The city promised 500 acres and a sports complex but will only deliver 77 and a financial burden.
In the past two years, the City of Hercules has spent nearly $1.9 million in an effort to annex 500 acres north and south of Highway 4 on the eastern edge of town. The fruits of the expensive effort, however, will be the annexation of a meager 77 acres, now known as the “Panhandle Annexation,” which was recommended for approval by the planning commission on Monday evening.
The city’s quest for annexation of the greater 500 acres began with a city council resolution in March 2009. In 2008, the city had signed two agreements with Big League Dreams, totaling $1.2 million, for an exclusive license agreement and the planning and design of a sports complex, which would be the centerpiece of the annexed property.
The city touted the plan for the future sports complex, which would include little league sized replicas of famous ballparks, such as Fenway Park and Wrigley Field.
At the 2009 Community Update event, the City hosted two former baseball greats–Vida Blue and Bill Russell–who signed autographs for residents and trumpeted the benefits of the city’s plans. But it was all for naught: Without warning, the city reduced the proposed annexation area from 500 acres to 77 acres this past summer.
The reasons to annex the 77 acres are unclear. At Monday’s meeting, Planning Director Dennis Tagashira noted that owners of a few of the parcels (seven parcels in total are being annexed) seeking to expand their facilities face a rather draconian ban on new building permits from the county. The city has promised that they would approve such permits, which would be an awfully generous gesture if it were the only reason to annex the parcels.
The principal reason for annexation appears to be the relocation of the Caltrans yard on Willow Avenue to make room for Transit Town, a future phase of the New Town Center project. The city acquired the Yellow Freight property–which is slated to be annexed and lies between the east and westbound lanes of Highway 4–in 2009 for that purpose. But it is not clear why the city could not lease the property to Caltrans without annexation. Whether or not the property is within the expanded city limits of Hercules, or remains in unincorporated Contra Costa County, should not matter to the State of California.
The biggest cause of concern is the cost of annexation. The city has spent $1.9 million and the 77 acres may simply never return that investment. As Tagashira noted on Monday, the city would receive permit fees from the proposed expansion of existing facilities, and future expansions, but that fee revenue will not come close to dent the exorbitant cost of annexation.
A fiscal analysis states that at full build-out, “the assessed value on the property is projected to increase to $33.5 million [and] the city would then receive $17,200 in total property tax.” That additional property tax comes at a cost however, in terms of services, mainly police and government administration. And the cost is alarming. In fact, the annexation would “generate a net negative fiscal impact of $436,600 per year” at full build-out.
Planning Commissioner and councilmember-elect Myrna de Vera asked on Monday why this annexation makes sense considering the negative fiscal impact. The city’s consultant said it is assumed that the city would annex adjacent property–presumably the remaining 423 acres–which would improve the economics of the annexation. The consultant described the Panhandle Annexation as an “icebreaker” with the Local Agency Formation Commission (LAFCO).
But Tagashira stated that the city has no current plans for further annexation, and considering the costs involved, residents can understand why. The fact is that annexation is no guarantee. LAFCO does not extend boundaries without a lengthy courtship, it seems.
As of right now, there is no legitimate plan for Big League Dreams to come true in Hercules. In hindsight, it was another costly misstep by a city manager and city council that failed to focus on priorities.