STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of October 24, 2023
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Timothy Rood, AICP
Community Development Director
SUBJECT: Termination of Disposition and Development Agreement for Loop Site (APN 406-070-042) RECOMMENDED ACTION:
Approve the draft Termination of the Disposition and Development Agreement (Attachment 2) for the Loop Site and authorize the City Manager to execute all related documents that are substantially similar to the approved draft.
BACKGROUND:
On March 8, 2005, the City of Hercules and the former Redevelopment Agency of the City of Hercules (City/Agency) approved a Disposition and Development Agreement (DDA) with Hercules New Town Center, LLC, a California limited liability company managed by Red Barn Communities Company, a California corporation (Attachment 3). The agreement was intended to facilitate the redevelopment of the planned Town Center along the Willow Avenue Corridor between San Pablo Avenue and Palm Avenue (Figure 1, Site Map).
Figure 1. Site Map
On December 11, 2006, the City/Agency approved the First Minor Amendment to the DDA (Attachment 4), intended to effectuate an agreement to advance Redevelopment Agency funds to the developer to buy out one of the members of its LLC, The Surland Companies, at its request, and to provide financial participation in the project to the Agency in return.
On January 22, 2008, the City/Agency approved a second minor amendment (Attachment 5), which adjusted the budget and schedule for the initial project and made certain other modifications.
The DDA identifies two “Initial Parcels,” which are the site that is now Safeway (“PNR Parcel”) and the site that is now the Hercules Transit Center (“C-1 Parcel”). It also designates “Additional Town Center Parcels,” which are other parcels in the vicinity that were considered important to the creation of the planned New Town Center and which the developer had the option to develop in accordance with the other provisions of the DDA if the developer was able to acquire an interest in them. The Loop Site bounded by the off-ramp from eastbound I-80 and Willow Avenue is one of these Additional Town Center Parcels. The DDA was recorded against both the Initial and Additional Parcels covered by the agreement.
The redevelopment project contemplated by the DDA did not move forward, the developer did not acquire an interest in the Loop Site, and the California legislature dissolved all redevelopment agencies in California effective February 1, 2012.
A DDA termination agreement for the Loop Site was drafted and circulated in March 2014 but was never executed.
ANALYSIS:
The current owners of the Loop Site, Hercules Hotel Development Group, have requested that the City terminate the DDA with respect to the Loop Site to facilitate the potential sale of the parcel.
As the previously contemplated redevelopment project led by Red Barn Communities has not moved forward and the Redevelopment Agency no longer exists, staff requests that the City Council approve the Termination of the DDA for the Loop Site in order to facilitate its sale and potential development and authorize the City Manager to execute all related documents that are substantially similar to the approved draft.
FISCAL IMPACT:
There is no fiscal impact associated with this action.
ATTACHMENTS:
Attach 1 – Resolution
Attach 2 – Draft Termination of DDA
Attach 3 – DDA
Attach 4 – First Minor Amendment to DDA
Attach 5 – Second Minor Amendment to DDA