REPORT TO PLANNING COMMISSION
SUBJECT
Title
Proposed Project: Related applications on a 45.6-acre site:
USE PERMIT: to demolish an existing recreation center, surface parking lot, and six-level parking structure to allow a new 592,567 square-foot research and development (R&D) building along Central Expressway; demolition of four buildings (928 East Arques Avenue, 242 Commercial Street, 230 Commercial Street, and 222 Commercial Street) to allow for a new seven-story parking structure along Commercial Street; demolition of one building at 930 East California Avenue to allow for the expansion of an existing PG&E electrical substation; and installation of associated site improvements around the proposed R&D building and parking structure. The site would retain four existing industrial/office/R&D buildings, including an office building (930 East Arques Avenue), Building 81 (974 East Arques Avenue), Building 85 (978 East Arques Avenue), and a central utility plant. The project includes merging seven existing lots to form a larger campus parcel, with one existing lot remaining at 222 Commercial Street.
VARIANCE: to exceed the maximum height limit and floor plate sizes specified in the Arques Campus Specific Plan.
Location: 974 East Arques Avenue (APNs: 205-36-006, -007 and -008); 928-930 East Arques Avenue (APN: 205-35-017); 222, 230 and 242 Commercial Street (APNs: 205-35-006, 007 and 008, respectively) and 930 East California Street (APN 205-35-003).
File #: PLNG-2023-0134
Zoning: M-S
Applicant / Owner: Applied Materials (Applicant/Owner)
Environmental Review: An addendum to the Arques Specific Plan EIR and the Land Use and Transportation Element (LUTE) Update EIR has been prepared pursuant to CEQA Guidelines Sections 15162 and 15164.
Project Planner: Cindy Hom, Associate Planner (408) 730-7411, chom@sunnyvale.ca.gov
Report
REPORT IN BRIEF
General Plan: Industrial
Zoning: M-S (Industrial and Service)
Specific Plan: Arques Campus Specific Plan (974 East Arques Avenue only)
Existing Site Conditions: Applied Materials office/R&D campus at 974 East Arques Avenue, with individual industrial and office buildings at the other sites.
Surrounding Land Uses:
North: Industrial and office/R&D uses across Arques Avenue
South: Industrial and office/R&D uses across Central Expressway, both in the City of Sunnyvale and City of Santa Clara
East: Office/R&D uses
West: City’s corporation yard, industrial, and commercial uses across Commercial Street.
Issues: Height and floor plate variances, parking
Staff Recommendation: Approve Alternative 1: Make the required Findings to approve the addendum to the Arques Campus Specific Plan EIR and LUTE Update EIR and no additional environmental review is required pursuant to CEQA Guidelines Sections 15162 and 15164; and approve the Use Permit and Variance based on the Recommended Findings in Attachment 3 and Recommended Conditions of Approval in Attachment 4.
BACKGROUND
The current Applied Materials (AMAT) campus was originally developed for industrial use by Fairchild Semiconductor in 1967 and later purchased by Hewlett Packard in 1978. AMAT acquired the property for research and development (R&D) purposes in 1995. AMAT is a global semiconductor company that supplies equipment, services, and software for the manufacture of integrated circuit chips for electronics and flat panel displays for computers, smartphones, televisions, and solar products.
On June 15, 1999, the City Council adopted the Arques Campus Specific Plan and certified its Environmental Impact Report (EIR). The specific plan consists of the “legacy” AMAT campus parcels at 974/978 East Arques Avenue (APNs 205-36-006, -007, and -008), generally bounded by East Arques Avenue to the north, Central Expressway to the south, properties along the east side of Commercial Street to the west, and a smaller office/R&D campus to the east just south of the intersection of East Arques Avenue and Santa Trinita Avenue. The specific plan allows for:
• Approximately 593,600 square feet of net new gross floor area resulting in 1,114,600 square feet of gross floor area or 72% floor area ratio (FAR) on a 35-acre site.
• An effective FAR of 64%, which discounts non-employee generating areas from the gross floor area to better assess traffic and air quality impacts on local and regional transportation corridors. These areas include those that are occupied by tools, equipment, and utility facilities; and employee amenity spaces such as an employee cafeteria, fitness/recreation center, conference center, and training rooms.
• Phased development of new office, R&D, and laboratory buildings; a parking structure; and amenity space (cafeteria, recreation center, conference center, and training rooms).
• A development agreement between the City and Applied Materials for the implementation of the Arques Campus Specific Plan.
Since the adoption of the Arques Campus Specific Plan, none of the new square footage included in the adopted Arques Specific Plan was ever built. Furthermore, the development agreement expired in August 2014.
