City Reaches Settlement with Surland to Resolve Aquatic Center

Published on August 21, 2026

TRACY, Calif. – On Tuesday, August 18, 2026, the Tracy City Council, by a unanimous 5-0 vote, authorized the City Attorney’s Office and outside counsel to file a stipulated judgment with the San Joaquin County Superior Court to resolve and settle two pending litigation matters between the City of Tracy and Surland.

Surland Communities, LLC is the master developer of property within the Ellis Specific Plan area, which includes the area surrounding the future aquatic center.

The City and Surland have agreed to the terms and conditions of a settlement agreement and public infrastructure agreement, which are incorporated into the stipulated judgment submitted to the Superior Court for approval. The agreement was reached after more than a year of good-faith negotiations between the City and Surland to resolve the disputes.

The stipulated judgment was filed with the Superior Court on Wednesday, August 19, 2026. It is subject to judicial review and approval and includes the following material terms of the settlement approved by both parties:

• Surland will transfer the aquatic center property to the City. Surland will quitclaim the property to the City, clearing title so the City can move forward with its plans to construct an aquatic center. The settlement agreement provides for the property transfer through escrow following satisfaction of the agreement’s conditions.
• Surland will provide $8 million to the City for the aquatic center. This payment is consistent with the terms of the operative development agreement and will support the construction of the aquatic center.
• Surland will receive fee credits and reimbursements for eligible public infrastructure improvements. Consistent with City practice and the terms of the Public Infrastructure Agreement, Surland will receive credits and reimbursements based on the actual value of eligible public improvements constructed. The agreement establishes the process for applying those credits and reimbursements to eligible infrastructure improvements.
• The parties will mutually release their claims. The settlement provides for a mutual release of claims between the City and Surland, resolving the litigation between the parties. 

The filing and agreement, subject to Court approval, bring an end to many years of disputes between the City and Surland concerning the aquatic center property and surrounding development. The settlement also establishes a framework for the City and Surland to fulfill their respective obligations related to public infrastructure and the aquatic center.

The City will provide additional information regarding the aquatic center as the settlement moves through the court approval process and the City proceeds with the next steps.