Council gives direction on key terms for Arroyo Lago pre‑annexation agreement after developer revises plan

The Pleasanton City Council on Oct. 21 reviewed key terms of a proposed pre‑annexation and development agreement with 330 Land Company/Steelway for the 26‑acre Arroyo Lago residential development east of the city limits. Staff and the applicant described negotiated changes to grading and lot design, commitments to off‑site water and sewer upsizing, creation of a community facilities district for long‑term maintenance and a public‑benefit contribution toward El Charro Road design and construction.

Why it matters: The parcel is a housing‑element site currently proposed under Alameda County review. Annexation to Pleasanton would shift land‑use authority and many mitigation and design requirements to the city. Council members weighed gains from annexation (city standards, sewer connections, negotiated public benefits) against infrastructure costs that are likely to be borne partly by existing Pleasanton residents over time.

Negotiated terms summarized - Project scale and design concessions: applicant and city staff reported redesigns that lower grading near the Ironwood subdivision and shift homes adjacent to the wall to single‑story designs with larger rear yard setbacks. Steve Riley (applicant) said the revised plan yields pad elevations “within a foot” of Ironwood pads in many locations. - Infrastructure and reimbursements: developer agreed to construct upsized off‑site water and sewer mains (about $4 million in additional infrastructure investment, applicant stated) and to be eligible for reimbursement or fee credits because those pipes serve broader East Pleasanton needs. - Transportation and El Charro contribution: developer initially proposed a contribution and later increased its offer to $3,000,000 toward El Charro design/construction; staff and applicant discussed flexible use for other congestion‑relief projects if El Charro does not proceed. - Fiscal and tax arrangements: staff said the project would qualify for previously adopted (lower) impact fees because the application pre‑dated recent fee updates; the developer also proposed using a community facilities district (CFD) so homeowners rather than the general fund would pay for long‑term maintenance of streets, parks and storm facilities. - Affordable housing: because the application started under county processing (which lacked local inclusionary requirements), the developer proposed 48 deed‑restricted junior ADUs integrated into units rather than the city’s usual inclusionary approach or an in‑lieu fee. Staff described this as a compromise given project history and added costs to bring the project into city standards.

Public comment and neighborhood concerns Residents who back onto the site praised the new grading approach and single‑story edge homes, while others raised concerns about traffic, emergency access and long‑term city costs including El Charro. Multiple speakers urged the council to require stronger commitments or to ensure funding for county‑level impacts if annexation proceeds.

Council direction and next steps Councilmembers generally signaled support to pursue the agreement’s terms and to continue negotiating the development agreement (this item sought direction, not final approval). Staff will finalize the draft development agreement and return it to the council with the city’s environmental review materials and a full package of entitlements for formal approval.

Ending Councilmembers said the agreement is a path to shift greater design control and public benefits to Pleasanton compared with the county alternative, but they also urged continued attention to traffic mitigation timing, long‑term maintenance and the affordable‑housing approach for future East Pleasanton projects.