
The project’s towers would be significantly shorter, and the development itself was designed to make it easier to persuade lenders to provide construction financing for a series of properties that could come together to form Cupertino’s new urban center. It is scheduled to be reconfigured.
“The challenging market conditions of the past year have impacted real estate projects across the region, and The Rise is no exception,” said Reed Moles, managing director of Sand Hill Properties, Cupertino. he said in a letter to manager Pamela Wu.
Alarmed by slumping revenues and profits, and seeking to usher in an artificial intelligence revolution, tech companies have dramatically shifted their priorities, cut jobs and slashed office space requirements.
Complicating matters is the sharp rise in interest rates that Federal Reserve officials have set in place to fight inflation. Rising interest rates have made construction loans for real estate projects harder to find and more expensive once approved.
“These are difficult times for commercial real estate,” Mols said in an interview with this news organization. “Due to economic conditions, some projects have been canceled and others have been postponed. Rise is not immune to these market conditions.”
As an example of the change, previous redevelopment proposals envisioned a mix of high-rise rental and condominium housing above ground-floor shops and restaurants.
A typical new version of the building in the revamped plan envisions rental housing in a low-slung building above commercial space on the ground floor, or sales housing above commercial space, but a mix of both. isn’t it.
Restructuring could also make it easier to build projects in smaller stages, which could open up a smoother path to construction financing.
“This is a more pragmatic approach to increasing the feasibility of the project,” Mols said.
Cupertino city officials, not the city’s Planning Commission or City Council, are being asked to make decisions about the project. Sand Hill Properties believes its revised proposal only needs approval from the city manager and not from policymakers on the council or commission.
Refocused Development plans to resume preliminary construction in early 2024. Infrastructure improvements could be built next year. The first vertical building could even begin construction in late 2024 or 2025, Moles said.
“This will be the vibrant downtown district Cupertino has always wanted, creating the housing our community needs and creating the dynamic retail environment we so desperately want in our city.” Mols said.