Sunnyvale Town Center
A former two-level shopping mall and redevelopment site in downtown Sunnyvale, California.
Last updated August 24, 2026
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Overview
Sunnyvale Town Center was a two-level shopping mall in downtown Sunnyvale, California. It opened in 1979 on a roughly 36-acre site bounded by Mathilda Avenue, Washington Avenue, Sunnyvale Avenue, and Iowa Avenue, occupying most of the city's downtown apart from a block of Murphy Avenue. The project replaced earlier retail development, including Sunnyvale Plaza, and was intended to create a substantial commercial center for the city. The mall opened with major department-store anchors and later became associated with Macy's, Montgomery Ward, and JCPenney. Montgomery Ward eventually closed, and Target took over the replacement space. JCPenney was not secured until 1992, while changes in shopping habits and competition from newer regional centers contributed to the property's long decline. By the early 2000s, the center had become heavily under-occupied, with most activity concentrated in its anchor stores. During a period when it was promoted as WAVE, or Walking and Village Entertainment, the city began pursuing a more ambitious mixed-use replacement featuring retail, restaurants, entertainment, offices, housing, and a civic-oriented central plaza. The redevelopment became financially and legally troubled. In 2007, Downtown Sunnyvale Mixed Use LLC and Downtown Sunnyvale Residential LLC took control of the project. The entities combined Sand Hill Property Co., associated with Silicon Valley developer Peter Pau, with RREEF, a Deutsche Bank-owned real-estate investment manager. Their plan sought to create a high-end, mixed-use destination modeled in part on Santana Row in San Jose. The project was financed with a $108.8 million loan from Wachovia Bank, later acquired by Wells Fargo. Construction involved demolition of much of the mall, but the redevelopment was not completed. The development entities defaulted on the loan in 2009 after Target had been replaced by a new store and other structures remained unfinished. Wells Fargo initiated foreclosure proceedings and took possession after an August 2011 auction drew no bidders. Litigation involving Pau, Wells Fargo, and the attempted transfer of the property then delayed further construction for several years. California appellate decisions in 2015 and the California Supreme Court's refusal to review the matter effectively ended the principal litigation. A new ownership group involving J.P. Morgan Asset Management, Sares Regis Group, and Hunter Properties received city approval in late 2015 and took possession in 2016. The redevelopment was modified and rebranded as CityLine Sunnyvale. Some partially framed retail structures around the planned Redwood Square were removed, while plans for residential buildings, restaurants, retail space, offices, a cinema, and a supermarket proceeded in revised form. A 12-screen AMC theater and Whole Foods Market opened in October 2020. Macy's, one of the former mall's principal anchors, closed its Sunnyvale store in March 2019, and later proposals called for its former site to be replaced by additional mixed-use construction and a roughly one-acre public park. Sunnyvale Town Center therefore no longer operates as a conventional enclosed mall. Its physical and commercial legacy continues through the broader CityLine Sunnyvale redevelopment, which has transformed much of the former shopping-center site into a mixed-use urban district.
History
Sunnyvale Town Center was developed as a major downtown retail project for Sunnyvale, California. In June 1976, the Sunnyvale City Council approved the decision to build the center on approximately 36 acres bounded by Mathilda Avenue, Washington Avenue, Sunnyvale Avenue, and Iowa Avenue. The site contained much of the city's downtown except for a block of Murphy Avenue. Demolition began in 1977 and included Sunnyvale Plaza, a retail development that had been approximately two decades old. The mall opened in 1979 as a two-level shopping center. Its development was accompanied by a local preservation effort led by resident Fern Ohrt. Six redwood and cedar trees associated with Sunnyvale's first city hall, and originally donated by local residents, were preserved in an open area at the center of the complex. The project was also affected by California's Proposition 13, approved in 1978. The measure reduced property-tax revenues that Sunnyvale had expected to use in repaying bonds connected with the Town Center and changed the financial assumptions surrounding the development. A third major anchor, JCPenney, was not secured until 1992, making the city's financial recovery more difficult. The property subsequently passed through several ownership arrangements. Some owners defaulted on loans or became involved in contract litigation, while the mall suffered from changing consumer preferences and competition from newer and larger shopping destinations. By 2002, the center was largely vacant apart from its principal anchors. During this period it was promoted under the WAVE name, short for Walking and Village Entertainment, but the branding did not reverse the center's decline. The city instead pursued a replacement concept resembling a traditional downtown, with shops, restaurants, a movie theater, high-rise apartments, and a central public space called Redwood Square. In 2007, Downtown Sunnyvale Mixed Use LLC and Downtown Sunnyvale Residential LLC became responsible for the property and redevelopment. The entities joined Peter Pau's Sand Hill Property