Redwood City officials are fining the owner of a 72-unit apartment building for failing to rebuild it after a six-alarm fire displaced all of its residents in late 2013.
The city notified affordable housing developer KDF Communities, which owns the Hallmark House Apartments property at 531 Woodside Road, in early June that fines would be issued for an abandoned building and gave the company until June 29 to respond. KDF Communities did not respond in that time frame, and so it has been fined five times so far and will continue to get fined a total of $1,075 daily, said city spokeswoman Meghan Horrigan.
The fines are also for weeds encroaching the sidewalk and overgrown vegetation that could attract rats and create a fire hazard, according to the city’s blog, Redwood City Voice. The city notified KDF Communities of those concerns in May and gave the company until June 14 to respond, which it didn’t.
“The city intends to issue citations daily until it hears from the property owner and they develop a plan to correct the code enforcement violations,” Horrigan said in an email. “The city may explore several options if there is continued non-compliance including litigation under the health and safety code, a hearing procedure for unsafe buildings, or an administrative code enforcement nuisance abatement hearing.”
Assistant City Manager Aaron Aknin said in 2016 KDF Communities submitted plans and obtained a building permit. The company was scheduled to begin rebuilding by December 2017 and complete the project within a year, but that never happened. Aknin said construction started and stopped several times, adding that the stall initially may have had something to do with a disagreement between KDF Communities and its insurance company, which took a while to settle, and now the company may have a disagreement with its investors.
According to the blog post, the city was informed last year that KDF Communities could not “work out financing options” and decided to sell the property, but the status of those plans is unclear.
KDF could not be reached for comment.
After KDF Communities bought the building for $8 million in 2003, the city provided a loan to the company to help refinance the building and convert the rental units from market rate to below market rate. The terms of the loan require the units to be affordable to very-low-income renters until 2058, according to the post. Those rent restrictions will continue when the property is rebuilt and no matter who owns it.
“Achieving housing security for all in the community is a priority for Redwood City and part of the city’s housing strategy is to convert market rate rental properties to affordable housing,” Horrigan said. “Hallmark Apartments is an example of this type of affordable housing strategy.”
The fire is believed to have started in a third-floor unit where a now-deceased man was cooking at about 1:45 a.m. The fire then moved through the 1964 complex, which was not outfitted with sprinklers. One-hundred people were displaced and 21 people were injured.
Many former tenants at Hallmark House Apartments sued the owner for the lack of sprinklers and smoke detectors at the building.
After the fire and another on Woodside Road that gutted another building, the City Council approved a loan forgiveness program for property owners required to install fire sprinklers to their older buildings that has a rent stabilization component to it.
The Fire Safety First Program provides an incentive for owners to retrofit the at-risk residential buildings during a five-year voluntary compliance period in exchange for an agreement to slow rent increases.
All properties with four or more units built before July 1, 1989, must install sprinklers within five years. Those who do so voluntarily will be able to secure a low-income loan from the city which may be forgiven if property owners agree not to raise rents more than 5 percent a year for at least five years.
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