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Pleasanton council confirms new fees for Johnson Drive Economic Development Zone

Revenue to cover cost of traffic improvements ahead of future projects like Costco

Developers who build on land in Pleasanton's Johnson Drive Economic Development Zone (JDEDZ) by the I-580/I-680 interchange will also cover the cost of traffic improvements in its vicinity, after the City Council unanimously voted on Tuesday to levy transportation fees on new development in the area.

With a Costco, two hotels and other businesses planned to anchor the location of Pleasanton's newest commercial development, city staff said revenue collected from the transportation fees would mitigate the impact of new development in the JDEDZ by upgrading and adding to the city's traffic infrastructure. Fees would be assessed according to land-use and the building square footage being proposed.

The item made its way to the council at their meeting this week after being on pause for several years. Originally adopted in 2018, the transportation fee was rescinded several months later while the city conducted additional environmental review of the project to resolve an initial lawsuit.

After completing the review, the JDEDZ was formally approved last year -- though that decision was hit with litigation, too, which is headed to the state appellate court. Approval of the project would also change land-use designations and zoning in the city's General Plan to "spur investment" in the 40-acre area near Johnson and Stoneridge Drive.

"I'll just reiterate my stance that it's essential that the Stoneridge Drive work proceed," Councilmember Jack Balch said before voting Tuesday evening. "Regardless of the outcome or results of the lawsuit, I think that is essential."

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An estimated $27.6 million in transportation improvements are needed to accommodate traffic when the JDEDZ is fully built out, according to staff. Traffic engineer Mike Tassano told the council that one of the projects has been planned since 1998 and will be paid by traffic impact fees already collected by the city.

"That's the only project that's within these five projects that can be funded through our traffic impact fee because it's in there and so we've separated that one out," Tassano said. Work on the project includes widening on westbound Stoneridge Drive, heading toward Hacienda Drive, from three lanes to four lanes.

Tassano explained, "Essentially the widening length is along the entire (Dublin San Ramon Services District) frontage, so that westbound lane continues through the intersection and that brand new lane would then go immediately on to I-680 north."

"That I-680 north currently has just one lane, so we need a second lane, which requires the construction of a bridge widening, which is just essentially a second bridge attached to the current bridge," Tassano said, adding that the project costs are "all anticipated in the Traffic Impact Fund."

Since the overall project's original budget was set four years ago, costs have grown by $6.1 million -- from $21.5 million. A sales tax-sharing agreement at a 1.5% interest rate with Costco lasting 25 years will pay for about $6.8 million of the necessary transportation improvement costs.

If applied to all future non-Costco development, staff said the fee would raise $8.6 million -- enough to reduce the city's mandatory reimbursement to Costco. Any fee revenues received after the city has fully reimbursed Costco would be used to reimburse the general fund.

The $8.6 million includes approximately $1 million of right-of-way (ROW) costs; staff said most of the needed ROW is located in the parcels that would be charged. A credit against the fee to property owners equal to the contributed ROW value was recommended, as well as extending credit for previously completed JDEDZ work, including California Environmental Quality Act and preliminary transportation design work.

There is also $440,000 expended to cover preliminary costs in the total project costs, "and therefore the $8.6 million allocation to future development," staff said.

The council also approved allocating a $5.2 million grant from the Alameda County Transportation Commission to reduce the city's cost between traffic impact fee and cost contributions toward the Stoneridge Drive and I-680 on-ramp project, as well as paying $1.8 million from the Dublin Freeway Reimbursement Reserve to fund their half of ROW expenses, and half of any project costs exceeding estimates from 2017.

The master fee schedule was also amended on Tuesday to reflect fees of $38.16 per square foot to develop retail for currently vacant parcels in the JDEDZ, and $14.12 per square foot for hotels. A second reading of the ordinance is scheduled to take place at the May 18 council meeting; if approved, the fee would go into effect 60 days later.

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Pleasanton council confirms new fees for Johnson Drive Economic Development Zone

Revenue to cover cost of traffic improvements ahead of future projects like Costco

by / Pleasanton Weekly

Uploaded: Wed, May 5, 2021, 4:47 pm

Developers who build on land in Pleasanton's Johnson Drive Economic Development Zone (JDEDZ) by the I-580/I-680 interchange will also cover the cost of traffic improvements in its vicinity, after the City Council unanimously voted on Tuesday to levy transportation fees on new development in the area.

