There is a lot of good information in this article, including: the sweetest of deals ($1.65/sq. ft.); the City Attorney using the phrase, “there is no question;” Kay Sala directed a letter to specifically Nelson Oliva and Ed Balico (but not the rest of the Council, although Balico was the mayor at the time); and the real estate broker assigned to find a tenant for the restored historic Civic Arts Building has basically given up.

Eatery in Hercules Civic Arts building not a done deal
By Tom Lochner

The buck stops with the Hercules City Council, which ultimately will decide whether Sala Thai Restaurant opens at the Civic Arts building. And despite what some residents believe, it’s not a done deal, city administrative officials say.

City Manager Nelson Oliva reiterated that for Sala Thai to open, the council, sitting as the Hercules Redevelopment Agency board, would have to give final approval by ratifying a tentative lease.

“The RDA (board) can withhold it,” Oliva said. “The lease is tentative.”

A zoning change over the summer that escaped the attention of many, including that of city planning staff, allows a restaurant at the historic building without planning commission review. The old “Public/Quasi-Public-Park” zoning required planning commission approval; the new “Historic Town Center” zoning does not, although officials say the planning commission might have some say whether a restaurant serves alcoholic beverages.

In February, Kay Sala, doing business as Sala Thai Restaurant, signed a tentative lease of the Civic Arts building with the city at a starting rent of $1.65 a square foot per month. On July 7, the planning commission denied Sala a conditional-use permit, siding with residents of the adjacent Hercules Historic Homes who said a restaurant with late-night hours would spoil the quietude of their neighborhood. Sala appealed the commission’s ruling.

The council rezoned the building two weeks later by adopting a developer’s initiative by ordinance July 22. The Waterfront Now Initiative, authored by AndersonPacific LLC, provides for more than 1,200 homes, offices, shops and an intermodal transit center. It also redraws the boundary of the Waterfront District by looping it around the Civic Arts building and puts it under the “Historic Town Center” zoning with other nearby historic buildings.

On Sept. 9, the council referred the Sala Thai matter back to the planning commission for reconsideration under the new zoning — even though, according to a staff report, a restaurant now would need only a nondiscretionary business license from the city finance department. The planning commission was supposed to take up the matter Oct. 6 but postponed it in September pending a meeting of city staff members with AndersonPacific to discuss the intent of the initiative, including the alcohol issue. That meeting occurred Sept. 30; the staff is still studying how to apply the initiative, City Attorney Mick Cabral said.

“There is no question that a restaurant is a permitted use on the parcel,” Cabral said.

However, he said, “The City Council retains absolute discretion to approve or disapprove the Sala Thai lease.”

Oliva said he expects to hold a study session soon at the planning commission, to give the public another chance to comment. No date has been set.

Sala has sought to open a restaurant in Hercules for more than a year and previously negotiated unsuccessfully to rent another redevelopment agency-controlled property, now occupied by the Powder Keg pub. In a “final offer” to the city in June 2007, directed to the attention of Oliva and Councilman Ed Balico, Sala proposed a starting rent of $1.50 a square foot per month, increasing to $1.75 after two years; the city had asked $3.75 a square foot a month.

A broker’s sign advertising “Commercial Space for Lease” remained in front of the Civic Arts building Monday. A person who answered the phone of the broker, Penner Homes of Hercules, last week promised to call back with more information but never did. Several other calls to Penner were not returned. Sala and a representative, Glen Cole, did not return several calls.