But an attorney who successfully challenged the agreement in Superior Court said the move could land the city in contempt of court.
The allotments were handed out in accordance with an agreement the City Council entered with The Surland Cos. in 2008 that guaranteed building rights for the 2,250-home Ellis development southwest of the city, confirmed Bill Dean, Tracy’s assistant development services director.
That agreement included a promise from Surland to donate land and money to the city for use in a possible aquatics center.
To date, Dean said Tuesday, the developer has banked 500 allotments under the agreement, which was officially ruled invalid by Superior Court Judge Lesley Holland on Oct. 31 and awaits an appeal.
Securing residential growth allotments is the first step toward building homes in Tracy. An average of 600 is available each year under the city’s growth management law.
But Dean said there were many steps Surland and its CEO, Les Serpa, must take before those allotments could be used, including annexing the Ellis land into the city. The nearly 400-acre property is outside city limits southwest of Corral Hollow and Linne roads.
“That (process) was basically put on hold, basically as a result of the lawsuit,” Dean said, referring to the suit filed by Tracy Region Alliance for a Quality Community challenging the developer agreement.
Mark Connolly, who represented TRAQC in court, said that by granting Surland residential growth allotments this week, the city violated Holland’s court order.
“They shouldn’t be issued in the first place,” Connolly said. “It appears to us that issuing the RGAs is contempt.”
Holland wrote in October that those involved in the court action were “enjoined from any and all actions to further implement the project.”
“It’s our opinion that … the portion of the judgment that said ‘You will not do the following’ is not stayed on appeal,” Connolly said.
TRAQC will likely seek a contempt-of-court ruling against the city and the officials who issued the most recent round of allotments, Connolly said.
Serpa, meanwhile, said his company was acting in good faith under the agreement in place when it requested the allotments.
City attorney Dan Sodergren said Tracy officials were simply upholding their end of the bargain.
“That’s what the agreement requires,” Sodergren said. “(Surland) submitted a request on the agreement, and we’re just performing our obligations under the agreement.”
Sodergren said the accord with Surland was still valid, contrary to Connolly’s contention.
“Because the case is on appeal, it puts on hold the superior court’s ruling, so we do have a valid developer agreement at this point,” Sodergren said.
He added that it was unclear what would happen to any residential growth allotments obtained by Surland under the agreement if the appeals court upheld Holland’s ruling.
“I think a lot of it would depend on the nature of the appellate court’s ruling,” Sodergren said.
Connolly, however, was confident that the growth allotments would vanish if the appeals court found in TRAQC’s favor.
“It should be pretty black and white,” he said.