With a Costco, two hotels and other businesses planned to anchor the location of Pleasanton's newest commercial development, city staff said revenue collected from the transportation fees would mitigate the impact of new development in the JDEDZ by upgrading and adding to the city's traffic infrastructure. Fees would be assessed according to land-use and the building square footage being proposed.

The item made its way to the council at their meeting this week after being on pause for several years. Originally adopted in 2018, the transportation fee was rescinded several months later while the city conducted additional environmental review of the project to resolve an initial lawsuit.

After completing the review, the JDEDZ was formally approved last year -- though that decision was hit with litigation, too, which is headed to the state appellate court. Approval of the project would also change land-use designations and zoning in the city's General Plan to "spur investment" in the 40-acre area near Johnson and Stoneridge Drive.

"I'll just reiterate my stance that it's essential that the Stoneridge Drive work proceed," Councilmember Jack Balch said before voting Tuesday evening. "Regardless of the outcome or results of the lawsuit, I think that is essential."

An estimated $27.6 million in transportation improvements are needed to accommodate traffic when the JDEDZ is fully built out, according to staff. Traffic engineer Mike Tassano told the council that one of the projects has been planned since 1998 and will be paid by traffic impact fees already collected by the city.

"That's the only project that's within these five projects that can be funded through our traffic impact fee because it's in there and so we've separated that one out," Tassano said. Work on the project includes widening on westbound Stoneridge Drive, heading toward Hacienda Drive, from three lanes to four lanes.

Tassano explained, "Essentially the widening length is along the entire (Dublin San Ramon Services District) frontage, so that westbound lane continues through the intersection and that brand new lane would then go immediately on to I-680 north."

"That I-680 north currently has just one lane, so we need a second lane, which requires the construction of a bridge widening, which is just essentially a second bridge attached to the current bridge," Tassano said, adding that the project costs are "all anticipated in the Traffic Impact Fund."

Since the overall project's original budget was set four years ago, costs have grown by $6.1 million -- from $21.5 million. A sales tax-sharing agreement at a 1.5% interest rate with Costco lasting 25 years will pay for about $6.8 million of the necessary transportation improvement costs.

If applied to all future non-Costco development, staff said the fee would raise $8.6 million -- enough to reduce the city's mandatory reimbursement to Costco. Any fee revenues received after the city has fully reimbursed Costco would be used to reimburse the general fund.

The $8.6 million includes approximately $1 million of right-of-way (ROW) costs; staff said most of the needed ROW is located in the parcels that would be charged. A credit against the fee to property owners equal to the contributed ROW value was recommended, as well as extending credit for previously completed JDEDZ work, including California Environmental Quality Act and preliminary transportation design work.

There is also $440,000 expended to cover preliminary costs in the total project costs, "and therefore the $8.6 million allocation to future development," staff said.

The council also approved allocating a $5.2 million grant from the Alameda County Transportation Commission to reduce the city's cost between traffic impact fee and cost contributions toward the Stoneridge Drive and I-680 on-ramp project, as well as paying $1.8 million from the Dublin Freeway Reimbursement Reserve to fund their half of ROW expenses, and half of any project costs exceeding estimates from 2017.

The master fee schedule was also amended on Tuesday to reflect fees of $38.16 per square foot to develop retail for currently vacant parcels in the JDEDZ, and $14.12 per square foot for hotels. A second reading of the ordinance is scheduled to take place at the May 18 council meeting; if approved, the fee would go into effect 60 days later.

Comments

Matt Sullivan
Registered user
Stoneridge
on May 5, 2021 at 5:02 pm
Matt Sullivan, Stoneridge
Registered user
on May 5, 2021 at 5:02 pm

It’s stunning to me that the City Council approved this. The city of Pleasanton's published policy is that developers must pay for the infrastructure costs associated with their projects. Yet this project is funded with $19 million in public money, with Costco’s contribution at only $8.5 million. The Staff Report did not include a Pro Forma that detailed the return on our “investment” over the 25 years indicated in the article. What was the basis of their decision? My guess is that the Costco Board of Directors is popping champagne corks and dancing on the conference room table over this sweetheart deal. Like other parasitic companies like Amazon, Costco has perfected the business model of private profit at public expense. They have also shifted the risk of the JDEDZ being successful onto the backs of Pleasanton taxpayers by enacting the fee structure for future JDEDZ tenants to pay us back for our “investment” – if there are any.

