National City City Council members have approved the continuation of a plan to authorize negotiations with the Tower 999 Limited Liability Company to possibly sell two city-owned real estate parcels at 921 and 929 National City Boulevard. Combined with a third parcel of approximately 8,712 square feet of land carrying the now closed Trophy Lounge, the properties could be developed into a mixed-use tower that would include affordable housing.
The land located at 921 National City Blvd. was purchased by the city’s Community Development Commission in August 2000 for $350,000 and the land at 929 National City Blvd. was purchased by the CDC in July 2003 for $225,000. Together they comprise an 11,761 square foot section of land.
City consultant Will Soholt summarized the current situation: Tower 999 has asked the city to sell its two parcels as exempt surplus land. They proposed a 9-story building with approximately 25% affordable housing and retail stores on the ground floor.
As early as 2018, Southwestern College leaders pursued development of a combination of the three properties—both city-owned and the Trophy Lounge property—into a mixed-use development with student housing. This idea was put aside during the COVID-19 pandemic.
As part of their purchase request, 999 tower reps said they would consider considering Southwestern College in their plans, but would not work out details until the purchase is complete. .
“Essentially, there are three paths ahead of us when it comes to the Surplus Land Act. Gate number one is that the city council could declare the property exempt from excess land, gate number two is that the city could declare the property surplus land and which has a different outcome and route, or the city could determine that the law on excess land is not applicable, which is typically done when ownership is transferred to another agency,” Soholt said.
Declaring the excess land exempt would be a direct route to selling the land to Tower 999.
Declaring the land surplus, but not the surplus exempt, would require the city to provide notice to other agencies and interested parties, hold a 60-day circulation period, and enter into 90 days of good faith negotiations with all interested parties.
The initial proposal made by Tower 999, LLC stated that its mixed-use project would consist of approximately 100 units of which 25% would be restricted as low-income units. The new development would also include 5,000 square feet of street-level retail space and 55 parking spaces.
At the June 21, 2022 City Council meeting, City staff provided an update on the sale of the City property and City Council directed staff to further review the legality of the sale of the property as excess “exempt” land and City staff to further review the Tower 999, LLC development proposal.
“What awaits you tonight is a request from staff to allow trading and an exclusive trading agreement that allows city staff to perform financial due diligence, ensure the buyer is in a good position to move forward, helps to ensure that the transaction would be in accordance with the land surplus, establishes the negotiation process and helps establish mutually agreeable terms. The goal is that upon entering the ENA, a provision will be negotiated to ultimately be the binding document,” Soholt said at the Oct. 4 meeting.
Soholt clarified that board approval would simply be for the creation of ENA, after which staff would still have to come back for approval of ENA itself, followed by a development agreement. This timeline would place the city around the summer of 2023.
City Council member Jose Rodriguez asked National City Housing Authority Director Carlos Aguirre if developers would be open to an ownership component of one of the proposed homes and Aguirre said a conversation could take place. take place during the negotiations and what it would take to get there. The motion to approve the creation of the ENA is adopted unanimously.