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BACKGROUND In August 2000, the City Council approved the Bernal Property Specific Plan, PUD Development Plan, Final Environmental Impact Report, and Development Agreement. The 39.22 acre project area is generally defined by Bernal Avenue to the north, Valley Avenue to the east, City parkland to the south, and the I-680/Bernal Avenue exit ramp to the west. The applicant, South Bay Development Company, proposes to modify the office-only approval of their property in the Bernal Property Specific Plan to allow a mixed-use development that would include business and professional offices and retail uses. The Project would include the following: • 65,000 square foot lifestyle format Safeway grocery store • A 10 fuel dispenser gas station to be owned and operated by Safeway Stores • 59,506 square feet of multi-tenant retail shops located in the retail component of the Project • 588,500 square feet of office space to be located in seven buildings. The seven buildings of office space will remain the same as approved in the Bernal Property Specific Plan Fiscal Analysis In May, 2008, the Planning Commission held a workshop on the modifications to the Project with the applicant. The Planning Commission requested a market and fiscal analysis of the Project to be included at the time the Project is considered by the Planning Commission and the City Council in November, 2008. In response and in light of the Project's impact, staff has determined that this study would be beneficial. As indicated previously, staff solicited bids from four firms and received proposals from three of the four. Based on the quality of the proposals including the proposed fees, staff is recommending Economic & Planning Systems for this project. Economic & Planning Systems has considerable experience providing market and fiscal analyses related to new development and as a result, are well qualified to complete this work. Some time ago, the City hired Maplnfo/Pitney Bowes to prepare a market trade area impact analysis of the proposed Safeway Store at Pleasanton Gateway Business Park. The scope of work included identifying the economic impacts to the City and to existing grocery stores in the City; consideration of the "zero sum gain" issue of adding a new grocery store in the trade market given the limited growth that is planned in Pleasanton; and provide expected gross sales revenues of the new store, initially upon opening and in three years. This information and other market information regarding the remainder of the Project will be incorporated in the market and fiscal analyses of the Project that EPS will prepare. Page 2 of 3