Fremont City Council Meeting: 06/02/26 07:00 PM
3300 Capitol Avenue Div/Dept: Finance Department
Fremont, CA 94538 Category: Budget
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5727) DOC ID: 5727
Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 1 FY 2026/27 Proposed Operating Budget - First Public Hearing (Published Notice) on FY 2026/27 Proposed Operating Budget
Contact Persons:
Name: David Persselin
Title: Finance Director
Div/Dept: Finance Department
Phone: 510-494-4631
E-Mail: [email protected]
Executive Summary: The purpose of this report is to recommend that the City Council hold a public hearing on the FY 2026/27 Proposed Operating Budget. The second public hearing and adoption are scheduled for June 9, 2026.
Background: The following information has been extracted from the Budget Overview section of the FY 2026/27 Proposed Operating Budget document.
It sets the context for the proposed budget by describing the challenges and opportunities the City will address and the major initiatives underway.
Consistent with the City Council’s foundational principal of fiscal sustainability, General Fund budgeted expenditures for the coming year of $289.1 million have been limited to fit within the projected ongoing resources without the use of the Budget Uncertainty Reserve. Although projected revenue growth is sufficient to maintain staffing and services at their current levels, it does not provide capacity to restore the $3.2 million of ongoing maintenance support that was eliminated to balance the FY 2025/26 adopted budget or the $3.1 million of ongoing personnel, supplies, and services reductions that were needed to rebalance the FY 2025/26 budget after labor negotiations concluded.
The proposed budget continues to incorporate the City Council’s and community’s highest priorities by maintaining funding for economic development, reducing homelessness, and ensuring public safety.
The following are highlighted in this overview:
• FY 2026/27 Fiscal Outlook
• Economic Update
• Key Budget Assumptions
• Discussion of Unmet Needs
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 2 • Major City Initiatives
Discussion/Analysis:
FY 2026/27 Fiscal Outlook
Staff anticipates that the local economy will grow modestly during FY 2026/27 and total General Fund ongoing resources (revenues and transfers in) of $291.0 million are projected to increase by 3.0% over estimated actual ongoing resources in FY 2025/26.
Property tax and sales tax are the City’s most significant revenue sources.
Property tax revenues are estimated to total $152.5 million in FY 2025/26, and staff projects those revenues will increase to $158.2 million in FY 2026/27, an increase of 3.7%. The estimated increase in secured property value for FY 2026/27 is based on the California Consumer Price Index, property transfer tax data for calendar year 2025 and preliminary information from the County Assessor. High mortgage rates continue to reduce the number of home sales to historically low levels.
With two quarters of available data, we are estimating FY 2025/26 sales tax revenue of $67.3 million and projecting FY 2026/27 sales tax revenue of $69.1 million, a 2.7% increase. Although the total revenue over the first two quarters is higher than anticipated, the State is investigating suspected sales tax misallocations by businesses which could be temporarily inflating our revenue numbers. Backing out an estimate for potentially misallocated revenue, we can still see underlying year-over-year growth of close to 3%.
Business taxes are projected to yield $14.9 million in FY 2025/26. While this represents a 13.8% increase from the prior year, much of the gain results from several large payments we’ve received in the construction-related business tax revenue category along with a delayed payment attributable to FY 2024/25. The FY 2026/27 business tax estimate of $15.1 million assumes historical growth in the general business tax category and a continuation of construction activity at the current level.
Hotel/motel occupancy tax revenues are estimated to total $6.9 million in FY 2025/26 and increase to $7.3 million in FY 2026/27. The strong growth in the current year estimate reflects one-time impacts from the Super Bowl in February 2026 and the World Cup in June 2026. The FY 2026/27 projection assumes growth returns to the most recent three-year average.
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 3 The FY 2026/27 proposed operating budget maintains the General Fund Contingency Reserve at 16.7% of budgeted expenditures and transfers out, or $48.3 million, a level consistent with City Council policy and the recommended practice of the Government Finance Officers Association of the United States and Canada. The General Fund Budget Uncertainty Reserve is projected to end FY 2025/26 at $4.3 million.
Economic Update
The national economy is expected to continue expanding at a moderate rate.
The Federal Reserve anticipates growth in the low 2% range in 2026 and 2027. Calendar year 2025 saw the national economy expand at a healthy
2.1% annual rate, but down from 2.8% in calendar year 2024. While the volatile path of tariff policy contributed to that slowdown, consumer spending consistently offset reductions in other areas of the economy as businesses hesitated to increase hiring or expand production. The advance estimate for the first quarter of 2026 reports that gross domestic product (GDP) increased by 2.0%.
