City Council Staff Report Page 1 of 4 July 14, 2026
Staff Report
Agenda Item No. 4.3
DATE: July 14, 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 the First Amendment to the Purchase and Sale Agreement with the California Department of Transportation (Caltrans) for the Route 84 Excess Properties
EXECUTIVE SUMMARY
As part of the Quarry Lakes Parkway project, the City entered into a Purchase and Sale Agreement with the California Department of Transportation (“Caltrans”) in 2019 for the property known as the Gateway site to facilitate construction of Quarry Lakes Parkway Phase 2 (“Segment 2”) and to sell the excess property for housing development. Due to several delays, staff recommends that the City Council adopt a resolution authorizing the City Manager to execute the First Amendment to the Purchase and Sale Agreement (Exhibit A) between the City of Union City and the California Department of Transportation for the Route 84 Excess Properties, in a form approved by the City Attorney, to extend the Agreement’s timeline.
STRATEGIC PLAN ALIGNMENT
This agenda item is aligned with the following:
Goal C, Strategy 2: Facilitate the buildout of the greater Station District Area through the construction of 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.
Goal C, 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 former State-owned Route 84 Excess Properties, or Gateway site, is a 36-acre collection of parcels roughly bounded by Osprey Drive, Alvarado-Niles Road, the Fremont city limit, and Old Alameda Creek. Caltrans previously secured the parcels for the Agenda Item No. 4.3
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expansion of the Historic Route 84 Corridor. The former parkway project, planned for decades, was listed as a capital project in the 1986 local Measure B expenditure plan.
The Alameda County Transportation Authority – the predecessor to the Alameda County Transportation Commission (“Alameda CTC”) – assumed the project in 2003 and renamed it the East West Connector.
On March 22, 2018, Alameda CTC approved the City of Union City’s request to serve as the project sponsor for the East West Connector Project. As Project Sponsor, Union City assumed responsibility for the project’s design, right-of-way certification, and construction. On February 12, 2019, the City Council adopted Resolution No. 5444-19, authorizing the renaming of the East West Connector Project to the Quarry Lakes Parkway Project to reflect the roadway’s purpose as a local, multimodal corridor.
Soon after, the City Council adopted Resolution 5546-19 on July 9, 2019, authorizing the City to acquire the Gateway site from Caltrans. A Purchase and Sale Agreement (“PSA”) between Caltrans and Union City was executed on August 16, 2019, and is included as Exhibit B. The California Transportation Commission (“CTC”) authorized the conveyance of the former Route 84 Excess Properties to the City of Union City at its June 24, 2021 meeting (Tab 81, Ref# 2.4d(3)). The CTC memo for the action item is included as Exhibit C. The Director’s Grant Deed transferring ownership of the site from Caltrans to the City is included as Exhibit D.
The City is required to pay Caltrans the land cost payment for the purchase of the developable portion of the property, which may not be less than Caltrans’ appraised land value of $86,184,000. The land cost paid to Caltrans will be deposited into a Local Alternative Transportation Improvement Program (“LATIP”) account and distributed to LATIP projects approved by the CTC on December 30, 2009. Over $58 million of the LATIP is earmarked for projects that constitute the former East West Connector, including Decoto Complete Streets in Fremont ($16,400,000) and Quarry Lakes Parkway in Union City ($41,814,000). A list of the LATIP projects is included as Exhibit E.
Pursuant to the Surplus Lands Act, the City issued a Notice of Availability for approximately 25.4 acres of the Gateway site to qualified housing developers on June 28, 2021. City Ventures Homebuilding, LLC, submitted a statement of interest proposing to pay $90 million for the property. On December 14, 2021, City Council adopted Resolution 5874-21, approving an Exclusive Negotiating Rights Agreement (“ENA”) with City Ventures Homebuilding, LLC for the sale and development of that portion of the Gateway site.
The term of that ENA has been extended several times, most recently on April 28, 2026, when the City Council authorized extending the agreement to June 7, 2027, to continue good-faith negotiations on a Property Sale Agreement between the City and the developer. The extensions were also needed to ensure the City and its project team could progress toward the design and construction of Quarry Lakes Parkway, Phase 2 (Segment 2), the segment of the future multimodal corridor located between AlvaradoNiles Road and Old Alameda Creek and crossing through the Gateway site. Phase 2 includes realigning Quarry Lakes Drive closer to Old Alameda Creek, constructing a new Quarry Lakes Parkway, and modifying Alvarado-Niles Road. The Quarry Lakes Parkway Phase 2 Project Title Sheet is included as Exhibit F.
