DAILY BRIEFING Company 1 Cards Against Humanity, which 1 Sotheby’s plans to sell a founders loves to tweak Black Friday deals, Rembrandt portrait with a Domenico created a websitethat offered one difference: the artist’s finger- If you missed it ... Dolce item every 10 minutes that day at prints may be preserved in the (left) and what you might call a deep dis- paint. George Gordon, Sothe- In a week when Black Friday didn’t Stefano count — 99 percent off. “As the by’s co-chairman of Old Mas- describe the Bay Area’s air quality, this Gabbana ancient Mayans foretold, a savings ters, says someone’s prints also happened: apologize event of this magnitude only occurs were discovered during exam- 1 Joining a long tradition of compa- in a video once every thousand years,” the ination and restoration of the nies that drop bad news on holidays, on site said. “Act now while supplies oil sketch “Study of a Head of Facebook on Thanksgiving eve took Chinese last.” People on Twitter reported a Young Man” several years responsibility for hiring a Washington social successfully getting a $20 bill for ago. The painting will go up for lobbying company, Definers Public media. 20 cents, plus shipping fees. sale in London on Dec. 5, with Affairs, that pushed negative stories an estimated price of $7.7 about Facebook’s critics, including 1 The Satanic Temple, which had million. philanthropist George Soros. Face- Ng Han Guan / Associated Press sued Netflix and Warner Bros. for book’s communications and policy 1 Note to be outdone in the arms race for corporate stupid- $50 million over allegedly copying chief, Elliot Schrage, said in a memo ity, Dolce & Gabbana saw its goods disappear from Chinese the image of its Baphomet deity in Daily Briefing is compiled from posted Wednesday that he had done e-commerce sites as the fallout grew over remarks insulting “The Chilling Adventures of Sa- Chronicle staff so to help protect the company’s im- to China that were apparently made by two of its Instagram brina,” said it has “amicably set- and news services. For more age — yeah, that really worked well — accounts. The company has blamed hackers. Several tled” its lawsuit. CNN reported that items and links, subscribe to the and conduct research about its high- screenshots were circulated online showing co-founder the group’s leader said “the unique Tech Chronicle newsletter at profile critics. Schrage is leaving the Stefano Gabbana referring to China with crude terms and elements of the Satanic Temple's www.sfchronicle.com/ Menlo Park company, a move planned emoji as he defended promotional videos that had sparked Baphomet statue” will be acknowl- newsletters. Twitter: Bubefore the memo was releassined. controversy earlieress. Reedged in the show’spocredits. @tecrthchronicle

SanFrancisco Chronicle and SFChronicle.com | Sunday, November 25, 2018 | Section D

DRIVING THE FUTURE Fight over dead mall in Apple’s shadow

By Roland Li

As Apple flourished in Cupertino, becoming the first American company worth $1 trillion, Vallco Shopping Mall rotted away in its shadow. The 1976 mall was home to the retail giants of the 20th century: Macy’s, Sears and J.C. Penney, which all closed their stores in the last three years as foot traffic dwindled and shoppers shifted online. To- day, Vallco is a cavernous, mostly empty space of 1.2 million square feet, with a handful of survivors such as Dynasty Seafood Restaurant and the Bay Club hanging on. On the other side of Interstate 280 is Apple’s new $5 billion headquarters, which includes a sleek visitor center and Paul Chinn / The Chronicle shop. Anitha Arackaparampil removes groceries from Farmstead that were delivered to her Burlingame home by Udelv. Since 2014, developer Sand Hill Property Co. has sought to transform the mall into nearly 2 million square feet of office space, more than 2,400 Robotic grocery vans housing units and a 400,000- square-foot retail center. Thousands of Cupertino residents have fought back. In 2016, Sand Hill Property sub- feed delivery demand mitted a ballot measure to win support for one version of the project, while opponents had a measure that banned office App’s users receive space and housing on the site alert informing them Vallco continues on D3 order is ready at curb