The employment situation has remained stable, with the April 2026 unemployment rate of 4.3% the same as March, just slightly down from February, and consistent with reported levels over the last year. The reluctance of businesses to expand or add staff in the face of the evolving global trade environment, combined with the potential for artificial intelligence to replace certain job types, has led to what some have characterized as a “no-hire, no-fire” labor market.
Inflation has remained somewhat elevated throughout the past year, with the Federal Reserve’s preferred measure remaining at or close to 3% compared with its 2% target. However, the closure of the Strait of Hormuz at the end of February, following the commencement of military actions against Iran, immediately led to a jump in gasoline and fuel prices which is now just beginning to contribute to higher costs for goods and services. The press release from the most recent meeting of the Federal Reserve Open Market Committee on April 29th notes that: “Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook.”
Given the probability of elevated inflation over the next several months, if not longer, the Federal Reserve is unlikely to cut its interest rate target from the current level until the end of 2026 or early 2027. With no change in Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 4 monetary policy, 30-year mortgage rates are expected to remain above 6% for the foreseeable future.
The City’s revenue forecast assumes the economy will continue to grow at a moderate pace, supporting modest revenue growth for sales tax and business tax, but that continued high mortgage rates and interest rates will suppress property sales and development activity at least through the end of 2026.
On a cautionary note, global oil and gas supply disruptions continuing into FY 2026/27 would increase the likelihood of an economic slowdown or possibly a recession. If that were to occur, staff would return to the City Council with recommendations for any necessary budget adjustments.
Key Budget Assumptions
Based on the data we have at this time and economic forecasts from a range of sources, we are making the following key assumptions for the FY 2026/27 proposed budget:
1. The local economy will grow modestly during FY 2026/27. Ongoing FY 2026/27 resources are estimated to grow by 3.0%. The largest contributor to the increased resource estimate is property tax (up
3.7%). The General Fund’s top five revenue categories, property tax, sales tax, business tax, hotel/motel tax, and franchise fees, comprising
91.3% of total General Fund resources, are estimated to increase by
3.4% from the FY 2025/26 level.
2. As the City is currently engaged in a collective bargaining process with its employee groups, the FY 2026/27 proposed budget includes a placeholder salary adjustment of 2.0%.
3. The FY 2026/27 proposed budget includes ongoing funding of $3.8 million for capital maintenance activities for sidewalks, facilities maintenance, park and street median capital replacement, and capital improvements to achieve compliance with ADA standards.
4. In accordance with City Council policy, an additional pension contribution of $1.2 million to pay down the City’s unfunded liability more rapidly has been incorporated into the proposed General Fund budget.
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 5
5. Total expenditures in the FY 2026/27 proposed budget include a savings assumption of $19.7 million (approximately 6.6% of total budgeted expenditures in FY 2026/27) to reflect the City’s historical experience of under-spending total allocated resources, primarily due to salary savings from vacant positions.
6. The General Fund Contingency Reserve will be maintained at 16.7% of total budgeted expenditures and transfers out, the minimum level recommended by the Government Finance Officers Association of the United States and Canada (GFOA).
7. The proposed budget does not include funding to increase the General Fund Budget Uncertainty Reserve, but establishing or maintaining that reserve at an appropriate level will be considered a top priority. As part of the FY 2025/26 Year-End Report in Fall 2026, staff will bring forward recommendations for allocating any available ending unreserved fund balance to address one-time priority projects, programs, unfunded liabilities, or reserve augmentation.
Unmet Needs
Fremont is a great place to live, work and do business. However, like many cities throughout California, our City faces long-term fiscal challenges that impact the City’s ability to maintain quality of life services at the level residents want and deserve. Important quality of life services we must continue to protect, maintain and improve include:
• Police/Fire protection and emergency response services • Garbage and recycling services
• Maintaining public parks
• Streets/Roads repair
• Protecting the safety of drivers, bikers, and pedestrians.
We continue to grapple with increasing needs for public safety services and the growing cost of maintaining Fremont’s roads and other infrastructure.
The construction of new residential units as well as commercial and industrial development throughout the City is necessitating increased police and fire response to protect public safety. The majority of Fremont’s public infrastructure was constructed many years ago and now requires either an increased level or increased frequency of repairs, compounded by not having had adequate resources to spend on maintenance in the past. Moreover, as Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 6 Fremont continues to grow, additional infrastructure is added that must be maintained, further stretching the City’s limited maintenance resources.
