FPPC Determination Allows Cupertino Vice Mayor to Participate in Vallco Development Decisions

California, Fair Political Practices Commission, Cupertino, Vallco Property Owner

CUPERTINO, CA (April 18, 2019) – The State of California’s Fair Political Practices Commission (FPPC) has notified the City of Cupertino that Vice Mayor Liang Chao is free to participate in decisions relating to two Vallco development projects approved by the City.

In a January 15, 2019 letter to the City, attorneys for the developer, Vallco Property Owner LLC, argued that under the state Political Reform Act, Vice Mayor Chao must recuse herself from all Vallco matters because her residence is located within 1,000 feet of the Vallco property line.

In response, the City referred the issue to the FPPC, which administers the Political Reform Act. In its letter, which considered the scope of the Vallco projects and their impacts, the FPPC concluded that the Act does not prohibit the Vice Mayor “from taking part in governmental decisions concerning either of the two proposed mixed-use development projects located 939 feet away from her residence.”

The FPPC noted that both of the proposed plans “constitute major projects of significant magnitude” and found that “there is no indication that the foreseeable impacts such as increased property value, increased traffic on several main thoroughfares, intensity of use or views, will have a unique or disproportionate effect on Vice Mayor Chao’s residence.”    

“The FPPC’s decision makes it clear that Vice Mayor Chao has the right to fully participate in matters related to the two Vallco projects,” Cupertino City Attorney Heather Minner said. “Until now, the Vice Mayor had recused herself on these matters out of an abundance of caution.”

To date, owners of the Vallco property have received approval for two development plans for the site. The first, which was approved by the City Manager under a new state law designed to streamline approval of affordable housing (SB 35), is currently facing litigation. Under that SB 35 project, the site would be converted to a mixed-use development with 2,402 housing units of housing, half of which would be affordable. It would also include 1.8 million square feet of office space and 400,000 square feet of retail.

In addition, in September 2018, the Cupertino City Council approved a Specific Plan for the site. The Specific Plan project would include 2,923 housing units—534 of which would be affordable—as well as 1,750,000 square feet of office space, 400,000 square feet of retail space, and 191 hotel rooms. Under a Development Agreement for the project, the developer would contribute funding towards a new Cupertino City Hall building, a performing arts center, and local schools. Residents challenging City approvals for the Specific Plan project have qualified three referendum petitions for the ballot.

This was not the first conflict of interest alleged by attorneys for Vallco. In letters dated December 6, 2018 and December 12, 2018, they argued that the City’s two newly elected councilmembers, Vice Mayor Chao and Councilmember Jon Willey, along with incumbent Mayor Steven Scharf, could not participate in any decision regarding the Vallco projects based on past statements that were critical of the projects.  Vallco claimed that these Councilmembers were prohibited from participating under what the law refers to as common law conflicts.

The City hired an outside legal expert to conduct an extensive analysis in January 2019 that concluded no common law conflict of interest exists for any of the City Councilmembers, including the Mayor and Vice Mayor. City Attorney Heather Minner noted that “the California Supreme Court has confirmed that it is appropriate for candidates to make their concerns about large-scale development projects known during their campaigns for office and in other community engagement. This is part of a healthy, functioning democracy. Such statements do not preclude elected officials from participating in related decision once elected.”

Documents related to the conflict of interest allegations can be found at www.cupertino.org/conflictofinterest.

West Coast Commercial Real Estate News