HomeMy WebLinkAboutCC RESO 2019-26RESOLUTION NO. 2019 — 26
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING
THE CITY MANAGER TO EXECUTE A LEASE AGREEMENT WITH MORGAN TOWER
HOUSING ASSOCIATES, L.P. FOR THE GEORGE H. WATERS NUTRITION CENTER,
LOCATED AT 1415 "D" AVENUE IN NATIONAL CITY, FOR AN INITIAL TERM OF 10 YEARS
WITH AUTOMATIC RENEWALS FOR SUCCESSIVE FIVE (5) YEAR TERMS ENDING 99
YEARS AFTER THE COMMENCEMENT DATE OF THE LEASE AT A RENT OF $1.00 PER
YEAR; AND AUTHORIZING THE CITY MANAGER TO EXECUTE A NUTRITION CENTER
FUNDING AGREEMENT WITH THE COMMUNITY DEVELOPMENT COMMISSION -HOUSING
AUTHORITY OF THE CITY OF NATIONAL CITY FOR THE PURPOSE OF FUNDING THE
OPERATION OF SAID NUTRITION CENTER IN THE AMOUNT OF $475,000 FOR THE FIRST
YEAR AND INCREASED BY 3.5% EACH YEAR THEREAFTER FOR A TOTAL OF FIFTY-FIVE
(55) YEARS
WHEREAS, the Community Development Commission -Housing Authority of the
City of National City ("Housing Authority") is the fee title owner of that certain real property located
at 1317 D Avenue and 1415 "D" Avenue in the City of National City ("City"), which is more
commonly known and referred to as the Kimball and Morgan Towers; and
WHEREAS, since 1979 the City has operated, or caused to be operated, the
George H. Waters Nutrition Center ("Nutrition Center") at the Kimball and Morgan Towers; and
WHEREAS, the Kimball and Morgan Towers are "housing projects" as defined in
California Health and Safety Code Section 34212. California Health and Safety Code Section
34212 defines housing project to include `'real or personal property for necessary, convenient or
desirable appurtenances, streets, sewers, water service, parks, site preparation, gardening,
administrative, community, health, recreational, educational, welfare or other purposes." The
Nutrition Center provides important and necessary community, health, recreational, educational,
welfare and other benefits to low income residents of the Kimball and Morgan Towers housing
projects and other low income persons in the City of National City. As such, the Nutrition Center
is a portion of the housing project for purposes of California Health and Safety Code Section
34212; and
WHEREAS, under the Disposition and Development Agreement for Kimball and
Morgan Towers approved by the Housing Authority on June 19, 2018, the Housing Authority is
ground leasing the Kimball and Morgan Towers to two (2) affordable housing project the
developer/operators, who are required to rehabilitate the Kimball and Morgan Towers and operate
the Kimball and Morgan Towers as low income affordable housing projects. A portion of the
consideration payable by the Kimball and Morgan Towers developer/operators is in the form of
seller carryback notes ("Kimball and Morgan Notes"); and
WHEREAS, the Housing Authority and the City believe it will be beneficial to the
health and welfare of the community and the citizens of the City of National City for the Nutrition
Center to continue to be operated by the City for the benefit of its low income residents, rather
than having the Nutrition Center run by private interests. Therefore, as a material consideration
for the Housing Authority's entry into the ground leases for the Kimball and Morgan Towers, the
Housing Authority is requiring Morgan Tower Housing Associates, L.P., ground lessee of the
Morgan Tower, (the building in which the Nutrition Center is located) to enter into a 99 year lease
with the City with respect to the Nutrition Center with an annual rent of $1.00; and
Resolution No. 2019 — 26
Page Two
WHEREAS, California Health and Safety Code Section 34312 empowers the
Housing Authority to use its funds to operate housing projects. As part of the foregoing
transaction and in lieu of having the ground lessee of the Morgan Tower operate and pay for the
Nutrition Center, the Housing Authority has agreed to pay to the City a portion of the consideration
received annually by the Housing Authority from the Kimball and Morgan Notes. The City shall
use the fund for the operation of the Nutrition Center (which is part of a housing project as defined
in the California Health and Safety Code) in furtherance of the City's and the Housing Authority's
goal of improving the health and welfare of the community and the citizens of the City of National
City; and
WHEREAS, under the Nutrition Center Funding Agreement, the Housing Authority
shall make fifty-five (55) annual payments to the City. The first such payment shall be in the
amount of $475,000.00, and further payments shall be increased by 3.5% each year thereafter.
Such payments shall be made from the proceeds of the Kimball and Morgan Notes. The first
annual payment shall be due and payable by the Housing Authority to the City ten (10) business
days after receiving such annual payments from the Kimball and Morgan Towers ground lessees;
and
WHEREAS, the City shall use the funds received by the City pursuant to the
funding agreement referenced herein, solely for the purpose of funding operation of the Nutrition
Center (which is part of a housing project as defined in the California Health and Safety Code).
No portion of such funds shall be used for any purpose other than funding operation of the
Nutrition Center without the express written consent of the Housing Authority, which consent shall
be granted only in the event that the use of those funds by the City is allowed under the Housing
Authorities Law, Health and Safety Code Section 34200, et seq.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
National City authorizes the City Manager to execute a Lease Agreement with Morgan Tower
Housing Associates, L.P. for the George H. Waters Nutrition Center, located at 1415 `'D" Avenue
in National City, for an initial term of 10 years with automatic renewals for successive five (5) year
terms ending 99 years after the Commencement Date of the Lease at a rent of $1.00 per year.
BE IT FURTHER RESOLVED that the City Council of the City of National City also
authorizes the City Manager to execute a Nutrition Center Funding Agreement with the
Community Development Commission -Housing Authority of the City of National City for the
purpose of funding the operation of said Nutrition Center in the amount of $475,000 for the first
year and increased by 3.5% each year thereafter for a total of fifty-five (55) years.
BE IT FURTHER RESOLVED that Lease Agreement and Nutrition Center Funding
Agreement will be fully executed prior to the close of escrow with other necessary documents as
may be required by the Disposition and Development Agreement for Kimball and Morgan Towers
dated June 19, 2018. A fully executed copy of the Lease Agreement and the Nutrition Center
Funding Agreement will be on file with the City Clerk after the close of escrow.
Resolution No. 2019 — 26
Page Three
PASSED and ADOPTED this 5th day of March, 201 • /�
Alejandr
ATTE
pi -.-Michael R. 'ialla, City CI• rk
APPROVED AS TO FOR
An. ""+'o'is-Jon
Ctorney
Mayor
Passed and adopted by the Council of the City of National City, California, on
March 5, 2019 by the following vote, to -wit:
Ayes: Councilmembers Cano, Morrison, Quintero, Rios, Sotelo-Solis.
Nays: None.
Absent: None.
Abstain: None.
AUTHENTICATED BY: ALEJANDRA SOTELO-SOLIS
Mayor of the City of National City, California
City Clerk of the City of National City, California
By:
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2019-26 of the City of National City, California, passed and adopted
by the Council of said City on March 5, 2019.
City Clerk of the City of National City, California
By:
Deputy