Much ado has been made by some people over the City of Hercules selling the former Hercules Redevelopment Agency (RDA) properties known as Parcel C and Victoria Crescent. Both sites have been available and for sale for many years.
The Plan for Central Hercules (Draft, December 2000) recommended locating a big retail box store with ample surface parking on Parcel C. Wal-Mart studied this option with an economic impact analysis in 2005. But when the community balked, Wal-Mart decided not to build there. The Hercules RDA bought Parcel C in 2009. The RDA also purchased the undeveloped Victoria Crescent site the same year.
(Read more at Hercules in Crisis)
From 2009 through the end of 2011, the city presented both parcels to commercial real estate developers and tried to actively promote both properties for retail. From 2009-2010, the Hercules Economic Development Director tried, and in 2011 the newly hired Real Property Manager tried, all to no avail.
Realizing that it was not in the land development business, the City of Hercules listed both properties for sale with commercial real estate brokers in December 2011. Parcel C was listed with CBRE and marketed for retail, office R&D, and residential use. During the same month, Cassidy Turley was chosen as the broker for Victoria Crescent and the property was likewise marketed.
Once these two properties went publicly up for sale, commercial real estate brokers unanimously told the city that aside from putting a huge big box “category killer” like Wal-Mart or Costco on Parcel C, no developer wanted to buy Parcel C for retail. Wal-Mart was out. Costco looked, but ultimately stated that they were not interested. Costco also passed on Victoria Crescent, too.
Now, who exactly are these commercial real estate brokers talking to Hercules? I asked City Hall and was told they include Don LeBuhn of CBRE; Tony Beatty of Cassidy Turley; Brad Blake of Blake-Hunt Ventures; Kent DeSpain of Retail West; Brad Deck of Evergreen Commercial; David Greensfelder of Greensfelder Commercial; Ray Devlin of Tri-Valley Management; and Christine Firstenberg of Metrovation. All of these brokers have many years of retail real estate experience in Contra Costa County. They and their companies have represented or developed sites for most of the well known retailers in the Bay Area, including Marshalls, Costco, Whole Foods, Peet’s, Safeway, CVS, Chipotle, Pet Food Express and so forth.
In early 2012 the only offers to purchase the two sites were for residential development on both parcels. In particular, Parcel C appears to be prized for residential because it will be close to “transit oriented development” within ¼ to ½ miles of the soon to be built Intermodal Transit Center (ITC). The ITC had its kickoff celebration September 18. Moreover, waterfront developer Hercules Bayfront, LLC has stated that it will break ground in the third quarter of next year on the parcels adjacent. his developer’s retail and office space next door will serve the residential market.
In February 2012, the city was hit with a lawsuit by its RDA bond insurer, Ambac. As a result of the Ambac legal settlement, Hercules is now under court order to sell Parcel C and Victoria Crescent. In order to avoid bankruptcy, the city must sell now. DeNova Homes has signed a purchase and sale agreement to build 350 homes on Parcel C, with perhaps some small retail as a portion of the development. The Victoria Crescent parcel is back on the market and offers have been received. When these properties close escrow, the city will pay a 6 percent commission on Parcel C, and a 5 percent commission on Victoria Crescent.
By selling these two properties, the city council has faced reality and is doing what is best for the City of Hercules.
Chris Kelley, Hercules Resident