Consideration and Adoption of Resolution No. 2023-16 :  A resolution of the Flagstaff City Council, authorizing the execution of a development agreement between the City of Flagstaff and MICM BUTLER LOFTS PROJECT LP, SIERRA VISTA NO 6 L.L.C., and BROOKSTONE VENTURES L.C. for the Lofts on Butler, related to the development of approximately 17.2 acres of land located at 2950 East Butler Ave and establishing an effective date.

State law allows the City to enter into development agreements by resolution of the City Council with landowners and persons having an interest in real property in order to facilitate the development of the property. The Lofts on Butler Development Agreement will be between MICM BUTLER LOFTS PROJECT LP, SIERRA VISTA NO 6 L.L.C., BROOKSTONE VENTURES L.C. and the City of Flagstaff. The Development Agreement is intended to facilitate the development of approximately 17.2 acres of land generally located at 2950 East Butler Ave. The applicant intends to develop the property for use as a mixed-use project consisting of commercial retail and residential land uses. The property is currently zoned Medium-Density Residential (MR) and Rural Residential (RR) and the applicant is requesting to rezone the property to Highway Commercial (HC). The proposed agreement governs the terms and conditions of the entitlements, on site improvements, in-lieu fees for frontage improvements to the property, the developer's responsibility to provide a left-hand turn lane into the development from Butler Ave, a proportional payment for a permanent stop light at N Fourth Street and Butler Ave, a proportional share of the Soliere transmission main secondary water source for the area, administration of the Affordable Housing Plan, quantifies the multi-family dwelling unit mix, and the quantity and type of on-site bicycle parking and electric vehicle charging stations and infrastructure installation.

There are no financial impacts associated with the Development Agreement.

There are no policy impacts associated with the Development Agreement.

Priority Based Budget Key Community Priorities and Objectives

• Safe and Healthy Community: Ensure the built environment is safe through the use of consistent standards, rules and regulations, and land use practices
• Robust Resilient Economy: Support and strengthen a more robust, diverse, and sustainable economy in ways that reflect community values and provides for affordable housing opportunities.
• Livable Communities: Achieve a well-maintained community through comprehensive and equitable code compliance and development that is compatible with community values.

Carbon Neutrality Plan

• Priority One - Neighborhoods:
  • DD-2 Create inclusive networks for walking and biking that are continuous, attractive, safe, comprehensive and convenient for people of all ages.
  • DD-5 Invest in comprehensive and equitable transit.
• Priority Two - Energy Sources:
  • FS-2 Encourage new buildings to rely on the electric grid as their main energy source.
• Priority Three - Consumption:
  • WS-1 Improve water infrastructure and expand water reuse.
  • WS-2 Improve ecosystem management for protection of water resources.
• Priority Four - Commitments:
  • HF-5 Encourage diverse native plant ecosystems in the built environment.
  • HS-5 Improve the resilience of public infrastructure and City facilities.

Regional Plan

• A complete analysis of the Regional Plan goals and policies can be found in the project narrative and Panning and Zoning Commission staff report dated February 15, 2023, attached to the Zoning Map Amendment staff summary.

There have been no prior Council decisions made in regard to this application.

1. Approve the Lofts on Butler Development Agreement as presented.
2. Approve the Lofts on Butler Development Agreement with additional, modified, or deleted terms.
3. Remand the Lofts on Butler Development Agreement back to staff for additional negotiations with the applicant.
4. Deny the Lofts on Butler Development Agreement.

An application for a Direct to Ordinance Zoning Map amendment requires the applicant to submit fully developed site plans with all supporting information required for site plan review and approval concurrently with the Zoning Map amendment application. Once the Zoning Map amendment is approved by the Council, then the applicant may proceed directly to construction plan and building permit review, and no additional site plan review is required. However, if the Council adds conditions of approval that require substantial amendments to the site plan, as determined by the Director, then a revised application shall be submitted for site plan review and approval prior to building permit review and approval.

