Hercules: Safeway at Sycamore Crossing looks ready to go after years of negotiations


HERCULES — Years of haggling over plans for a shopping center anchored by Safeway came to apparent fruition this week when the City Council approved a package of resolutions and an ordinance to enable the project.

Sycamore Crossing, a bullet-shaped parcel bounded by Sycamore Avenue, San Pablo Avenue and Tsushima Street, is supposed to include about 136,250 square feet of shopping and dining space anchored by a two-story, 55,000-square-foot Safeway grocery store with an 18-pump gas station. The rest of the space will consist of a 37,000-square-foot fitness center and several other stores and restaurants ranging from 2,500 to about 10,000 square feet.

On Tuesday, the council unanimously approved an addendum to the project”s initial environmental impact report; vacation of portions of rights of way along San Pablo and Sycamore avenues; General Plan and zoning amendments; a final development plan; and permits relating to the project.

The council action, following a positive recommendation by the Planning Commission a month earlier, met with applause from the gallery. When city leaders and Safeway originally announced plans for a store, some residents complained of suburbanization and a betrayal of Hercules” New Urbanist vision.

City Manager David Biggs said the first new retail development approved in Hercules in more than a decade will add much-needed retail space to an underserved market.

“The success of this center … will set the stage for the development of our bay front district, which will include ”Main Street” type retail and services,” Biggs said Friday.

He projected annual sales tax revenue of $400,000 to $700,000 a year once the center opens. Site preparation could begin later this year, and the center could open in 2017, he said.

Sycamore Crossing, measuring 12.85 acres after dedications of surrounding rights of way, will include a 1.37-acre strip of wetlands area that will be restored.

The council action is the culmination of about eight years of convoluted negotiations over Sycamore Crossing.

The now-defunct Hercules Redevelopment Agency acquired the property from developer Penterra Poe Hercules LLC in 2007 for $14.5 million. The agency once slated the site for 80,000 square feet of commercial and retail space, a supermarket, 40,000 square feet of office space, a 180-room hotel, 40 attached residential units and two parking garages, but that concept never gained traction.

In 2011, the Redevelopment Agency transferred Sycamore Crossing and two other properties to the city, ostensibly to satisfy most of a pre-existing $34.9 million debt consisting of earlier loans from the city to the agency and assumption by the city of some agency construction costs.

In 2012, the state abolished all redevelopment agencies in California. Later that year, the state overturned the 2011 property transfer, and Sycamore Crossing landed in the portfolio of the redevelopment successor agency. That meant the proceeds of its eventual sale would go toward Hercules” redevelopment debt of more than $300 million.

Early in 2012, the city agreed to sell Sycamore Crossing to Property Development Centers, Safeway”s development subsidiary. But a title search revealed a deed restriction, placed by a previous owner, barring grocery sales on an 8.23-acre portion of the site. That forced Safeway to plan a two-story, podium-style structure on the smaller, eastern portion.

In late 2013, PDC and the city, which acts as the successor agency, agreed on a $5 million sales price.

A state-of-the-art store in Hercules could portend an uncertain future for an older Safeway store just over a mile away in Rodeo. The Rodeo Municipal Advisory Council was slated to discuss that store”s possible closure last year, but the matter was tabled to sometime this year.

Contact Tom Lochner at 510-262-2760. Follow him at Twitter.com/tomlochner.

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