AMAT has acquired additional parcels adjoining the legacy campus in recent years, including several in the proposed project area. AMAT intends to construct additional buildings on an expanded campus area in the future. The City is preparing the Central Arques Specific Plan in parallel with the proposed project to facilitate more intensive industrial development in an 80-acre area generally bounded by Commercial Street/DeGuigne Drive to the west, Santa Trinita Avenue to the east, Central Expressway to the south, and East Arques Avenue to the north. The new specific plan would replace the Arques Campus Specific Plan and is expected to be completed in mid-2025.
Description of Proposed Project
The applicant proposes to use all of the approved and unbuilt square footage in the Arques Campus Specific Plan to build a new state-of-the-art, three-story 592,567 gross square foot R&D facility consisting of two levels of sub-fab and utility space and one level of cleanroom space for innovation testing and manufacturing labs. The proposal also includes construction of a new seven-story parking structure along Commercial Street; expansion of the existing PG&E substation along California Avenue to provide the energy for the R&D building; installation of a new dedicated sewer line offsite on Santa Trinita Avenue and Kern Avenue; and various site and off-site improvements. The project includes merging seven existing lots to form a larger campus parcel with one existing lot remaining at 222 Commercial Street.
Demolition of four buildings (totaling approximately 118,358 square feet) at 928 East Arques Avenue, 242 Commercial Street, 230 Commercial Street, and 222 Commercial Street would be needed to accommodate the proposed parking structure. Demolition of the existing AMAT recreation center, surface parking lot with solar panel canopies and the adjacent parking structure would be necessary to accommodate the proposed R&D facility. The existing building at 930 East California Avenue would also need to be demolished for the expansion of the existing PG&E substation. The site would retain four existing industrial/office/R&D buildings, including an office building (930 East Arques Avenue, Building 81 (974 East Arques Avenue), Building 85 (978 East Arques Avenue), and a central utility plant (see Figure 1 below for Site Plan). The project includes a temporary parking plan for construction workers and staff.
See Attachment 1 for a map of the vicinity and mailing area for notices, project data tables for the proposed R&D Building and parking garage in Attachment 2, and the applicant’s project description letter in Attachment 7.
Figure 1 - Site Plan
Use Permit
The project sites are all located within the M-S (Industrial and Service) zoning district which allows for manufacturing, office, and R&D uses. The proposed R&D building is located within the Arques Campus Specific Plan boundary. New construction within the specific plan area requires design review, subject to the review and approval by the Planning Commission. The proposed parking structure, outside of the specific plan boundary, is a permitted use in the M-S zoning district and is also subject to design review. The proposed PG&E substation requires a Use Permit pursuant to Sunnyvale Municipal Code (SMC) Table 19.22.030 (6)(O). Given the varying permit paths associated with the different project components, the project is packaged together as one Use Permit for review purposes.
See Attachment 8 for the applicant’s Use Permit justification.
Variance
The proposed project includes variances from the Arques Campus Specific Plan for the R&D Building to exceed the seven stories and 75 feet maximum height limit and 50,000 square foot maximum floor plate allowance. The project proposes a building height of 100 feet to the top of the roof and floor plate sizes that vary between 194,279 and 204,009 square feet. Additional height and larger floor plate sizes are needed for the functionality of the sub-fab and cleanroom operations. Variances are intended to address practical difficulties, unnecessary hardships, and/or unique circumstances that may occur when the strict application of the standard zoning requirements results in an inconsistency with the general purposes of the zoning district. Variances are subject to the required findings in SMC Section 19.84.050.
See Attachment 9 for the applicant’s Variance justification letter.
Previous Actions on the Site
The AMAT campus site was approved for development in 1967. In 1975, the site was rezoned from Office to Industrial and Services. In 1997, the City approved the construction of the Maydan Technology Center (Building 85, 978 Arques Avenue), a central utility plant, a recreation center, and a six-story parking structure. As noted in the background, the City adopted the Arques Campus Specific Plan in 1999, but it was never built out. Between 1999 and 2021, minor permits were granted for exterior and site modifications. On September 28, 2021, the City Council initiated a General Plan Amendment study of a larger study area as an industrial intensification site in the General Plan to allow up to 100% FAR with the preparation of a new specific plan (Central Arques Specific Plan).
Previous permits for the Commercial Street and East California Avenue properties include site and architectural approval for the original buildings and subsequent permits for minor site or exterior building modifications.
EXISTING POLICY
General Plan and Arques Campus Specific Plan Goals and Policies: A complete list of goals, policies, and design guidelines from the Arques Campus Specific Plan and Land Use and Transportation Element (LUTE) of the General Plan that pertain to the proposed project are provided in Attachment 3.