Finally, new requirements result in increased costs. Some of these requirements are voluntary, such as the City’s commitment to improving traffic and pedestrian safety and traffic congestion, and encouraging alternative forms of transportation, through implementation of the Mobility Action Plan. Components of the Mobility Action Plan, such as completion of the Safe Routes to Schools program, traffic signal modernization, and construction of major bicycle and pedestrian infrastructure are costly and will necessitate development of enhanced funding sources. Similarly, components of the Climate Action Plan including electric vehicle charging infrastructure for City vehicles and converting City buildings from gas to electric heating call for major investments. Other new requirements, which are regulatory in nature, have increased dramatically over the last few years, and have added significant costs to City operations. The City’s Americans with Disabilities Act (ADA) Transition Plan is projected to need over $100 million over the next 25 years.
Anticipating the slowdown in revenue growth for FY 2025/26 that we’re now experiencing, the adopted General Fund budget was balanced by reducing ongoing funding for capital maintenance activities by $3.2 million. Later in the year, the City Council approved additional ongoing reductions, totaling $3.1 million across all City departments, to offset higher personnel costs resulting from negotiated labor agreements. While the FY 2026/27 proposed General Fund operating budget contemplates no additional service reductions, the only increase in staffing is to add a position to provide administrative support for the Mayor and City Councilmembers. As noted in the key budget assumptions, because the City is engaged in labor negotiations, the proposed budget also includes a 2% placeholder salary adjustment.
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 7 Major City Initiatives
The City of Fremont continues to support and invest in major strategic growth initiatives while navigating an operating environment characterized by everchanging conditions and macroeconomic uncertainty. These initiatives are important elements of our diversified tax base strategy to preserve and expand Fremont’s General Fund over time and position the City for sustainable economic growth and fiscal stability.
Development: Fremont continues to experience strong development momentum, driven by sustained demand from advanced manufacturing, life sciences, clean energy, robotics, and AI hardware companies. Major private‑sector investments across key employment districts -- Warm Springs, Bayside, Pacific Commons, Ardenwood, and City Center -- are transforming former underutilized sites into high‑value employment campuses, mixed‑use destinations, and modern industrial facilities.
Collectively, these projects generate significant job growth, attract emerging technologies, support vital infrastructure upgrades, and reinforce Fremont’s position as one of Silicon Valley’s most competitive markets for innovation, manufacturing, and long‑term economic expansion.
Warm Springs Innovation District
The Warm Springs Innovation District remains one of Fremont’s most strategically important employment centers, distinguished by its scale, transportation access to Warm Springs BART Station, I-680, SR-262, and I- 880, and concentration of advanced manufacturing and technology firms.
Spanning approximately 850 acres, the district offers a unique “blank canvas” environment large enough to support next‑generation industrial development while providing the infrastructure and land use protections necessary for high‑intensity production uses.
Warm Springs continues to attract major employers in clean technology, semiconductors, robotics, energy storage, and biomedical production.
Companies such as Tesla, Lam Research, Delta Products, Seagate, Western Digital, ThermoFisher, and Boston Scientific all maintain significant operations in the district. This clustering effect reinforces Fremont’s position as one of the nation’s most important hubs for advanced hardware manufacturing and integration.
The district’s momentum is further highlighted by several major development projects. In 2025 the City celebrated the groundbreaking for Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 8 the Fremont Innovation Center, a 70,000-plus-square-foot advanced manufacturing facility that transforms a long-vacant commercial parcel into a new manufacturing site. Upon completion, the project is expected to generate more than 100 permanent high-tech jobs, contribute over $2 million in infrastructure funding, and activate a key strategic location.
Meanwhile, 49000 Milmont Drive, completed in late 2025, is a 267,000- square-foot advanced manufacturing building now fully leased by Tesla for robotic manufacturing operations. This project further strengthens Warm Springs as a hub for high-tech employment and next-generation mobility innovation. Additionally, the Sobrato Warm Springs Advanced Manufacturing Campus is a proposed 22-acre master-planned development featuring 420,000 square feet of new manufacturing and R&D space expected to break ground in September 2026.
Overall, the Warm Springs Innovation District continues to mature into a flagship employment hub, combining major private‑sector investment, high‑value industrial land uses, transformative infrastructure projects, and long‑term planning strategies that reinforce Fremont’s economic leadership in Silicon Valley.
Bayside Technology Park
Bayside Technology Park continues to reinforce its position as one of Fremont’s most active and strategically significant advanced manufacturing districts. With more than 20 million square feet of flexible R&D and industrial space and strong demand from global technology firms, Bayside remains a premier location for companies scaling production, R&D, semiconductor work, and AI‑driven technologies. As industrial demand accelerates -- fueled by reshoring manufacturing, the growth of AI hardware, and ongoing innovation across clean energy and biomedical sectors -- Bayside plays a critical role in attracting high‑value investment to Fremont.
