Another Sunnyvale Office Campus Gains Approvals

By Sharon Simonson

San Jose-based JP DiNapoli Cos. Inc. has secured approval from the city of Sunnyvale to build a 612,000 square-foot corporate campus on a southern Sunnyvale site labeled a “gateway” location to the community.

The approvals allow the real estate investment and development company to construct buildings as tall as 103 feet—up from 75 feet now—and increase the acceptable development density to 100 percent, allowing a square foot of building for every square foot of land.

The developer prefers not to start construction without a tenant in tow but is in active discussions with multiple possible lessees, said John DiNapoli, president of JP DiNapoli Cos. “We have companies looking at it—taking a very hard look at it,” he said, “to take the whole thing, and companies that would take a portion of it, too. That was the way it was designed, to be a campus or a multitenant complex.”

Under the approvals, JP DiNapoli has entitlements to build two six-story buildings, one four-story building and a five-story parking garage. It also will be allowed to keep an existing 73,000-square-foot building and to construct an amenities building to serve the entire site. That building would also be open to the public. The site is currently occupied by buildings totaling 300,000 square feet, meaning the square footage will more than double.

A 1993 city study that included the intersection of West Maude and North Mathilda avenues concluded it should receive a “gateway treatment” with more intensive office development allowed, but for many years, the market showed no interest, said Hanson Hom, Sunnyvale community development director. “More recently there has been intense interest in Class A office development, particularly at this location,” Hom told the Sunnyvale City Council on June 19. “We think sites north of this development will come in with proposals for more Class A offices.”

Sunnyvale has become an epicenter of new office development in the valley’s current commercial property recovery as tenants have been squeezed out of Palo Alto, Menlo Park and Mountain View by strong demand for office space from the technology sector. Demand has focused on the interchange of U.S. 101 and state Highway 237.

The DiNapoli properties, at 505 N. Mathilda Ave., 595 N. Mathilda Ave. and 599 N. Mathilda Ave., are a few miles south of that point. They are also about a mile by bike from the Caltrain station at the Sunnyvale Town Center, an amenity popular with tenants, and two blocks from a five-acre site where Silicon Valley developer Peery Arrillaga is demolishing a single-story building previously occupied by the U.S. Postal Service and seeking to build a five-story office building and multi-story parking garage. San Francisco-based Riverbed Technology Inc. is also a close neighbor, having recently signed a 10-year lease for multiple stories at 535 Almanor Ave., another new office development.

By and large the council supported the DiNapoli proposal. Approvals were granted with the caveat that the staff re-visit concerns about the taller property casting shadows on a residential neighborhood to its east. The staff previously evaluated the concern internally and concluded no additional study was required. If staff changes its perspective, it would return to the city’s planning commission, which previously approved the project.

Council people identified the development as progress and of benefit to the community, voting 5-1 to allow it. “There are a lot of buildings in this area that need to be redeveloped, and the whole area is degraded. This [site] is coming right off the freeway into a gateway to Sunnyvale, and I do see it as a positive thing—the looks of and it has lots of open space,” said Councilmember Tara Martin-Milius.

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