ENVIRONMENTAL REVIEW
A Program-level EIR was prepared for the Arques Campus Specific Plan (State Clearinghouse No. 1998092072) upon original adoption in 1999 per the California Environmental Quality Act (CEQA), which identified broad environmental impacts resulting from the proposed development intensities and acknowledged that subsequent development of the area would occur in multiple years and phases. Certification of the Arques Campus Specific Plan EIR included a mitigation monitoring program (MMRP) and a Statement of Overriding Considerations for significant and unavoidable air quality and cumulative traffic impacts was adopted in conjunction with the Arques Campus Specific Plan. Additionally, the City certified an EIR for the General Plan LUTE Update (State Clearinghouse No. 2012032003) that included the area covered by the Arques Campus Specific Plan.
CEQA Guidelines Section 15164(a) provides that “The lead agency or a responsible agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in Section 15162 calling for preparation of a subsequent EIR have occurred.” Consistent with the process described, the City evaluated the proposed buildout of the Arques Campus Specific Plan to determine what type of additional environmental review would be required. This analysis was conducted using an environmental checklist to determine whether any additional environmental review would be required for the project. This analysis considers whether there are changes proposed in the previously adopted Arques Campus Specific Plan, new information of substantial importance, or changed environmental conditions that are of sufficient magnitude to result in new or substantially more severe environmental impact compared to those evaluated in the Arques Campus Specific Plan EIR and the LUTE Update EIR.
Based on the CEQA analysis, the project does not result in a substantial change, or result in new or substantial more severe environmental impacts. The EIR Addendum containing the checklist is provided in Attachment 5. All of the applicable mitigation measures from Arques Campus Specific Plan EIR and LUTE Update EIR have been incorporated as recommended conditions of approval (Attachment 4).
DISCUSSION
Present Site Conditions
The AMAT campus is currently developed with the following:
• 333,000 sq. ft. office/prototype lab (Building 81)
• 167,000 sq. ft. technology center (Building 85, Maydan Technology Center)
• 17,000 sq. ft. central utility plant
• 4,000 sq. ft. recreation center
• A six-story parking structure that provides 1,275 parking spaces as well as a 1,021-space surface parking lot with solar carports.
The buildings at 928-930 East Arques Avenue; 222, 230, and 242 Commercial Street; and 930 East California Avenue are developed with one-story industrial buildings totaling 118,358 square feet of gross floor area along with surface parking serving each building.
Mature landscaping is provided throughout the 45-acre combined project site including 1,385 existing trees.
Use
AMAT is a materials engineering company that designs and manufactures semiconductor chips. Existing uses onsite include prototype labs and offices and R&D. The proposed R&D building, associated parking, and PG&E substation expansion are consistent with the industrial uses envisioned in the M-S zoning district.
Site Layout
The applicant proposes to consolidate the legacy AMAT campus parcels under the Arques Campus Specific Plan with recent parcel acquisitions along Commercial Street and California Avenue to form one large campus lot. One existing lot at 222 Commercial Street, south of the proposed parking structure, would remain with access easements to the larger campus lot.
The proposed R&D building is positioned in the southeast corner of the current AMAT campus, abutting Central Expressway. The siting of the proposed R&D building accommodates an 18-foot irrevocable offer of dedication that is required for future Central Expressway improvements, consisting of a 12-foot-wide auxiliary lane and six-foot-wide sidewalk. These future improvements would be performed by the County of Santa Clara Roads and Airports Department. The irrevocable offer of dedication area necessitates an adjustment to the existing loop access road, relocating it eight feet to the north. A centralized trash enclosure, loading area, and service yard are planned on the south side of the R&D building, screened with a 19-foot tall precast concrete wall cladded with a green screen in between the wall panels. New trees are proposed along the adjusted loop road to help screen views of the service yard.
The proposed parking structure is located midblock on the east side of Commercial Street between East Arques Avenue and California Avenue, on the current 222, 230, and 242 Commercial Street properties. The parking structure includes approximately 10,520 square feet of amenity space, a shower facility, and a bicycle storage facility on the ground level. The applicant has not yet determined the programming of the amenity space but envisions uses such as a fitness center, cafe facility, or campus transit assistance facility for scooters, bicycles, golf carts, etc. A landscaped open space area is proposed directly south of the parking structure as a buffer to two neighboring properties on East California Avenue.
The applicant proposes a new surface parking lot in place of the 928 East Arques Avenue building proposed for demolition that would integrate with the existing surface parking in front of the building to remain at 930 East Arques Avenue. The proposed PG&E substation expansion is located on the current 930 East California Avenue property on the west side of the existing PG&E substation.
At the northeast corner of the campus, the applicant proposes to demolish the existing recreation building and rehabilitate the existing landscaped area that will continue to provide passive open space and landscaping. A small surface parking lot is proposed behind this open space area to serve the proposed R&D building.