A major highlight for Bayside is the groundbreaking of Phase 1 of Campus at Bayside, a 473,250‑square‑foot advanced manufacturing project located at 47100 Lakeview Boulevard. This project represents one of the largest industrial investments breaking ground in Silicon Valley in 2025. The development showcases Fremont’s competitive edge as a manufacturing hub and is expected to create up to 2,500 new manufacturing and R&D jobs at full build‑out. Phase 1 has already been fully pre-leased with the groundbreaking for Phase 2 in the pipeline.
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 9 Prologis has acquired multiple strategic sites at the Siemens campus and is proposing a new 200,000‑square‑foot advanced manufacturing project, reinforcing their deep and long‑standing presence in Fremont’s industrial market. With this upcoming project, Prologis’ Fremont portfolio includes 55 buildings totaling 4.6 million square feet, with nearly all of this space leased to manufacturing and technology companies.
A defining advantage for Bayside is the City’s collaboration with LS Power to bring major utility upgrades to the district. The $500 million “Power the Bay” project is connecting nearly 1 gigawatt of solar‑generated power to Fremont’s Bayside transmission station, with an associated 75-megawatt local grid distribution expansion to support advanced manufacturing growth.
This transformative infrastructure investment also provides five miles of dedicated fiberoptic conduit to the City for future high‑speed broadband needs.
Pacific Commons and Fremont Auto Mall
The Pacific Commons area is a disproportionate driver of General Fund revenues for the City due to the sales tax revenues provided by the Fremont Auto Mall -- one of the largest auto malls in California -- and Pacific Commons Shopping Center, one of the largest outdoor shopping malls in the country. Fremont’s Auto Mall continues to show resiliency in the face of changing macroeconomic conditions, with new dealership franchises continuing to locate there.
This includes Enterprise Mobility Solutions, which in 2025 opened a new 3‑in‑1 dealership, rental center, and commercial truck facility -- its largest dealership in California. In Pacific Commons Shopping Center, H Mart announced the purchase of a 100,000-square-foot former Kohl’s building, where it plans to build a flagship multi-level food and entertainment hub, its largest investment in company history.
Immediately adjacent to the shopping center is Pacific Commons South. A
2.5 million-square-foot modern industrial development, Pacific Commons South continues to play a major role in Fremont’s economic growth, supporting job creation, industrial reinvestment, and new retail activity. The master-planned, 10-building campus is leased to many of the region’s leading technology companies, including Meta, Quanta Computer, Bloom Energy, UPS, and Amazon.
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 10 Nearby, the recently developed, 400,000-square-foot Fremont Tech Center campus has reached full occupancy, generating approximately $4 million in one‑time impact fees and an estimated 650 full‑time jobs. It exemplifies Fremont’s ability to reposition former retail sites into high‑value employment centers
Ardenwood Technology Park
Ardenwood Technology Park offers a more idyllic setting amongst Fremont’s industrial employment districts. Strategically located 2.5 miles from the Peninsula at the eastern landing of the Dumbarton Bridge, the district offers unmatched regional access -- providing a shorter or reverse commute for workers traveling from the Peninsula, South Bay, and the greater East Bay.
Employers consistently cite Ardenwood’s central location and high‑quality campus environment as key advantages for scaling operations.
Ardenwood is home to one of Fremont’s largest concentrations of biotechnology, life science, and advanced technology companies. Recent expansions include Meta, Nextpower, Novo Nordisk, Boehringer Ingelheim, and Alexza Pharmaceuticals, each deepening their manufacturing and R&D footprints in the district.
With its combination of locational advantages, high‑value employers, flexible zoning, and access to world‑class amenities, Ardenwood Technology Park remains one of Fremont’s most competitive and future‑ready districts for biotechnology, clean energy, semiconductor, and office‑based innovation.
Untapped development capacity still exists in Ardenwood, supported by greenfield sites and higher density zoning, which staff expect to materialize into new employment centers and General Fund revenues in the coming years.
Downtown and City Center
Downtown Fremont and the broader City Center area continue to evolve.
Envisioned as Fremont’s primary gathering hub, this centrally located district is defined by its walkable street grid, proximity to regional transit, and concentration of civic, commercial, and residential uses. The 110‑acre Downtown Community Plan area, framed by Fremont Boulevard, Mowry Avenue, Paseo Padre Parkway, and Walnut Avenue, sits at the heart of the larger 430‑acre City Center Community Plan area, both of which provide the long‑term land use framework guiding Fremont’s downtown revitalization.
