This post was contributed by a community member. The views expressed here are the author's own.

Politics & Government

City Gets $12,000 a Month for Old Freight Yard

County land earns the city money, but whether the Hercules Redevelopment Agency properly bought the property is unclear.

A small freight yard the Hercules Redevelopment Agency purchased under questionable authority two years ago will soon be earning the city $12,000 a month.

Hercules agreed to lease the yard to Harbor Freight Lines Inc. under a three-year contract approved by the council on Tuesday night.

The property in question is the Yellow Freight yard, which is sandwiched between the east and westbound lanes of Highway 4 just outside the city's limits. The Hercules Redevelopment Agency spent $2 million on the yard in the summer of 2009 in the hopes that the city would eventually annex the land on which it was built.

But the annexation plans were scrapped, and the city found itself owning a freight yard in unincorporated Contra Costa County that might have been purchased without the proper authority to do so.

State laws are fairly strict when it comes to the use of redevelopment, a powerful tool that allows cities and counties to place properties within a specialized jurisdiction to capture property tax increases for further economic development. The City Council, acting as a redevelopment agency, has the power to condemn properties it aims to acquire through the use of eminent domain, which effectively circumvents the usual scenario of a willing buyer and a willing seller.

That didn't initially happen in this case. On the contrary, the freight yard was not even in the city's limits; it was in the county.

But that's also where the problem lay.

State law requires that certain findings be made before a city's redevelopment agency may purchase property outside its jurisdiction. The agency needs to prove:

  •  The purchase is of benefit to the city's redevelopment project area by helping to eliminate blight or providing low- or moderate-income housing.
  •  That there was no other reasonable means of financing the purchase.
  •  That the public purchase was consistent with the agency's plan for redeveloping the area.

That wasn’t done when the city bought the land two years ago, but a series of findings presented to the council Tuesday night outlined retrospectively the intent of the purchase, which now includes the elimination of blight and continued economic development.

The freight yard is one of four parcels purchased for some $33.7 million with bond proceeds that have recently been. The $12,000 monthly lease revenue on the yard will go to the city, and not to the city’s .

The city recently appropriated another $25,000 for improvements to make the freight yard an attractive lease option.

Laila Kearney contributed to this report.

We’ve removed the ability to reply as we work to make improvements. Learn more here

The views expressed in this post are the author's own. Want to post on Patch?