See Attachment 6 for the site and architectural plans.
Access and Circulation
Vehicular access for the project is provided through existing driveways along East Arques Avenue, Commercial Street, and East California Avenue. All of the project driveways lead directly into surface parking lots, the new parking structure, or to secured areas. The six driveways along East Arques Avenue consist of five existing two-way driveways and one new two-way driveway at the northeast corner of the campus. The seven existing driveways on Commercial Street would be consolidated into four. There would be direct two-way driveway access into the new parking structure and a new two-way driveway with access lane on the south side of the parking structure. The two driveway access points to the parking structure are needed to allow for efficient access and to minimize queuing on Commercial Street. There are two existing gated and secured campus driveways located at the end of the East California Avenue cul-de-sac. One driveway accesses the existing service yard and the other connects to the private loop road along the rear of the campus, leading north to East Arques Avenue. The loop road provides emergency vehicle access and access for other service trucks. The existing driveway location for the PG&E substation site would be unchanged.
A new campus pedestrian promenade, consistent with the vision of the Arques Campus Specific Plan, is provided in front of the parking structure and new R&D Building, connecting to public sidewalks on East Arques Avenue and Commercial Street. The promenade would be integrated with the existing campus walkway network, linking together building entries. The project also introduces a new landscaped paseo with seating areas between Building 81, Building 85, and the new R&D building to promote a campus environment. New public sidewalks will also be added along the Commercial Street project frontage and in front of the PG&E substation expansion site.
Existing Class II bicycle lanes would be maintained along the Arques Avenue and Commercial Street frontages, with access inside the campus through vehicular driveways.
Architecture
R&D Building
The applicant proposed modern architectural forms for the R&D building with exteriors articulated with grids of perforated metal panels in silver, blue and charcoal colors, vision glass, and architectural precast panels. The rectangular building form is dictated by the functional requirements of the sub-fab and cleanroom facilities. The massing is broken up by incorporating recesses on the upper levels to create wall plane changes and movement. Shadow boxes provide relief through six-foot deep recesses and four-foot wide metal brows with projecting fins. A projecting entry element is provided at the northwest corner of the building to create a focal point for the building.
Parking Structure
The proposed parking structure mimics the style of the R&D building with design elements including glass elevator towers and a façade with undulating perforated metal panels, delineated with bands of fritted glazing and precast panels similar to the precast paneling used on the R&D building. All vehicular and pedestrian entries are highlighted with metal awnings. The parking structure incorporates upper floor recesses on east and west elevations that help break up the roof line and massing.
Bird-Safe Design
In accordance with the City’s Bird-Safe Design Guidelines, all exterior glazing for the R&D building and parking structure would be laminated with bird-safe fritting less than 25% reflectivity. Additionally, all integrated lighting would be on timers and shut off one hour after dusk. Staff recommends Condition No. PS-3 that requires a final bird-safe design report and letter certifying bird-safe measures have been incorporated in the final construction drawings.
PG&E Substation Expansion
The primary function of the electrical substation is to take in electricity at one voltage, change the voltage, then redistribute electricity at the new voltage to be used for AMAT operations. The proposed substation consists of various electrical equipment (medium voltage switchgear, transformers and oil containment, station service voltage transformer, coupling capacitor voltage transformer, busbar support, underground cables, breakers, switchboard, and jumpers) mounted on concrete pads and enclosed within a nine-foot tall chain-link enclosure. The outer perimeter of the chain link enclosure includes a 13’-4” tall concrete masonry wall to screen the substation, matching the screening for the existing substation. To enhance the appearance of the wall, staff recommends Condition PS-1 which requires the perimeter concrete masonry wall to be painted an earthtone color and to plant larger 36-inch box trees to conceal the wall from East California Avenue.
Development Standards
The proposed R&D building is subject to the Arques Campus Specific Plan development standards because it is located within the plan boundaries. The proposed R&D building complies with applicable development standards such as lot coverage, floor area ratio, setbacks, and landscaping but is requesting a variance to deviate from the height and floor plate size standards which are discussed further in the sections below.
The proposed parking structure and PG&E substation expansion are located outside of the specific plan boundary and are subject to the M-S zoning development standards. All applicable standards are met and no variances are requested.
See the project data table in Attachment 2.
Floor Area Ratio
The Arques Campus Specific Plan specifies an actual FAR of 72% and an effective FAR of 64%. The actual FAR controls the total amount of gross floor area that may be built on the site. The effective FAR calculation discounts non-employee generating spaces (e.g. employee amenity spaces, on-site child care centers, tool equipment/utility areas), which provide a better reflection of the anticipated traffic and air quality impacts on both local roads and sub-regional transportation corridors.