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 11 The City has invested heavily in creating the foundation for a vibrant mixed‑use district. A walkable street grid with enhanced pedestrian linkages connects Downtown to the nearby Fremont BART Station, while public and private developments have delivered new urban amenities, civic spaces, and a growing mix of retail and residential opportunities. Within a one‑mile radius of Downtown, there are already 15,000 residents and a 20,000- person workforce primarily geared toward healthcare and retail, and the district benefits from adjacency to major commercial anchors including the Fremont Hub, Gateway Plaza, and Fremont Plaza shopping centers.
Several transformative projects are shaping the next wave of Downtown and City Center growth:
• The Hub and Gateway Plaza Redevelopment (Kimco Projects) Two significant redevelopment projects at The Hub and Gateway Plaza, led by Kimco Realty, were unanimously approved by the Planning Commission and later upheld by City Council. These projects will bring over 500 units of multifamily housing, new retail space, community amenities, and enhanced streetscapes -- transforming primarily surface‑parked shopping centers into mixed‑use anchors that strengthen Downtown’s commercial core.
• Capitol Avenue and Capitol Square
Capitol Avenue continues to serve as Downtown Fremont’s emerging “retail spine,” supported by strong retail leasing activity. In 2025, the Capitol Square development reached full “lease‑up” of its 11 ground-floor commercial spaces, reinforcing the burgeoning district’s capacity to attract small businesses, restaurants, wellness services, and locally owned shops.
• Downtown Event Center (DTEC)
The City‑owned Downtown Event Center, opened in 2021, has become a major event venue hosting thousands of attendees annually. It is a central activation hub for industry events and community gatherings. This facility supports both community programming and Downtown’s growing cultural identity.
Downtown Fremont is one of the rare opportunities in the Bay Area to build a downtown from the ground up. Since the adoption of the Downtown Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 12 Community Plan in 2012 and the City Center Community Plan in 2016, the area has seen:
• A new civic plaza and event center
• High‑density residential entitlement and construction activity • Growth in ground‑floor commercial tenants
• New six-story office headquarters for Fremont Bank
• Increasing interest in mixed‑use redevelopment of older commercial centers
These developments collectively reinforce Downtown Fremont as a growing regional destination for living, working, shopping, and cultural activity.
Business Attraction: Fremont’s business attraction efforts continue to strengthen the City’s advanced industry ecosystem, drawing high‑growth companies across manufacturing, clean energy, life sciences, and next‑generation technology sectors. Through proactive outreach, real estate and permitting support, and close coordination with regional partners, the City helps companies expand and establish new operations in Fremont.
This high‑touch, relationship‑driven approach supports job creation, innovation, and long‑term fiscal stability while reinforcing Fremont’s position as one of the Bay Area’s most competitive markets for industrial and technology investment. These activities contributed significantly to Fremont’s record‑setting year in 2025, during which the City led all Silicon Valley submarkets with nearly five million square feet of commercial space leased, and captured 70% of all advanced manufacturing leases in the Bay Area, reflecting its dominant position in the industrial and hardware technology sectors.
Fremont supported significant expansions by leading firms such as AMAX, Bionova Scientific, Bloom Energy, Boehringer Ingelheim, Lam Research, Nextpower (formerly Nextracker), Novo Nordisk, Novo Pneuma (formerly Alexza Pharmaceuticals), Quanta Manufacturing, Raxium, TD Synnex, Tesla, Wisk Aero, and Wistron. These expansions represent some of the region’s most active and capital‑intensive industrial investments.
Fremont also successfully attracted many fast‑growing and emerging companies in next‑generation technologies including Aivres, Agility Robotics, Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 13 Avidex Industries, Kuprion, Stacked Energy, Tandem PV, and Mitac Information Systems. These companies selected Fremont for its advanced manufacturing ecosystem, workforce talent, and robust public‑private support infrastructure.
Advanced Industry Sector Highlights
Fremont continues to strengthen its role as a national hub for advanced industries, supported by major investments in biomedical manufacturing, clean energy, semiconductor technology, autonomous mobility, and AI‑driven hardware. The City’s business‑friendly environment, deep manufacturing expertise, and coordinated utility and permitting support create ideal conditions for companies scaling complex and power‑intensive production operations.
The biomedical and life sciences sector remains one of Fremont’s fastest‑growing clusters, with more than 150 companies contributing to ongoing research and advanced manufacturing. Recent expansions by firms such as Bionova Scientific, Boehringer Ingelheim, and Novo Nordisk continue to deepen the city’s specialized talent base and reinforce long‑term stability through high‑skilled employment and production capacity.
Clean‑energy and battery innovation also continue to accelerate, driven by companies that leverage Fremont’s industrial capabilities and infrastructure readiness. Bloom Energy and Stacked Energy are expanding clean‑energy and storage technology manufacturing across the city, while firms throughout the cleantech ecosystem benefit from federal incentives and Fremont’s strategic support for power‑intensive operations. Together, these investments bolster Fremont’s position as a national leader in energy‑transition technologies.