By Carolyn Said

Anitha Arackaparampil likes the idea of robot cars delivering groceries to her Burlingame home for her fami- ly of four — in theory. In reality, deliveries she’s received Tales of the from test runs by a pilot project of digital grocer Farmstead and autono- housing crisis mous van maker Udelv had issues. Housing is the Bay Area’s most With regular deliveries, a driver troubling issue. Whether you are a brings them to her door. With autono- buyer, a seller, a renter, a landlord, mous deliveries, customers are sum- abuilder or an investor, the moned by text to retrieve their goods availability and affordability of from the vehicle, to simulate what the housing are everyday concerns. As driverless future will be like. part of its continuing coverage, “The things I order are heavy, and Josie Lepe / Special to The Chronicle The Chronicle wants to hear the our driveway is quite long,” she said. JuanJuan Sun places an order through the DeMartini market app for story of your housing experience. Robots continues on D2 groceries to be delivered by AutoX to her home in Santa Clara. 1 Tell us your story: www.sf chronicle.com/housingstories

KATHLEEN PENDER Brokerage firms make money on switch Net Worth Most brokerage firms have The average yield on the100 $175. Money market fund yields found a subtle way to squeeze largest money market funds is The sweep switch is a bypro- generally follow the federal money out of their customers. about 2 percent, while the aver- duct of the price war that has funds rate. When the Federal The trick: switching their sweep age yield on bank sweep ac- driven down trading commis- Reserve kept the funds rate accounts from higher-yielding counts at brokerage firms is 0.27 sions — even eliminating them near zero from 2009 through money market mutual funds to percent, said Peter Crane of in some cases. Brokerage firms 2015, money funds and bank lower-yielding bank accounts. Crane Data, which tracks mon- have had to find other ways to deposits all yielded next to Sweep accounts are the ey market mutual funds. make money, and sweeps is a nothing, and it didn’t really places within a brokerage Investors who have cash in a big one. It’s similar to the way matter where you kept your account where cash from bank sweep account that they many airlines have cut fares and cash. dividends, interest, stock don’t need in the short term made up for it with fees for As interest rates rose, so did sales and other trans- could use it to buy a higher- baggage, seat assignments and the yield on money funds. Many actions accumulates. yielding money market fund. overpriced food. brokerages found they could When investors buy stock On a $50,000 balance, the dif- Investors may balk at paying make more money on sweep or other securities, it ference between 2 percent and $4.95 to trade stocks but ignore cash by switching it to an ac- comes out of the sweep 0.25 percent over one year is the hidden cost of earning less count with a bank, often one account automatically. $875. On a $10,000 balance, it’s on their cash, Crane said. Pender continues on D5 N SFChronicle.com | Sunday, November 25, 2018 | D3 BUSINESS Dead mall spurs fight over ’s soul

