Stalled Healdsburg Townhouse Project Getting Fresh Look

After languishing incomplete since March 2010, a townhouse subdivision in north-central Healdsburg that hit the skids during the North Bay real estate market crash is now getting at least casual new attention from city staff.

"There are a couple of developers who have expressed interest in talking to us about housing," said City Manager Marjie Pettus. "Staff had the idea that it would be nice to see if we could make a connection between the developer and receiver to see if there is a way to complete the project."

Attorney Tony Theophilos of San Francisco, the court-appointed receiver on the project, said he is meeting Wednesday with Healdsburg city staff to review the status of the development, known as Grant Street Village.

"We've had lots of inquiries about it, but no decisions have been made," Theophilos said Monday.

Of 39 townhouse units planned, only 12 have been built, Theophilos said. Of those, only two are actually completed -- the rest need interior work, he said.

Of the 39 townhouses, 10 were slated to be affordable housing, said City Senior Planner Lynn Goldberg.

Project developer New Healdsburg Venture, a partnership run by North Bay developer Bob O'Neel, received approval from Healdsburg City Council on Aug. 7, 2006 and final map approval from the city on Oct. 15, 2007, according to city records.

Healdsburg issued building permits for 20 of the 24 Phase I lots in 2008 and 2009, city records show.

"Inspections were regularly conducted for 12 of the units until the end of 2009," a city overview on the project states. "All building permits have expired due to lack of inspections since then."

By March 2010, the project's lender, former Marin County-based Tamalpais Bank, foreclosed on the property, according to Theophilos, who was appointed receiver soon thereafter to oversee the property. New Healdsburg Venture subsequently filed for bankruptcy, he said.

A short time later, however, Tamalpais Bank was taken over by the Federal Deposit Insurance Corp. Assets of Tamalpais Bank, including the loan on Grant Street Village, were acquired by Union Bank, which currently owns the property, Theophilos said.

According to an original project overview supplied by Goldberg, Grant Street Village was to be built on 4.84 acres at 75 Grant St., just west of the main station.

It was to include 39 two-story two, three and four bedroom homes ranging in size from 1,117 to 1,642 square feet. Each unit was to have a one-car garage with a second on-site parking space in the driveway.

Six affordable units for very low and low income famillies were to be built in Phase I, with four more affordable units for moderate income families in Phase II. Healdsburg's affordable housing project had set up income guidelines for the affordable units and the city had been accepting applications.

At the time, the annual total household income limits for a family of four to qualify for the affordable units were: Very low income, $157,700; low income, $252,294; moderate income, $392,430.

Prices on the homes were not immediately available, but Theophilos said none of them have been sold -- despite a "sold" sign that appears on one of the units.

Another component of the project included plans for an office building development on an 0.14-acre lot adjacent to Healdsburg Avenue. A 2,159-square-foot commercial building was planned for the site, city records show.

According to city records, 21 growth management allocations were reserved for the rest of the project. However, those allocations will expire in 2012. If no building permits are issued by then, a new developer would likely have to reapply for the GMAs, city records state.

Grant Street Village plans also included a 0.92-acre landscaped public open space area with a walking trail along Foss Creek at the western boundary of the site.