This application from MICM BUTLER LOFTS PROJECT LP proposes to develop four vacant parcels (APN 106-04-007C, 106-04-006B, 107-11-001B, and 107-44-062) into a mixed-use project within the HC zone that will include 172 residential units, 2,154 SF of office space, and a future separate parcel to be developed as a commercial use.  Two of the parcels (APN 106-04-006B and 107-11-001B) currently have RR zoning and parcel APN 107-44-062 is zoned MR.  The remaining parcel (APN 106-04-007C) is currently already zoned HC.
 
The purpose of the rezoning is to create an entire 17.20-acre site zoned HC and with a Resource Protection Overlay. Approximately 1.09-acres of the total site will become a separate parcel dedicated to a future commercial building (not included in the approved Site Plan.) The resulting approximate 16-acre parcel will be the development site for the mixed-use project (please reference the approved Site Plan drawings attached to this report.)
 
The mixed-use development site will consist of (43) 5,550-sq.ft., 2-story residential buildings containing 4 units each, and a separate 5.000-sq.ft. building with 2,806 sq. ft. of clubhouse space and 2,154 of sq. ft. of commercial office space.  There will be (26) 1-bedroom units, (120) 2-bedroom units, and (26) 3-bedroom units.  The proposed density for the development is 10.8 units per acre, below the maximum 29 units per acre allowed in the zone.  The proposed density also meets the minimum Regional Urban Activity Center characteristic of 8 units per acre in mixed-use developments.
 
The Highway Commercial zone is characterized by the development of commercial uses in addition to residential uses to provide diversity in housing choices. The requested rezoning would allow the development of a mixed-use project consisting of commercial office space and multi-family residential uses on the parcel. The commercial portion of the mixed-use project is required to be constructed either prior to, or simultaneous with, the residential component of the development and may not at any time be separated from the existing parcel. Residential uses with more than two units are permitted in the HC zone as part of a mixed-use development located above or behind the commercial uses. Office uses are permitted in the HC zone.
 
The development includes vehicular and bicycle parking spaces, open and civic spaces and provides 5% of the residential units as Affordable Housing units.

The draft Development Agreement is attached to this report. The primary purpose of this agreement is to set out roles and responsibilities regarding the following (not limited to):

• In-lieu fees for frontage improvements to the property and ROW dedication for right-hand turn lane into western driveway
• The developer's responsibility to provide a left-hand turn lane into the development from Butler Ave
• A proportional payment for a permanent stop light at N Fourth Street and Butler Ave
• A proportional share of the Soliere transmission main secondary water source for the area
• Provides administration of the Affordable Housing Plan - 5% (9 units) permanently affordable 
• Quantity of on-site bicycle parking - 40 bicycle spaces; 24 covered, 16 uncovered) where 19 total are required
• Quantity of total required electric vehicle charging stations and infrastructure installation including providing one dual charging station as part of the initial development.
• Prohibition of short term rentals (60 days)
• Materials Management Plan for enhanced recycling
• All electric units with Energy Star certified appliances and HVAC equipment.

Community benefits and considerations related to this request are addressed in more detail in the Planning and Zoning Commission staff report, dated February 15, 2023, attached to the Zoning Map Amendment staff summary. 

Per the requirements of Flagstaff Zoning Code Section 10-20.40.060(E)(1) to provide notice of the City Council’s public meeting concerning the Development Agreement, pursuant to the public hearing requirements of Section 10-20.30.080, Notice of Public Hearings, the applicant mailed notification letters to affected properties and property owners within a 300' radius of the development site and posted a sign on the development site in compliance with Zoning Code Section 10-20.30.080(B). Staff posted a legal ad in the Saturday, March 18, 2023, newspaper as required in Zoning Code Section 10-20.30.080(B)(5)(a). A Citizen Participation Report is attached to this agenda item.