Sunnyvale Town Center — when downtown became a mall

Originally published in 2006; expanded and updated in 2026.

In the 1970s, many cities believed enclosed shopping malls could save aging downtowns. Sunnyvale embraced that idea on a grand scale. Eight blocks of downtown were cleared for a $60 million redevelopment project that would transform 34 acres into Sunnyvale Town Center, an enclosed regional shopping mall anchored by Macy's and Montgomery Ward.

At the time, Sunnyvale was one of the largest cities in California without a department store or regional shopping center. City leaders hoped the project would bring shoppers back to downtown and create a new civic centerpiece. Modeled in part after a similar redevelopment in Santa Maria, Sunnyvale Town Center represented the prevailing wisdom of the era: if downtown was struggling, build a mall.

For a time, the strategy seemed to work. But over the following decades, Sunnyvale would discover an unexpected problem. The mall built to save downtown ultimately became an obstacle to the kind of downtown the city wanted to create.

Building a mall for downtown Sunnyvale

To make way for Sunnyvale Town Center, eight blocks of downtown were cleared as part of one of the city's most ambitious redevelopment efforts.

From a July 1978 San Jose Mercury News photo—construction begins on Sunnyvale Town Center, where eight blocks of downtown were cleared for the city's ambitious redevelopment project.

City leaders envisioned the project as a modern downtown wrapped in Mission-style architecture, combining regional shopping with a distinctly Californian identity.

From an October 1978 San Jose Mercury News—an early rendering of Sunnyvale Town Center highlighted its Mission-inspired architecture, landscaped walkways, and preserved redwood trees.

Developed by Ernest W. Hahn and Macy's, the 34-acre project was designed to replace aging commercial buildings with a new retail centerpiece. Plans called for multiple department stores, specialty shops, restaurants, and landscaped public spaces that would draw shoppers back to downtown.

One of the mall's most distinctive features was a central courtyard built around mature redwood and cedar trees that had stood on the site since the 1920s, preserving a small piece of Sunnyvale's past within its new commercial future.

Developers originally hoped to secure three department store anchors, but only Macy's and Montgomery Ward committed to the project. Although the mall opened with fewer anchors than planned, expectations remained high. Regional shopping centers were still viewed as powerful economic engines, and Sunnyvale Town Center was intended to become the city's new heart.

The downtown mall experiment

When Sunnyvale Town Center opened on September 27, 1979, it felt like the start of something big.

Vintage January 1980 mall directory promoting Sunnyvale Town Center’s grand opening and early shopping experience.

The new mall gave Sunnyvale something it had long lacked: a true regional shopping destination anchored by major department stores. Shoppers could browse dozens of stores without leaving downtown, while landscaped courtyards and preserved redwood trees provided gathering spaces uncommon in traditional shopping centers. For city leaders, the project appeared to validate years of planning and investment.

For a time, the concept seemed to work. Families strolled the air-conditioned corridors, local residents treated the mall as a community meeting place, and downtown once again had a clear commercial center. Sunnyvale Town Center was no longer simply a collection of storefronts along city streets—it had become a destination.

Yet the experiment revealed tensions that would never fully disappear. Montgomery Ward struggled to meet expectations, vacant storefronts proved difficult to fill, and some residents questioned whether an enclosed mall could truly function as a downtown. While supporters appreciated the convenience and modern atmosphere, critics argued that the project turned its back on the surrounding streets, isolating rather than connecting the heart of the city.

Those concerns would become more significant in the decades ahead as new competitors emerged across Silicon Valley and changing retail trends challenged the assumptions that had inspired the project in the first place.

Competition comes to Silicon Valley

By the late 1980s and early 1990s, Sunnyvale Town Center faced pressures that its planners had never anticipated. New regional shopping centers offered larger selections, newer stores, and more modern facilities. Nearby destinations such as Valley Fair attracted shoppers from across Silicon Valley, while expanding retail corridors gave consumers more choices than ever before.

At the same time, the department store industry was entering a period of consolidation. Chains merged, closed locations, and reduced expansion plans, making it harder for malls to maintain the strong anchor lineups that had fueled their success in previous decades. Sunnyvale Town Center, which had opened with only two anchor stores instead of the three originally envisioned, found itself at a disadvantage.

