HERCULES — Hundreds of additional apartments were planned to fill out the Hercules Bayfront, but a change in market conditions has led the project developer to slash its proposal.
Ledcor Development, a Southern California firm, had previously planned to build 476 apartments on nearly 4.5 acres of land divided across three parcels just off the San Pablo Bay.
The proposal was part of a larger three-part development effort dubbed the Hercules Bayfront Community. Ledcor has already seen the completion of two other apartment projects — The Exchange and The Dylan — that brought 403 units to the city.
While the company was unable to obtain financing for the original version of the proposal, a new iteration approved by council members at their Sept. 9 meeting, now calls for 168 for-sale homes, 141 multi-family townhomes and 27 live-work units on five parcels covering about 7 acres of land.
“It’s been a journey on this project,” said Jason Silver, Ledcor’s vice president of development, during the council meeting. “I’m still very proud of it. Unfortunately, economic times have changed,”
As part of the Transit Village Neighborhood, the Hercules Bayfront Community was meant to be a high-density community that would support the city’s future transit hub, a train, bus and ferry station that has been in the works for decades.
But market-rate development has slowed recently as interest rates remain high, rents stagnate and the industry braces for the already rising costs of building materials to be compounded by President Donald Trump’s tariffs.
Ledcor Senior Vice President John Santry said the firm, which specializes in apartment, condo, mixed-use and resort development, will likely seek to sell the project to a national home builder beginning in January 2026, when interest rates may be lower, Santry said. Construction is then expected to begin that summer.
“The market is significantly soft after a really surprising lack of sales in the spring selling season into the summer,” Santry said. “The hope is that next summer you’ll see dirt starting to move and construction underway.”
Once built, the site will include 10 units designated as affordable housing for people not making more than 60% of the area median income, bringing the total number of affordable units in the community development to 25. The original plan would have included 30 affordable homes.
In Contra Costa County, area median income is about $159,800 for a family of four, according to the 2025 State Income Limits released by California’s Housing and Community Development Department.
Hercules also has a goal of adding 995 new homes to the city by 2031 as part of its Regional Housing Needs Assessment, a state mandated process requiring jurisdictions to plan for more home development. More than half of those new homes would need to be listed at affordable rates for the city to meet its goal.
While some councilmembers shared disappointment in the loss of density, they ultimately approved the new proposal.
The updated proposal abides by all zoning, general plan and objective design standards, meaning the council could only deny the project if it posed a clear and documented risk to public health or safety, in accordance with Senate Bill 330.
“It’s unfortunate we’re losing that density downtown,” Mayor Dion Bailey said. “But the positive thing is I think parking would be more than we can handle if we had eight-story buildings.”
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