Politics & Government

The Issues: What has Hercules Learned from Redevelopment

Candidates running in the June 7 Hercules City Council election answer questions posed by Hercules Patch with input from readers: The redevelopment agency

Much of the city's financial trouble can be traced to the Hercules Redevelopment Agency. What lessons have been learned through that experience?


The purpose of the Redevelopment Agency is to provide economic stimulus for the whole city, not for a few citizens. Our RDA was used as a financial and marketing tool to promote business for friends/family of senior City officials.

Find out what's happening in Pinole-Herculeswith free, real-time updates from Patch.

Hercules RDA should not have been transformed into a real estate company. No wonder the State is trying to get rid of RDAs in California. We took huge risks with taxpayer’s money by investing at the peak at the market.

Why did we buy so much land to be developed for business and residential purposes? It makes sense when we want to create a new park, a recreational area, but to act as a developer… We are now dealing with the consequences of disastrous projects such as Sycamore North, the New Town Center and Big Dreams League.  We are “under water” on all our investments, our RDA debt is $1.5M higher than our RDA revenues.

Find out what's happening in Pinole-Herculeswith free, real-time updates from Patch.

What I learnt through that sad experience: A City must not compete with private enterprise. We must simplify the City Hall’s scope of work by providing our resources to core services and let the businesses do their business.

Joanne Ward

All of the Hercules Redevelopment Agency funds have negative fund balances; therefore, much of the city's financial trouble can be traced to the Hercules Redevelopment Agency. One lesson learned is that the city's general fund budget needs to be balanced without any reimbursements from the Hercules Redevelopment Agency. And, because the economy has not fully recovered from the economic downturn which began in September 2008, the existing Redevelopment Agency revenues are less than what is needed to pay the debt service on the bonds. And, until the Hercules Redevelopment Agency finances are stabilized, another lesson learned is that all capital projects should be suspended. If we ignore these two lessons, then the city of Hercules will just continue doing the same things which have caused its current dire financial situation. By learning from these mistakes, I believe that the city of Hercules can get its financial health back which will then allow the city to move forward with its long-term goals and vision.

Don Kuehne

The Hercules Redevelopment Agency (RDA) acquired too much debt when the economy was booming and now has insufficient revenue from property taxes to cover the debt service. The RDA should have been more conservative and anticipated a possible downturn in the economy. The RDA advanced too much money to developers who did not have the resources to deliver major projects. The RDA purchased land to have more control over future development but now is holding property that is worth much less than the RDA paid for it and is generating no revenue.  The affordable housing program made too many costly loan deals.  The RDA should have had more oversight and accountability.

Virgil de la Vega

Hercules’ experience with Sycamore North illustrates the risks involved when a city decides to take the lead as a developer.

The city staff and City Council should exercise more thoughtful analysis of projects the city undertakes.  The City Council should demand more progress reports from city staff.   

The council should not approve projects with no detailed funding plan.

The City Council should be more active in managing the debts that the city enters into.  Since RDA debts don’t need a public vote, the council should exercise due diligence in approving debt applications.  An analysis showing how new debts/bonds combined with the current debt impacts the city’s debt capacity should accompany every future debt/bond issue proposal. 

We should not invest our funds in projects which do not provide benefits or returns commensurate to the money we put in. The council should learn the correct way of evaluating the feasibility of capital expenditures. 

We should learn how to create credible budgets.  This requires correct revenue forecasting and expenditure analysis. Our revenue forecasts have been well-off target, thus creating massive deficits because budgeted expenditures became sustainable.  

Sherry McCoy

The lessons learned in terms of the Redevelopment Agency (RDA) are really not much different from the lessons in other areas. Although the RDA provided a means for amassing an incredible amount of debt, the real issue was the lack of oversight – by choice or otherwise – by the members of the RDA, the City Council members. Although the RDA provides much of the city's financial woes, both short-term and long-term, it was the same people taking/getting money the easiest way they could and the City Council members allowing it to happen through, at a minimum, lack of adequate oversight, monitoring and questioning.


The problems with the city and the Hercules Redevelopment Agency are the perfect example of “the fox being in charge of the hen house.” Any junior business management student knows the importance of establishing checks and balances in every business deal.  The RDA is a classic example of what happens when deals are rubber-stamped and there are no checks and balances in place.  No one person or group can be so powerful that they have ability to “bully” city representatives into agreement. The absence of discussion from the public and pertinent city officials enabled the RDA to run amuck.  No matter how many bonds are sold, the one constant is they must be paid back at some point, which means that bonds should only be acquired if they are directly attached to a revenue generating activity that will enable repayment.  It’s impossible to pay bonds off if all your activity is directed one way - spending.  The council has to be vigilant in its focus on city development that supports citizen activities, but is also revenue generating.

Dan Romero
Has not responded to questionnaire as of May 6. 

The Redevelopment Agency was out of control as the result of the use of project funds for consultant contracts and many dead end projects.  Over $4 million dollars in  contracts went to NEO, Affordable Housing Solutions,  for consultant fees and management costs.  In addition, there were other, numerous contracts, loans, and funds paid to friends, and friends of family from the  Redevelopment Agency budget.  Projects without merit, without  financial feasibility, and without real partnership were pushed forward as mechanisms to spend money for consultants. 

When Council Members do not take a strong leadership role, and delegate their oversight responsibilities, it is easy for one or two strong personalities to lead them down the road to mismanagement, misappropriation and malfeasance. 

Council broke the back of the Redevelopment Agency and ensured that it can no longer function.  In a time, when most Redevelopment Agencies in California are making money to support cities, Hercules is using General Fund money to support the Redevelopment Agency.  If most Redevelopment Agencies functioned as our City does, the Governor would not be looking to abolish them, since the s


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

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