The Hercules Redevelopment Agency entered the post-redevelopment
era in default on its bond debt, after failing to make a $2.4
million interest payment that was due Wednesday.﻿  On Tuesday,
the bond insurer, Ambac Assurance Corp., sued Hercules in Contra
Costa County Superior Court, seeking to force the city to turn
over all $4.1 million in tax increments it collected in
December, or at least to get the court to freeze the funds. But
that could cause the city to go bankrupt, Hercules' outside
attorney John Killeen warned.  Alternatively, Ambac asked the
court to attach other Hercules assets such as some real estate.
But court Commissioner Judith Sanders declined the insurer's
petition for immediate relief and scheduled a hearing before a
judge for Feb. 21.  The redevelopment agency's bond debt
obligations have exceeded revenue from property tax increments
in recent years, and as of this week, the agency's nonhousing
component was $3.8 million underwater, City Manager Steve Duran
said.  "It was inevitable ther