Council greenlights annexation of two East Pleasanton properties

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The Pleasanton City Council unanimously voted on Tuesday to move forward with the process of annexing properties in East Pleasanton where two large housing developments are being proposed for construction.

While there were some questions about specific design elements for both of the residential development proposals, the consensus during the meeting was that annexation was necessary to have more oversight over the projects and to reap the additional yearly revenue.

“This is a very large project,” Mayor Jack Balch said during the Feb. 18 council meeting. “This is, between all of these projects, a huge planning effort. We should be working cautiously to make sure we get it right.” 

Last August, the City Council instructed staff to look into what the pros and cons would be if the city annexed two properties in unincorporated East Pleasanton where developers are looking to build the new housing.

Both developments would be located in the East Pleasanton planning area, which is a 1,100-acre area located east of Valley Avenue and Busch Road, north of Stanley Boulevard and south of Arroyo Mocho. Both properties are owned by SteelWave LLC — a San Mateo-based real estate developer.

The two projects in question are the Arroyo Lago project, which aims to develop 194 single-family homes and 49 accessory dwelling units, and the East Lakes Project, which could see up to 600 units depending on final designs.

Community development director Ellen Clark told the dais that by annexing both properties the city could generate about $903,000 in yearly property and sales tax revenue. If the city did not annex the two properties — which are currently under the purview of Alameda County — Clark said it would have had a negative impact on the city.

“If those projects (were) developed in the county, the analysis showed that there would be a net negative fiscal impact of about $778,000,” Clark said.

She said while those residents would have been in an unincorporated area of the county, most of them would have taken advantage of Pleasanton services, which in turn would have incurred costs to the city without the benefit of the additional revenue.

Clark also reviewed infrastructure needs for the proposed developments and said the few sewer and water infrastructure improvements — like a new water pipeline and the upsizing of existing downstream sewer pipes — needed to support the projects would be paid by the developers.

She said while current studies don’t analyze the water supply or sewer treatment capacity, other recent studies related to the city’s Housing Element suggest capacity will be adequate. However, staff made it clear that more environmental impact reviews must be conducted as the projects move forward under the purview of the city.

Councilmember Matt Gaidos brought up concerns about sewer treatment and how the larger of the two developments had proposed constructing an independent, offsite treatment facility near the Chain of Lakes, which is located near the properties, as part of the county plans. But now as the city gets set to annex the properties, the city will handle those services.

Clark mentioned the possibility of creating a community facilities district — a mechanism used by public agencies to finance shared infrastructure, through municipal bonds repaid through special taxes on benefiting properties — to address infrastructure needs in East Pleasanton. As part of the ongoing work, Clark said staff will continue to explore this concept with the property owner.

The Arroyo Lago project aims to redevelop 26.56 acres located immediately east of the city’s limits and is currently undergoing CEQA review, which will look at potential environmental impacts. 

The applicant for the property — Danville-based 330 Land Company — has been under the purview of the county’s application process over the past two years. However, it recently submitted a preliminary application to the city with revisions, primarily to address concerns raised by residents of the adjacent Village at Ironwood, who showed up during Tuesday’s meeting to voice their grievances about the fencing that would be adjacent to a lot of their homes.

Several neighbors whose backyards are parallel to the Arroyo Lago project agreed the best course of action was for the city to annex the properties so that it could work with developers to address concerns like the height of the fencing so that Ironwood residents don’t lose their backyard views.

“I think this is a good opportunity for Pleasanton to assume a leadership role,” Vice Mayor Jeff Nibert said. “Hopefully this will create some good will among all parties so that as we go along the path together, there may be a little flexibility along the way.”

Councilmember Julie Testa appreciated 330 Land Company’s willingness to work with the city on mitigating those concerns. However, she did have some concerns regarding the East Lakes Project, which aims to redevelop 61.6 acres located east of the Arroyo Lago site

SteelWave originally submitted an application to the county under the builder’s remedy state provision, which allows developers to build housing projects that don’t comply with local zoning or general plans, last June to build over 500 residential units exclusively for seniors. Since then, the applicant submitted a revised application to the county reducing the total unit count to 357 single-family, age-restricted homes and 88 age-restricted assisted living units.

SteelWave also provided two alternate proposals for the latter project designed specifically for Pleasanton. One includes 697 units, with both market-rate units (no age restriction) and age-restricted active adult units, while the other proposal includes 628 units with market-rate, single-family homes and duets (no age restriction) and senior multifamily units.

Testa asked both staff and the developer why they backtracked on the fully age-restricted community to which SteelWave director Steve Dunn said they had heard feedback from certain councilmembers about bringing in mixed housing and when staff heard about those same proposals, Clark said they saw several positives to having mixed units.

Nibert agreed with Testa’s comments of wanting to keep some age-restricted units because of previous traffic studies showing less traffic impacts due to senior citizens not driving during peak hours. Ultimately, the council majority agreed that there should be mixed housing units at the East Lakes property, rather than keeping it 100% age-restricted. Others like Councilmember Craig Eicher supported the mixed housing units because it would bring in younger families whose children will be able to help address the school district’s declining enrollment.

Another issue Testa raised was the number of proposed units that would be counted toward Pleasanton’s assigned Regional Housing Needs Allocation counts for new housing units. 

Clark said the county included both properties in its recently certified Housing Element and Testa said she spoke with county supervisors who told her there was some disconnect on which municipality would claim the RHNA numbers. However, Clark said city staff will continue to meet with the county to see if the two agencies can come to some agreement because the county will have to make up those housing unit numbers elsewhere.

Testa also had concerns about the land surrounding the area and said there are pits and quarries that have been filled with backfill that could be contaminated or unstable, but the developer said they have been working on adding reinforcements and foundations that would allow for construction.

She ended the meeting by confirming that, unlike the Arroyo Lago project which is further along in the design process, the city is not committing to any East Lakes design plans to construct nearly 700 new units.

“I do not support increasing the units,” Testa said. “I want there to be an awareness with the neighbors and the community that are impacted if that evolves into a more dense and bigger project.”

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