Sunnyvale Town Center was a two-level shopping mall located in Sunnyvale, California, USA. It opened in 1979 on the site of much of the city's downtown, and was anchored by Macy's, Montgomery Wards, and later, J.C. Penney. Target moved in when Montgomery Wards closed. By the early 2000s, the mall had failed financially and only the Target and Macy's stores remained open. Work on a mixed-use development to replace the mall was stalled by a legal dispute from 2009 to 2015 and as of July 2016, when a new agreement was reached modifying the plans for the site, most of the buildings are still incomplete.
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History
The mall opened in 1979 on a 36-acre site bounded by Mathilda Avenue, Washington Avenue, Sunnyvale Avenue, and Iowa Avenue and comprising most of Sunnyvale's downtown, except for one block of its main street, Murphy Avenue. After a campaign by one citizen, six redwood trees that had surrounded the first Sunnyvale city hall were preserved in an open space at the center of the mall.
Over the years, the development went through a series of owners who either defaulted on loans or were sued for breach of contract. During that time, the mall fell into decline with changing tastes of shoppers and the emergence of newer and larger competitors. By 2002, the mall, then known as WAVE (Walking and Village Entertainment), was largely untenanted except for the three anchor stores, Macy's, Penney's, and Target, and the city decided to replace it with a modern version of a traditional downtown, including stores, restaurants, a movie theater, and high-rise apartment buildings. Redwood Square was to be a central plaza incorporating the redwood trees. Finally, in 2007, new entities named "Downtown Sunnyvale Mixed Use LLC" (DSMU) and "Downtown Sunnyvale Residential LLC" (DSR) took over the mall. DSMU and DSR were partnerships between Silicon Valley developer Peter Pau's Sand Hill Property Co. (which owned about 5%), and RREEF, a real-estate management business owned by Deutsche Bank (which owned the remaining 95%). DSMU/DSR's goal was to redevelop the mall into a high-end retail, residential and office development similar to San Jose's successful Santana Row.
DSMU/DSR took out a loan of $108.8 million from Wachovia Bank; Wachovia was later acquired by Wells Fargo. By June 2009, with the mall demolished and Target having been replaced by a new store but the other new buildings incomplete, DSMU/DSR defaulted on the loan. Pau said that the decision to default was made by RREEF without his consent. After the default, Wells Fargo started foreclosure proceedings. A foreclosure auction in August 2011 attracted no bidders, so Wells Fargo took possession of the property itself. The bank then attempted to sell the land to another developer, but this attempt was thwarted by a lawsuit from Pau, and further development continued to be stymied by litigation between Pau and Wells Fargo. In May 2012, the City of Sunnyvale issued a press release accusing Pau of having filed "delaying lawsuits that have served little purpose other than to hold the project hostage", and claiming that "a nationally-recognized development team was set to come in and finish the project in 2011 ... until the barrage of lawsuits blocked their entry". In February 2013, further appeals were filed by both Pau and Wells Fargo; Pau's attorney estimated that the appeals would delay resolution of the case by at least two years.
Current status
As of January 2015, apart from Target and Macy's the only active tenants on the site are Apple and Nokia, which have occupied new office space along Mathilda Ave. The remaining retail and entertainment space is still under construction and the residential units are all unfinished.
The California Court of Appeals rejected Pau's two appeals in January and May 2015. Pau filed an appeal to the California Supreme Court, which declined to review the decision on August 12, 2015, effectively ending the litigation. On November 18, 2015, Wells Fargo announced that it intended to sell the mall to an ownership group made up of J.P. Morgan Asset Management, Sares Regis Group and Hunter Properties. That announcement triggered a 20-day review period during which the Sunnyvale City Council evaluated the proposed ownership group. On December 10, 2015, the Council voted to acknowledge that the new ownership group met the necessary criteria, effectively allowing the sale to proceed.
In July 2016, the city announced an updated agreement with the developer under which the project would be modified: some two-story retail buildings around Redwood Square, for which only the steel framing was erected, would no longer be built, but the project continues to include high-rise residential, restaurant, and retail components and a movie theater. In September 2016, the new development team closed escrow and took possession of the project, with a groundbreaking scheduled for October 2016
Nearby developments
The Town and Country Village retail buildings across Washington Avenue from the site were demolished by the end of April 2010 and in 2013–14 were replaced with high-rise apartment buildings with ground-floor retail, developed by BRE and Carmel Properties.