My question is, does anyone at City Hall really think this is a good way to spend public money meant for other, more important needs in the community? Never mind the negative environmental, economic, public health, and quality of life impacts of the project. Or is it all about politics and careerism?


Michael Austin
Registered user
Pleasanton Meadows
on May 5, 2021 at 5:31 pm
Michael Austin , Pleasanton Meadows
Registered user
on May 5, 2021 at 5:31 pm

The voters know this deal is a good deal, that is why voters approved this deal.


Matt Sullivan
Registered user
Stoneridge
on May 6, 2021 at 7:56 am
Matt Sullivan, Stoneridge
Registered user
on May 6, 2021 at 7:56 am

Most people who voted didn’t know about the public subsidies for Costco at the time. I know that because I talked to hundreds of people during the Measure MM campaign. The city kept the subsidy negotiations with Costco secret, and when confronted with the facts from a public records request, they denied it. Can an election be legitimate when your government intentionally lies about facts that that might change the outcome? The answer is no. Sorry, Michael, your argument doesn’t hold water. Again, a simplistic view of a very complex issue. There’s much more at stake here than a Costco. It’s very disappointing that the people we elected to uphold democracy see so little value in doing that. And that the Costco supporters are so adamant despite the far-reaching ramifications. What does this say about our society? Nothing good, I'm afraid.


Michael Austin
Registered user
Pleasanton Meadows
on May 6, 2021 at 8:14 am
Michael Austin , Pleasanton Meadows
Registered user
on May 6, 2021 at 8:14 am

Matt,

The fact is: 21,532 voters approved the Costco verses 12,849 voters that did not approve, (62.63% - 37.37%).

Perhaps you did talk to "hundreds" of people during the MM campaign, you did not talk to the thousands of people that voted to approve measure MM.


Matt Sullivan
Registered user
Stoneridge
on May 6, 2021 at 9:27 am
Matt Sullivan, Stoneridge
Registered user
on May 6, 2021 at 9:27 am

Michael - to demonstrate the confusion about MM, approving it would have prohibited big box stores at that location. The fact that someone who supports Costco so fervently didn't understand what the vote was all about speaks volumes. Do you think others were confused as well?


dknute
Registered user
Golden Eagle
on May 6, 2021 at 3:49 pm
dknute, Golden Eagle
Registered user
on May 6, 2021 at 3:49 pm

Anxiously awaiting more from Michael Austin and Matthew Sullivan. Wonder if they'll still be speaking when the foundation is poured for Costco..The Big Box Store...bringing additional funds to our community....


Dave
Registered user
Highland Oaks
on May 6, 2021 at 3:56 pm
Dave, Highland Oaks
Registered user
on May 6, 2021 at 3:56 pm

Yeah, The vote was to allow or not allow large box stores not Costco. But Costco was implied since we all knew they wanted that location.

Whatever. I want to see some progres son the site instead of the existing rock pile.

The developers need to kick in and pay their share of infrastructure for roads.

I envision that the spot on 68N Exit Near Stoneridge, where it merges from 3 lanes to two will become a traffic mess with increased Costco and Hotel drivers getting on 680 N at Stoneridge drive. Not sure how 680 S will be impacted. At least 680 S is 3 lanes through the freeway exchange.


Michael Austin
Registered user
Pleasanton Meadows
on May 6, 2021 at 4:30 pm
Michael Austin , Pleasanton Meadows
Registered user
on May 6, 2021 at 4:30 pm

Matt:
Voters approved big box store - COSTCO!


Dave
Registered user
Highland Oaks
on May 6, 2021 at 4:33 pm
Dave, Highland Oaks
Registered user
on May 6, 2021 at 4:33 pm

Here for the comments :)


Pleasanton Parent
Registered user
Pleasanton Meadows
on May 6, 2021 at 10:23 pm
Pleasanton Parent, Pleasanton Meadows
Registered user
on May 6, 2021 at 10:23 pm

I love the parasitic commentary on Costco with zero acknowledgment to the existing parasites gouging Pleasanton residents on fuel costs.

Citizens for continued price gouging should come fwd and openly challenge Costco. Let’s see your hand.


Matt Sullivan
Registered user
Stoneridge
on May 7, 2021 at 10:56 am
Matt Sullivan, Stoneridge
Registered user
on May 7, 2021 at 10:56 am

I sent these questions to the Council this morning. Perhaps others would be interested in the answers as well.

