Pleasanton City Council members voiced their initial support Tuesday night for a pre-annexation and development agreement between the city and the applicant behind the Arroyo Lago project set to bring nearly 200 single-family homes to East Pleasanton.
Once staff finalizes the development and annexation agreement and brings it back to the council for approval early next year, the council will be able to vote on approving the housing development as a city project, versus a county project.
“We’ve had several opportunities to do better at this site than where we find ourselves today so to me, this is an example of Pleasanton getting back in the driver seat, achieving what gains we can in the landscape of laws and challenges we are faced with, with this site,” Mayor Jack Balch said during the Oct. 21 council meeting.
The council has discussed the annexation of both the Arroyo Lago and the East Lakes sites over the past year, which are both located east of Valley Avenue and Busch Road, north of Stanley Boulevard and south of Arroyo Mocho. Both sites are currently unincorporated land overseen by Alameda County.
Though the council did not actually vote on annexing the property where the Arroyo Lago project is set to be built, which proposes building 189 single-family homes at 3030 Mohr Ave., the dais gave staff the green light to continue drafting the development agreement with project applicant 330 Land Company.
“If this had been annexed into the city, we could have zoned it however we wanted … and now we’re stuck between an odd part between the county going forward and putting something we all wouldn’t want there as a city and as the neighbors of Ironwood wouldn’t want or to do our best to come up with a best decision possible and the best plan possible,” Councilmember Matt Gaidos said. “I truly believe this is the best thing that we can come up with given the situation we’re in.”
Discussions surrounding the east side’s future date back to 2012 when the city first embarked on developing an East Pleasanton Specific Plan.
By 2014, the city drafted a specific plan and published an environmental impact report, each of which provided detailed policies regarding land-use, urban design, transportation, environmental protections and public infrastructure in eastern Pleasanton.
However, that work was paused between 2015 and 2019 and was further halted amid the onset of the COVID-19 pandemic in 2020. In light of these setbacks, the east side specific plan was ultimately never adopted.
During the Feb. 4 council meeting this year, the council directed staff to begin a new process — the East Pleasanton Policy Framework — in order to establish a General Plan vision for the east side that includes policies for future development in the area. The direction came after the council also agreed to move forward with the process of annexing the Arroyo Lago and East Lakes project sites.
While East Lakes, which could see up to 600 units depending on final designs, is still in the early phases of development and is expected to have more flexibility for city discretion and review, the Arroyo Lago project has been moving forward under the county’s planning development process.
City community development director Ellen Clark told the council on Oct. 21 that the Alameda County Planning Commission was set to certify an environmental impact report and approve a vesting tentative tract map subdivision for the Arroyo Lago project the night before but continued the item once again to Nov. 17 — the commission had already previously continued the item from a September meeting.
The key difference between the county version of the project and the version being discussed at the city level is that the county’s maintains the originally proposed 194 homes while the city proposes to build 189.
The ultimate goal of the city’s pre-annexation and development agreement and the key terms that were presented to the council that night are to help ensure that the developer maintains certain responsibilities as the project progresses and ideally gets annexed into city boundaries.
Some of the terms to be included in the draft agreement are that the developer must complete the project within 10 years once the city annexes the land; a public trail must be constructed through the project to Mohr Avenue; maintenance funding must be ensured for park, trail, streets, lighting and storm facilities; and the developer must construct needed water, sewer and offsite road infrastructure improvements.
According to Clark, the developer would bear the upfront costs of those infrastructure improvements but could be eligible for reimbursement.
Other terms of the agreement are set to include allowing the developer to qualify for the city’s old impact fee rate schedule; designating Pleasanton as the point of sale for construction materials and fixture; and stipulating the project to include 48 deed-restricted, junior accessible dwelling units, which would be the only affordable housing offered by the project.
The last key term is that the city and developer agreed to having 330 Land Company contribute $3 million for the design and construction of an El Charro Road extension, which residents, staff and the council have said is an important piece to the puzzle regarding future East Pleasanton developments.
While that contribution might not reflect a true fair-share cost of the total $6.5 million to $8 million that would be required for El Charro Road, Clark said $3 million is reasonable given that if it were a county project, there wouldn’t be any monetary contributions to similar improvements.
The project applicant has also made several concessions and incurred a number of additional costs or losses in value, according to Clark. The project made changes to accommodate deeper and larger lots, which brought the overall unit number down from 194 to 189. The developers also paid city impact fees that they were not originally planning for as the county’s fees are much different compared to the city of Pleasanton’s.
“We are really contributing a lot,” said Steve Dunn, senior managing director for SteelWave which owns the Arroyo Lago site. “In addition to the $4 million … We’re now paying $2.2 million in city (transportation improvement fees), which we wouldn’t have to pay in the county. We’re also paying an additional $3 million contribution to El Charro, which we wouldn’t have to pay in the county.”
“But if you look at the whole bucket of fees, it’s about $10 million more for us to go (through) the city than to go into the county,” Dunn added.
Another concession Dunn pointed out was going from two-story to one-story homes which, combined with the loss of five units, totals in about $5 million of lost value. The applicant decided to shift to one story units to appease residents of the Ironwood neighborhood adjacent to the project who raised concerns about privacy.
But despite the many concessions, Dunn and the project applicant said they still wanted to move forward with the city annexing the project site and moving forward under the city’s development process.
While the council was mostly on board with moving the project forward under the city’s process because it could bring hundreds of thousands of dollars in property taxes, some concerns were still raised from the dais.
Councilmember Julie Testa had staff point out that the housing units from this project will not count toward the city’s state-mandated Regional Housing Needs Allocation unit numbers. Vice Mayor Jeff Nibert also noted the importance of building out El Charro in order to avoid serious traffic congestion, which was a concern raised by a couple of residents during public comment.
Testa also said toward the end of the meeting that she still believes an age-restricted project or even light industrial development at that site would have been a better use of the space.
“I don’t believe that the residential that is going to evolve in this area is going to be revenue positive,” she said.
However, she also acknowledged all the work that has already been done to update the project and ultimately supported moving forward with the process to annex the property by early next year.
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