Consideration and Possible Adoption of Resolution No. 2016-35:  A resolution authorizing the execution of a Development Agreement between  VP 66 & Woody Mountain, LLC and the City of Flagstaff related to the development of approximately 197.58 acres of real property generally located at 3425 West Route 66. (Timber Sky Development Agreement)

State law allows the City to enter into development agreements by resolution.  The proposed agreement governs the terms and conditions of the annexation, zoning and phasing of the preliminary plat improvements.

City obligations will include reimbursement for upsizing and extending water and sewer infrastructure adjacent to and extending beyond the boundaries of the Subject Property.  Owner obligations will include the provision of on-site and off-site water and sewer improvements per the approved Water Sewer Impact Analysis, the provision of a sewer line easement through the property at the time of Phase 1 Final Block Plat, traffic mitigation, increased outdoor lighting mitigation, the provision of 100 affordable housing units, storm water mitigation as well as maintenance of on-site improvements.

Reimbursement for the Thompson Street and West Kaibab off-site sewer infrastructure improvement is budgeted as part of the Utilities Capital Improvement Program for fiscal year 2021.  The estimated amount for this improvement is $1,460,000.  The City is agreeing to reimburse the Owner for the cost of the design and construction of the off-site improvement.  The Owner has requested the City move the project to fiscal year 2020 subject to the approval of the Flagstaff City Council.  The remaining off-site sewer improvement, the Westside Sewer Line Extension, is expected to be completed in conjunction with the proposed Core Facilities project scheduled for Fiscal Year 2017.  Construction plans are 90% complete and all easements have been obtained for this improvement.  If the City does not move forward with this improvement prior to the development of Timber Sky the Owner will be responsible for constructing this improvement.  Utilities has budgeted $1,107,381 for the upsizing of this sewer line extension and which may be reimbursed to the Owner at the time of construction.

A new well is required to serve the Timber Sky development.  The development of well is estimated to cost the City of Flagstaff approximately $3.1 million.  The Owner will be required to pay their proportionate share of a new well in relation to their development. A portion of their capacity fees will be paid in advance of the need for the additional well and will be reimbursed as capacity fees are paid for future units. 

The Incentive Policy for Affordable Housing (IPAH) incentivizes developments that commit to permanently affordable housing units. If a developer desires to take advantage of the incentives offered under the IPAH document, they would need to provide rental and/or ownership opportunities that have resale and rent restrictions placed on the units for the intended affordable housing population. The affordable units should be distributed proportionally throughout the development and phases (where applicable) and appropriately designed and integrated with market-rate units throughout the development.  Developers of residential or mixed use developments that voluntarily provide a minimum of ten percent (10%) affordable housing units seeking rezoning approval will be able to benefit from the incentives offered by IPAH.  A variety of housing types, mixed income and affordable housing developments are encouraged throughout the City and within each neighborhood. Mixed-income means that the development includes at least 10% affordable housing units that are preserved as permanently affordable.

The Owner has agreed to voluntarily provide 100 permanently affordable housing units that are a minimum of 2 bedrooms and 2 bathrooms in size.  The Owner is not seeking to utilize any of the incentives provided for in the Zoning Code or the IPAH at this time.  The proposed development has a minimum density limit of 910 units and a maximum density limit of 1300.  The 100 units may potentially meet the 10% as encouraged through the IPAH depending on the final build out of the project. 

COUNCIL GOALS:

• Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics
• Provide a well-managed transportation system

REGIONAL PLAN:
Staff identified the relevant Regional Plan Goals and Policies that could be applied to support or not support the proposed Zoning Map Amendment, including the subsequent Development Agreement.  A list of those Goals and Policies, as well as a discussion and analysis, was provided in the Zoning Map Amendment staff report.

The City Council has previously held one public hearing related to the Zoning map Amendment.  A first reading of Ordinance No. 2016-39 occurred on November 1, 2016.  Discussion and approval of this Development Agreement must occur prior to the second reading and adoption of the ordinance.

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

A detailed background of this project was included with the Concept Zoning Map Amendment report.

City Obligations:

• Water Allocation: The City has allocated water for up to 480 dwelling units. 
• Water & Sewer Infrastructure Reimbursement:  The City has agreed to reimburse the Owner for upsizing and extending the existing water and sewer infrastructure as detailed in the agreement.

Owner Obligations:

• Workforce Housing: The project will deliver 100 residential ownership units with a minimum of 2 bedrooms and 2 bathrooms that will be sold at or below 100% AMI affordability level.
• Outdoor Lighting:  The Owner has built upon the Zoning Ordinance requirements to prepare a unique set of Dark Sky Standards that will apply to all development on the Property through the implementation of Conditions, Covenants & Restrictions ("CC&Rs").
• Homeowners' Association Responsibilities:  The HOA (as provide in the CC&Rs) shall maintain the private trails, drainage facilities, landscaping within rights-of-way, medians, bridge abutment fascia, private open spaces, and private common areas within the Property.  The HOA will require homeowners to maintain the individual on-lot LID features through the CC&Rs.
• Water & Sewer Improvement Requirements:  The Owner is required to adhere to all of the requirements of the WSIA dated November 3, 2015.  On-site water and sewer improvements shall be phased  appropriately to ensure stand-alone water and sewer availability within each phase.  Owner agrees to provide all on-site water and sewer system required to support the overall development plan including a 12" diameter looped water system from W Route 66 to Woody Mountain Road and a new 8" PVC waterline connection to the eastern boundary of the development.
• Water System Improvements:  The Owner shall at its own expense install a well as required in the WSIA to meet the Project's Average daily usage requirements at full build out.
• Off-Site Sewer Improvement's: The Owner agrees to replace the existing 8" sewer line with an 18" diameter pipe the reach of 3,100 feet along Thomson Street and West Kaibab.  The Owner is also responsible for the installation f approximately 5, 170 feet of sewer line from Adirondack Avenue to the project boundary.  The City will be constructing this line in conjunction with the Core Facilities project.  If the project should not be built the Owner is responsible for constructing the line.
• Drainage Mitigation:  The Owner agrees to mitigate the Project's identified drainage impacts in accordance with the Drainage Impact Analysis (DIA) and ensure maintenance of individual on-lot LID features.  A new DIA must be submitted and approved for the eastern side of the property if all drainage flows cannot be directed towards the westerly drainage corridor.
• Road Improvements Requirements: The majority of the off-site traffic improvements will occur within the ADOT right-of-way and the Owner maintains a separate agreement with ADOT for these improvements.  Two improvements are required within City right-of-way and are detailed in the agreement.  They include improvement to the intersections of Woodlands Village and W. Route 66 and Woodlands Village and University Ave which are to occur with the first phase of development.  Additionally, any remaining monies from phase one improvements is to be paid to the City during the third phase of development to be used as leverage for additional funds to improve the W. Route 66 corridor.

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