Council opts to use infrastructure grants to prepare Mills Crossing site, pauses full build-out

Rancho Cordova — The City Council on Sept. 3 directed staff to pursue a site-infrastructure implementation of the Mills Crossing entitlement (scenario 3), using the city's infrastructure grant funding to complete roads, grading and utilities, and to create entitled parcels for future development. City staff presented four implementation scenarios for the Mills Crossing site: full build-out of the entitled $120 million project (three buildings including a potential 36,000-square-foot community health building), reduced build-out (buildings 1 and 2), a site-only infrastructure build using about $9 million in grant funds, and a pause/no-project option. Staff said no financial commitments were required at this council step and stressed that grant deadlines — notably an infrastructure grant with an expenditure deadline of Dec. 31, 2026 — require near-term direction if the city wants to use the money. After public comment from two speakers urging a pause or reconsideration, council members discussed tradeoffs including program costs, parking and feasibility, the project's intended role in revitalizing Folsom Boulevard, and the risk the Surplus Land Act could pose if city-owned land remained undeveloped. Council members expressed mixed views: some preferred pausing or seeking a private partner for full build-out, while others emphasized using the infrastructure grant to resolve on-site utility and drainage issues. Council moved and approved the motion to pursue scenario 3 — site infrastructure work only — and to return to council with risk analysis and next steps. The motion directed staff to proceed with amending the predevelopment/project agreements as needed, work with permitting and utilities, and start a guaranteed maximum price process if applicable with the project consultant. A subsequent staff report was requested addressing Surplus Land Act risks, options for future uses of parcels, and outreach to potential partners. Key clarifying figures presented by staff: the city holds approximately $9 million in site-infrastructure grant funding and an additional $7 million behavioral-health grant for Building 1; staff estimated Building 1 as a $31 million structure in the full-build scenario and described the overall entitled project at roughly $120 million (scenario 1) or $105 million without the event building (scenario 2). Staff emphasized scenario 3 would create the entitled parcels and leave community facilities, plaza and parking for future decisions. The council vote on the motion was recorded by roll call with Council Member Linda Budge, Vice Mayor Gary Gatewood, Council Member David Sander, Council Member Joe Little and Mayor Pulapati voting yes; no members voted no or abstained. Council members asked staff to come back with a timeline for site work and the legal risks and procedures relevant to surplus land and future disposition, and to accelerate outreach to potential tenants or partners while completing infrastructure work.