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City Desk: August 6, 2015

Council Says No to Extending 20-year-old Agilent Development Agreement

At its July 14 meeting, the Santa Clara City Council voted unanimously against extending Agilent’s 2005 development agreement for 55 acres at 5301 Stevens Creek (at Lawrence) for another five years – to 2020 – with an option for an additional extension to 2025. The initial development agreement and project EIR for 1.3 million square feet of office space goes back to 1995, which was extended for 10 years in 2005. Agilent’s request was to extend the existing master plan agreement; not to change or add to it.

Agilent split off HP’s test and instrument business in 1999 with 47,000 employees. In 2006, the company moved its headquarters from Palo Alto Research Park – now home to Tesla – to the Stevens Creek campus. Over the past 15 years, Agilent has acquired three companies, sold off four product lines and shut down two others, and last year split into two companies. Agilent currently has 12,000 employees and operations in 30 countries.

Under the terms of the 2005 development agreement, any extension must have its “first read” by the Council by July 25, 2015 – July 14 was the last scheduled meeting before that deadline. The Planning commission recommended extending the agreement for five years, provided Agilent reduced building heights.

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During the time it has had the agreement, Agilent hasn’t presented any construction plans, which had some on the Council wondering if the company was planning to sell the property – if it were sold, the development agreement would transfer to the new owner.

“Here we are over 20 years later and nothing much has happened,” said Council Member Teresa O’Neill. “We’ve gone thru several boom and bust cycles, since the agreement was originally signed … It seems like this is very stale.”

“Things have changed so tremendously for us since 2005,” said Council Member Lisa Gillmor. “What is the upside for us to do this? Normally with development agreements, we’re assured they’re going to move ahead. But it doesn’t even look like they have a project.”

Agilent wasn’t ready to build yet, said Santa Clara Planning Director Kevin Riley. “They have to decide what their business plan looks like. “They’re not ready to decide. That’s why they’re asking to extend the development agreement.” The City’s interest is served in many ways, said Riley, from keeping a long time business to providing public amenities as part of future development.

“It’s true we don’t have any immediate plans to build,” said Attorney Steve Madison, an Agilent representative, “but if business … warrants it, we want to be prepared to do that by having the development agreement in place. It allows Agilent to move forward more quickly.”

There was a supplemental EIR in 2005, which included an updated traffic analysis, according to Shannon George of David Powers Environmental Consulting. That study was focused on changes to the master plan.

The Planning Department’s 2015 update to that study (santaclaraca.gov/index.aspx?page=2193) reports that, “No substantive revisions are needed to the 2005 Final Supplemental EIR because no new significant impacts or impacts … no changes in circumstance in the project area … [and] no new information has come to light that would indicate the potential for new significant environmental impacts or substantially more severe impacts.” EIRs have to consider all previously approved projects at full development in their analyses.

Two other City concerns are linked to the Agilent development agreement. The first is assuring a right of way for a continuation of the Saratoga Creek/San Tomas Aquino Creek Trail along the property under the agreement.

The second is that Silicon Valley Power would like to buy the land and rebuild the substation, which is on Agilent’s property. Under the proposed 2015 extension agreement, Agilent would enter into a purchase agreement with SVP to sell the land for $1.9 million. “If we’re not able to purchase this property, we’ll do the best we can to modernize on the existing site, but it would be a much tougher job,” said SVP Director John Roukema.

“If Agilent were planning to build this, I imagine you’d be planning to build it soon … If you were planning to build in the next five years, wouldn’t you be planning to build it now. Or are you planning to dispose of it in the next five years?” Gillmor asked.

“If we were interested in disposing of the property, we’d likely be coming in with a different property owner, interested in different entitlements,” said Madison.

The Council discussed alternatives for adding milestones and new environmental reviews to the agreement. In the end, City Attorney Richard E. Nosky, Jr. crystallized the question before the Council.

“If we agree to the extension of the development, that means, by extension, that we believe that the EIR is adequate. In the development agreement, we are conferring vested rights to the developer with the EIR as it is today. That puts the City in a very vulnerable position. If we do not feel … the environmental review is adequate, then by implication we don’t feel the development agreement is adequate.”

“It seems simpler to deny the request and come before the Council with a new agreement,” said Mayor Jamie Matthews.

Most of the public comment about Agilent’s development agreement, were complaints about Apple’s recent and current construction – focusing on the looming ship-like appearance of the Stevens Creek building (next to 280), expected gridlock on Stevens Creek when the Apple 2 campus is finished and the safety of high school students who walk to school on Stevens Creek.

Cupertino currently has five active development projects on Stevens Creek Boulevard; part of its “Heart of the City” plan to create five distinct “districts,” all centering on Cupertino’s main corridor, Stevens Creek.

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