Vallco from page D1 Re-redeveloped able housing, but all the Moore said Apple’s levels, not just the ones office project is different and kept the retail size After Cupertino residents challenged a redevelopment plan, Vallco’s developers that would satisfy ser- because the site was the same. Both measures switched from a plan they had negotiated with the City Council to a plan that complied vice workers.” already office space, were rejected by voters, with a new state law, SB35. Cupertino’s median formerly occupied by throwing the project into home value is $2.3 mil- Hewlett-Packard. limbo. City plan SB35 plan lion, up 16.6 percent The project, which The notion of replac- Housing 2,668 units, 20 percent afford- 2,402 units, 50 percent during the past year, was approved in 2012, ing Vallco with another able affordable according to Zillow. also came before much mall seems utterly unre- That’s more than 10 of the tech boom that alistic: A quarter of Office 1.75 million square feet 1.8 million square feet times the U.S. median, has flooded the highways America’s 1,100 shopping Retail 400,000 square feet 400,000 square feet according to Trulia. with traffic and led to malls are expected to Vallco’s SB35 afford- soaring housing costs. In close within five years. Building heights Up to 150 feet Up to 240 feet able housing plan in- the wake of the reces- Opponents, who Other 191 hotel rooms cludes low- and very- sion, the possibility of formed a group called low-income units, but Apple moving away Better Cupertino, say the Benefits $23.7 million for school fees, $11 not moderate-income helped spur the city to project will exacerbate million in transit improvements, units that are typically green light the plan, traffic, which is already New City Hall, 600-seat per- available for teachers. recalls Rod Sinks, Cu- miserable in the wake of forming arts center Not everyone wants pertino’s vice mayor. ’s opening. Sources: City of Cupertino, Sand Hill Property Co. affordable housing. At a Apple invested $75 The addedoffice space September public hear- million for infrastructure will also worsen the ing, Thomas Maiello and transit improve- region’s jobs-housing In Apple’s shadow Better Cupertino identified himself as a ments and paid $5.85 imbalance, they say. Adeveloper plans to build more than 2,400 housing units at the members said they sup- public school student million for affordable “The rate of office mostly vacant Vallco Shopping Mall, which is just amile from port the housing but and gave a presentation housing,double what it growth is a lot faster Apple’s headquarters. don’t want the office opposing affordable was required. Cupertino than it used to be. It’s space because of traffic. housing. is now studying a poten- unsustainable,” said “I’m a numbers per- “According to the sales tial per-employee tax Liang Chao, co-founder E. HOMESTEAD RD. son, so I certainly looked pitch, the new housing that would largely affect of Better Cupertino and at the numbers and said, units would include Apple. Cupertino a City Council candidate Apple ‘This is way too much,’ ” low-income high-density Sinks, who has also

