REPORT TO COUNCIL
SUBJECT
Title
Information on Alternate Leasing Plan for Department Stores at Related Santa Clara Project [Council Pillar: Promote and Enhance Economic, Housing and Transportation Development]
Report
BACKGROUND
On June 28, 2016, Council approved a Disposition and Development Agreement (DDA) with Related Santa Clara, LLC (Developer) for the development of a 240-acre mixed use project (Project) located north of Tasman Drive on the former Santa Clara Golf & Tennis site. The proposed mixed-use development described in the DDA included retail/entertainment, food & beverage, hotel, residential and office uses.
The Master Community Plan (MCP), approved for the Project on June 26, 2016, provided for a multi-phased development with the core of the project or CityCenter comprised largely of retail/food & beverage, entertainment and hotel uses. The CityCenter portion of the Project is contemplated to be completed in Phases 1 through 3.
Section 5.3 of the DDA sets forth a series of Developer obligations addressing, among other items, the relocation of a fire station, minimum building requirements and minimum retail building requirements (See Discussion below). In addition to these obligations, Section 5.3.6, provides that the Developer "use its best efforts to complete and ensure the opening of two to three departments stores of 100,000 gross square feet or larger with middle to high price points" and that at least two of these department stores would not already be located within the City. The Developer's obligation to use best efforts include requirements that the Developer submit a Best Efforts Report every six months describing efforts to secure interest of retail tenants and in particular department stores.
At the time the Project term sheets and DDA were negotiated, department stores were still considered as traditional anchors in major retail developments. However, given 1) the rapid nature of change in the retail environment; 2) t...
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