Disposition and Development Agreement between
the City of National City and Tower 999, LLC
OCTOBER 1, 2024
Carlos Aguirre, Community Development Director
Photo: Indicative of general design / not a current rendering/elevation Item 9.1
Background
• 2017, City-owned site development Request for Proposals (RFP) issued: No proposals were received
• 2018, Southwestern College Facilities Master Plan
included the City-owned property for student housing
development
• October 2020, Developer, Tower 999 LLC., approached
the City about a project that included the City-owned
property
• January 2023, City entered into an Exclusive Negotiating Agreement (ENA) with the Developer for the City-owned
property. Developer to consider partnership with
Southwestern College.
2 N
City-owned property
921, 925, and 929 National City
Blvd. Developer-owned
property
999 National City Blvd.
SEVEN-STORY, MIXED-USE BUILDING
(119,800 +/- sq. feet)
• 127 residential dwelling units
o No onsite parking for the residential
component
• Retail/commercial space component 9,300 +/-
sq. feet
o Three (3) parking spaces for the retail
component
• Amenities
o Laundry room and a large, central plaza
on the 4th floor
o 7,800 gross square-foot rooftop terrace
PROJECT PHOTO: INDICATIVE OF GENERAL DESIGN /
NOT A CURRENT RENDERING/ELEVATION
Proposed Project by Tower 999, LLC.
3 Disposition and Development Agreement (“DDA”)
4 Regulatory Agreement
• Restriction of the rent and occupancy of the Affordable Units for fifty-five (55) years, and the Developer shall pay the annual occupancy monitoring fee.
Affordable Units
• Forty percent (40%) of the total units will be restricted to Low-Income and Very Low-Income households. At least 60% and 50% respectively.
Due Diligence Period
• Expires June 30, 2025. Before said date, the Developer may choose whether to proceed with the purchase of the City Property or terminate the DDA.
Access & Cooperation
during the Due Diligence
Period
• Developer will have full access to the City Property and will provide the City copies of all surveys, studies and tests.
“As-Is,”
“Where-Is”
• Developer hereby agrees to take title to the City Property in its “as-is” condition and shall have the sole responsibility at its own expense to investigate and determine the physical and environmental conditions of City Property.
Cost of Project
• The Developer shall pay for all costs of the Project, including planning, the payment of any required prevailing wages, if any, designing, developing and constructing the Project in accordance with the Project Design and Plan.
Disposition and Development Agreement (“DDA”)
5 Closing Deadline &
Conditions to Closing
• Closing Deadline: December 31, 2025
• May be extended at the Developer’s sole discretion to 12/31/2026 if:
o The Developer is not in default under the DDA;
o Fed Funds Rate is not at or below 4%; and/or
o Low-Income Housing Tax Credits have not been secured by the Developer. • If any condition is not met by the Closing Deadline, the Agreement may be terminated (unless both parties agree). Closing conditions include:
o Securing all necessary entitlements and environmental compliance o Obtaining approval for the Project design and plan
o Obtaining a title policy, agreeing on the forms of required documents o Secured Project financing
o Secured Project construction contract
Q&A
6 Optional
Slides
7 Staff Recommendation
Adopt the Resolutions Entitled:
1. “Resolution of the City of National City, California Authorizing the City Manager to Execute a Disposition and Development Agreement with Tower 999, LLC, a Nevada Limited Liability Company for the Disposition of City-Owned Real Property Located at 921, 925, and 929 National City Boulevard and the Development of a Seven-Story, Mixed-Use Building with Approximately 9,294 Square Feet of Retail/Commercial Space and 127 Rental Housing Units.”
2. “Resolution of the City Council of the City of National City, California Authorizing the City Manager to Execute the Compensation Agreement by and among the City of National City, the County of San Diego, the National School District, the Sweetwater Union High School District, Southwestern College, San Diego County Office of Education, and the San Diego County Water Authority Pertaining to the Sale of Real Property Located at 921, 925, and 929 National City Boulevard in National City.”
8 Compensation Agreement
• The Revised Long-Range Property Management Plan (“LRPMP”)* addresses the disposition and use of the real properties that the Community Development Commission of the City of National City previously owned. • The LRPMP provides that in connection with the property located at 921, 925, and 929 National City Blvd. (collectively, “City Property”), the City is required to enter into a compensation agreement with the affected Taxing Entities. • In order to provide 40% of the housing units at the affordability levels required by the Surplus Land exemption being exercised, the Developer’s project budget only proposes $50,000 as the purchase price for the City Property. • The Taxing Entities would receive a ratio of the purchase price according to Fund and Impact Ratio Table (next slide). • With the exception of the City of National City, all other affected Taxing Entities have consented to the proposed purchase price for the City Property.
9 *The LRPMP was prepared by the Successor Agency to the Community Development Commission of the City of National City as the National City Redevelopment Agency (“Successor Agency”)
Taxing Entities & Fund Impact Ratio
10 Taxing Entities Fund Name FUND IMPACT RATIOS
County of San Diego (County General) 0.14927220
National School District 0.28785044
Sweetwater Union High School District 0.17612891
Southwestern College 0.04745948
San Diego County Office of Education* 0.02113370
Educational Revenue Augmentation Fund 0.13300694
City of National City 0.1812058
San Diego County Water Authority 0.0039425
TOTAL 1.00000000
*Acceptance of the Compensation Agreement for the Educational Revenue Augmentation Fund is completed by the San Diego County Office of Education.
Affordable Housing Requirements of Surplus
Land Act Exemption
11 2022 Area Median Income (AMI)
San Diego County: $106,900
Family
Size
80% of AMI
Low Income
50% of AMI
Very Low Income
30% of AMI
Extremely Low
Income
1 72,900 45,550 27,350
2 83,300 52,050 31,250
3 93,700 58,550 35,150
4 104,100 65,050 39,050
5 112,450 70,300 42,200
6 120,800 75,500 45,300
7 129,100 80,700 48,450
8 137,450 85,900 51,550
Exemption Category 2:
Land destined for affordable housing
If seeking an exemption under Government Code
section 54221, subdivision (f)(1)(A), is the local
agency transferring land for a development where:
(i) At least 80% of the property's area is used for
housing;
(ii) At least 40% of units are affordable to
households at or below 60% of AMI;
(iii) At least half of the above affordable units are
affordable to very low-income households; and
(iv) Affordable units are subject to at least a 30-
year regulatory agreement
Allowed Monthly Housing Expenditures (Rental)
12 2024 Income Limits
Area Median Income (AMI)
13