City Council Staff Report Page 1 of 4 April 28, 2026
Staff Report
Agenda Item No. 3.9
DATE: April 28, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Adopt a Resolution Authorizing the City Manager to Execute an Amendment to Extend the Exclusive Negotiating Agreement with City Ventures Homebuilding, LLC., for the Sale and Development of a Portion of the Gateway Property (Caltrans Site)
EXECUTIVE SUMMARY
Staff recommends that the City Council adopt a resolution authorizing the City Manager to execute an amendment to extend the Exclusive Negotiating Agreement with City Ventures Homebuilding, LLC., for the sale and development of a portion of the Gateway Property (Caltrans Site).
STRATEGIC PLAN ALIGNMENT
Strategic Plan Goal C, Economic, Community Development, and Public Safety:
Strategy 2: Facilitate the build-out of the greater Station District Area through the construction of the Quarry Lakes Parkway, completion of the pedestrian rail crossing, and implementation of the recommendations of the Southern Alameda County Regional Rail Integration Study to make the Station District a passenger rail hub served by ACE.
Strategy 18. Facilitate the development of entitlements and closing on the sale of the Gateway property to generate revenue to fund the construction of Phases 3 and 4 of the Quarry Lakes Parkway.
BACKGROUND
The City Council adopted Resolution 5526-19, which authorized the acquisition of the Gateway Property from Caltrans to construct Quarry Lakes Parkway and sell the remaining parcel for residential development. Osprey Drive, Alvarado-Niles Road, the Fremont city limit, and Old Alameda Creek roughly bound the 36-acre parcel. A Purchase and Sale Agreement with Caltrans to purchase the property was executed on August 16, 2019.
Agenda Item No. 3.9
City Council Staff Report Page 2 of 4 April 28, 2026
The City Council adopted Resolution 5682-20, which authorized staff to issue a Notice of Availability soliciting interest for development of a portion of the Gateway Property under procedures required by the Surplus Land Act.
The California Transportation Commission authorized conveyance of the Caltrans property to the City of Union City at its June 24, 2021, meeting (Tab 81, Ref# 2.4d(3)).
On June 28, 2021, City staff emailed the Notice of Availability of the Gateway Property to all parties who registered with the California Department of Housing and Community Development and expressed interest in receiving notices of surplus land availability. The Surplus Land Act requires the City to provide potential developers with 60 days to respond in writing to the Notice of Availability and to require developers to provide a minimum of 25% affordable homes in development proposals.
City Ventures Homebuilding, LLC, the developer that built “The Sugarmill” project on Union City Boulevard, submitted a statement of interest by the August 30, 2021, deadline.
City Ventures proposed to pay Union City $90 million for the property. The proposed $90 million purchase price exceeds the $86,184,000 appraised value. The City is obligated to pay Caltrans the full amount received by the City for the property, and no less than the appraised value of $86,184,000.
City Council adopted Resolution 5874-21 approving an Exclusive Negotiating Agreement with City Ventures Homebuilding, LLC for the sale and development of a portion of the Gateway Property on December 14, 2021. The Exclusive Negotiating Agreement establishes the framework for the product type, density range, and proposed amenities for the development. Four hundred to 535 residential units with a variety of densities and product types will be evaluated during the entitlement process. Twenty-five percent of the units must be affordable to accommodate very low- and low-income households. The developer will also be required to comply with certain preservation requirements for the Peterson Farmhouse Site, included in the Caltrans Office of Historical Resources Studies PRC Review, October 9, 2020, DD; 034410-01-01.
The Exclusive Negotiating Agreement is nonbinding but intended to provide the Parties with time to negotiate a binding agreement. The First Amendment to the original agreement was executed to extend the period for which the developer could perform its due diligence on the parcel. The original agreement was set to expire on December 14, 2023. Still, it included a provision allowing the City Manager to extend the term for 180 days if the Parties were continuing to negotiate in good faith.
The City and City Ventures executed that extension via the Second Amendment to the Exclusive Negotiating Agreement, and the agreement was set to expire on June 12, 2024.
City Council authorized a third amendment to extend the agreement for an additional 180 days to December 9, 2024, with the option to extend an additional 180 days under the City Manager’s discretion. The City and the developer agreed to exercise that option, and a fourth amendment was executed to extend the agreement by 180 days to June 7, 2025.
