The Tracy City Council has agreed to merge a new subdivision with the Ellis development, which would effectively increase the size of the Ellis project, and give the new addition, annexed to the city just 3 months ago, the same development priority as the existing Ellis project.

The council’s 3-1 vote, with Mayor Nancy Young, Councilman Dan Arriola and Councilman Mateo Bedolla in favor, Councilwoman Eleassia Davis opposed and Mayor Pro Tem Veronica Vargas absent, overrules a Tracy Planning Commission recommendation from February, where the commission recommended denial of the merger on a 3-2 vote.

The council’s decision on Tuesday drew sharp criticism from local attorney Mark Connolly and former Councilwoman Mary Mitracos, who had sued the city, and won, in an effort to block Surland Communities LLC, developer of Ellis, from applying residential growth allotments (RGAs) issued for Ellis on projects outside of the Ellis development.

The Ellis project covers 321 acres on the north side of Linne Road and west of Corral Hollow Road. Approvals for the project date back to 2008, though a lawsuit at the time forced the city and developer to revise the plan, and the city council approved an updated Ellis Specific Plan in January 2013.

A 2013 development agreement between Surland and the city gives the developer priority status for 2,250 residential growth allotments (RGAs), which are a prerequisite for taking out building permits. Though the Ellis Specific Plan states that up to 2,250 homes could be built, city-approved subdivision maps from 2014, 2017 and 2019 show potential buildout of 966 homes on those 321 acres.

The Avenues Specific Plan covers 95 acres between the northern boundary of Ellis and Valpico Road, with the potential for 380 to 480 new homes, plus a new fire station and a storm drain basin to serve that part of town. Greystone Land Investment Partners gained Tracy City Council approval for the plan in September 2018. The San Joaquin Local Agency Formation Commission approved annexation of that land into Tracy city limits on Jan. 14 of this year.

Issues the council considered during more than 4 hours of discussion on Tuesday included whether the Avenues project would be taking RGAs ahead of development projects that have been waiting for those growth allotments. The city’s growth management ordinance (GMO) restricts the number of RGAs per-year to 750, though that is the peak number allowed in any single year, and the city must maintain an average of 600 RGAs issue per-year.

Steve Herum, the attorney representing Surland Communities, told the council that adding the Avenues to the Ellis Specific Plan won’t affect the number of RGAs, or the number of new homes, that Ellis would get in a year.

He referred to the city’s definitions for five levels of RGA priority allocation, with “F1” the top priority for “vested” projects, which were approved before the growth management ordinance was revised in 2000 to reduce the rate of growth. Ellis and Tracy Hills fall under the “F4” priority by virtue of their development agreements with the city. When the city is able to issue up to 750 RGAs in a year, Tracy Hills gets 406 RGAs, Ellis gets 194, with another 100 going to “primary growth areas” mostly within city limits, and 50 going to “other projects.”

Herum stressed that adding The Avenues to the Ellis Specific Plan would not change the number of RGAs that the Ellis Specific Plan could get in a year, and it would take The Avenues out of that pool of developers that would compete for RGAs that aren’t already spoken for.

“To make absolutely clear, what is involved tonight and what isn’t, number one, we are not taking more RGAs than the Ellis project is entitled to,” he said. “Number two, we are not modifying the GMO in any way. It’s 194 yesterday and it will be 194 tomorrow if you grant the zoning request.”

Connolly told the council that reclassifying The Avenues allows that project to have access to RGAs that other new developments not connected to Ellis or Tracy Hills could not get.

“You were shown at the beginning of this meeting, by your staff, the areas that constitute primary and secondary residential growth areas,” Connolly said. “Those were not adopted on a whim, one night, by the city council as a result of a developer annexing additional property to the city of Tracy a few months earlier. They were developed over years of development, of hearings and consultation.”

“So this latecomer, which it truly is, should not even be considered,” Connolly said. “The decision is whether this newcomer project, previously unable to be annexed to the city of Tracy, should be now approved and given priority over other projects, including the downtown, Bowtie, primary residential areas, that have been in the queue waiting for development for 20 years.”

He added that a judge’s ruling from February 2020 and court order from September 2020 strikes down the 2018 amendment to the development agreement between the city and Surland, which would have allowed Surland to apply its RGAs to projects outside of Ellis. The city appealed that ruling in January. The appeal sets aside that ruling for now, but Connolly told the council that it doesn’t exempt the city with having to comply with the judge’s order.

The discussion also included mention of accessory dwelling units, which could qualify as affordable housing under the state Regional Housing Needs Assessment and also qualify for priority status under the city’s Growth Management Ordinance.

During further council comments, Davis said that most likely would not be enough to designate any aspect of The Avenues as “affordable housing.”

“I am one of the people that truly feel we are in need of affordable housing. Being that that is one of our city’s primary goals, I’m not sure that for me this project would be a priority,” she said. “I’m already at odds with the current development agreement and some of the benefits. I don’t even necessarily feel comfortable combining a different plan with plan that’s existing that I’m already having challenges with.”

Vargas said that she was concerned about the order that builders are in as they await a chance to get city RGAs.

“To me it’s a ‘no,’” Vargas said. “The principal I can’t find myself supporting, adding this project, passing everyone waiting on the list to get those RGAs.”

Further discussion followed on community services districts, which is how the city determines the assessment, used to pay for city parks and infrastructure, that each homeowner pays on thehr property tax bills. The questions was whether The Avenues should be part of an Ellis CFD, its own CFD, or a citywide CFD. Council members mostly agreed that it should have its own CFD.

As the discussion continued past midnight, Vargas told the other council members that she had an early morning meeting on Wednesday, and she left before conclusion of the agenda item. A few minutes later the council took a series of votes related to state environmental policy and city general plan policy regarding the inclusion of The Avenues into the Ellis Specific Plan, plus the amendments to each of the two specific plans approving their consolidation into one plan, and each passed on a 3-1 vote.

• Contact Bob Brownne at brownne@tracypress.com, or call 209-830-4227.

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