HERCULES -- Three years after this city teetered on the brink of bankruptcy, a fresh crop of officials is seeking to pressure state and county prosecutors to focus anew on one of Hercules' more grandiose redevelopment debacles.
Publicly, the new City Council has been most focused on former City Manager Nelson Oliva, whom it considers an architect of many of the city's bad deals. But it is also determined to get to the bottom of the Hercules New Town Center project -- and how a $12 million fund put up by the Hercules Redevelopment Agency melted away without the project ever breaking ground.
"I think that the state attorney general right now should come and start investigating because that is RDA money that was taken, that's never going to get returned," Councilman Dan Romero said at a City Council meeting last week referencing billings by New Town Center's developer, the Red Barn Co. "These people are out there today thinking that they've gotten away with this."
Neither the state Attorney General's Office nor the Contra Costa district attorney responded to requests for comment.
A fresh review of public documents surrounding the New Town Center development and new interviews with some of the principals show how much the city spent -- and how little it got in return.
New Town Center's first phase was supposed to be Market Town, a planned residential-retail-commercial complex rising five stories or higher, with outdoor plazas and fountains, on a 6.6-acre tract at Sycamore and San Pablo avenues near the Interstate 80-Highway 4 interchange.
The saga began in the middle of the last decade under Oliva's predecessor, Mike Sakamoto, when the council approved a development agreement with Hercules New Town Center LLC, headed by Red Barn CEO Tom Weigel, and created the $12 million primary project fund. It continued under Oliva, who was city manager from April 2007 to January 2011.
By the end of Oliva's tenure, the money was gone. About $7 million of it went to move a park-and-ride lot and bus transfer station, then owned by BART, to a new site owned by the city to make way for Market Town, according to then-economic development director Steve Lawton. The two agencies swapped the properties. Red Barn was the construction manager for the project.
Some of the money went into Market Hall, a temporary outdoor food court and events unit that occupied the site for about a year before closing in 2011.
The rest of the money paid for travel, luxury hotel stays, consulting fees and other bills of Weigel and his associates.
Invoices include a $20,000-per-month consulting fee paid to Weigel. His company's North Carolina law firm was paid a $10,000-per-month retainer, plus two $50,000 bonuses.
The fund also paid for Weigel's $2,329 first-class ticket from Los Angeles to New York in September 2009 on Virgin Airlines, and another $2,229 first-class ticket on the same flight for Red Barn principal James Fowler. Bills were approved by Lawton, then-finance director Gloria Leon and finally Oliva.
The fund also financed Weigel's $1.6 million buyout of his partner in 2006, when Sakamoto was still city manager. The $1.6 million advance, loaned at 8 percent interest, was never repaid.
In 2009, the city gave Red Barn title to the Market Town site, then valued at $5 million, for zero dollars and a pledge to share future proceeds. The following year, Red Barn used the property as collateral for a $2.5 million loan, and billed the city for the $97,500 loan transaction fee. The city reimbursed Red Barn from the project fund.
Red Barn defaulted on the loan; the lender foreclosed, and the 6.6-acre property eventually landed in the hands of RPW Exchange, which sold it for an unknown sum to a Palo Alto developer in May 2013. The property is currently valued at $5.75 million, according to county assessor's office records.
Sakamoto, Oliva and Oliva's attorney, Richard Ewaniszyk, could not be reached for comment. Weigel, reached on his cellphone earlier this month, hung up when a reporter identified himself.
"The Red Barn deal just stinks of improprieties," Romero said at Tuesday's council meeting. "The city buying out a loan for Tom Weigel. The city deeding the property to Tom Weigel. The unchecked bills. The expensive flights ... for Mr. Weigel to go to New York first class."
Weigel told the city he couldn't do anything because of a turn in the economy, Romero continued, "but he was billing us -- he gave his attorney a $50,000 bonus. That was our money."
In the aftermath of the New Town Center fiasco, Red Barn dissolved and Weigel filed for bankruptcy. These days, Weigel has a new consulting company, Town Makers Inc., at the same Newport Beach office as his old company, according to California Secretary of State records.
Leon, the former finance director, said earlier this month that she would not comment on specifics of the Hercules New Town Center but that her role as city finance director was to pay the bills and make sure they were backed up by a contract and invoices -- not make judgments as to whether they were extravagant or not.
Lawton said that some of the Red Barn charges were deemed unreasonable but that he didn't recall any specific ones.
The larger picture, Lawton said, was that zoning and environmental clearances were in place, and the stage was set for development.
"It was a huge accomplishment, and I'm proud of it," Lawton said. "It was not my fault that the world changed, redevelopment disappeared and the city manager did some very foolish things."
Former City Manager Steve Duran, who came to Hercules in late 2011 and has since moved on to become Antioch's city manager, said last fall that he and City Attorney Patrick Tang had not discussed going after Red Barn or Weigel for reimbursement of their costs.
"Even if we thought we had a case, it was the redevelopment agency, and any recovery would go to pay redevelopment agency debts," Duran said in an email. "It makes no sense to use scarce city dollars and human resources to go after money the city will never see."