Lafayette Council Approves Seventh Story for Mt. Diablo Project, 5-0

Lafayette's City Council approved a taller, seven-story version of the mixed-use project at 3458 Mt. Diablo Blvd. on Oct. 26, 2026, even as members criticized its bulk and affordable units. The unanimous vote on Resolution 2026-58 followed a warning from the city attorney that state density bonus law leaves little legal room to say no. The council instead used its leverage on wording, findings and conditions.

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• Seventh story approved, 5-0, for 3458 Mt. Diablo Blvd. after a marathon hearing
• New resolution language states the council is required by state law to grant the waiver
• Very-low-income units draw fire over size, location and lack of decks
• Carpenters union seeks labor standards; the city has none
• State lobbyist flags Prop 43 and impact-fee changes as risks to local finances

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Seventh Story Approved, With Objections on Record

The basics: California's density bonus law lets developers who include affordable units build more than local rules allow. It also lets them request waivers of local standards. According to the city attorney, the city can deny those waivers only on narrow grounds.

Why it matters: The council approved a six-story version of this project under Resolution 2026-24 on March 23, 2026. Seven months later, the developer returned with a taller building, and the council concluded it had little choice but to approve it.

Where things stand: OUTDO Lafayette LLC's revision raises the building from 62 feet, 3 inches to 71 feet. It also cuts the unit count from 31 to 30, adds more three-bedroom units, merges the lobby and commercial space, and adds a live-work cafe. The Design Review and Planning Commissions reviewed the plans Oct. 5. Staff recommended a California Environmental Quality Act (CEQA) exemption and revised conditions 2, 27 and a new condition 45.

The city attorney set the legal frame early: "In order to deny a waiver, you would have to find a specific adverse impact to public health and safety," said the City Attorney. Conflicts with law are the other ground, the attorney said, and cities have lost on such arguments.

The applicant blamed the market. "The primary reason for the changes that you're seeing is what has been selling have been larger units," said the applicant, adding that interest rates make the approved plan unfinanceable.

"So the project that we approved six months ago is really not viable financially?" asked Jim Cervantes, Councilmember. The applicant said he lacked confidence that many of the units would sell.

The other side: Members zeroed in on the very-low-income units and their size, placement and missing decks. "Those are the ones that we're most desperate for," said Susan Candell, Councilmember. The applicant pointed to the subsidy instead: "The VLI is going to sell for $270,000. A similar unit is going to be $1.2 million, right?"

"I am a little disturbed that the plans were shown apparently don't reflect reality," said John McCormick, Councilmember. He pushed to make a change to the cafe door a condition of approval.

Rob Lavoie, a public commenter, said seven stories on a 0.63-acre parcel is too much for the town. He questioned the height limits and the lack of a setback on the west side. He also asked how the cafe would differ from the library's failed cafe.

Ramon Amaral, a field representative for the North Coast States Carpenters Union, Local 152, said the union is pro-housing. He urged the city to adopt standards on wages, benefits, apprenticeship and local hire. Asked whether Lafayette has such rules, the city attorney said, "No, I don't believe we do."

Decisions and stakeholder impacts: "We create real risk for the city by opposing it," Councilmember Cervantes said before moving adoption as amended. Mayor Carl Anduri was blunter: "That seventh story just seems to push it over the edge, but there's nothing we can do about it."

The amendments do several things:

• Add language stating the council is required by state law to grant the waiver.
• Delete landscaping and compatibility findings the council could not support.
• Note that Municipal Code 6-3715 is subject to state density bonus law.
• Extend the approval's expiration and strengthen public art approval.

Scott Watkins, Senior Planner, read revised language stating that "the city cannot withhold approval of the revised project."

The vote was For: 5, Against: 0, Absent: 0.

The developer gets a taller, larger-unit building it says it can finance. Council critics got their disagreement written into the record. Labor groups left without workforce standards.

What's next: Staff described the cafe layout change to the council but did not analyze it. Residents may want to watch how that space, and the public art approval, are carried out.

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Lobbyist Warns of State Shifts on Taxes, Fees

Why it matters: State decisions on impact fees, special-tax thresholds and the budget flow directly into Lafayette's finances and authority.

Where things stand: Casey Elliott, Vice President and Chief Strategy Officer at Townsend Public Affairs, said about 1,800 bills were introduced this year. About 1,160 passed, and roughly 10% of those were vetoed.

His recap covered:

• Wildfire bills supported by Lafayette or the Lamorinda Coalition
• E-bike laws and housing streamlining
• Timing of the Regional Housing Needs Allocation (RHNA), the state process that sets local housing targets
• Impact fees on accessory dwelling units (ADUs)
• Vetoed labor bills
• Changes to the Brown Act and the Public Records Act

On the November ballot, Elliott flagged a housing bond, Props 40–42, Prop 45 on CEQA streamlining and Prop 43, which addresses the two-thirds threshold for special taxes. "Prop 43, on the other hand, is definitely a local agency impact," said Elliott.

Decisions and stakeholder impacts: Councilmembers asked about the incoming state administration and the structural deficit. Elliott said he expects a ramp-up period. He also said Prop 2 would not fix the state's revenue volatility. The item was received and filed with no vote.

What's next: The full briefing is available in the Item 8A State Legislative Update.

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Minor Items

• Consent calendar: Council adopted Ordinance 703's objective design standards and an East Bay Regional Park District sublicense for the Topper Lane trail connector by voice vote.
• Transportation money: Consent approvals included $230,000 for Lamorinda Smart Signals optional items and city sponsorship of a $104,000 school bus grant.
• Record corrected: Minutes now show the Oct. 13 objective design standards vote as 3-1-1, not 4-0-1. The amended minutes were approved For: 5, Against: 0.
• Sunflower Hill at Sierra Place: The 48-unit affordable project at 949 Moraga Road will honor Sierra Olson, announced Rosemary Kerbox, a Sunflower Hill board member.
• Trash changes: About 2,400 Lafayette units will get new pickup days, and only plastics 1, 2 and 5 will be accepted, Councilmember McCormick reported.

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Looking Ahead

The council proclaimed Nov. 4, 2026, as Shelter In Place Education Day and November as Lung Cancer Awareness Month. Expect Caldecott Tunnel closures for bore maintenance, and watch the Contra Costa Transportation Authority (CCTA) shift its proposed sales tax plan toward fewer named projects plus a strategic plan. Closer to home, the city manager reported progress on the Mt. Diablo/Hampton beacon crossing, arrests of three Safeway suspects, and $7,477 raised by the Youth Commission's haunted house, which drew more than 1,900 guests.