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The Pleasanton City Council approved documents this summer initiating proceedings to annex the site of a nearly 200-unit residential development proposed between Pleasanton and Livermore into the city’s boundaries.
The decision came almost a year after the council first signaled interest in annexing the Arroyo Lago development to prevent it from moving forward in Alameda County. The roughly 30-acre project is currently located on unincorporated county land in East Pleasanton.
“Clearly annexation is what we want to do,” Mayor Jack Balch said during the July 27 meeting. “The choice of no development is not a choice … the city gets the choice of whether we want to annex it or not. If we do, we get contributions toward Pleasanton.”
The split vote also approved the project’s pre-annexation and development agreement, which outlines several developer stipulations.
A central point of contention was the developer’s commitment to contribute $3 million toward designing and constructing an El Charro Road extension — an important piece for future East Pleasanton developments.
The council voted 3-2 to maintain the $3 million figure. Dissenting councilmembers Jeff Nibert and Julie Testa offered a substitute motion to increase the contribution to $8 million, but it failed due to a lack of majority support.
The Arroyo Lago project has been roughly 10 years in the making as applicant Steelwave long sought to annex the housing development into the city.
When the city paused its East Pleasanton Specific Plan in the early 2010s, Steelwave submitted plans with Alameda County instead.
In 2019, Steelwave withdrew its county application when Pleasanton restarted the specific plan, but those efforts paused again during the COVID-19 pandemic.
330 Land Company later joined Steelwave, and together they refiled with the county in 2022 after the city omitted the area from its sixth Housing Element.
The Alameda County Board of Supervisors approved that county version in February, which included more units and an offsite sewer treatment facility near the Chain of Lakes.
In 2024, the Pleasanton City Council directed staff to evaluate annexing the project. Following discussions and a workshop, the council authorized staff to draft key terms for a PADA.
During another workshop last October, the council reviewed terms including deed-restricted junior accessory dwelling units, forming a community facilities district to finance shared infrastructure and contributing $3 million for El Charro Road.
Other terms require the developer to complete the project within 10 years of annexation, build a public trail to Mohr Avenue, ensure maintenance funding for infrastructure, and construct required water, sewer and road improvements.
The Planning Commission approved the project design and documentation on June 24. Now approved by the council, the entitlements include an environmental impact report addendum, General Plan amendments, zoning changes, a vesting tentative subdivision map and a planned unit development plan.
The project proposes 189 single-family homes (159 two-story and 30 one-story) east of Valley Avenue and Busch Road, north of Stanley Boulevard, and south of Arroyo Mocho. Lot sizes range from 3,500 square feet to 5,652 square feet.
It also includes 48 deed-restricted JADUs ranging from 170 square feet to 212 square feet, attached to the primary homes.
A central park owned by the HOA will also be open to the public.
Most public speakers supported the project, though a few expressed concerns regarding long-term fiscal impacts on city services — concerns shared by some councilmembers.
But the council majority felt annexing and constructing the project under city oversight offers greater overall benefits.
“It’s really a no-brainer,” Gaidos said in regard to approving the project.
The council also debated contingency language requested by the applicant in case off-site easements for storm drains, sewer and trails cannot be obtained from the Zone 7 Water Agency.
“Essentially what we’re trying to do is incorporate enough into this language to where it’s clear that basically the only thing that we’re looking at changing pertains to the utility design itself,” Interim City Manager Joe Calabrigo said. “All of the other conditions and standards that have been built into the entitlement would remain substantially as shown on the plans.”
While the council supported the language, Zone 7 General Manager Valerie Pryor expressed confidence that the applicant will secure the easements.
Attention turned back to the $3 million El Charro Road contribution and whether the developer could increase it to $8 million, as requested by the Planning Commission.
Community development director Ellen Clark noted the city estimated total extension costs at $8 million. She explained that $3 million reflects what the developer budgeted due to absorbed costs associated with building in the city rather than the county.
“The $3 million contribution is a reduction from the full cost, but the full cost is not one that can be supported by the project by its current finances,” Clark said.
Clark added that multiple existing and proposed East Pleasanton developments contribute to the traffic demand on El Charro Road.
“It’s not just this project,” Clark said. “It’s a small fraction of the total demand and so that cost will be spread out and part of our road maintenance budget over time.”
Testa and Nibert pushed to require the $8 million. Testa noted she supported the project and annexation, but advocated for higher road improvement funding.
“The philosophy of Pleasanton, for decades, has been (that) growth should pay its way,” Testa said. “So the $8 million fair share should be included in the approval.”
The developers, however, argued they had already made significant concessions.
330 Land Company representative Steve Riley noted they lost nearly $20 million in revenue by reducing unit counts and converting western boundary homes to single-story to address privacy concerns from neighboring Ironwood residents. Additionally, forming a CFD will yield approximately $4.5 million in additional city revenue over 30 years.
“So the project will definitely be a net positive (for the city),” Riley said.
Riley highlighted that the $3 million contribution is voluntary, reminding the council that county approval provided an alternative pathway had the city rejected the agreement.
Steelwave representative Steve Dunn noted that another planned East Pleasanton project, East Lakes, includes a commitment to construct two lanes of El Charro Road from East Lakes to Stoneridge.
He then emphasized the developers’ continued commitment to pursuing the project through Pleasanton, despite the city’s indecisiveness over the years.
“We’re here before you to work with you … Zone 7 wants this, the city wants this, neighbors want this, we want this,” Dunn said. “It’s already been proven that fiscally, this is the best thing for the city to go forward with.”
