The San Ramon City Council indicated its intent Tuesday to approve an initiative ordinance related to the 740-home Faria Preserve project that would lay the groundwork for potentially decreasing the number of homes and removing affordable housing units.

Spurred by a local citizens' petition, the initiative ordinance would allow the developer to apply to reduce the previously approved development proposal by shrinking the project's Neighborhood 5 from 302 units -- 185 of which were affordable apartments -- down to 180 homes total, all at market rate.

The developer would instead pay a fee into a new city affordable housing fund that could reach $9 million if all 180 units are built.

"We have, what seems to be here, a better solution to what has been a very complex land-use development in the Faria Preserve, as we all know," Councilman Harry Sachs said, speaking in favor of adopting the initiative ordinance rather than sending the question to city voters in November.

"This really gives us an opportunity, as a city, to move forward in extremely meaningful ways ... We see the value and we see the merit in this initiative," added Sachs, who was the lone dissenting vote when the council approved the Faria Preserve project in September 2014.

The already approved version of the project called for a total of 740 units divided among single-family homes, townhouses, condominiums, apartments and senior housing, with building focused on 152 acres of a 456-acre site east of Bollinger Canyon Road and north of Deerwood Drive. Home construction hasn't started but is expected to begin next year.

Last month, former San Ramon City Councilwoman Carol Rowley, and Mike Conklin, CEO of the military veteran support nonprofit Sentinels of Freedom, submitted an initiative petition to the city aiming to reduce the scope of the project and create the affordable housing funding.

Contra Costa County election officials deemed the petition had 4,350 statistically valid signatures, well above the minimum of 10% of the 35,569 registered city voters required to force the council to consider the underlying initiative ordinance for adoption or a citywide vote.

"I'm very proud to be a sponsor of this initiative," Conklin told the council Tuesday. "For me to support this, it has to be good for the city of San Ramon and it has to be good for veterans."

Conklin and Rowley each said the initiative proposal would help create future affordable housing opportunities for a variety of public employees who serve in the area.

"As a principal trying to hire teachers who could not afford to live in the community which they work, I enthusiastically support the project for teachers, police, firefighters and our veterans," Rowley said. "These heroes support our community, provide critical service for our citizens and deserve to live in the community in which they work."

In his presentation Tuesday, interim city attorney Bob Saxe explained that "the essence of the initiative" is a proposal that would allow the Faria Preserve owners to reduce the Neighborhood 5 density from 302 apartment units to 180 units and be relieved of any obligation to provide affordable housing.

The owners would have the option of accepting the petition but they would not be obligated to do so, Saxe said.

No representatives of CalAtlantic Homes -- which purchased the Faria Preserve property in April -- spoke to the council Tuesday night. But Conklin indicated the move has the support of the project developer.

"I talk about housing for veterans a lot across the country," Conklin said. "I have never seen this opportunity, where a developer comes in and says 'I want to reduce the size of this project, I want to create a housing fund and I want an open space.'"

A majority of the council's audience of about five-dozen people Tuesday were local veterans in support of the petition.

As proposed, the initiative would allow the developer to reduce the number of residences in the 12.6-acre Neighborhood 5 from up to 302 units to a maximum of 180, with all of those units being sold at market rate and designed with senior residents or multi-generational families in mind. That would mean none of the 185 affordable for-rent apartments approved for Neighborhood 5 -- 86 of which were senior apartments -- would be built.

For each of the units in Neighborhood 5, the developer would pay a $50,000 affordable housing fee and $11,111 open space fee to the city. If all 180 units were built, the city would receive $9 million for its affordable housing fund and slightly under $2 million for the open space fund.

A new housing fund would be created by the city and used by housing services in whatever ways the city deemed appropriate, according to Saxe.

Saxe explained that losing 185 affordable homes in Neighborhood 5 would have an effect on the regional housing needs allocation that requires San Ramon to maintain its fair share of affordable housing needs in the Bay Area.

Under the Association of Bay Area Governments requirement, San Ramon must create 1,417 affordable homes by 2023. The city stands credited with 868 qualifying units but that includes the Faria Preserve, so removing the 185 units would raise the city's credit shortfall to 734 affordable units.

The Planning Department has indicated that there are more than sufficient potential housing sites to fulfill the allocation by 2023. "We would have to replace these 185 units, but according to planning, it is not an unreasonable burden," Saxe said.

Upon completion of the presentation and public comments, the councilmen began to discuss how to move forward with the petition.

"I am opposed to submitting this to the ballot, because a lot of people, where I was, were asking if this had anything to do with the golf course," Councilman Dave Hudson said, referring to the unrelated debate about the potential residential development at the San Ramon Golf Club property.

"If you put this on the ballot... there is going to be some confusion," Hudson added. "Submitting this right now, I think this is a win-win situation for everyone. This is something that a neighborhood has gotten behind, said we wanted -- I actually think we've done something right for a change -- so let's do it."

"This is an unusual opportunity to do something that has what Faria never had, in my view: flexibility," Councilman Philip O'Loane said. "This builds flexibility into how we can do things. It's flexibility in terms of thinking about things differently; not looking at what affordable housing looked like in 1999, but looking at what it might look like in 2025."

In the end, the council voted 4-0 Tuesday night to support the initiative ordinance and set formal adoption for the next council meeting. Vice Mayor Scott Perkins was absent.

In other business

* The council named Sachs and O'Loane as city liaisons to meet with Contra Costa County and Danville town officials regarding a memorandum of understanding related to development in the Tassajara Valley with the goal of contractually preserving and protecting up to 17,718 acres subject to the county general plan and zoning standards.

* Council members approved of proceeding with a grant deed and all other documents necessary to transfer title of the Bishop Ranch 3A site at 6200 Bollinger Canyon Road from the city to BR3A, LP -- an affiliate of Sunset Development Company -- as the final payment to Sunset for building the new San Ramon City Hall.

* The council appointed Shikha Malaviva as the city's new poet laureate. Outgoing poet laureate Kathy Moore will be recognized at an upcoming council meeting that is yet to be determined.

The council also appointed Lihua Gu to the Library Advisory Committee, Nancy Bambino to the Senior Advisory Committee, Ranjani Mohana to the Arts Advisory Committee, and Vincent Salinas and Jennifer He to the Housing Advisory Committee.

* John Mills was recognized by the city of San Ramon for his years of service to the Parks and Community Services Commission. Mills was introduced by division manager Kathi Heimann and given a proclamation by Mayor Bill Clarkson.