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Sources: maps4news.com/©HERE, City of Cupertino Todd Trumbull /The Chronicle long battle also reflects and raised in Cupertino sharp contrast to nearby “Most of us moved to growing unease over the and worked for a cloth- Apple Park, the 2.8 mil- Silicon Valley because of Bay Area’s booming 50 percent will be afford- continue to rise because ing store in Vallco. She lion-square-foot head- the economic opportuni- economy, where jobs are able, which qualifies it workers are scarce, was previously a Cuper- quarters, which has no ty. The question is, are plentiful but housing is for SB35. Cupertino Moulds said. “For a tino public school teach- housing. we affording our kids scarce,particularly for planned to add 1,064 project of this size, we er until she had her first “I was really pleased that same opportunity?” less wealthy residents. housing units citywide estimate our rate of esca- a child. She lives in San when I travel to have he said. “I think we’re Some city officials want between 2014 and 2022. lation is $700,000 a day,” Jose. people say, when I said beginning to have a job growth to slow SB35’s author, state he said. “She wasn’t able to Cupertino, ‘Oh that’s the change of heart about down, but the roaring Sen. Scott Wiener, D-San Moulds said that the live here. This is where home of Apple.’ It was housing.” tech sector shows little Francisco, said he fully office space will help pay she grew up. This is founded here,” Moore signs of cooling. supports the Vallco proj- for the affordable hous- where we are. This is said. “My wife and I Roland Li is a Chronicle “The hardest thing ect. State laws pushing ing, while housing will where her friends are,” have iPads, and she has staff writer. Email: I’ve had to deal with is for housing are critical help support stores and Moore said. “So I’d like a an iPhone. We like their [email protected] the idea that growth is when there are oppo- offices by providing foot good amount of afford- products.” Twitter: @rolandlisf infinite and unstoppable. nents who “want to traffic and giving work- Cities fill up,” said Mi- freeze Cupertino in am- ers places to live. chael Goldman, a city ber and who are un- “A ll of these pieces councilman in Sunny- concerned about wheth- work together to make a vale, which borders er anyone can actually viable project,” he said. Apple’s headquarters. afford to live in Cuperti- “We have other retail The negative effects of no,” Wiener said in a projects in Cupertino growth include people statement last month. that are struggling to fleeing be- The battle isn’t over, keep the lights on, not cause of high costs, and but the developer has because business is bad, giantcompanies squeez- seized the initiative. It but because they can’t ing out smaller ones, demolished a parking get people to show up to Goldman said. structure in October, and work because their hous- “We’re going to have demolition of the mall is ing is unstable.” three big companies,” expected to begin early Vallco’s affordable Goldman said, referring next year, according to a housing levels are un- to Apple, Google and city spokesman. precedented, said Adhi Facebook. “You know A nonprofit called Nagraj, San Francisco where else had three big Friends of Better Cuper- director of SPUR, an companies? Detroit.” tino, a Better Cupertino urban planning nonprof- Cities in the region affiliate, filed a lawsuit it think tank. have few options to hit against the city, saying “To build 50 percent the brakes on job that the project doesn’t on site with no public growth, but they have comply with SB35. It subsidy is unheard of,” powerful control over alleges that the project he said, adding that land use. Projects can be isn’t two-thirds housing typical projects provide stalled for years through because it includes resi- 10 to 15 percent.” city approval processes, dential parking space, “You can imagine a lot ballot measures and that it’s built on a haz- of Apple employees who lawsuits. ardous waste site and are now struggling, sit- In the face of wither- that it doesn’t have ting in shuttles ... living ing opposition, devel- enough green space. (On in these new units,” opers usually cut a deal, a list of answers to fre- Nagraj said. “This is a THIS WEEK ON adding community bene- quently asked questions great reuse of a dying fits or scaling projects on its website, the city asset, which is a mall, down. denies there is hazard- and converting it to a Developer Sand Hill ous waste at Vallco.) growth asset.” did the opposite at Vall- A separate referen- Project critics are co: Its recent plan dum was also submitted doubtful that potential doesn’t include more for 2020 to block the residents of Vallco will •Nospare tire,no than $35 million in city city’s alternative devel- work locally. Yo ung Ap- fees compared with an opment plan, which ple employees already alternative project. It prompted Sand Hill to choose San Francisco key, no CD player? doesn’t have a traffic pick the SB35 plan in- because it’s more fun, mitigation plan and calls stead. said Steven Scharf, a What’s missing from for taller buildings, up to “We’re under way and Cupertino councilman 240 feet, close to the we’re going, and we who is “sympathetic” height of San Jose’s tall- couldn’t be more excit- toward project oppo- newcars. est towers. ed,” said Reed Moulds, a nents. Cupertino approved it managing director at “A single person is not in September. Sand Hill Property. that interested in living The reason was SB35, “We’re not going to be in Cupertino,” he said. a new California law that deterred.” requires cities that The $4 billion project haven’t met housing has full financing to Ship traffic •How SF makes goals — and most in the move forward, and no Due to arrive today Bay Area have not — to public funds are needed SHIP FROM PORT fast-track projects that to build the affordable Bosporus Yokohama, Japan BNC peopleanxious. Highway include affordable hous- housing, Moulds said. Cepheus OceanTaizhou, China SCK ing. It is a powerful Sand Hill’s equity part- Duesseldorf Long Beach OAK Express growth tool, exempting ner is Abu Dhabi In- Harvest Leader Vancouver, Wash. RCH Heijin Long Beach BNC projects from years-long vestment Authority, the Luminous AcePortland RCH hurdles, including envi- sovereign wealth fund NYK Rigel Los Angeles OAK NYK Romulus Vancouver, B.C. OAK VisitSFGATE.COM ronmental reviews and with estimated assets Orca AceLong Beach SFO public hearings. over $800 billion. The YM MandateLos Angeles OAK Sand Hill’s approved project is expected to Due to depart today plan includes 2,402 open in 2021 or 2022. SHIP TO PORT Ever Liberal Tokyo OAK housing units, and its More delays would be Orca AcePort Unknown SFO biggest concession is that costly; construction costs Source: S.F. Marine Exchange