In 2004, Jeffrey Wisniewski was fresh out of college, living in an apartment in Lafayette and house-hunting with his future wife, when chance brought them to Hercules.

"We fell in love with the architecture on the waterfront," said Wisniewski, today a civil engineer, married, with a young son. "We liked the style, we liked the setting, so we bought in."

They looked at the new Promenade subdivision, checked out the Hercules waterfront master plan that included a ferry terminal, train station and nearby elementary school, and eventually bought a home in Baywood, the next new waterfront-area subdivision.

But today, most of a decade later, the Hercules dream that lured the Wisniewskis exists largely on paper.
The 24,000-population city on San Pablo Bay is mired in deficit and debt. The waterfront, one of many concepts that made Hercules the toast of urban architecture magazines, remains mostly undeveloped. Other pieces of the vision -- the Sycamore North residential-over-retail project, the Hercules New Town center, a "Field of Dreams" baseball complex -- are all half-finished, in limbo or abandoned altogether.

The train station and ferry terminal, supposed to be operating before the end of the last decade, have been postponed again and again. A planned Bayfront Boulevard of shops and restaurants and a surrounding neighborhood of about 1,400 homes are on hold.

Along the way, the city spent tens of millions of dollars on projects, properties and plans, with little to show for it. The financial mismanagement contributed to a recent recall and upheaval on the City Council, started by a group of fed-up residents.


Developer Jim Anderson and former interim City Manager Charlie Long, now a consultant to the city, recently agreed to sit down and try to jump-start the stalled waterfront projects, which Wisniewski and many of his neighbors look to as the long-term ticket out of the city's largely self-inflicted financial meltdown.

But even as the state last month extended $9.1 million in transportation grants for 10 months, some residents, not to mention much of the City Hall bureaucracy, are resisting the project, believing it to be too costly at a time of fiscal austerity. The city has invested more than $12 million in the project to date.

The city and the developer have been at odds over how much land the city needs to acquire from Hercules Bayfront LLC for the transit center and how it should be valued. The city's appraisal is $20 a square foot, the developer's, $33 a square foot.

Wisniewski, like many other waterfront pioneers, believes the waterfront should have been built up already.
"The funds were available prior to 2009," he said. "They (city officials) were spending money buying property instead of investing in the waterfront project. Every year they got $13 million (in tax increments) and we have nothing to show for it."

Redevelopment agency tax increments, as high as $13.5 million in 2007-2008, were down to about $9.7 million in the just-completed fiscal year.

Elsewhere in the city, Market Town, the first phase of what was supposed to be the Hercules New Town Center, is an empty lot. The city turned over title to a developer, the Red Barn Co. for zero dollars, with the proviso that the company would deliver a high density mixed-used project. Red Barn turned around and encumbered it with a $2.5 million mortgage, without building anything.

The project's $12 million primary budget is virtually depleted, largely frittered away on consultants and their travel, hotel and other expenses.

'Dynamic trade area' touted

Nearer to the waterfront, the hulking skeleton of Sycamore North, stalled and only half-complete, dominates the skyline over what a 2009 city-authored brochure described as a "dynamic trade area," to open in spring 2011, that would draw patrons from all Hercules and beyond with "a collection of the finest local, national and regional restaurants and specialty retailers."

Today the Hercules Redevelopment Agency-owned mixed-use project, with more than $30 million already spent, faces a funding gap on the order of $30 million and a possible future as a largely low-income housing complex.

And earlier this year, after having spent almost $2 million, the city abandoned plans for a Big League Dreams sports complex outside the city limits, bending to the reality that prospects for future annexation are uncertain and the owner of the land, ConocoPhillips, opposed the project. Not to mention the approximately $20 million it would take to build it.

Meanwhile, the city is emerging from a months-long struggle to plug a $6 million budget deficit. Even after the recent layoffs of 30 to 40 percent of the city workforce, the 2011-2012 general fund budget still has a structural deficit, with $800,000 coming from a reserve. The Redevelopment Agency's non-housing budget has a $1.9 million deficit; most of this year's deficit would be made up by the pending sale of a trucking yard on the city's eastern outskirts for $1.4 million.

Hercules' fledgling renaissance originated in a series of community planning charettes in 2000, culminating in the Central Hercules and Waterfront plans that have won accolades from smart-planning groups.

"The Hercules vision is to have a compact, walkable center of town," former Community Development Director Steve Lawton said as late as 2007 in an interview with the West County Times. "Other cities are talking about it, but Hercules is doing it, and so it's being used as a model for how California can grow."

"It gets back to having a vision and sticking to it," Lawton said at the time. "Soon Herculeans will have many more choices on how to get around: ferry, train, bus and ultimately BART" -- the reference was to a hoped-for future BART extension to be called 'wBART.'

