HERCULES -- The City Council embraced a dual-pronged strategy Tuesday to resolve an impasse over a half-built apartment building, urging negotiations to avoid litigation while preparing for a possible eminent domain action to secure an easement on an adjacent alley for maintenance and construction.
Sycamore North, clad in weatherproofing material and highly visible from Interstate 80, was conceived in the last decade as a mostly low-income housing development to satisfy the affordable housing quota of the adjacent 335-home Bayside subdivision under state redevelopment rules in effect at the time.
The Hercules Redevelopment Agency started out as developer of the approximately $70 million project but ran out of money halfway through construction.
Last year, a developer group agreed to take over Sycamore North from the city for the nominal amount of $425,000 and a promise to finish it as an upscale rental apartment complex with about 10,000 square feet of restaurant and retail space. But the developer soon learned that no easements are in place to use the alley that runs behind the apartment complex for construction, or later for maintenance. The alley is owned by Bayside.
The Bayside Homeowners Association has said it wants the top floors of the four-story building to be removed as a condition for an easement on the alley. But Mark Conroe, principal in the developer group UC-BNB, said that idea is "a nonstarter."
Some residents of Bayside have said the homeowners association should allow Town Centrale to be completed expeditiously. Others want the building, which has cost the city about $35 million, to be demolished altogether.
Resident Selina Williams chastised unnamed critics who she said had cast aspersions against the homeowners association board, accusing it of "holding this development hostage." She also objected to the developer sending a letter to Bayside homes rather than to the board.
Williams said the developer does not even have standing to negotiate since it is not the owner and that the city, as the owner, should be the one to negotiate with the association.
Earlier, as the council emerged from closed session, City Attorney Patrick Tang announced the scheduling of a special meeting Aug. 20 to vote on a "resolution of necessity," a required step before initiating an eminent domain action -- in this case for the taking of a public right-of-way easement on the rear alley.
Tang also announced that the council had authorized legal action against the Bayside Homeowners Association "if that becomes necessary," and that it had directed City Manager Steve Duran "to take all necessary action to attempt to resolve the issue without litigation."
Later, the council, by 5-0, approved a 10th amendment to the Sycamore North purchase-and-sale agreement that extends the deadline for closing escrow another six months, to Jan. 31. The amendment also provides that the developer will pay carrying costs up to $28,000 a month but that half of it will be refunded from sales proceeds at closing.