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Page 16 of 18 City staff and the applicant request City Council feedback on whether the East Lakes project should provide on-site inclusionary units or if the City would accept payment of the affordable housing fee in lieu of on-site inclusionary units. Staff recommends that the East Lakes project construct on-site inclusionary units. Constructing units on-site would be consistent with the stated purpose of the City’s inclusionary zoning ordinance (IZO). During the recent amendment of the IZO, the City Council affirmed its strong preference for market rate projects to construct affordable units, rather than pay fees. East Lakes Application Process If the City Council wishes to proceed with the East Lakes application, USL/Steelwave seeks certainty regarding the City entitlement process and schedule. Staff recommends the City Council approve terms in Attachment 2, which documents the City’s intended process for the East Lakes application, including required discretionary entitlements, CEQA review, and target schedule. Staff and USL/Steelwave are in agreement with all aspects of the anticipated East Lakes application process contained in Attachment 2. These terms only concern the application process; the details of the proposed project (e.g., site plan, number of units, type of units) will be addressed by the City Council at a future meeting. As with the Arroyo Lago terms, the East Lakes terms would be non-binding on future actions of the City Council. SUMMARY OF RECOMMENDATIONS The following summarizes staff’s recommendations, as presented above: Annexation and Development of the Two Projects in Pleasanton: 1. The City should accept and process development applications for the Arroyo Lago and East Lakes projects, due to the relative environmental and fiscal benefits of these projects developing in Pleasanton, and opportunity to achieve a coordinated approach to planning and provision of infrastructure. 2. Direct staff and the applicants to work collaboratively toward creating a mechanism for property owners benefiting from new public infrastructure to help finance the East Pleasanton infrastructure. 3. Direct staff to initiate a process to amend the General Plan, to incorporate a vision and expanded and updated policies for the East Pleasanton area. Arroyo Lago Project: 4. Accept deviations from all non-compliant ODS standards except for the minimum 15-foot rear setback standard. Direct the applicant to modify the project to provide a minimum 15-foot rear setback for lots abutting the Ironwood community, with the expectation that such modifications do not require significant re-design of the project. 5. Approve the Key Terms as outlined in Attachment 1, with respect to the anticipated Arroyo Lago application process, including required discretionary entitlements, CEQA review, and schedule. Page 215 of 749