Retrofitted Grant Street Village Townhouses Could Go On Sale This Summer

Major U.S. homebuilder D.R. Horton could close escrow in about a week on the Healdsburg townhouse project that stalled in March 2010 after becoming a victim of the recent financial markets collapse.

Steve Reilly, a consultant on the project, said legal technicalities are being worked out in the purchase between buyer D.R. Horton and the seller, a bankruptcy receivership managed by Union Bank and the Federal Deposit Insurance Corp.

Tamalpais Bank of San Rafael, failed.

"You are seeing locally what happened all over the country," said Reilly, who desclined to disclose the purchase price. "This is the banking collapse."

Once the escrow closes, D.R. Horton plans to retrofit the replacing windows, adding sound-proofing features and in general making the 12 existing units ready for sale by later this summer, Reilly said.

Of the 12 partially completed units, six will be sold at below-market rates, Reilly said. Those include two at "very low income" prices, and four at "low income."

In the latter "low income" group, two units were originally set to be for "moderate income."  However, because of the real estate market slump, the city will be subsidizing some costs to allow a switch to lower pricing "from moderate" to "low income," Reilly said.

The switch is because there is between "moderate" and "market rate" in the current real estate market to make a "moderate income" home purchase with affordable housing restrictions worth it for the buyers, Reilly said.

"The city may be interested in buying those two units, perhaps for the (which is next door)," Reilly said. "D.R. Horton will be continuing the conversation with the city on Phase I."

also be working to help coordinate and subsidize the affordable units.

The other six townhouses will be sold at market rates.

Beyond the existing townhouses, D.R. Horton may be looking to rework the rest of the project to switch over to single family homes.

While the original plans called for 40 townhouses -- or about 28 more than what is currently built --  D.R. Horton would be willing to lose about eight units in exchange for building 20 single family homes on larger lots, Reilly said.

"They would like to do it with not as much density," Reilly said. "They want to make the floor plans bigger, with bigger lots -- even if they have to lose some units."

He said he would expect the single family homes to be ready for sale by the end of the year.

Reilly, of the San Ramon branch of Land Advisors Organization, said D.R. Horton's Bay Area headquarters in Pleasanton will oversee the project.

"They have about 15 building projects going on now in the Bay Area," said Reilly, who said he was hired by the bankruptcy receivership to coordinate the Healdsburg plans with the city and the developer.