By a 5-0 count, the council gave staff members at City Hall the go-ahead to negotiate modifications to a developer agreement with The Surland Cos. regarding the Ellis subdivision, planned for land outside city limits northwest of Linne and Corral Hollow roads.
City Manager Leon Churchill said after the meeting that the goal of negotiations was to land an aquatics center.
“Our goal is to secure funding for at least the first phase,” he said.
Churchill acknowledged the difficulty of building a swim center while the city faces a general fund deficit, but he said staff members are working to achieve the project that council members have repeatedly called a top priority.
He added that Surland would likely want certain guarantees in exchange for money or land that could be used for an aquatics center, and negotiations would determine whether the two sides could reach a compromise.
Surland, led by CEO Les Serpa, previously offered $10 million and 16 acres to the city in exchange for guaranteed building rights for the Ellis development, which could include as many as 2,250 houses.
Those terms were laid out in a developer agreement struck down in 2011 by Superior Court Judge Lesley Holland, a ruling that is now before an appeals court.
At the Tuesday meeting, Serpa confirmed his commitment.
“It is a $10 million proposal and 16 acres, not ‘up to,’” Serpa said. “Our commitment is to leave those numbers static.”
Serpa said he hoped negotiations would address Holland’s concerns with the previous agreement while saving time and money.
“From a business perspective, it’s very expensive to wait,” he said.
But Mark Connolly, who filed the successful legal challenge to the developer agreement on behalf of Tracy Region Alliance for a Quality Community, said it made no sense to modify an accord that had already been ruled illegal and was under judicial review.
If Surland and the city think Holland was wrong, Connolly said, there’s no need to modify the agreement. He added that if Surland and the city believed Holland’s ruling was correct, an entirely new agreement should be sought.
“The whole procedure is totally illogical,” said Connolly, who also successfully challenged two Tracy developer agreements in 2006. “Surland is still trying to have it both ways.”
Surland’s lawyer, Wilson Wendt of Miller Starr Regalia, said after Tuesday’s meeting that it was “consistent and rational” to build on the existing developer agreement while waiting for an appeal ruling.
The appeals court could overturn Holland’s ruling regarding Connolly’s attorney fees, for example, but sustain the rest of the superior court judge’s decision.
“There’s no trick involved with it,” Wendt said.
City Attorney Daniel Sodergren also thought entering negotiations was a “legally defensible” course of action.
Before their vote, council members made it clear they were authorizing staff members to talk with Surland representatives only, not to formalize any deal.
“At least we ought to give (Serpa) the courtesy of listening to what he has to say,” said Councilman Steve Abercrombie.
“I’m looking at this as an alternative,” added Councilman Mike Maciel. “I think it’d be foolish to sit back and wait.”
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