Yet competition alone did not explain the mall's challenges. The idea of what constituted a successful downtown was also changing. During the 1970s, many cities viewed enclosed malls as a modern solution to downtown decline. By the 1990s, planners increasingly favored walkable streets, outdoor gathering spaces, restaurants, and mixed-use development. The qualities that had once made Sunnyvale Town Center seem innovative now appeared to separate downtown from the surrounding city.

A November 1991 San Francisco Chronicle photo capturing Sunnyvale Town Center during its peak years. Some observers described Sunnyvale as "a town happy without a downtown," reflecting how the enclosed mall had largely replaced the traditional commercial center envisioned by earlier generations.

As one newspaper observed in 1991, Sunnyvale had become "a town happy without a downtown." The remark captured a growing realization: while the mall had succeeded as a shopping center, it had not created the kind of downtown many residents and planners would eventually seek.

Undoing the mall

By the early 2000s, city leaders had reached a conclusion that would have seemed unthinkable when Sunnyvale Town Center opened in 1979. The problem was no longer how to save downtown with a mall. Instead, many believed the mall itself had become an obstacle to creating the downtown Sunnyvale wanted.

The closure of Montgomery Ward in 2001 accelerated that thinking. Rather than recruiting another department store or renovating the aging complex, planners proposed something far more ambitious: undo the mall altogether.

The vision called for removing the enclosed corridors, reopening public streets, and replacing the inward-facing shopping center with a walkable district of shops, restaurants, housing, offices, and public gathering spaces. Inspired by emerging mixed-use developments such as Santana Row, the proposal reflected a dramatic change in urban planning priorities. Where the 1970s had favored enclosed malls, the new century favored active streets and traditional downtown environments.

To make way for redevelopment, stores gradually departed. Leases were allowed to expire, tenants relocated, and the mall began to empty. JCPenney closed in 2005, followed by the closure of the interior mall itself. Macy's remained in operation, while Target opened in 2009 as redevelopment plans continued to evolve.

The interior of Sunnyvale Town Center shortly after its 2005 closure, as redevelopment plans called for the enclosed mall to be replaced by a new downtown district.

By 2005, the mall that had once served as Sunnyvale's commercial center was awaiting a second transformation.

Sunnyvale Town Center in 2005, shortly before redevelopment plans began reshaping the former mall site.

For the second time in a generation, Sunnyvale was preparing to reinvent its downtown. This time, however, the goal was not to build a mall. It was to build a downtown once again.

The long road to redevelopment

The decision to replace Sunnyvale Town Center proved easier than the redevelopment itself.

Plans for a new mixed-use downtown generated excitement, but progress was slow. Financial challenges, changing development partners, and the realities of rebuilding an entire city center repeatedly delayed the project. What was expected to be a quick transformation stretched into years.

Demolition proceeded in stages. The parking garage came down first, followed by the gradual removal of the mall itself. Large portions of the site sat vacant as plans evolved and new proposals emerged. For many residents, the empty land served as a visible reminder of both the mall's disappearance and the uncertainty surrounding its replacement.

Yet even as redevelopment stalled, the city remained committed to a different vision for downtown. The debate was no longer whether Sunnyvale needed a mall. It was how to create a downtown that could function without one.

Legacy of Sunnyvale Town Center

Today, the former mall site has been redeveloped as a mixed-use district with housing, offices, restaurants, retail, and public spaces—elements more commonly associated with a traditional downtown than an enclosed shopping center. Target remains on the site, one of the few visible links to the Town Center era.

Sunnyvale Town Center represents a specific moment in American urban planning. In the 1970s, many cities believed enclosed malls could revive struggling downtowns by concentrating shopping, activity, and investment under one roof. For a time, the experiment appeared successful.

But over the following decades, ideas about downtown changed. By the early twenty-first century, planners increasingly favored walkable streets, mixed-use development, and public spaces connected to the surrounding city. The qualities that once made Sunnyvale Town Center seem modern came to be viewed as limitations.

In that sense, Sunnyvale Town Center was neither a failure nor a success. It was an experiment. Built to save downtown, it ultimately helped redefine what downtown should be.

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