The project would utilize all the remaining unbuilt square footage included in the Arques Campus Specific Plan. The gross floor area of the proposed R&D building is 592,567 square feet and the effective floor area, discounting non-employee generating areas, is 509,609 square feet. Considering the proposed R&D building and buildings to remain, the total proposed actual campus FAR is 72%, with an effective FAR of 65%. The effective FAR is slightly above the 64% in the specific plan, but the project does not exceed the remaining unbuilt square footage allowed in the plan.
Setbacks
R&D Building
The proposed R&D building exceeds all minimum setback requirements. The building is located approximately 416 feet from the front property line on East Arques Avenue; the proposed side setback to the east property line varies from 55 to 101 feet and the side setback to the nearest west property line is approximately 698 feet. The rear of the building is setback 172 to 181 feet to the south property line along Central Expressway. Additionally, the proposed R&D building is separated approximately 88 feet from Building 81, 147 feet from the central utility plant, and 137 feet from Building 85.
Parking structure
The proposed parking structure exceeds all M-S zoning minimum setback requirements with a 27-foot front setback, a 212-foot side setback to the south property line, and a 404-foot side setback to East Arques Avenue. The proposed parking structure is approximately 177 feet away from the building to remain at 930 East Arques Ave, 74 feet from Building 81, and 368 feet from Building 85.
PG&E Substation Expansion
The proposed equipment is setback 78 feet from East California Avenue, 101 feet to the west property line and 41 feet to the south (rear) property line.
The concrete masonry wall is positioned approximately 36 feet from the front property line along East California Avenue, five feet from the west property line, and 14’-6” from the rear property line. The existing concrete wall for the existing substation along the east side would remain. A new 40-foot opening will be provided at the southeast corner to allow access for servicing and maintenance.
Building Height
R&D Building Height Variance
The Arques Campus Specific Plan specifies a height limit of seven stories and 75 feet, which is slightly different than the M-S zoning standard of eight stories and 75 feet. Furthermore, SMC Section 19.32.030 allows architectural projections, roof equipment screens, and machinery penthouses not exceeding 25 percent of the roof area to extend above the maximum height limit by an additional 25 feet. The proposed three-story R&D building measures 100 feet tall to the top of the roof, 125 feet to the top of the roof screen, and 135 feet to the top of the exhaust stacks.
The applicant is requesting a variance to exceed the 75-foot height limit due to the size of the equipment and the quantity of process utilities that are needed for the sub-fab levels and cleanroom operations. The R&D use depends on close and quick connectivity between labs, cleanrooms, and support spaces. The ground-level sub-fab houses utilities such as electrical equipment and distribution as well as the process piping for wastewater and the ultra-pure water filtration systems. Additionally, the ground-level sub-fab provides storage areas for chemical and gas units. The second level sub-fab includes pollution control equipment, safety clearances, and the exhaust and utility conveyance systems. The third-level cleanroom contains all the tools that interface directly with silicon wafers. The cleanroom requires a waffle structural concrete slab and raised metal floor to provide openings for airflow, vibration resistance, and space for utility hook-ups. There is also an interstitial level and equipment deck above the cleanroom ceiling that houses air filters and fans that scrub the air of particles to maintain a clean and sterile cleanroom environment. The applicant would be utilizing a deep roof truss for a column-free cleanroom to enable better tool placement and density.
All rooftop equipment is adequately screened by an architectural screen that is incorporated into the overall design of the building. The proposed 25-foot tall roof screen encompasses 30 percent of the roof perimeter. The mechanical roof yards occupy 22% of the roof area. Additionally, there are scrubber exhaust stacks located along the south elevation that project 10 feet above the roof screen due to safety clearance requirements.
The proposed heights exceed Arques Campus Specific Plan and M-S zoning district maximums, but there are other areas in the city that allow 100-foot building heights for industrial and R&D uses. The nearest area is the Lawrence Station Area Plan directly to the south and across Central Expressway, which allows heights up to 100 feet. The Downtown Specific Plan, approximately 1.2 miles southwest, also allows heights up to 100 feet. The Moffett Park Specific Plan allows heights ranging from 145 to 275 feet. The M-S/100% FAR zoning district, only in a few areas of the city, also allows heights up to 100 feet. One such example is the nearby office/R&D campus at the southeast corner of Central Expressway and Wolfe Road which was constructed with 100-foot building heights. Granting the variance for additional height will not result in a special privilege given the precedent set by other plan areas that allow industrial intensification.
Staff also supports the variance due to the unique design requirements and technical functions of the R&D facility that require taller heights. The building is located at the back of the campus along Central Expressway and is set back far from property lines. There are no adjoining residential uses or other sensitive receptors. The applicant is also preserving mature trees along Central Expressway and augmenting them with new trees to soften views of the building. The variance would also align with General Plan policies that encourage business growth and business retention.