1. What was your reasoning for providing $19 million in public funds to offset the infrastructure costs for the project? I’m sure you are aware of the General Plan Fiscal Element policy stating: “Through fee studies and efficient accounting, the City can ensure that development fees pay for those portions of projects that are needed to serve new development”. This has been a long-standing policy requiring developers to pay the infrastructure costs associated with development and not putting these costs on the public. If you have decided that this policy is obsolete, does that open the door for all new development to want the same deal, such as the proposed 10x Genomics developed at the mall site?

2. If your decision was based on a fiscal return on investment to the city for these subsidies, please provide a copy of the revenue analysis used to determine this. It was not provided in the Staff Report. If such an analysis does not exist, how did you determine that this was a good investment of public money?

3. If your decision was based on the perception that the majority of Pleasanton residents want a Costco, how do you reconcile your responsibility as City Councilmembers to provide transparent information to the community about the rationale for public spending and to educate your constituents in the true costs of a project which may affect their view of the benefits of that project? Ignoring inconvenient truths and pandering to loud consumerist demands is not the role of a City Councilmember.


dknute
Registered user
Golden Eagle
on May 7, 2021 at 11:09 am
dknute, Golden Eagle
Registered user
on May 7, 2021 at 11:09 am

Matt Sullivan. You engaged the city with numerous Questions. Then provided them and readers herein with how they may object, further more, provided more questions, more ways to object, etc, etc, etc. You line of questioning is so confusing that I would imagine their answer to you will be “complete silence “. What you really need to do is run for office. See what kind of support you can conger up!


Matt Sullivan
Registered user
Stoneridge
on May 7, 2021 at 1:34 pm
Matt Sullivan, Stoneridge
Registered user
on May 7, 2021 at 1:34 pm

dknute,

I am asking legitimate questions of my elected representatives to understand the reasons for their decision and to hold them accountable for their actions. It's within my rights as a citizen. Indeed its my responsibility. But you are right, they likely won't respond. Not because the questions are too complicated, but that they probably don't have a good answer for them.

Regarding your suggestion about running for office: Been there, Done that!


dknute
Registered user
Golden Eagle
on May 7, 2021 at 3:58 pm
dknute, Golden Eagle
Registered user
on May 7, 2021 at 3:58 pm

Matt Sullivan...I know you have been on the Council. I know that since you've left the council, you seem to be concentrating on being a thorne (no punn intended) in their side (backside). Some criticism of the council may be warranted, but you seem dedicated to questioning Every Move they make. And the list of moves this council has made is very short, since they've only been in office a very short time. Possibly a little break may be warranted? I believe the decision on COSTCO was a vote of the People, not just the Council. Or, am i missing something ?


Matt Sullivan
Registered user
Stoneridge
on May 7, 2021 at 4:35 pm
Matt Sullivan, Stoneridge
Registered user
on May 7, 2021 at 4:35 pm

dknute,

I know the PW editors don't like the back and forth between two people on this blog but I will respond and then let it alone for a while. Besides, when these things deviate from an actual debate of issues to personal attacks it becomes destructive and pointless. (p.s. asking questions or criticizing elected officials is not a personal attack)

Actually, I have weighed in on very few issues since I left the Council. Costco is the exception because of its egregious nature and my strong objection to the corrupt process the city is using to get it built. And there are only two newbies on the Council. The others have been at it for a while.


dknute
Registered user
Golden Eagle
on May 7, 2021 at 6:16 pm
dknute, Golden Eagle
Registered user
on May 7, 2021 at 6:16 pm
Flightops
Registered user
Downtown
on May 10, 2021 at 6:36 pm
Flightops, Downtown
Registered user
on May 10, 2021 at 6:36 pm

Legitimate question for MS. - when will your people come out of the shadows and reveal who really is funding this anti-Costco campaign ??
Let’s all be up front and put all the cards on the table, Ptown residents have been gouged long enough at those overpriced gas stations and it’s time for a little competition!


Jack
Registered user
Downtown
on May 12, 2021 at 7:42 am
Jack, Downtown
Registered user
on May 12, 2021 at 7:42 am

Something is rotten in the state of Denmark...

If Matt was wrong, wouldn't we all be shopping at Costco already?


Flightops
Registered user
Downtown
on May 12, 2021 at 8:03 am
Flightops, Downtown
Registered user
on May 12, 2021 at 8:03 am

Amazing what you can accomplish with deep pockets and frivolous lawsuits against the city and Costco. As for shopping at Costco we are already doing that just not in our own town, we are leaving our dollars in Livermore and Danville.


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