REPORT TO COUNCIL
SUBJECT
Title
Action to Waive Second Reading and Adopt Ordinance No. 2078 to Approve Amending the Development Agreement to Implement Aspects of Scheme C, a New Land Use Scenario that added Light Industrial as a Permitted Land Use on Parcels 1 and 2, Replacing the Originally Planned Office Uses and Transferring Unused Development Intensity to Parcel 4 for the Related City Place Santa Clara Project (PLN24-00060) Located at 5155 Stars and Stripes Drive
Report
BACKGROUND
At the July 8, 2025 Council meeting, proposed Ordinance No. 2078 was passed for the purpose of publication. Pursuant to City Charter Sections 808 and 812, a summary of proposed Ordinance No. 2078 was published to the Santa Clara Weekly on September 10, 2025, and copies were posted in three public places.
DISCUSSION
The ordinance introduced on July 8, 2025 would amend the August 12, 2016 Development Agreement (“DA”) between the City of Santa Clara and Related Santa Clara, LLC (“Developer”), for the 240-acre Related Santa Clara mixed-use Project located at 5155 Stars and Stripes Drive (formerly known as “City Place”). The DA amendments are necessary to implement the “Scheme C Variant” for the Project. At the July 8 meeting, the Council also approved amendments to the Project’s General Plan land use designation, Master Community Plan, and Disposition and Development Agreement, all contingent upon the Council’s final adoption of the DA ordinance.
The Scheme C Variant would amend the Master Community Plan for the Project to authorize light industrial uses, including general service, warehousing, storage, distribution, manufacturing, and data centers on the eastern parcels (Parcels 1 and 2); make corresponding modifications to development standards for Parcels 1 and 2; and allow for a transfer of some of the previously anticipated square footage of development from Parcels 1 and 2 to the western parcels (Parcels 4 and 5). If approved, the Developer would have the option of developing the site with either the Scheme C Variant, or either of the original development alternatives (Schemes A and B).
The proposed ordinance would make the corresponding amendments to the 2016 DA, and increase the percentage of dwelling units that must be affordable to moderate income households. Specifically, other than with respect to the initial 200 residential units in Phase 1, 15% of the units must be affordable to households with income that does not exceed one hundred percent (100%) of the Area Median Income for Santa Clara County, whereas only 10% were required to be affordable under the 2016 DA. In addition, the proposed DA amendments would require that the industrial uses within Scheme C would pay development impact fees and administrative fees at the levels as and when otherwise due, with no caps. Finally, the amended DA would add a regional traffic fee for industrial uses (similar to office uses) at $1 per square foot.
ENVIRONMENTAL REVIEW
An Addendum to the City Place 2016 EIR was prepared for the project by the environmental consultant firm ESA, in accordance with CEQA, and was posted on the City’s website. The Addendum concluded that any potential environmental impacts associated with development of the project site under the proposed Scheme C were adequately analyzed and covered by the analysis in the 2016 EIR. The proposed project would not trigger substantial changes to the previously approved EIR and implementation of Scheme C would cause no new significant environmental effects and no substantial increase in the severity of previously identified significant effects than were disclosed in the 2016 EIR. Therefore, no further review or analysis under CEQA is required.
FISCAL IMPACT
As described in detail in the July 8, 2025 Report to Council, the development of the project under Scheme C will continue to provide substantial land lease revenues to the City’s General Fund. Sales and property tax revenues will accrue to the City, as well as to nearby agencies that benefit from the increases in the distribution of property tax that will grow as the project develops and is occupied.
• Scheme C generates a projected $20.6 million annual net positive fiscal impact to the City General Fund upon buildout, or $28.1 million annually with inclusion of ground rent.
• The projected City General Fund fiscal impact with buildout of Scheme C, including a data center use, is a net positive $22.2 million annually, or $30.3 million with inclusion of ground rent. This is an increase of approximately $2 million annually compared with Scheme C without a data center. Higher assessed values, lower City service demands, and increased ground rent associated with data center uses contribute to an increase in the projected net positive City General Fund fiscal impact.
Comparison with Scheme A
• Scheme A with minimum retail, generates a projected $20.5 million annual net positive fiscal impact to the City General Fund.
• Scheme A with Full Retail with build-out of the full 1.5 million square feet of included retail uses generates a projected $25 million annual net positive fiscal impact to the City General Fund. This is the largest net positive fiscal impact of the four scenarios, attributable to the sales tax revenues generated by approximately 700,000 square feet in additional retail space.
The project will create a variety of jobs for residents in the City and region, the changes under Scheme C could accelerate early activation and lay the foundation for full realization of the project. Finally, the public benefits under Scheme C, include a commitment that at least 15% of all residential units on the sites will be affordable at a maximum average of 100% AMI. In addition to the ongoing revenues, one-time sales tax revenues will be generated for the City from construction purchases. Through the purchase of building materials within the City, total buildout construction is also expected to generate onetime sales tax revenues to the General Fund.
The proposed Scheme C amendment retains the core vision of the Related Santa Clara project as a vibrant, regional mixed-use district centered around a high-density City Center while incorporating land uses that address current economic realities and enable development momentum. The modifications under Scheme C are supported by environmental analysis, consistent with applicable policy frameworks, and designed to uphold the City’s public-private development objectives.
COORDINATION
This report has been coordinated with the Community Development Department.
PUBLIC CONTACT
A summary of proposed Ordinance No. 2078 was published to the Santa Clara Weekly on September 10, 2025, and copies were posted in three public places and made available for public inspection at the City Clerk’s Office.
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Waive Second Reading and Adopt Ordinance No. 2078 to approve amending the Development Agreement to implement aspects of Scheme C for City Place Santa Clara Project.
Staff
Reviewed by: Glen Googins, City Attorney
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Ordinance No. 2078 (Intro)