Floor Plate Variance
The Arques Campus Specific Plan specifies that floor plate sizes for office/prototype lab buildings may be up to 50,000 square feet. Floor plate is another term to describe the floor area of a particular floor within the building. The floor plate parameters are intended to be adaptable and accommodate several workspace clusters. However, these floor plate parameters are outdated compared to the current industry standards and are too small to accommodate AMAT’s interior operational needs. The City also does not regulate floor plate sizes in other specific plans or zoning districts, only the total FAR. The proposed larger floor plate sizes that vary between 194,279 and 204,009 square feet are due to the functional and technical needs to operate the sub-fab space.
Staff supports the variance due to the unique functional and technical needs for the proposed R&D use including innovation testing and manufacturing labs. The project is within the maximum allowable FAR and floor area included in the Arques Campus Specific Plan. The larger floor plate sizes occur in the middle of the campus and are not visually impactful to adjoining properties. The variance would not constitute as a special privilege considering there are no other specific plan or zoning provisions that limit floor plate sizes in any zoning district. The Arques Campus Specific Plan envisioned several smaller buildings placed within the campus where 50,000 square feet floor plates could be practicable, and were more common in the late 1990s when the Specific Plan was adopted. Approvals of Class A office/R&D projects in recent years have exceeded 50,000 square foot floor plates, particularly within the Peery Park Specific Plan. The project is designed to be flexible and adaptable to future technologies and forms workspace clusters as specified in the Arques Campus Specific Plan.
Automobile Parking
Currently, the project area provides a total of 2,296 parking spaces that are comprised of an existing parking structure with 1,275 parking spaces and 1,021 surface parking spaces. The project proposes to remove approximately 2,063 spaces to accommodate the new R&D building, parking structure, and associated site improvements. The applicant would retain 233 existing parking spaces in front of Building 81 and on the north side of the office building at 930 East Arques Avenue.
The applicant proposes a total of 2,300 parking spaces consisting of 1,900 parking spaces in the new seven-level parking structure and 400 surface parking spaces (combination of existing and proposed) near 930 East Arques Avenue, in front of Building 81, and in front of the new R&D building.
The Arques Campus Specific Plan requires 2,975 parking spaces and a parking ratio of one space per 322 square feet of floor area. The project would be required to provide a minimum of 3,310 parking spaces based on the plan’s ratio. The project is also eligible for a three percent parking reduction because employee shower and locker room facilities for bicycle commuters are provided, but the proposed parking supply still falls short of the plan’s requirement. The applicant is requesting a parking adjustment in accordance with SMC Section 19.46.130 which allows flexibility in parking requirements to address unusual or specific use or locational characteristics.
A parking study was prepared by Hexagon Transportation Consultants (Attachment 10). The Arques Campus Specific Plan was approved in 1999 and utilized a parking ratio that was typical for office buildings at the time. However, as the campus has evolved, many of the buildings are used for R&D/industrial purposes which are filled with machinery and have low employment density. Therefore, the original parking ratio would be too high and result in many more parking spaces than needed. Hexagon conducted field parking counts for one week in June 2023 to determine the peak parking demand. The peak use was on a Wednesday at 11:00 AM with a total of 1,205 vehicles parked on the campus. Based on the counts, the study recommended a parking ratio of 2.16 per 1,000 square feet of floor area. This parking ratio is consistent with the City’s Parking Code which requires two spaces per 1,000 square feet for R&D uses. Based on the recommended adjusted parking rate, a total of 2,245 spaces would be required and the proposed 2,300 spaces would be consistent with that rate.
Staff is supportive of the requested parking adjustment because the parking ratio is consistent with what is typically required for R&D uses throughout the city. A field parking study also confirmed the actual parking demand onsite. Additionally, the City has approved other similar parking adjustments for R&D buildings in Moffett Park at 1155 Borregas Avenue and 1160 North Mathilda Avenue. The project site is also served by bus and rail transit service.
Transportation Demand Management
The Arques Campus Specific Plan and its EIR mitigation measures require the project to create and implement Transportation Demand Management (TDM) measures to achieve a minimum trip reduction goal of 15% for AM and PM peak-hour automobile trips. A final TDM plan and annual reporting requirements under the City’s TDM Program are required per the conditions of approval. A draft Transportation Demand Management (TDM) plan has been submitted that identifies methods to reduce AM and PM peak hour trips by 15 percent (see Attachment 11).
