HomeMy WebLinkAbout2026-98 - CTCAC Regulatory Agreement Execution and Amendment to Kimball Highland Ground Lease and Promissory Note RESOLUTION NO. 2026 - 98
RESOLUTION OF THE OF THE BOARD OF THE COMMUNITY DEVELOPMENT
COMMISSION-HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY, CALIFORNIA,
AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE THE CTCAC REGULATORY
AGREEMENT AND APPROVE AMENDMENTS TO THE GROUND LEASE AND
CAPITALIZED GROUND RENT PROMISSORY NOTE FOR SITE 2 OF THE KIMBALL
HIGHLAND MASTER PLAN, LOCATED AT 1221 D AVENUE IN NATIONAL CITY.
WHEREAS, on October 20, 2020 the Community Development Commission-Housing
Authority of the City of National City ("CDC-HA") entered in a Disposition and Development
Agreement ("DDA") with D Avenue Housing Associates, L.P. ("Developer") for the
development of the Kimball Highland Master Plan ("Project"), and
WHEREAS, pursuant to the DDA, on June 1, 2022 the CDC-HA, as Landlord/Lessor,
and Developer, as Tenant/Lessee, executed a Ground Lease for Project Site 2, located at
1221 D Avenue in National City, allowing for the construction, operation, and management of
the Project; and
WHEREAS, the Project received tax credit funding through the California Tax Credit
Allocation Committee ("CTCAC"); and
WHEREAS, in return for the tax credits the Project must adhere to regulations and
covenants memorialized in a Regulatory Agreement; and
WHEREAS, as a portion of the Project operates under a Ground Lease, the Lessor is
required be a signatory to the Regulatory Agreement; and
WHEREAS, in lieu of the Ground Lease requiring a set schedule of rental payments
to the CDC-HA, Developer concurrently executed a Capitalized Ground Rent Promissory
Note ("Note") in favor of the CDC-HA in the principal amount of $3,000,000 at three percent
(3%) simple interest; and
WHEREAS, the CDC-HA has since been made aware that certain language related
to "Capitalized Ground Rent" contained within the Ground Lease and Note may create
potential risk of future tax credit recapture for the Project under the applicable Low-Income
Housing Tax Credit regulations; and
WHEREAS, CDC-HA and Developer desire to amend the Ground Lease and Note to
remove references to "capitalized" and to instead clarify the payments as prepaid expenses.
NOW, THEREFORE, THE BOARD OF THE COMMUNTIY DEVELOPMENT
COMMISSION-HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY, CALIFORNIA,
DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:
Section 1: That the Board of the Community Development Commission-Housing
Authority of the City of National City hereby authorizes the Executive Director or his designee
to execute amendments to the Ground Lease and Capitalized Ground Rent Promissory Note
for the Kimball Highland Master Plan.
Section 2: That the Board of the Community Development Commission-Housing
Authority of the City of National City hereby authorizes the Executive Director or his designee
to execute the CTAC Regulatory Agreement and to modify and execute any other documents
as needed related to the Kimball Highland Master Plan.
Section 3: That the City Clerk shall certify to the passage and adoption of this
Resolution and enter it into the book of original Resolutions.
PASSED and ADOPTED this 2nd day of Ju e, 2026.
Morrison, Chairman
ATTEST:
Shellyv ey cha el, MMC, Secretarfi\iy
p
APPROVED AS TO FORM:
Heidi Skinner, General Counsel
Passed and adopted by the Board of the Successor Agency to the Community
Development Commission as the National City Housing Authority on June 2, 2026, by
the following vote, to-wit:
Ayes: Yamane, Rodriguez, Bush, Molina, Morrison
Nays: None.
Absent: None.
Abstain: None.
AUTHENTICATED BY: RON MORRISON
Chair of the Board of the Successor Agency,
City of National City, California
SHELLEY CHAPEL
Secretary of the Board of the Successor
F tario, Agency, City of National City, California
TT*4 BY:
Shelley C►.p 1, MMC, City Clerk