Sunnyvale to take downtown parking garages from successor agency after county agreement on contamination liability
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Summary
The City Council and the successor agency approved an agreement on Oct. 28 that transfers three downtown parking garages to the City and makes Sunnyvale responsible for ongoing environmental monitoring of a decades‑old PCE contamination plume beneath one garage block.
The City Council and the successor agency to the former Sunnyvale Redevelopment Agency adopted resolutions on Oct. 28 to approve a compensation agreement that allows the successor agency to transfer three downtown parking garages to the City.
Background: The garages were built or retained during earlier redevelopment projects and remained on successor‑agency books after the 2012 statewide dissolution of redevelopment agencies. Discussions with the county oversight board had stalled for years because the county sought future revenue sharing tied to private, contractually dedicated parking within the garages. In the current agreement, Sunnyvale will not be required to share future revenue; instead the city will accept responsibility for long‑term monitoring and potential remediation costs related to perchloroethylene (PCE) contamination beneath Block 5, the garage adjacent to the AMC/Whole Foods block.
Staff described the contamination as legacy dry‑cleaner solvent that entered soil and groundwater decades ago. Remediation work and monitoring have dramatically reduced concentrations; the site currently requires periodic monitoring rather than active cleanup. As part of the negotiated deal, county staff recommended the city receive reimbursement to purchase a 10‑year environmental insurance policy; staff obtained quotes in the range of approximately $150,000–$250,000 for a 10‑year policy, according to the presentation.
Action taken: The council first approved the city resolution to accept the compensation agreement and authorize the city manager to take steps to implement it; the successor agency then adopted a parallel resolution to transfer the properties. Both votes were 5–0 (Councilmembers Cisneros and Lay absent). Staff described the action as the final step needed to wind down the successor agency’s remaining property holdings and allow a future formal dissolution process.
What it means: After the transfer, the City will own the three garages and be able to negotiate parking operations, terms and future uses without a county revenue‑sharing condition. The city will also assume monitoring and remediation obligations associated with the PCE plume and will be responsible for any future insurance renewals beyond the recommended initial 10‑year policy.
Sources: Staff presentation and Q&A, joint council/successor agency meeting, Oct. 28, 2025.