Agenda Item No. 4.3
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The final design of Quarry Lakes Parkway Phase 2 will establish the boundaries of the Gateway site available for residential development, a step required to negotiate the terms of a Property Sale Agreement with City Ventures. Unfortunately, the final design of Phase 2 has been delayed by engineering challenges, design complexities, extended coordination with funding agencies, and prolonged coordination with regulatory agencies and other jurisdictions on stormwater treatment and environmental mitigation strategies, among other key challenges.
DISCUSSION
Pursuant to Section 1.3 of the PSA, the City is required to pay Caltrans the land cost payment no later than six years after the PSA is approved by the CTC, which gives the City and Caltrans until June 23, 2027, to complete the sale of the Gateway site. In late 2025, as it became apparent to staff that the PSA term would not provide enough time to complete the roadway construction or give the City and the developer adequate time to complete the land sale transaction, the City and its consultant contacted Caltrans staff to begin discussions on extending the term of sale identified in the PSA. By late June 2026, the City and Caltrans had mutually agreed on the terms of an amendment extending the term of sale, thereby ensuring that the roadway construction and land sale transaction could be completed.
The First Amendment to the Purchase and Sale Agreement extends the term of sale by six (6) years. Once the First Amendment is executed by both parties, the full deposit for the purchase price of the Route 84 Excess Properties will be due to Caltrans on June 23, 2033. The amendment also defines the fair market value of the Route 84 Excess Properties as the 2021 Caltrans-appraised land value of $86,184,000.
The term extension will provide the City and its project team with additional time to complete the design and construction of Quarry Lakes Parkway Phase 2. Staff currently anticipates that the final design, including the detailed preparation of final plans, specifications, and estimates (PS&E) for contract bidding, will be completed by late 2026.
Approval of construction funding from Alameda CTC is also anticipated by early 2027, with the construction contract awarded by mid-2027. Construction is anticipated to commence by late 2027, with the roadway expected to be completed by the end of 2029.
The term extension should also give the City adequate time to complete the land sale transaction with the prospective developer. Once the City Council authorizes the execution of this First Amendment, the City and the developer, City Ventures, will ramp up negotiations on the terms of a Property Sale Agreement. The City is also developing a tentative parcel map for the Quarry Lakes Parkway Phase 2 project, which will be used in the Property Sale Agreement with the developer to define the boundaries of the Gateway site available for sale and residential development. The City anticipates approval of the tentative parcel map by the Union City Planning Commission by late 2026.
Once the tentative parcel map is approved, the City can execute a Property Sale Agreement with the developer. As noted previously, the current ENA was extended to June 7, 2027, establishing a deadline for the City and the developer to define terms and execute the agreement. Upon execution of the Property Sale Agreement, the City and the Agenda Item No. 4.3
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developer will complete the transaction and pay the land cost to Caltrans before the new term of sale expires on June 23, 2033.
FISCAL IMPACT
There is no fiscal impact to the City for approving this First Amendment to the Purchase and Sale Agreement and Caltrans.
RECOMMENDATION
Staff recommends that the City Council adopt a resolution authorizing the City Manager to execute the First Amendment to the Purchase and Sale Agreement for the Route 84 Excess Properties with the California Department of Transportation.
Prepared by: Jonathan Segarra, Management Analyst II
Submitted by: Marilou Ayupan, Public Works Director
Attachments
1. Draft Resolution
2. Exhibit A: First Amendment to the Purchase and Sale Agreement with Caltrans
3. Exhibit B: 2019 Purchase and Sale Agreement for the Route 84 Excess Properties
4. Exhibit C: 2021 California Transportation Commission Action Item Memo
5. Exhibit D: Director’s Grant Deed for the Route 84 Excess Properties
6. Exhibit E: LATIP List of Projects
7. Exhibit F: Quarry Lakes Parkway Phase 2 Project Title Sheet