National City officials will have to honor a three-year-old letter they say they didn't know existed that cancels an affordable housing project they approved.

After consulting with the city attorney, the City Council intends to tell a group of developers tonight that it can continue with its plan to build market-rate row houses near City Hall, which is a change from the original proposal.

Mayor Ron Morrison said the former redevelopment director, Ben Martinez, wrote a letter to Truestone Investments LLC in September 2005 saying its project didn't have to include affordable housing – a decision he made without consulting the City Council.

The council first learned of the letter last month when Truestone partners Alfonso Reynoso, Adolfo Gallegos and Edgar Herrera requested a time extension on the project near East Eighth Street and C Avenue.

DETAILS City Council When: 6 p.m. today Where: City Hall, 1243 National City Blvd.

When council members asked why the project, which initially was an eight-unit development with two affordable homes, no longer included affordable housing, Reynoso gave them Martinez's letter.

Reynoso said the group asked Martinez to waive the affordability component to make it easier to obtain financing.

“The purpose of this letter is to verify that the 8-unit rowhome project that you are undertaking at the above address will not be subject to any affordable housing requirements,” Martinez wrote.

Martinez, who no longer works for the city, did not return messages seeking comment.

“In the entire scheme of things, two houses aren't going to make a difference,” Morrison said. “It was just a terrible policy decision made by someone who wasn't in a policy-making position.”

The council will also decide tonight whether to grant the group a second extension.

In 2003, the Alpha Project for the Homeless planned to build the row houses, including the affordable housing at the city's urging. The agency sold its interest to Truestone in 2006.

This isn't the first project that Reynoso, Gallegos and Herrera have proposed in National City. Two years ago, under the name CYMA, they proposed building a residential development near the Plaza Bonita shopping center.

Then-Mayor Nick Inzunza was on the council committee that selected CYMA for the project but didn't tell the rest of the council he received $4,200 in campaign contributions from the group.

There were other facts the council didn't have. Reynoso and Gallegos identified themselves as chiropractors, although Gallegos didn't have a state license at the time. The pair's clinic was closed but they listed the business as part of their financial portfolio.

Herrera, a contractor, was convicted in 1998 of transporting marijuana. That felony was reduced to a misdemeanor and was later expunged after Herrera completed his probation.

After debating whether the group could continue on the project, the City Council dropped CYMA last September because it couldn't pay a $25,000 deposit or work within the city's six-month time frame.

At a City Council meeting last month, Councilman Luis Natividad told Reynoso his previous connections could harm his development efforts.

“Be careful because there's people involved that are going to get you in trouble,” Natividad said. “All the people that were involved before are still involved and that's a fact.”

Reynoso asked Natividad what he meant.

“I don't want to make it public,” Natividad said. “I'll tell you outside in the hall.”

Natividad said later that he wondered why the Martinez letter was never presented before.

Morrison said yesterday that staffers found the letter in the redevelopment agency files.

“There was a copy in the CDC (Community Development Commission) but nobody else was aware of it, which is kind of sloppy,” he said.

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Tanya Sierra: (619) 498-6631; tanya.sierra@uniontrib.com