Temporary Parking During Construction
As conditioned, there will be a temporary parking plan that will be implemented during construction to ensure adequate parking is maintained. The temporary parking plan includes off-site parking that has been secured at 903 East Arques Avenue, 955-965 East Arques Avenue, 995-999 East Arques Avenue, and 920-960 Stewart Drive with shared parking agreements and a shuttle program that will pick-up and drop-off employees from the assigned off-site parking areas to various pick-up and drop-off zones near Buildings 81 and 85.
Bicycle Parking
Bicycle parking is required for five percent of vehicular spaces provided. Based on 2,300 vehicle spaces, a minimum of 115 bicycle spaces are required - of which 86 must be secured (Class I) and the remainder may be Class II spaces. The final locations of bicycle parking spaces will be reviewed during the building permit in accordance with VTA bicycle parking guidelines.
Landscaping and Tree Preservation, Removal and Replacement
The Arques Campus Specific Plan encourages a landscape design that unifies the campus as well as enriches spaces that can be used for a variety of outdoor activities as well as provide a natural complement to the indoor spaces. The proposed landscape plan builds upon the existing campus landscape with its mix of mature trees by utilizing similar planting palettes for design continuity.
There are 1,385 trees currently located on the 45-acre project site, including street trees. The applicant proposes to remove a total of 541 trees including 191 protected trees (any tree that measures 38 inches or greater in circumference measured 4 ½ feet above grade) and 350 non-protected trees. There are various reasons for the proposed removals: the location of the tree is in the building footprint of the new R&D building and parking structure; trees are in conflict with utility trenches or in the path of electrical conduits from the substation to the new R&D building; adjustments are needed to the loop road for emergency and service access that impacts trees; and crane access to construct the new R&D building would be impacted by existing trees.
The City Arborist and Planning Division staff walked the project area to verify proposed removals and identify trees that should be retained. Based on the City’s tree replacement standards, a total of 266 replacement trees are required. The applicant is proposing to install 501 new trees consisting of (408) 24-inch box trees, (83) 36-inch box trees, and (10) 48-inch box trees. Proposed replacement trees include Big Leaf Maple, California Buckeye, White Alder, Pacific Madrone, Western Redbud, California Sycamore, Coast Live Oak, Valley Oak, and Fremont Cottonwood trees.
The 18-foot irrevocable offer of dedication required for the County of Santa Clara’s future roadway improvements on Central Expressway would require the removal of additional perimeter trees along the southern edge. These trees are anticipated to be removed when the County moves forward with the improvements, but will remain with the proposed project. Future tree removals would be subject to a separate permit. To account for the anticipated removals, the applicant is proposing a row of screening trees along the rear loop road.
The project is consistent with landscaping requirements by providing approximately 33% percent of the total site area with landscaping where 20% is the minimum requirement. The project also complies with parking lot landscaping and shading requirements. The project provides 51% parking lot landscaping where 20% is required and 58% parking lot shading where 50% is required.
The proposed landscaping concept is consistent with the Arques Campus Specific Plan by maintaining landscaping buffers with trees along East Arques Avenue and Central Expressway, the main campus entry fronting the new R&D building, and the loop road. The project also provides landscaped pedestrian walkways that connect to open space areas and other campus destinations. The landscaped pedestrian walkways would be furnished with seating areas. The promenade and paseo areas would also utilize decorative paving to help delineate pedestrian courtyards, plazas, and building entries.
Offsite Improvements
The project is required to upgrade an existing driveway on East Arques Avenue to current City standards and install frontage improvements including new sidewalks, curb and gutter, streetlights, and street trees along the project site frontages on Commercial Street and East California Avenue. A new dedicated offsite sewer line would be installed to accommodate the increased flows projected by the proposed project. The new sewer line would exit the project site at the northern edge, cross East Arques Avenue, and extend north along Santa Trinita Avenue and east along Kern Avenue. The sewer pipeline would be approximately 2,100 feet long and up to 20 inches in diameter. Final designs will be reviewed by the Department of Public Works at the off-site improvement stage of the project.
Easements and Utilities
In addition to the irrevocable offer of dedication for the future Central Expressway improvements, the project is required to provide the necessary easements/dedications for right-of-way, emergency vehicle access, and installation of utility improvements for water, sewer, fire service and electrical service to the new R&D building and parking structure.
Fiscal Impact
Standard fees and taxes are expected, such as Transportation Impact Fees, Housing Mitigation Fees, as well as all building permit-related fees and taxes. Additionally, the project is subject to fair share transportation contributions as identified in the Arques Campus Specific Plan MMRP. Other utility impact fees were paid in the early 2000s, as well as partial housing mitigation and fair share transportation fees. The total amounts in the conditions of approval reflect credit for these partial payments.
Public Contact
Public contact was made by posting the Planning Commission meeting agenda on the City's official-notice bulletin board at City Hall. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 West Olive Avenue (during normal business hours), and on the City's website.
