The 4-1 decision, with Councilman Michael Maciel dissenting, followed two hours of debate. Surland CEO Les Serpa and several residents asked for action, and attorney Mark Connolly and several others urged caution.
The council majority gave its OK to tentative terms with Surland, though the council must give its approval several more times before any developer agreement would be finalized.
In exchange for 16 acres and $10 million disbursed over three years to help build a swim center, the developer would be granted 2,250 residential growth allotments that could be used only within Ellis, which is slated for land now outside city limits on the northwest corner of Linne and Corral Hollow roads. The city would set aside at least 150 but no more than 225 allotments a year for 25 years specifically for Surland.
Each RGA allows one house to be built.
The developer would be required to install recycled water systems in the Ellis development. Surland would also obtain rights to sewage capacity and treatment for 800 homes, which would save the developer $6.5 million, according to a city staff report.
That 800 is an increase of 300 from an earlier developer agreement between the city and Surland that was struck down by Superior Court Judge Lesley Holland when challenged by Connolly in a lawsuit. The ruling is under appeal.
Serpa said some of the changes, such as spreading out payment of the promised $10 million, were necessary to make any agreement pencil out.
“We’re trying to hold the commitment, even though it’s very tough economic times,” he said, adding that delays in the project were costing his company hundreds of thousands of dollars. “Every month we leave this open is very, very expensive.”
But Celeste Garamendi, who is married to Connolly, said the city was opting for a worse deal by continuing negotiations.
“You’re regressively negotiating against yourself,” she said.
Others also questioned the prudence of acting while the original agreement was under court review. Attorney Steve Nicolaou said it made no sense for the city to argue in court that the old developer agreement should stand while also working on a new agreement to address its flaws.
“It’s just a full employment act for attorneys,” he said.
Several residents spoke in favor of quick action, however, and lamented the legal challenges and other delays that had pushed back construction of a Tracy swim center for years.
Changes to the city’s Growth Management Ordinance would be needed to accommodate terms of the proposed agreement, according to city staff members. That work would coincide with the drafting of a specific plan and an environmental review, which are standard steps in the development process.
Maciel, who voted against the motion, had sought a two- or four-week pause so other developers potentially affected by changes in the ordinance would have time to examine the issue.
Also at the council meeting
• The City Council received the first report from the Measure E citizens oversight committee.
Arch Bakerink delivered the report, a synthesis of the individual thoughts of the five committee members.
Bakerink said the Measure E money had been spent appropriately so far, but he urged the city to take more aggressive action to balance its general fund budget.
• The council unanimously decided to make the Northeast Industrial Area a specific plan, which staff members said would simplify development of commercial and industrial projects there.
No longer would every part of the process in that area require planning commission and council approval, senior planner Victoria Lombardo said. Instead, city employees could handle many of the steps, cutting 30 to 60 days off project time.
Development Services Director Andrew Malik said the time savings could mean the difference between landing and not landing a project.