Co., which held approximately 5 percent, with RREEF, the real-estate investment business owned by Deutsche Bank, which held the remaining approximately 95 percent. Their proposal envisioned a high-end retail, residential, and office complex influenced by Santana Row in San Jose. The developers borrowed $108.8 million from Wachovia Bank; Wachovia was later acquired by Wells Fargo. The redevelopment encountered severe financial problems. By June 2009, much of the original mall had been demolished, Target had been replaced by a new store, and numerous replacement buildings were incomplete. The development entities defaulted on the loan. Peter Pau stated that RREEF had made the default decision without his consent, while Wells Fargo began foreclosure proceedings. A foreclosure auction in August 2011 produced no bidders, leaving Wells Fargo in possession of the property. The bank's efforts to sell the site to another developer were then hindered by litigation involving Pau. The dispute generated multiple lawsuits and appeals, and city officials argued that the litigation had prevented a prospective development team from completing the project. By January 2015, Target and Macy's remained the principal retail occupants, while Apple and Nokia had offices along Mathilda Avenue. Most retail and entertainment areas were unfinished, and the planned residences had not been completed. The California Court of Appeals rejected Pau's appeals in January and May 2015. On August 12, 2015, the California Supreme Court declined to review the matter, effectively clearing the way for a new ownership arrangement. Wells Fargo announced in November 2015 that it intended to sell the property to an ownership group consisting of J.P. Morgan Asset Management, Sares Regis Group, and Hunter Properties. After a city review, the Sunnyvale City Council acknowledged in December that the group met the necessary requirements. A revised agreement announced in July 2016 retained residential, restaurant, retail, and cinema components but reduced or changed the planned retail buildings around Redwood Square. The new team closed escrow and took possession in September 2016. The project was rebranded CityLine Sunnyvale, and unfinished steel frames around Redwood Square were removed so that a temporary park could be established. The replacement district gradually gained new uses. A 12-screen AMC movie theater was announced in 2017 and opened in October 2020 alongside a Whole Foods Market. Macy's announced in January 2019 that its Sunnyvale store would close as part of a nationwide retrenchment, and the location closed in March of that year. Because the Macy's building had previously been sold, developers later proposed a new group of mixed-use buildings around Redwood Square. The proposal, submitted in 2020, included a roughly one-acre park and an office tower in place of the former department-store building; the first phase was approved in January 2021. The original enclosed mall has consequently ceased to function as a conventional shopping center, while much of its site has been absorbed into the CityLine Sunnyvale mixed-use district.
- 2021
Former Macy's site plan approved
[1]The first stage of a plan for mixed-use buildings, an office tower, and a public park at the former Macy's site received approval.
- 2020
AMC and Whole Foods open
[1]A 12-screen AMC theater and Whole Foods supermarket opened as parts of the replacement mixed-use district.
- 2016
CityLine Sunnyvale redevelopment begins
[1]A revised development agreement was adopted, the new team took possession, and the project received the CityLine Sunnyvale identity.
- 2015
Litigation ends and sale is authorized
[1]State appellate rulings and the California Supreme Court's refusal to review the case removed the principal legal barrier to a sale.
- 2011
Wells Fargo takes possession
[1]After an unsuccessful foreclosure auction, Wells Fargo took possession of the property.
- 2009
Redevelopment loan default
[1]The redevelopment entities defaulted on a $108.8 million loan while construction remained incomplete.
- 2007
New redevelopment entities take control
[1]Downtown Sunnyvale Mixed Use LLC and Downtown Sunnyvale Residential LLC assumed control and proposed a large mixed-use project.
- 2002
Mall enters severe decline
[1]The center, then promoted as WAVE, was largely vacant apart from its anchor stores, prompting the city to pursue replacement redevelopment.
- 1992
JCPenney becomes a major anchor
[1]JCPenney was secured as a third anchor tenant after the mall had already been operating for more than a decade.
- 1979
Mall opens
[1]Sunnyvale Town Center opened as a two-level mall on a 36-acre downtown site.
Products and positioning
A downtown-oriented regional shopping center that later evolved into a planned mixed-use redevelopment combining retail, restaurants, housing, offices, entertainment, and public space.
Retail · 1979
Department-store retail
The mall's primary commercial offering was department-store shopping. Major anchors over its history included Macy's, Montgomery Ward, and JCPenney, with Target later occupying space associated with Montgomery Ward after that chain's closure. These stores provided apparel, home goods, consumer merchandise, and other general retail categories.
Shopping mall · 1979
Sunnyvale Town Center enclosed mall
The original two-level shopping center served as the central retail product of the project. It combined department-store anchors with smaller retail and food tenants on a downtown site. The enclosed-mall format declined as the property lost tenants and redevelopment plans replaced much of the original structure.
