National City council members approved moving forward with a plan to authorize negotiations with limited liability company Tower 999 to possibly sell off two city-owned real estate parcels at 921 and 929 National City Boulevard. In combination with a third parcel of approximately 8,712 square feet of land bearing the now-shuttered Trophy Lounge, the properties could be developed into a mixed-use tower which would include some affordable housing.
The lot located at 921 National City Blvd. was purchased by the city’s Community Development Commission in August 2000 for $350,000 and the lot located at 929 National City Blvd. was purchased by the CDC in July 2003 for $225,000. Together, they comprise a 11,761 square foot section of land.
City Consultant Will Soholt summed up the current situation: Tower 999 has asked the city to sell their two plots as exempt surplus land. They have proposed a 9-story building with approximately 25% affordable housing units and ground floor retail stores.
As far back as 2018, Southwestern College leaders pursued developing some combination of the three properties— the two owned by the city and the Trophy Lounge property— into a mixed-used development with student housing. That idea was set aside during the COVID-19 pandemic.
As part of their request to purchase, Tower 999 representatives said they will consider factoring Southwestern College into their plans but will only establish details after the purchase is complete.
“Essentially, there are three routes ahead of us with respect to the surplus land act. Door number one is the city council could declare the property exempt surplus land, door number two is the city could declare the property surplus land and that has a different outcome and route, or the city could determine the surplus land act is not applicable, which is typically done when property is being transferred to another agency,” Soholt said.
Declaring the land exempt surplus land would be a direct route to selling the land to Tower 999.
Declaring the land surplus, but not exempt surplus, 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 any interested parties.
The initial proposal made by Tower 999, LLC stated their mixed-use project would include approximately 100 units of which 25% would be restricted as lower income units. The new development would also include 5,000 square feet of street-level retail space and 55 parking spaces.
At the City Council meeting on June 21, 2022, City staff provided an update on the sale of the municipal property and the City Council directed staff to look further into the legality of selling the property as “exempt” surplus land and for City staff to further consider the Tower 999, LLC development proposal.
“What’s before you tonight is a request by staff to authorize negotiating and Exclusive Negotiation Agreement that allows city staff to perform financial due diligence, ensure the purchaser is in a good position to move forward, helps ensure the transaction would be in compliance with the surplus land act, establishes the process of negotiations and it helps set up mutually acceptable terms. The goal is that entering into the ENA, a disposition will be negotiated to ultimately be the binding document,” Soholt said during the Oct. 4 meeting.
Soholt clarified that council approval would simply be for creating the ENA after which staff would still need to come back for approval of the ENA itself, followed by a development agreement. That timeline would put the city near summer, 2023.
City Council member Jose Rodriguez asked Director of National City Housing Authority Carlos Aguirre if the developers would be open to an ownership component to any of the proposed homes and Aguirre said that conversation could be had during negotiations and what it would take to make that happen. The motion for approval to create the ENA carried unanimously.
