Carmel Partners to turn vacant store into 400 homes

Carmel Partners wants to turn the site of a shuttered hardware store in downtown Sunnyvale into more than 400 apartments and townhomes, making it the single largest multifamily project in the city’s pipeline.

The multifamily-focused developer filed plans to demolish a single-story, 33,700-square-foot warehouse at 777 Sunnyvale Saratoga Road, last occupied by Orchard Supply Hardware, into an eight-floor, 377-unit apartment complex and 40 three-story townhomes.

Plans call for about 12,000 square feet of space for shops and restaurants on the apartment complex’s ground floor. San Francisco-based Carmel intends to make 50 of its project’s for-sale and rental homes affordable to those on low and very low incomes, according to application documents filed with city planners in September.

Although those documents outline Carmel’s plans across hundreds of pages, its proposal remains incomplete from the city’s standpoint. The firm is responding to a dozen pages of comments from the city on incomplete or missing aspects of its plans after an initial project review last month, Sunnyvale Principal Planner George Schroeder wrote in an email.

The city hasn’t yet received resubmitted plans, according to Schroeder.

A Carmel representative listed as the primary contact on its project application didn’t respond to a request for comment.

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The firm filed plans under SB 330, a state law that streamlines the review and hearing process for compliant residential projects, and California’s density bonus law, which allows developers to build a denser development than permitted under local zoning in exchange for more on-site affordable housing. It will need to increase the number of affordable homes in its project by more than a quarter — to nearly 60 apartments and five townhomes — to qualify for the density bonus, according to comments the city provided to its application last month.

Less than 3 percent of Sunnyvale’s housing stock in 2020 was accessible to those on incomes ranging from extremely low to moderate, according to an analysis by SV@Home, an affordable housing advocacy group. Like other Silicon Valley cities, Sunnyvale has exceeded the state’s mandated target in planning for new above-moderate-income housing during the current 2015-2023 cycle, but is well short of achieving its housing allocation goals in the very low-, low- and moderate-income categories.

Carmel’s plans won’t make a meaningful dent in helping the city meet its goals in those categories — particularly for very-low-income units, which was 13 percent complete as of March. However, they may serve as a benchmark for how Sunnyvale can most efficiently expand its housing supply — turning an empty retail site into a dense project with market-rate and affordable homes that are a short walk from a bus stop and El Camino Real, which the city describes in planning documents as a major transportation corridor.