Hallmark House Apartments, closed since a 2013 fire, may receive $25 million in tax-exempt bonds for rehabilitation work at the 72-unit Redwood City building on Woodside Road.
The City Council will hold a hearing Monday on bond financing by the Sacramento-based California Statewide Communities Development Authority.
“The city bears no liability with respect to the issuance of the bonds,” said a municipal staff report.
The Hallmark House owner will buy out a limited partner and proceed with a rebuild, a city staff report said.
Redwood City in 2018 had notified KDF Communities, owner of the apartments at 531 Woodside Road, that fines would be issued for the abandoned building.
A city representative said Friday that fines totaled $35,000.
Mayor Diane Howard said the costs were a tool to help the owner come to the table.
“I would like to think it had some impact,” Howard said.
City residents will welcome work at the site, she said.
“They are going to be so thrilled to see dirt being moved,” the mayor said.
Howard spoke about the complexities of funding development.
“Financing for housing in general comes with so many strings,” she said. “It’s very frustrating.”
James Hamill, managing director for the statewide development authority, said investors — Citibank for the apartments in Redwood City — buy the bonds.
“We will not issue a bond in anyone’s backyard without holding a hearing,” Hamill said.
The Redwood City Council has held about eight public hearings for tax exempt, private activity bonds issued by public finance entities primarily for affordable housing developers in Redwood City, such as Hallmark, a city staff report noted.
To qualify as tax-exempt bonds, the city must conduct a public hearing providing members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing the project, the report said.
Sponsored by the League of California Cities and the California State Association of Counties, the joint powers development authority allows local government access to low-cost, tax-exempt financing for projects that provide a public benefit, the report said.
The City Council meeting will also hold a study session with planning commissioners on new accessory dwelling unit state laws. Zoning code amendments for a city ordinance to comply with state law will be discussed.
No action will be taken at the study session and a staff recommendation for a new dwelling unit ordinance will be presented at a future meeting, a staff report said.
The Redwood City Council meets 7 p.m. Monday, Feb. 10 at City Hall, 1017 Middlefield Road.
(650) 344-5200 ext. 106