Sand Hill Property Company

Putting cities back on the map┬áWith a focus on true mixed use and sustainable design, Sand Hill Property Company is helping to bring sunny days back to one California downtown area with its Downtown Sunnyvale project, as Andrew Pelis learns from Reed Moulds. In the current economic climate, every town has a tale of woe to tell. But Sunnyvale, California, with more than a small helping hand from local real estate developers Sand Hill Property Company, is a city that is about to get back up on its feet after more than a decade of decline.Regeneration of the Sunnyvale Town Center as ÔÇ£Downtown SunnyvaleÔÇØ will benefit the community and not just local businesses, as Reed Moulds, project manager at Sand Hill, explains. ÔÇ£Although itÔÇÖs the heart of Silicon Valley, Sunnyvale has socially been a bit off the map, and we anticipate putting it back on by leveraging the great history that Sunnyvale has established and the cityÔÇÖs eye toward the future. This project is going to create a great deal of opportunity, and we anticipate thousands of new office, retail and hotel employees here. Our aim is the authentic re-creation of a downtown, but one that offers the amenities and conveniences of a first-rate mall.ÔÇØ Sand Hill Property Company was founded by husband-and-wife team Peter and Susanna Pau in the mid-1980s and has its headquarters in San Mateo in Northern California. Its primary focus has always been on San Mateo and Santa Clara Counties, as Moulds explains, and this has given the company an advantage. ÔÇ£This has been a very dynamic area for real estate developmentÔÇöthe company has grown exponentially over the last couple of years by focusing solely on this region. Peter has been focused on this area for so long that he has built many important relations and solidified his reputation as a developer who can perform despite the capricious nature of the industry, but also one who is fair and easy to work with. He has gained the reputation of being able to pull off the more complex projects, and he can figure out problem sites that other local developers maybe cannot.ÔÇØThe Downtown Sunnyvale project has certainly presented its fair share of challenges. The 40-acre site under redevelopment was originally a vibrant downtown area that was redeveloped as the Sunnyvale Town Center Mall in 1979. It was a successful mall until it fell upon harder times post-9/11, resulting in the landlordÔÇÖs bankruptcy. The City of Sunnyvale then took the opportunity to designate the entire site as a master development area known as ÔÇ£Block 18.ÔÇØSeveral false dawns followed, with developers unable to complete the project until Sand Hill, with financial partner RREEF, became involved in 2007. ÔÇ£It took a while to consider the CityÔÇÖs requirements and come up with one or two additional suggestions, but one thing we had on our side was that the City wanted to get the project done, as the mall had been out of operation for many years. The community and the City were beginning to doubt whether this project would ever turn into a reality, so we have a very focused partner in the City,ÔÇØ comments Moulds.ÔÇ£The redevelopment plan always had a retail focus in the CityÔÇÖs plans. However, a couple of years ago the concept of creating office spaces was also mooted. A recovering Silicon Valley office market prompted us to introduce to the plan an increased office component and other office-centric amenities, such as a 200-room business-class hotel, which we thought would be great for the area, as it lacks hospitality options. ÔÇ£The entitlement process was swiftÔÇöless than four months after acquiring the real estate in May 2007, we had new office and hotel entitlements and architectural plans for about 90 percent of the project approved.ÔÇØ Working closely with the City has been one of two crucial partnerships for Sand Hill on this project, with additional expertise coming from RREEF. Moulds feels that the combination has been the key factor in getting the project up and running. ÔÇ£Between PeterÔÇÖs local expertise and RREEFÔÇÖs external influence, we were able to get this project moving forward.ÔÇØOne of the benefits for Sand Hill is the payoff for investing on publicly owned redevelopment agency land. This means that a number of capital projects can be quickly recompensed and has committed the City to working closely with the company. At the same time, there is a requirement to communicate regularly with both the City and the local community. ÔÇ£ThereÔÇÖs an awful lot of coordination, and we have regular construction mitigation meetings with the public to keep the community fully informed about what weÔÇÖre doing,ÔÇØ says Moulds. ÔÇ£We have weekly meetings with the City of Sunnyvale to ensure that issues are addressed. There is also public participation in clearing up some of the environmental waste that previously occupied the siteÔÇöwe share in the clean-up costs with the City.ÔÇØIndeed, environmental issues play an important role in the development, and the company has introduced LEED certification for the project, with office and residential buildings aiming for LEED Silver rating. ÔÇ£It was our decision to do so, and we like to think itÔÇÖs in tune with the feelings of the community,ÔÇØ Moulds asserts. ÔÇ£LEED is vitalÔÇöwe see ourselves in Sunnyvale and Silicon Valley as being in the lead in terms of finding new approaches to carrying out routine tasks. ItÔÇÖs important to introduce and educate people in sustainable development and sustainable business practices. From a marketing standpoint itÔÇÖs almost a prerequisite these days to be LEED-certifiedÔÇöto stay in tune with the passion of investors, customers and employees.ÔÇØWhile the cost of the project has increased now to the tune of a half billion dollars, much of the reasoning is to create ÔÇ£a more dynamic environment,ÔÇØ with the focus being on creating a unique project that will resonate with people. Upon completion, the redevelopment will serve up no less than 315,000 square feet of office space, 700 residential units, one million square feet of retail space, a 200-room hotel, a 13-screen cinema and well over 5,000 parking spaces. The opening will be phased in, with the office buildings likely to be occupied by the middle of 2009 and the majority of the project due for completion in 2010. ÔÇô Editorial research by Jim Rose┬á