City Council approved the fifth amendment extending the agreement by 365 days on May 13, 2025. The agreement now expires on June 7, 2026.
Agenda Item No. 3.9
City Council Staff Report Page 3 of 4 April 28, 2026
DISCUSSION
Pending City Council approval, City staff and City Ventures Homebuilding, LLC, have agreed in principle to extend the Exclusive Negotiating Agreement by an additional 365 days. The extension would provide the additional time needed to negotiate the terms of a Property Sale Agreement and any other necessary agreements.
City staff and representatives from City Ventures have worked in good faith on the terms of a Property Sale Agreement that would formalize the conditions for the purchase of the land. Securing permits and funding for the Quarry Lakes Parkway Phase 2 project has taken longer than expected, creating uncertainty about when the sale of the Gateway property could proceed. Phase 2 of the roadway, which sets the boundaries of the land to be sold, will extend from Alvarado-Niles Road to the edge of Old Alameda Creek, include a 20-foot Class I multi-use trail, and require the realignment of Quarry Lakes Drive. Before entering into a Property Sale Agreement for the Gateway property, the City will need to:
• Complete the final design of Phase 2;
• Secure construction funding for Phase 2; and
• Secure all permits needed to begin construction on Phase 2.
City Council recently authorized the dedication of right-of-way and easements for Phase 2 of the Quarry Lakes Parkway project on October 28, 2025, thereby setting the boundaries of the Gateway site that will be available for sale and development. City staff expects permit applications for Quarry Lakes Parkway to be submitted by Spring 2026, and for Phase 2 final design drawings to be completed by early Summer 2026. As such, staff expects to secure permits and to have a formal request for construction funding brought before the Alameda County Transportation Commission by Fall 2026.
Once the City and City Ventures successfully negotiate the terms of a Property Sale Agreement, the agreement will be brought to the City Council for review and approval. In addition, any residential development project proposed by City Ventures will be required to obtain City entitlements, including public hearings and opportunities for public engagement and feedback.
The land cost paid to Caltrans by the City will be deposited into a Local Alternative Transportation Improvement Program (LATIP) account and distributed to LATIP projects as approved on December 30, 2009, by the California Transportation Commission (CTC) under Item 5.2, Approval of State Route 84 Local Alternative Transportation Improvement Program (LATIP) in Southern Alameda County. The balance and revenue estimates for the LATIP projects were updated on May 18, 2023, by CTC under Item 4.24, Local Alternative Transportation Improvement Program - State Route 84 Historic Parkway Project – Request for Advance Funding under Assembly Bill 1386, and the approval of the updated Priority List Resolution LATIP-2223-01.
Agenda Item No. 3.9
City Council Staff Report Page 4 of 4 April 28, 2026
Below are the updated balances and revenue funds for the LATIP projects:
LATIP
Project
ID
Location Responsible
Agency Improvement Name
Estimated
LATIP
Balance or
Funds
1 Caltrans Land Deposit Frees $ 2,900,000
2 Fremont
Santa Clara
County
Transportation
Authority (VTA)
I-880/262/Mission
Interconnector $ 7,350,000
3 Fremont Fremont Existing Route 84
Relinquishment $17,720,000
4 Fremont &
Union City
Fremont & Union
City
Decoto Complete
Streets & Quarry Lakes
Parkway
$16,400,000
$41,814,000
TOTAL LATIP REVENUE $86,184,000
As shown in the list of priorities, the Quarry Lakes Parkway project will receive $41,814,000 through the LATIP, which will be reinvested into future phases.
FISCAL IMPACT
Authorizing the extension of the Exclusive Negotiating Agreement and preparation of the Property Sale Agreement will not impact the General Fund. Per the Exclusive Negotiating Agreement, City Ventures Homebuilding, LLC will pay for the entitlement process and the costs of preparing the Property Sale Agreement.
RECOMMENDATION
Staff recommends that the City Council adopt a resolution authorizing the City Manager to execute an amendment to extend the Exclusive Negotiating Agreement with City Ventures Homebuilding, LLC., for the sale and development of a portion of the Gateway Property.
Prepared by: Jonathan Segarra, Management Analyst II
Submitted by: Joan Malloy, City Manager
Attachments
1. Draft Resolution
2. Exhibit A - Sixth Amendment to Exclusive Negotiating Rights Agreement