Redco and Midar use builder’s remedy on 400-unit project in Palo Alto

17-story apartment tower would be the tallest building in Silicon Valley city

Redco and Midar use state builder’s remedy to build nearly 400 apartments in Palo Alto
Mollie Stone’s Market's Mike Stone and Redco Development's Chris and Jason Freise with renderings of plans for 156 California Avenue, Palo Alto (Mollie Stone's Market, Redco Development)

Redco Development and Midar Investment want to employ the state builder’s remedy to realize the largest housing complex with the third tallest building in Palo Alto.

The San Francisco-based developer and the Mill Valley-based owner of Mollie Stone’s Market  have filed preliminary plans to build three apartment buildings with nearly 400 apartments at 156 California Avenue, in Evergreen Park, the Silicon Valley Business Journal reported.

The project would replace a building containing a Mollie Stone’s grocery at California and Park Boulevard, which would move into the new development next to a Caltrain stop.

Redco and Midar would be the latest developers to propose builder’s remedy projects across the South Bay.

Redco and Midar use state builder’s remedy to build nearly 400 apartments in Palo Alto
Renderings of plans for 156 California Avenue, Palo Alto (Mollie Stone’s Market, Redco Development)

Plans call for a 17-story tower, an 11-story structure and a seven-story complex that would have 15,000 square feet of combined ground-floor shops and restaurants, including Mollie Stone’s.

The trio of buildings would include 382 studio, one- and two-bedroom apartments. The developers would set aside 77 units for affordable housing.

The project, designed by San Jose-based Studio Current, includes apartments fronted by floor-to-ceiling windows, trimmed in white, according to a rendering.

Redco Managing Partner Chris Freise said the large complex wouldn’t really be out of character for Palo Alto. It would be built on a pedestrian-oriented street permanently closed this month to cars in order to create a “second downtown.”

“I know people are saying that it’s the third tallest building in Palo Alto, but these types of approximate heights already exist in several areas such as Palo Alto Square, Channing House, 101 Alma and City Hall,” Freise told the Business Journal.

Redco submitted its proposal under the builder’s remedy, an untested provision of state law that allows developers to bypass local zoning rules in cities that have failed to certify their required state housing plans. The remedy requires 20 percent of a project’s homes be affordable.

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Palo Alto must plan to build 6,086 homes by 2031, but failed to get its Housing Element plan approved by the Jan. 31 deadline. This opens it up to the builder’s remedy, state housing officials and advocates say.

Ten of 16 cities in Santa Clara County have failed to get their plans approved, according to the Business Journal.

The Silicon Valley city adopted its housing plan in May and submitted it to the state in June. The  state rejected that plan in August, saying that “additional revision will be necessary to comply” with state law.

Nonetheless, Palo Alto insists it has complied with “the basic requirements” of state housing law — and thus is not susceptible to the builder’s remedy.

“The builder’s remedy does not apply,” the city wrote in a post on its website in reference to Redco and Midar’s three-building development proposal.

Midar and Redco disagree. They say only the state Housing & Economic Development Department can determine whether a city is in substantial compliance with the law, according to a letter to the city.

In March, Redco and AEW Capital Management walked away from San Francisco’s historic First National Bank building after failing to make their mortgage payments for 1 Montgomery Street. 

In June, Redco filed plans to build 126 apartments at 940 Willow Street in San Jose.

— Dana Bartholomew

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