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6.A. - Page 1 of 24 <br />/<�ik <br />Redwood <br />CitylCallifornia <br />Faunded 1867 <br />\:3aAW <br />DATE: December 17, 2018 <br />SUBJECT <br />STAFF REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br />Approve Loan Subordination Request to Support Financing to Reconstruct Affordable Apartments <br />Located at 531 Woodside Road (Hallmark House) <br />RECOMMENDATION <br />By motion, approve a loan subordination request for a loan from the City to KDF Hallmark and authorize <br />the City Manager or designee to execute a Subordination Agreement. <br />STRATEGIC INITIATIVE <br />Housing <br />BACKGROUND <br />In 2003 the City of Redwood City and the former Redwood City Redevelopment Agency provided a loan <br />in the joint amount of $650,000 to KDF Hallmark ("Owner') for the refinance and rehabilitation of the <br />Hallmark Apartments, located at 531 Woodside Road. The purpose of the loan was for the long term <br />preservation of existing affordable housing and the fund sources used were $150,000 from the former <br />Redwood City Redevelopment Agency (Low Mod Housing Set Aside) and $500,000 from Redwood City <br />HOME funds. The terms of the funding agreement included a 55 year period of affordability through a <br />deed restriction. At the time the City and Agency made the loan Hallmark Apartments included 72 units, <br />22 restricted for very low income senior/elderly households and 50 units restricted for low income <br />households. <br />A substantial fire occurred at the Hallmark Apartments on Sunday, July 7, 2013 and all tenants were forced <br />to immediately evacuate and were not able to return due to the extensive damage to the building. There <br />was one fatality as a result of the fire. All households had to be relocated and the City, County, Red Cross, <br />community volunteers and many community service organizations helped with this tremendous effort. <br />Most of the households were elderly, disabled or both and all were low and very low income. <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />7 <br />