Sycamore North Deal to Go Before Hercules City Council

The Hercules City Council Tuesday will consider a Sycamore North purchase and sale agreement with Presidio Development Partners, LLC.

Only half-finished, Sycamore North has drained the city of over $35 million. Hercules would need to spend $40 million, at the high end, to complete the project, which was first intended to have three stories filled with apartments and one floor for shops. The proposed deal with Presidio would involve turning most of the 40,000 square feet of ground-level planned retail into residential space, according to a city staff report.

The report said Sycamore North is “not a good retail site in comparison with the competition, including the Market Hall/Red Barn site and Sycamore Crossing, which are the City’s two best remaining retail sites.”

If the council approves the deal, changes to the building’s retail component would require zoning and design review by the Hercules Planning Commission.

The city would receive $425,000 for the building plus additional perks (an “earn-out formula”) if the construction costs to complete the project run low or if, once completed and occupied, Sycamore North rents run high.

“The proceeds from the earn-out formula cannot be accurately determined at this juncture, but could range from zero to over $2 million, depending on the final cost of the project and the net operating income at 90 percent occupancy,” the report said.

Presidio entered into exclusive negotiations with the city late last year. Sycamore North would be competed in about a year and a half if the agreement with the developer is approved Tuesday, the records show.