Hercules declares debt of $316.5 million from defunct redevelopment agency

The Hercules City Council this week declared a $316.5 million outstanding debt of its defunct redevelopment agency as of the coming fiscal year.

That comes out to more than $13,000 for each of Hercules' 24,000-odd residents.

The city opted to become the successor of the redevelopment agency as of Feb. 1, when redevelopment agencies statewide disbanded pursuant to state legislation affirmed by the California Supreme Court in December.

More than two-thirds of Hercules' redevelopment debt, or almost $224 million, is bonds -- $183 million nonhousing-related, and $41 million in affordable housing bonds. Other large debts include:

About $53 million from a court settlement with Catellus/Hercules LLC, the developer of the Victoria by the Bay subdivision completed about eight years ago;

$10.4 million worth of cash advances from the city to the agency;

$6 million for the Supplemental Educational Revenue Augmentation Fund, part of a statewide shift of Redevelopment Agency property taxes to schools in fiscal 2009-2010 and 2010-2011;

$6.5 million related to a court settlement with bond insurer Ambac Assurance Corp., which includes $4.1 million in tax increment that was supposed to have gone to a bond trustee, plus a cushion to cover possible interest, penalties and other consequences;

Just over $4 million payable to Contra Costa County under an arrangement with a developer regarding an assessment district.

The debt is payable from redevelopment area tax increments, which are the increased property taxes attributable to redevelopment activity.

The total due in fiscal year 2012-2013, including about $2 million in pass-throughs to various local agencies, is $20.9 million -- more than twice the $9.2 million in expected receipts estimated by Finance Director Nickie Mastay.

The annual debt total has ballooned for next year as a result of the Ambac settlement and an outstanding debt of about $4.3 million related to construction on the stalled Sycamore North residential-retail project.

Debts left unpaid will be passed through to the following year, Mastay said.

The next meeting of the oversight board will be Monday.

The seven-member oversight board consists of Hercules Councilman William Wilkins and Senior Planner Robert Reber, representing the city; Hercules Mayor Dan Romero and Hercules Planning Commissioner Richard Mitchell, appointed by the Contra Costa County Board of Supervisors; East Bay Regional Park District board member Ted Radke, appointed by the park district; West Contra Costa Unified School District associate Superintendent Sheri Gamba, appointed by the Contra Costa Office of Education; and Contra Costa Community College District board member Tomi Van de Brooke, appointed by the college district.

Contact Tom Lochner at 510-262-2760.

IF YOU GO
What: Hercules RDA Successor Agency Oversight Board
Where: Hercules City Council chamber, 111 Civic Drive
When: 7 p.m. Monday

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