Sunnyvale planners review proposal to replace Lakewood shopping center with 101 townhomes and new retail

Sunnyvale planning staff and the project applicant on May 12 presented a proposal to demolish the Lakewood Shopping Center at 1119–1163 Lawrence Expressway and redevelop the 5.28-acre site with 101 townhome units in 15 three‑story buildings and a commercial building currently proposed at 10,000 square feet.

Senior staff planner Jeff Cuchinotta, the city project planner, told the Planning Commission the current application is for a special development permit and a vesting tentative map to subdivide the three parcels into 27 lots for 101 condominium units. “The current proposal before us tonight is for a special development permit to demolish the existing Lakewood Shopping Center buildings … and to redevelop the site with residential and commercial components, which include 101 townhome units in 15 buildings and a commercial building with at least 10,000 square feet of floor area,” Cuchinotta said.

Why it matters: the site sits in Sunnyvale’s Lakewood neighborhood and is adjacent to an SFPUC-owned parcel that bisects the property and prevents direct site-to-site pedestrian and vehicle connectivity. Commissioners, staff and residents expressed concern about loss of neighborhood retail, pedestrian and trail connections, traffic and safety along Lawrence Expressway, and whether the proposed retail space would be large enough to replace community-serving businesses.

What’s proposed and why it’s complicated The project would replace an existing roughly 58,549-square-foot shopping center and a former 2,000-square-foot auto service building with: 101 townhomes (a mix of 2-, 3- and 4‑bedroom units totaling 275 bedrooms), 16 below-market-rate (BMR) units, and a commercial building now shown at 10,000 square feet. The application was submitted in April 2023; an SB 330 preliminary application submitted in January 2023 froze applicable development standards, staff said.

Applicant Kelly Ruchena, director of entitlements for Bay Area Projects at True Life Companies, said the team is examining an alternate that would use the city’s recently adopted commercial incentive program to enlarge the commercial building to about 23,000 square feet on two stories. “We are considering and analyzing this alternative to try to enhance the commercial portion of the site … to get it to a 23,000 square foot, 2 story building,” Ruchena said.

Trail and parcel ownership limit connectivity The project site is interrupted by a narrow parcel owned by the San Francisco Public Utilities Commission (SFPUC). City staff said SFPUC has told them that its parcel is not part of the application and that SFPUC will not allow the city to use that parcel for required parking, open space, or a formal trail connection. Staff said the applicant proposes a six‑foot fence along the shared lot line and that the PUC parcel would remain separate.

“Because this is not part of the application, you won't see any proposed improvements on the PUC portion,” Cuchinotta said. Staff and the applicant said they have discussed possible small openings or gates but that any formal easement or improvements would require SFPUC agreement; staff said SFPUC indicated it would not grant easements or improvements beyond limited shrub plantings.

Traffic and environmental analysis Commissioners asked whether replacing a retail center with residential units would increase vehicle miles traveled (VMT) because local shoppers would drive farther to other stores. Alicia Gonzales, the city’s environmental consultant, summarized trip‑generation estimates using Institute of Transportation Engineers (ITE) rates: she said an attached‑townhome rate of about 6.74 average daily trips per dwelling unit would produce roughly 681 daily trips from the 101 townhomes, and a 10,000-square-foot retail building would generate about 945 daily trips using a 94.5 trips per 1,000‑sq‑ft retail rate. Gonzales compared that to the existing retail center’s estimated 5,534 daily trips.

“Commercial land uses are just known to generate more trips compared to residential land uses,” Gonzales said, noting the city’s local transportation analysis threshold requires a net gain of 100 AM or PM peak hour trips to trigger a more detailed VMT study. Public works staff determined the project does not exceed that threshold, staff said.

Waivers, parking and amenities Because the applicant filed under SB 330, the developer has requested a set of state density‑bonus waivers. Staff identified 17 requested state waivers: eight for the residential portion (including building height, setbacks, separation between buildings, minimum usable open space and the absence of a community room), three for the commercial portion (including floor area ratio, front yard setback and loading space), and several waivers related to parking‑lot shading and landscaping standards.

Each townhome unit would include a two‑car garage (side‑by‑side or tandem). The plan set identifies 25 unassigned surface guest parking spaces in the townhome area, with three of those marked accessible. The applicant is also requesting a waiver from the commercial loading‑space requirement, staff said. Staff clarified Americans with Disabilities Act requirements remain separate and must be met.

Public outreach and comments Staff said an outreach meeting on April 24 drew about 40 community members. Speakers at the Planning Commission meeting voiced mixed views: - Lawrence Chan, a resident, warned that removing a neighborhood grocery could create or worsen low‑access food conditions and asked the commission to “please protect us from this.” - Daniel Alvarez, a field representative for North Cal Partners Union, urged the project to prioritize local hiring and strong labor standards so construction creates living‑wage jobs. - Brad D, a nearby resident joining remotely, urged the commission to reject the proposal as presented and said the plan prioritizes market‑rate townhomes over affordable housing and local retail. - Courtney Jansen, a Lakewood resident and member of the Sunnyvale Sustainability Commission speaking as a resident, urged the developer and city to integrate BMR units throughout the project and to consider retail on the ground floor with housing above. - Fawaz, a nearby resident, said he supported the development.

Safety and neighborhood impacts Commissioners and residents repeatedly raised safety concerns about locating homes directly adjacent to Lawrence Expressway, citing vehicle speeds and the risk of collisions. One commissioner asked whether the existing sound wall would be sufficient to prevent a vehicle from entering yards; staff pointed to an existing concrete wall along portions of the Lawrence frontage and an extension that is proposed to remain.

Next steps and planning context Staff told commissioners the draft Village Center Master Plan (a city planning document that will seek to align zoning and General Plan policy for village mixed‑use areas) is expected to come back to the commission in June; until the master plan and any zoning changes are adopted, applications like this are reviewed under the standards that were in effect when the SB 330 preliminary application was filed. Staff said the project will be evaluated as a single project for purposes of environmental review, even though the SFPUC parcel bisects the site and no formal connectivity across that parcel is included in this application.

No formal motion or commission decision was taken at the May 12 study session; commissioners asked for follow‑up, additional design detail and for the applicant to continue coordination with SFPUC and city transportation staff. The project will return to the Planning Commission for future public hearings.

The commission and staff plan to continue review at a public hearing where commissioners may vote on entitlements after required environmental and design review stages are complete.