Opponents of the project in East Sacramento had asked for an underpass under the train tracks at Alhambra Boulevard to ease traffic congestion caused by the 336-unit development.
The City says it has been advised that it would be difficult to secure grants to pay for an underpass.
A bicycle underpass would cost $22 million dollars. A vehicle underpass would cost $28 million.
The City also says Union Pacific Railroad would not consent to a tunnel option that would have cost $2 million.
The City is instead moving ahead with plans to improve alternative transportation access near the housing development.
The plans have not been finalized, but preliminary proposals include bike lanes on C Street and Elvas Boulevard, better lighting, and landscaping.
The City presented a proposal to the Sacramento City Council, but pulled the item from this week's agenda.
The item may be revisited in a couple of weeks.
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