Lawton today is the president of the Northern California chapter of the Congress for the New Urbanism.
As late as 2009, Bayfront and New Town Center received citations from the Greenbelt Alliance as models of pedestrian-, bicycle- and mass transit-oriented communities with jobs close to homes.

Hercules began the 2000s with a growth spurt that added more than 1,500 residential units by around mid-decade: Victoria by the Bay, Promenade, Baywood and Bayside, mostly during the tenure of former City Manager Mike Sakamoto.

The City Council flirted with the idea of a Wal-Mart store near the waterfront, eventually flip-flopping under pressure from residents who saw a big-box store with acres of parking as a betrayal of the pedestrian-friendly, New Urbanism philosophy underlying the Central Hercules Plan. After an unsuccessful attempt to acquire the retailer's 17.25-acre property by eminent domain in 2006, the city bought it in 2009 for $13.9 million, dipping into the proceeds of a 2007 bond issue that was supposed to pay mostly for infrastructure and improvements related to the intermodal transit center.

The site is now vacant and was most recently used to store dirt from the I-80 widening project.

The Nelson Oliva era

By then, the city manager was Nelson Oliva, once a protege of Sakamoto in the city of Bellflower in the mid 1980s. Oliva came to Hercules in late 2003 as a consultant with his firm, Affordable Housing Solutions Group, also known later as NEO Consulting Inc. He was tasked with reviving an affordable housing program suspended after a financial scandal. Just weeks earlier, a city employee, Darrick Chavis, and an outside accomplice, LaMark Kevin Lassiter, had been arrested on suspicion of cleaning out a city housing beautification fund to the tune of almost $400,000 with phony invoices; the duo eventually were sentenced to federal prison.

When Sakamoto retired in 2007, the council appointed Oliva, who several months earlier had divested himself of his company, he said, transferring it to two of his daughters. In the ensuing years, the city's business with NEO would grow to more than $1 million a year, the contracts breezing through the City Council on the consent calendar. The company added additional tasks to its portfolio, from administering business development loans and mortgage bailout loans to community cleanup and overseeing the installation of tamper-resistant mailboxes.

In the Oliva years, the Redevelopment Agency went on a buying spree. The shopping list included the vacant 11.44-acre so-called Penterra Poe site west of San Pablo Avenue and 3.9 acres now occupied by the unfinished Duck Pond Park for an aggregate $14.5 million; Victoria Crescent, a vacant 6.37-acre, commercial-zoned parcel on San Pablo Avenue, for $3.4 million; the 3.5-acre Yellow Freight trucking yard for $1.9 million; the five-building Venture Commerce Center II, for $13.4 million; and the Wal-Mart property for $13.9 million.

All the while, the city's finances were deteriorating.

In early October, Oliva went on medical leave. Charlie Long, installed as interim city manager later that month, promptly sounded the alarm about the city's finances. But in early December, the City Council, with two lame-duck members, dismissed Long by a unanimous vote in closed session and reinstated Oliva, if only for a month.

Angry residents recall two council members

The firing of Long, coupled with the reinstatement of Oliva, arguably was the pivotal event in the resignation of then-Mayor Ed Balico in January and the June 7 recall, by overwhelming margins, of the two remaining members of the 2010 City Council, Don Kuehne and then-Mayor Joanne Ward.

"It woke up a sleeping giant of apathetic residents," said Wisniewski, who in 2007 had created a website, Waterfront Watch, that served as a community forum and challenged City Hall for more than three years; it currently is dormant.

A new City Council faces the daunting task to unravel the fiscal mess and somehow steer Hercules back onto its erstwhile path to glory.

"To get out of this financial crisis, the city should aggressively find ways to generate revenue," Mayor Myrna de Vera said this week. "Among all the projects, the Bayfront/ITC is the most promising economic engine because this transit-oriented development is unique and of regional interest."

De Vera and Vice Mayor John Delgado are the longest-tenured members of the new City Council after their victory in November over incumbents Kris Valstad and Joe Eddy McDonald; the other three members, inaugurated in June, are Dan Romero, William Wilkins and Gerard Boulanger. The city also has a new interim city manager in Liz Warmerdam after the recent resignation of Fred Deltorchio, the longtime police chief who had served as interim city manager since Oliva's resignation in January.

A wiser Wisniewski remains bullish about the future of Hercules and its waterfront.

"Looking forward, I still have great hopes for the city," Wisniewski said, citing "its location: its proximity to San Francisco and Oakland and the Wine Country; a willing developer; community support, a potential for funding, and an award-winning plan."

"All the pieces are there."