Fremont City Council Meeting: 02/03/26 07:00 PM
3300 Capitol Avenue Div/Dept: Landscape Architecture
Fremont, CA 94538 Category: Agreements and Contracts
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5610) DOC ID: 5610 A
Updated: 1/28/2026 9:16 AM by Alberto Quintanilla A Page 1
AUTHORIZE LEASE AGREEMENT WITH LS POWER GRID CALIFORNIA - Authorize the City Manager to Execute a 28-Month Lease Agreement with LS Power for 10 Acres at 6900 Automall Parkway
Contact Persons:
Name: Tara Bhuthimethee Kim Beranek
Title: Parks Planning and Design Manager Community Services Director Div/Dept: Landscape Architecture Community Services
Phone: 510-494-4738 510-494-4330
E-Mail: [email protected] [email protected]
Executive Summary: Staff is requesting City Manager authority to execute a 28-month lease agreement with LS Power Grid California, LLC for the use of 10 acres at 6900 Automall Parkway, also known as Pacific Commons Sports Park, for a laydown space to facilitate the installation of their Power the South Bay Project.
BACKGROUND: Over the last several months, the City of Fremont has been working with LS Power Grid California, LLC (LSPGC) with their regional Power the South Bay Project to install a new 230 kilovolt alternating current transmission line through Fremont (6 miles within Fremont) from the existing NRS substation in Santa Clara (near Levi’s Stadium) to the existing Newark substation. Specifically, the City and LS Power entered into a Memorandum of Understanding Agreement, which facilitates an efficient permitting process for the construction of the underground transmission line and pledges the installation and dedication of approximately six miles of high-capacity broadband conduit to the City. This project will strengthen the electrical grid by providing robust connections and providing better access to cost-effective energy for residents and businesses. Construction is projected to begin in 2026 and conclude in 2028.
DISCUSSION/ANALYSIS: During the coordination efforts for the Power the South Bay project, LSPGC approached the City in search of an appropriate area for a 10-acre laydown space to be used as a temporary staging area and corporation yard from which to set up and run construction operations. Due to the proximity to the project site, which traverses Fremont north to south, the location at 6900 Automall Parkway was proposed. This site is also known as the future Pacific Commons Sports Park, slated to become a 40-acre park with regional-draw sports fields.
The parkland is currently vacant, as the park development project is undergoing design and environmental review. It is estimated that the first phase of the park project not commence construction for approximately 26 months, which aligns with the lease timeline. It is anticipated that neither environmental review nor construction of park improvements will interfere with or be hindered by the lease since the areas of the lease and Phase 1 of the park project do not overlap (See Exhibit 1).
The proposed lease area will be inspected to record existing conditions, monitored throughout the lease timeframe, and inspected at the end of the lease period to ensure that the land is returned to its original condition, unless requested otherwise. Staff may request Council Staff Report (ID # 5610) Meeting of February 3, 2026 Updated: 1/28/2026 9:16 AM by Alberto Quintanilla A Page 2 that some improvements to the lease area be left in place if they are deemed beneficial to the future park (for example, a gravel parking lot could have the potential to be reused as a base for a future parking lot). LSPGC will be required to abide by all City and agency regulations and to obtain requisite permits, including an encroachment permit and grading permit from the City.
The proposed rate of the ground lease is based on third-party analysis for vacant land within the region and falls within the analyzed range of recent rental comparables. The negotiated rate reflects a fair and reasonable value for a short-term ground lease while ensuring that Fremont retains as much public benefit from the project as possible. Based on the City’s request, LSPGC has agreed to prepay the lease in the lump sum amount of $2,500,344.
FISCAL IMPACT: For the 28-month lease, LSPGC will make an upfront lump-sum payment of $2,500,344. Staff recommends that this payment for use of City parkland, along with any additional payments for extensions of the lease term, be recognized in the Capital Improvement Fund (Fund 501) and appropriated to the new Central Park Community Center project (PWC9087), a citywide recreational park facility.
ENVIRONMENTAL REVIEW: Environmental Review for this item is addressed in two parts.
Environmental review is not required for the lease agreement, as a lease agreement is not a project pursuant to California Environmental Quality Act (CEQA) Guidelines Sections 15378(b)(2) and/or 15378(b)(5). It can be seen with certainty that there is no possibility that authorization of the agreements will have a significant effect on the physical environment per CEQA Guidelines Section 15061(b)(3), each as a separate and independent basis for CEQA compliance.
The California Public Utilities Commission (CPUC) is the lead agency for the Power the South Bay Project for which the lease is being considered. As a Public Utility in the State of California, LS Power Grid California is regulated by the California Public Utilities Commission (CPUC). More specifically, LS Power Grid California is required to obtain a Certificate of Public Convenience and Necessity (CPCN) for the Power the South Bay Project, which includes evaluation under the California Environmental Quality Act (CEQA) with the CPUC serving as the lead agency. All aspects of the Project, including laydown areas, are being evaluated by the CPUC under CEQA. In order to obtain Notice to Proceed (NTP) from the CPUC to begin work, LS Power Grid California has to provide an environmental evaluation of the entire Project, including the laydown area in Fremont, to the CPUC for their evaluation.
Use of the laydown area as part of the Power the South Bay Project will be covered by the CPCN with the CEQA evaluation being completed by the CPUC.
The Final Environmental Impact Report (FEIR) for the LSPGC Power the South Bay Project can be found here.
ATTACHMENTS: Exhibit 1, Proposed LS Power Laydown Space
ATTACHMENTS:
• LS POWER-EXHIBIT 1
Council Staff Report (ID # 5610) Meeting of February 3, 2026 Updated: 1/28/2026 9:16 AM by Alberto Quintanilla A Page 3 RECOMMENDATION:
1. Authorize the City Manager, or designee, to execute a 28-month Lease Agreement between the City of Fremont and LS Power Grid California, LLC for 10 acres at 6900 Auto Mall Parkway for a lump sum lease amount of $2,500,344.
2. Recognize lease revenue in the Capital Improvement Fund (Fund 501) and appropriate $2,500,344 and any other additional lease payments under this lease agreement to PWC9087-501 for the new Central Park Community Center project.