Mixed-use development · 2016
CityLine Sunnyvale
CityLine Sunnyvale is the later mixed-use identity applied to the former Town Center site. The revised concept combines housing, offices, restaurants, retail, entertainment, and public space rather than recreating the original enclosed mall. Its completed components include a cinema and supermarket, while additional site plans have addressed the former Macy's location.
Marketing campaigns
- 2002WAVE
Sunnyvale, California
The declining mall was promoted as WAVE, an abbreviation for Walking and Village Entertainment, as part of an effort to position it as more than a conventional shopping center.
Outcome. The repositioning did not prevent extensive vacancy or the subsequent decision to replace the property with a mixed-use downtown district.
Brand decisions
2020
Open the AMC theater and Whole Foods componentProduct launchBackground
The replacement project was being developed as a mixed-use district rather than an enclosed mall.
Action taken
A 12-screen AMC cinema and Whole Foods supermarket opened on the former Town Center site.
Aftermath
The openings added entertainment and grocery uses to the CityLine Sunnyvale district.
2019
Close the Macy's anchor storeStrategyBackground
Macy's announced a nationwide retrenchment, and its Sunnyvale location was part of the reduction.
Action taken
Macy's announced the closure of the Sunnyvale store, which shut in March 2019.
Aftermath
Developers proposed replacing the former department-store site with mixed-use buildings, an office tower, and a public park.
2016
Modify and rebrand the redevelopmentStrategyBackground
After litigation ended and a new ownership group acquired the property, the earlier redevelopment plan required revision.
Action taken
The city and developers adopted a modified program and introduced the CityLine Sunnyvale identity, reducing or changing planned retail structures around Redwood Square.
Aftermath
Construction resumed in stages, producing a mixed-use district with residential, retail, entertainment, and food-related uses.
2007
Pursue a high-end mixed-use redevelopmentStrategyBackground
New development entities backed by Sand Hill Property Co. and RREEF sought to replace the declining mall.
Action taken
The developers proposed retail, residential, and office uses modeled partly on Santana Row in San Jose.
Aftermath
The project was financed with a $108.8 million Wachovia loan but defaulted in 2009 before completion.
Development loan. $108.8 million loan outstanding at default (2007-2009)
2002
Replace the declining mall with a mixed-use downtownStrategyBackground
The mall had become largely vacant apart from its anchor stores and faced competition from newer shopping destinations.
Action taken
Sunnyvale pursued a redevelopment concept combining retail, restaurants, entertainment, housing, and a central Redwood Square.
Aftermath
The project eventually moved through several ownership changes, demolition, financing problems, and litigation before being revised and rebranded.
1976
Build a downtown shopping centerStrategyBackground
Sunnyvale sought to establish a major commercial focus in its downtown area.
Action taken
The city approved development of a large shopping mall on most of the downtown site.
Aftermath
The two-level Sunnyvale Town Center opened in 1979.
Recent events
- 2021
Mixed-use replacement for former Macy's site advances[1]
Other
The first stage of a plan to replace the former Macy's building with mixed-use development and a public park received approval.
- 2020
AMC theater and Whole Foods open at CityLine[1]
Product launch
A 12-screen AMC cinema and a Whole Foods supermarket opened in the redeveloped district on the former Town Center site.
- 2019
Macy's announces closure of Sunnyvale store[1]
Other
Macy's announced that its Sunnyvale location would close as part of a nationwide retrenchment; the store shut in March 2019.
- 2016
Redevelopment rebranded as CityLine Sunnyvale[1]
Other
A modified agreement changed the redevelopment program, and the new development team took possession before introducing the CityLine Sunnyvale identity.
- 2015
California litigation over Town Center redevelopment concludes[1]
Lawsuit
The California Court of Appeals rejected two appeals, and the state Supreme Court declined review, ending the principal legal impediment to a property sale and renewed development.
- 2015
New ownership group cleared to acquire the property[1]
M&A
The city acknowledged that a group comprising J.P. Morgan Asset Management, Sares Regis Group, and Hunter Properties satisfied the relevant criteria for acquiring the site.
- 2012
City criticizes litigation delaying redevelopment[1]
Lawsuit
Sunnyvale officials publicly criticized lawsuits associated with the failed redevelopment, arguing that they had prevented a replacement development team from proceeding.
- 2011
Foreclosure auction attracts no bidders[1]
Other
A foreclosure auction for the troubled property failed to attract buyers, after which Wells Fargo took possession.
- 2009
Town Center redevelopment enters financial default[1]
Bankruptcy · Other
The redevelopment entities defaulted on a $108.8 million loan while much of the replacement development remained unfinished, leading to foreclosure proceedings by Wells Fargo.
- 1979
Sunnyvale Town Center opens[1]
Product launch
The two-level mall opened on a large downtown site after demolition of earlier retail structures.
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