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 Originally adopted in 2018, the transportation fee was rescinded several months later while the city conducted additional environmental review of the project to resolve an initial lawsuit.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.