Semiconductors, AI hardware, and high‑performance computing remain key pillars of Fremont’s advanced industry landscape. Semiconductor and related companies such as Nova Systems and Lam Research continue to grow their presence. Fremont has emerged as one of the country’s most important hubs for AI server and computing hardware. The City now hosts 33 AI server manufacturing facilities totaling approximately four million square feet -- one of the largest concentrations globally -- up from just six facilities three years ago. These companies collectively drive demand for power infrastructure, support next‑generation computing innovation, and enhance Fremont’s competitiveness in global technology supply chains.
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 14 Retail and Commercial Vibrancy
Retail and commercial vibrancy remain central pillars of Fremont’s economic development strategy, supporting both quality‑of‑life and the success of small businesses across the city. Through coordinated outreach, targeted programming, and strategic partnerships with property owners and brokers, the City continues to cultivate a vibrant retail ecosystem that strengthens Fremont’s neighborhood business districts, Downtown, and destination shopping areas.
Downtown and City Center Retail Activity
Downtown Fremont continues to evolve into a vibrant, walkable district supported by new ground‑floor commercial spaces and strong tenant activity. The City assisted numerous retailers with navigating opening requirements, helping to expand the district’s mix of food, beverage, wellness, and specialty retail offerings. New businesses in the City Center area include: Angry Chickz, Dosa Dash, Palmetto, Paradox Barbershop, Pints of Joy, Pizza My Heart, Pour Decisions, Shugetsu, Stardust, The Kebab Shop, Waxing the City, and Zaitoon.
Downtown’s mixed‑use projects continue to show strong performance:
• Capitol Square, Downtown’s first mixed‑use development, is fully leased with eleven local businesses, including Banter Bookshop, Paradox Barber Shop, and Din Ding Dumpling House.
• The Beacon and The Tolman developments have activated their ground‑floor commercial spaces with businesses such as Pour Decisions, Waxing the City, and Palmetto Super Foods.
The City also invests in placemaking events that bring thousands of visitors Downtown. Activations like the 2nd Annual Holidays at the Plaza, Downtown Dog Days, Downtown Dance, Fremont Restaurant Week, and other family‑friendly events collectively attracted more than 10,000 attendees, driving both foot traffic and economic activity for small businesses.
Citywide Retail Vibrancy
Commercial vibrancy is an important priority across Fremont’s neighborhoods beyond Downtown. In collaboration with property owners, retail brokers, and commercial managers, the City continues to support reinvestment and tenant attraction in key commercial corridors. Notable new Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 15 retail openings citywide include: Bikanervala, Bintang, Bun Bun Chinese Food, Cassa Jam, Chicha San Chen, Extra Coffee Roasting Company, H Mart, Miniso, Qamaria Yemeni Coffee, Sourdough & Co., Umika Sushi, Wadaya, Wushiland Boba, and X20 Studios.
The City also launched Access Fremont, a free high‑speed public Wi‑Fi initiative serving commercial districts. Introduced in October 2025, the program enhances visitors’ experience and supports small‑business operations across Fremont’s key retail nodes.
Pacific Commons Retail Anchors and Major Investments
Pacific Commons remains a major regional retail destination, bolstered by significant new anchor investments:
• H Mart purchased a two‑story, 100,000‑square‑foot building to establish its largest California grocery store and its most substantial investment to date. The new flagship location will include dine‑in restaurants, a bar, live music, and a food hall experience.
• Miniso celebrated the grand opening of its new flagship North America location at Pacific Commons -- its largest store outside of Asia -- showcasing the district’s ability to attract high‑profile global retailers.
These anchor projects position Pacific Commons as a continued powerhouse for regional retail, complementing the district’s robust advanced manufacturing presence.
Capital Projects: The City has an ongoing Capital Improvement Program (CIP) that provides investments to improve infrastructure related to the City’s transportation system, parks, and building facilities. Primary funding for these investments comes from development impact fees; State gas taxes; County transportation funds; grants from federal, State, and regional sources; and ongoing and one-time transfers from the General Fund. In the recent past, significant projects completed include the West Access Bridge and Plaza at the Warm Springs BART Station and Dusterberry Neighborhood Park.
Notable projects in construction include:
• Central Park Community Center and Event Hall, a $51 million project planned for completion in Spring 2028.
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 16 • Park Restroom Modernization Program, a multi-year program to replace or remodel 18 old park restrooms with project completions occurring in 2026 (8 locations), 2027 (6 locations), and 2028 (4 locations). • Vallejo Mill Historic Park Improvements, with a new dog park and pickle ball courts, is planned for completion in Spring 2026.