The City sent 3,478 notices to property owners and residents within 2,000 feet of the subject site as well as interested parties in addition to standard noticing practices, including advertisement in the Sunnyvale Sun Newspaper and on-site posting.
The City received an email from a property owner near the project site (Attachment 13). The property owner expressed concerns with the appearance of the perimeter wall that is proposed for the PG&E substation expansion and potential health issues associated with electromagnetic radiation. Condition no. PS-2 requires the applicant to submit an electromagnetic fields (EMF) report prior to building permit submittal to confirm emissions comply with all applicable health and safety requirements.
Planning Commission Study Session
The Planning Commission reviewed the project plans at a study session on October 9, 2023. The Planning Commission was generally supportive of the project and gave the following feedback:
• Provide justification for the requested height variance and include examples of similar heights approved for other industrial, office/R&D projects.
• Provide a parking analysis to justify the proposed parking adjustment from the minimum parking ratio.
• Explore impacts on nearby Scanning Electron Microscopes (SEM) and Transmission Electron Microscopes (TEM).
• Explore the feasibility of incorporating a publicly-accessible lobby within the new R&D Building or another publicly-accessible exhibit highlighting the operations within the building.
• Clarify the extent of undergrounding PG&E power lines, and the ownership and operations of the PG&E substation.
• Include project views from the parking structure at the Central Expressway and Wolfe Road office campus.
• Address toxic gas contaminants associated with the semiconductor industry.
This staff report includes justifications for the proposed variances and parking adjustment. The applicant has provided a letter confirming the project will not introduce any impediments to neighboring business’ use of SEM/TEM (see Attachment 12). The applicant will review the feasibility of a publicly-accessible lobby in future buildings associated with the Central Arques Specific Plan. AMAT owns the property for the proposed PG&E substation expansion, with PG&E as the service provider. A cross-section study comparing the heights of the Central Expressway and Wolfe Road office campus building and the proposed R&D building is included on Sheet 10 of Attachment 7. The EIR addendum addresses toxic gas contaminants associated with semiconductor operations.
Neighborhood Outreach Meeting
The applicant hosted an online neighborhood outreach meeting on October 12, 2023, which was attended by five people. The attendees asked questions about construction timing, dust, and traffic, as well as undergrounding of existing overhead power lines.
ALTERNATIVES
1. Make the required Findings to approve the addendum to the Arques Campus Specific Plan EIR and LUTE Update EIR and no additional environmental review is required pursuant to CEQA Guidelines Sections 15162 and 15164; and approve the Use Permit and Variance based on the Recommended Findings in Attachment 3 and Recommended Conditions of Approval in Attachment 4.
2. Alternative 1 with modified conditions of approval.
3. Deny the Use Permit and Variance and direct staff where changes should be made.
STAFF RECOMMENDATION
Recommendation
Alternative 1:
Make the required Findings to approve the addendum to the Arques Campus Specific Plan EIR and LUTE Update EIR and no additional environmental review is required pursuant to CEQA Guidelines Sections 15162 and 15164; and approve the Use Permit and Variance based on the Recommended Findings in Attachment 3 and Recommended Conditions of Approval in Attachment 4.
JUSTIFICATION FOR RECOMMENDATION
Applied Materials is one of the three largest manufacturers of semiconductor process tools and is the only American company in the top ten world suppliers. The existing R&D facility, the Maydan Technology Center, is operating at its service capacity, and the proposed project would allow Applied Materials to grow its operations in Sunnyvale and continue its position as a global leader in the semiconductor industry. The project is consistent with General Plan policies to encourage business expansion and bolster the local economy with a diverse range of employment opportunities. The project completes the buildout of the Arques Campus Specific Plan and is in alignment with its vision to nurture inspiration and imagination; create leading-edge and flexible facilities; attract top industry talent; and create a sustainable, connected campus environment. The project site is near other properties owned by Applied Materials and is located considerable distances from residential and other sensitive receptors. All environmental impacts can be mitigated to a less than significant level. The height and floor plate variances are justified by other similar development examples and standards in the city. Future development in the campus is anticipated in the forthcoming Central Arques Specific Plan, which will be evaluated in a separate public review process.
Staff
Prepared by: Cindy Hom, Associate Planner
Reviewed by: George Schroeder, Principal Planner
Approved by: Shaunn Mendrin, Planning Officer
ATTACHMENTS
1. Vicinity and Noticing Radius Map
2. Project Data Table
3. Recommend Findings
4. Recommend Conditions of Approval
5. EIR Addendum
6. Site and Architectural Plans
7. Project Description Letter
8. Use Permit Justification Form
9. Variance Justification Form
10. Parking Study
11. Draft Transportation Demand Management Plan
12. Electron Microscopes Memo
13. Public Comments