But they are moving forward with other elements of the controversial and expensive Route 238 Corridor Improvement Project, including the redesign of downtown's traffic grid into a loop of wider, one-way streets.
Mayor Mike Sweeney said he believes city staff is "trying to reduce opposition to the project" by eliminating one of its most complicated features: a series of overpasses and underpasses planned for the intersection of Jackson Street with Mission and Foothill boulevards.
But Sweeney, who raised concerns about the road project while campaigning for office last year, said other parts of the project are equally worrisome to some local merchants and residents.
"To be honest, I've heard very few people speak in favor of the miniloop proposal," Sweeney said Sunday.
In a four-page report released late Friday, city administrators say they are backing off on the multilevel intersection because of community concerns and the project's exorbitant costs. They have scheduled a Tuesday public meeting to discuss the changes.
The graded intersection would put Jackson Street underneath Watkins Street and Mission Boulevard and cost about $27 million.
The total project is projected to be $138 million. But even if the intersection is taken out of the project, the entire cost would still be about $20 million over budget, the report states.
Businesses and the Hayward Chamber of Commerce have argued that the projected four years of construction, including 18 months for revamping the Five Flags intersection, would be a disaster for downtown commerce.
And the proposed loop of one-way streets has also been broadly panned by many of downtown's most active advocates, including some organizations that rarely agree on anything else.
The road project involves work along more than five miles of the Mission-Foothill boulevard corridor, a state road system also known as Route 238. It was designed as an alternative to the failed Route 238 Bypass, an elevated freeway that the state Department of Transportation wanted to build through the Hayward foothills.
Without that freeway, which was abandoned after 40 years of planning and debate, Hayward has been unable to find a way to handle the thousands of commuters who clog the city as they cross to and from the Tri-Valley, across the San Mateo Bridge and from various parts of the East Bay.
Audrey LePell, president of Hayward-based Citizens for Alternative Transportation Solutions, said she doesn't believe the city has found the right alternative.
"We feel the city's plan is too destructive," LePell said. "It's concentrated all that traffic into a half-mile triangle."
To create a loop of one-way streets downtown, city officials want to widen certain streets. To do that, they would have to acquire and tear down a number of buildings, such as La Victoria's Restaurant, housed in a 1940s structure at D Street and Mission Boulevard.
The Hayward City Council was scheduled to vote this month to approve the project's final environmental impact report, but that decision has been postponed until the fall as city officials try to digest the numerous changes detailed in the Friday report.
City engineers say they can eliminate the multilevel intersection while still achieving the traffic-relieving goals of the project because a one-way downtown street configuration will simplify how the existing intersection operates.
Along with eliminating the intersection project, city staffers say they also want to eliminate some of the peak hour travel lanes on Mission Boulevard that would have taken parking spaces away from Hayward Auto Row. Auto dealerships have fought that portion of the plan.
Also to be eliminated from the project is a proposed right of way acquisition that would chipped off part of downtown's Bay Cities Credit Union.
The Alameda County Transportation Authority has already appropriated $80 million for the project from money that was originally intended to pay for the Route 238 Bypass. Some have said they fear that if the city doesn't take advantage of this money, it could lose it and the traffic problems would remain unresolved. The city is contributing another $11.5 million.
Councilman Bill Quirk said taking away the intersection project probably "creates a lot less disruption," but there still won't be enough money to pay for the project. He said he is concerned money intended for the Route 238 Bypass, which he supported, has already been siphoned off to other projects in the county.
"We've scaled back the project, we're spending less and less, and then they're taking away money to build something in Castro Valley?" Quirk said, speaking of a Redwood Road interchange project. "That does disturb me."
Matt O'Brien can be reached at (510) 293-2473 or email@example.com.