• Electric Vehicle Charging for City Fleet Vehicles, providing an expansion of charging capacity at the Maintenance Center, Development Center, and City Hall, is planned for completion in Summer 2026.
Looking ahead, the City’s past Capital Budget approvals and the adopted five-year CIP (FY 2025/26 through FY 2029/30) include projects and programs valued at $236 million. The highlights of planned projects and capital investments are as follows.
Capital Maintenance
Preservation and maintenance of existing City assets is a primary focus of the CIP. The highest level of funding in Capital Maintenance is allocated to ongoing annual projects to repave City streets, repair sidewalks, curbs and gutters in the worst condition, and build ADA curb ramps. This also includes maintenance and capital replacement funding for parks, landscaped median islands, street lighting, and buildings, as well as a 50/50 grant program to assist residents with sidewalk repairs and street tree replacements. Other funded projects include:
• Buildings with aging heating, ventilation and air conditioning (HVAC) systems will have old natural gas units replaced with new electrical equipment, where feasible, and will align with Fremont’s clean energy goals. Projects planned for construction over the next three years include: Fire Stations 1, 4, 5, 7 and 10; Police Center dispatch center; Warm Springs and Centerville community centers; Centerville Library, and the Maintenance Center office building.
• Historic buildings planned for new roof systems include the Centerville Train Depot (2026), Chadbourne Carraige House (2026), and Patterson House (2027).
• Planning for replacing approximately 16,000 LED streetlights citywide to ensure replacement before they reach the end of their expected life.
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 17 It is noted that $3.2 million of annual funding from the General Fund for pavement maintenance and parks capital replacement was eliminated beginning in FY 2025/26 which is expected to result in a decline in pavement conditions and delayed replacement of aging parks infrastructure.
Transportation
The Transportation CIP includes investments for traffic operations and signal system improvement, bicycle and pedestrian facilities, and major projects. • Investments in traffic operations and signal projects include annual expenditures to maintain existing traffic signals, modernize equipment for more efficient operations, construct new traffic signals at priority locations to improve safety, and to respond to community interests/concerns related to traffic operations.
• The City receives dedicated funds from the County Measure BB program and State grants for “complete streets” projects to enable better travel opportunities for walking and bicycling. This program helps deliver priority projects identified in the City’s updated Active Transportation Plan and Safe Routes to Schools program.
• A significant element of the City’s Transportation CIP is oriented toward major and regional projects. This includes the City’s support for developing the new Irvington BART Station; connecting communities with trails by building bridges over freeways in the I-880/Innovation and I- 680/Sabercat areas; and modernizing freeway interchanges at I- 680/Mission and I-880/ Decoto. In addition, the City has been approved to receive $62 million in grant funding for multimodal transportation projects in the Dumbarton/Decoto corridor, the Peralta/Mowry corridor, and the Fremont Boulevard corridor.
Parks and Recreation
The Parks CIP includes investments to implement the Parks and Recreation Master Plan adopted by the City Council in March 2022. Significant projects to enhance parks and recreation programs in Fremont include the following:
• Centerville Community Park Expansion, increasing the park size from 10 to 20 acres, with construction planned to start in Summer 2026. This expansion will include a new playground, group and individual picnic areas, large and small field areas, and a new parking lot to accommodate Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 18 added users. Four pickleball courts, adult exercise equipment, and three bocce ball courts will expand and diversify Fremont’s non-youth offerings. • Palm Avenue Community Park project will develop 12 acres of park in a currently park-deficient area of Fremont. With the opening of this park, approximately 2,700 people will have new access to a public park within a ten-minute walk of their homes, moving Fremont closer to its goal of improved park equity.
• The Parks CIP also funds other ongoing projects for improvements such as new ADA upgrades, benches, and trails to add pathways and benches to existing parks, in alignment with other City efforts, such as the Age- Friendly Fremont Action Plan.
Legislative Advocacy: The City continues to be proactive with its legislative advocacy efforts and has forged ahead with building partnerships at the federal, State, and regional levels to ensure the interests and concerns of Fremont and the region are preserved. The City’s Legislative Framework, approved by the City Council, establishes guiding principles and priorities, and serves as the City’s foundation for pursuing major initiatives and funding opportunities. Adopting a legislative framework enables City staff and lobbyists to actively advocate for, influence, and monitor State and federal legislation that best represents Fremont’s interests.
The City Council held its annual retreat in February 2026 to establish four priority policy areas for the City in FY 2026/27, which included (1) Economic Development and Financial Sustainability, (2) Reduce Homelessness, (3) Public Safety, and (4) Charter City Initiative. The City’s legislative advocacy efforts for FY 2026/27 will focus on addressing these priorities.
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 19 Economic Development and Fiscal Sustainability
Continue to strengthen Fremont’s economic competitiveness and long-term fiscal health by prioritizing strategic business attraction and retention, workforce development, and targeted investments that enhance Downtown vibrancy. Align economic development, community identity, and quality-of- life initiatives with long-term budget sustainability, while establishing measurable outcomes that can be clearly communicated to community and stakeholders.
Reduce Homelessness
Build on progress and strengthen outcome orientation in Fremont’s homelessness response. Emphasize coordinated strategies that connect housing availability, service delivery, and measurable outcomes such as outreach effectiveness, shelter placements, navigation capacity, and transitions to stable housing. Strengthen regional coordination and public transparency regarding results and challenges.
Public Safety
Sustain and enhance public safety staffing and service capacity, while improving how public safety trends, strategies, and outcomes are communicated to the community. Continue to support recruitment and retention and reinforce public confidence through transparent, data-driven reporting and engagement.
Charter City Framework
This priority reflects the Council’s direction to initiate a structured work plan to evaluate the option of a City Charter, including the formation of an advisory committee and coordination with City staff to support analysis and public engagement. The intent of this work program is to conduct the evaluation and associated community engagement in a manner that would position a Charter City proposal for potential placement on the November 2026 ballot, subject to Council review and consideration as the evaluation proceeds.
During the California State Legislature’s 2025 Legislative Cycle, the Governor signed more than 700 bills into law. Some of the themes/topics addressed at the Legislature in 2025 included education, labor/workforce, transportation, infrastructure, environment, health and social services, housing, public safety, and local government administration/operations. At Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 20 the national level, in 2025, the United States Convened for the 1st session of the 119th Congress, and the Trump administration succeeded the Biden administration. This change brought new leadership across various federal agencies and shifts in federal policies to reflect the new administration’s priorities. Notably, in 2025, the President signed H.R. 1 (One Big Beautiful Bill Act) into law, which included a series of provisions relating to taxes and various federal programs, as well as increasing the statutory debt limit.
Other major legislative developments at Congress included S. 2651 (ROAD to Housing Act) and H.R. 4669 (FEMA Act of 2025), among others. Heading into the 2026 Legislative Cycle, City staff will monitor and review bills and regulatory changes that affect our community and local economy.
In 2025, Congressman Ro Khanna advocated to help secure $850,000 in federal Community Project Funding for the City’s Auto Mall Parkway Center Median Project, which was ultimately included in a consolidated appropriations package for FY 2026 that the President signed into law in February 2026. Further, in March 2026, Congressman Eric Swalwell submitted the City’s Lake Elizabeth Improvement Project ($3 million) and the Traffic Safety Improvement Project at Dusterberry Community Park ($3 million) for FY 2027 Community Project Funding. Additionally, Congressman Ro Khanna submitted the City’s Hetch-Hetchy Trail Gap Closure Project at Scott Creek Road ($3 million) and Walnut Avenue to Dixon Landing Road Quiet Zone Corridor Project ($4 million) for FY 2027 Community Project Funding. City staff will continue to monitor the progress of these funding requests, and will seek additional regional, state, and federal funding opportunities to further advance the City’s priority objectives.
Over the next year, staff will continue to work with our legislative advocates to prioritize and track legislation, while continuously evaluating the legislative climate to identify new areas of opportunity, with the overarching goal of improving quality of life and creating an equitable future for all, consistent with the City’s vision, goals, and policies.
Conclusion
Fremont prides itself on being a fiscally responsible, lean organization, making the most of the resources entrusted to us. This proposed budget focuses our limited ongoing revenues on the most essential City services while continuing to defer certain maintenance activities.
Council Staff Report (ID # 5727) Meeting of June 2, 2026 Updated: 5/28/2026 9:49 AM by Alberto Quintanilla Page 21 To the extent additional resources become available, we will work to ensure that they are used to address the City Council’s and community’s highest priorities.
Fiscal Impact: The City Council is not being asked to take action tonight on the FY 2026/27 Proposed Operating Budget other than to hold a public hearing and provide comments to staff. A second public hearing and adoption of the budget are scheduled for June 9, 2026.
Environmental Review: This agenda item is not subject to the requirements of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15378 as it is not defined as a “project.” Link: The FY 2026/27 Proposed Operating Budget is posted on the City’s website at
https://www.fremont.gov/government/departments/finance/financial- reports.
Recommendation:
1. Hold a public hearing.
2. Provide direction to staff on issues pertaining to the FY 2026/27 Proposed Operating Budget.