Consideration and Possible Adoption of Resolution No. 2018-13:  A resolution authorizing the execution of the Mill Town Development Agreement between Vintage Partners, LLC and the City of Flagstaff related to the development of approximately 18.11 acres of real property generally located at 1801 S. Milton Road. (Mill Town Development Agreement)

State law allows the City to enter into development agreements by resolution of the City Council. The Mill Town Development Agreement will be between Vintage Partners, LLC and the City of Flagstaff. The proposed agreement governs the terms and conditions of the entitlements, transportation improvements, land transfers, construction budget and payments, and requirements for on and off-site improvements. The proposed Mill Town project consists of approximately 18.11 acres located generally at 1801 S Milton Road.

The City has budgeted $7,375,000 for Transportation Improvements.  The City agrees to program an additional $400,000 for the Transportation Improvements based on the engineer’s estimate for the work using design drawings available at the time of the DA negotiations.  The City agrees to be responsible for any and all cost increases associated with the Transportation Improvements.  The total budget for the Transportation Improvements is $7,775,000 which is budgeted in the Transportation tax 5-year capital improvement plan.  The Transportation Improvements includes an amount of $80,000 for public art to be located in the Beulah/University roundabout.  This amount represents approximately 1% of the Transportation Improvements estimate.

The City agrees to contribute $400,000 to the pedestrian underpass as the community’s share of the underpass.  These amounts are also budgeted in the Transportation tax 5-year capital improvement plan.  Additionally, the City has budgeted $300,000 for upsizing an extension of a sewer line which is funded in the wastewater budget. The total City Budget for the Project is $8,475,000.

Council Goals
Transportation and Other Public Infrastructure - Deliver quality community assets and continue to advocate and implement a highly performing multi-modal transportation system.

Team Flagstaff Goals
Strategic Priority #3:  Foster a resilient and economically prosperous city.

Regional Plan
A complete analysis of the Regional Plan goals and policies can be found in the Zoning Map Amendment report.

The Mill Town Development Agreement is one of the steps in moving the Public-Private-Partnership project to completion.  The P3 project was formalized through a Pre-Development Agreement (PDA) between Vintage, the City and the Arizona Department of Transportation in March 2015.  The PDA has been renewed twice by Council with the most recent set expire at the end of March 2018.

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

On May 16, 2000, the voters of Flagstaff passed proposition 403 which established the local transportation tax 2000 to provide funding for a variety of transportation system improvements including the arterial and collector street system, and multi-modal elements.  The information pamphlet for this proposition specifically identified the Beulah Boulevard extension and the University Avenue realignment as “missing links” within the overall transportation network.   The exhibit for proposition 403 showed an alignment for these roadways similar to the current proposal. The transportation tax has been collected on a pay-as-you-go basis with a total of $7.375 million allocated for these transportation improvements.  These funds became 100% available as of July 1, 2017; however, many years of work have been spent on moving this project forward.  

In 2005, the City of Flagstaff acquired APN 103-21-002, a 9.58-acre site known as the “Fresquez Parcel” for approximately $2.7 million.  This purchase was the first step in moving this transportation project to fruition and provides the majority of right-of-way necessary to accomplish the Beulah Boulevard extension.  In order to accomplish the University Avenue/Drive realignment the ADOT District Offices and Regional Laboratory need to be relocated.   

Following the acquisition of the Fresquez parcel, the City and ADOT began to explore options for partnerships in order to relocate the ADOT facilities.  In July of 2009, the Arizona P3 (Public-Private-Partnership) Legislation was passed, allowing for partnerships between a public agency (in this case two public agencies) and a private-sector entity to allow greater participation in the delivery of a transportation project.  Typically, the public agency assumes all the risks and responsibilities for a transportation project, but under the P3 the private partner takes on some of those risks and responsibilities.  The Flagstaff P3 is the first time this initiative has been used to acquire new facilities for ADOT, which will free up land for roadway improvements and redevelopment.  A Memorandum of Understanding was executed on March 28, 2012, and set out the parameters for how this P3 project would function.  The City and ADOT would combine the remainders of their parcels after right-of-way dedication to be used for redevelopment.  The redevelopment parcel would then be traded from ADOT to the developer for relocated ADOT facilities.    

ADOT issued a Request for Qualifications in March 2012 to solicit a private partner who could relocate the ADOT facilities allowing for the construction of the road improvement project.  The selected private sector partner was Vintage Partners, who proposed to relocate the ADOT facilities to the former Harkins Theater on Woodlands Village Boulevard.  The P3 project was formalized through a Pre-Development Agreement (PDA) between Vintage, the City, and ADOT in March 2015.  This PDA grants Vintage Partners the authority to apply for the required entitlements to pursue redevelopment of the remaining lands.  ADOT and the City agreed to cooperate in good faith with Vintage Partners in order to process these entitlements, recognizing that the Flagstaff City Council retains its full discretion to approve or deny the entitlement applications.  The PDA also commits a total of $7.375 million for the extension of Beulah Boulevard and the realignment of University Avenue, which would be completed by Vintage Partners in conjunction with their redevelopment project.  

On February 7, 2018, the Inter-Department Staff (IDS) approved a site plan, a copy of which is attached to the Direct to Ordinance Zoning Map Amendment report, for the proposed development subject to successfully obtaining a Direct to Ordinance Zoning Map Amendment, Preliminary Plat and Conditional Use Permit, which is for the establishment of Rooming and Boarding as part of a mixed-use development and the approval of additional building height.  Should the Zoning Map Amendment or the Conditional Use Permit for building height be denied, the site plan as submitted will no longer be approved.

Summary of Mill Town Development Agreement Deal Points

• Provide for the sequence of approvals to facilitate the conveyance of the City Property to ADOT, the relocation of ADOT to the former Harkins Site, and the recordation of the final plat.  The foregoing events must occur before the transportation improvements to Beulah, University, and the Milton underpass can commence.  Acknowledge that other agreements, including the IGA between the City and ADOT, and the Implementation Agreement between ADOT and Vintage, will also speak to the timing and conditions for the property transfers from the City to ADOT, and ADOT to Vintage.
• Recognize the extended period of time that may be necessary between the recordation of the plat and approval of the preliminary plat by increasing the approval timeframe for the preliminary plat to 3 years, and acknowledging the zoning and site plan as a vested right for 5 years.
• Establish maximum overall unit count.
• Provide for the dedication of all required right-of-way and easements provided for in the preliminary plat, and the exchange of the remnant University road property in conjunction with the final plat.  Includes ability to make minor changes to ROW lines as the final design of the Transportation Improvements are completed.
• Establish the process for procurement of the City’s Transportation Improvements project, Vintage’s Milton Underground Pedestrian Crossing, and the City’s Utility upsizing project, all of which will be constructed by Vintage as one project.
• Provide for two funding phases of the road and underpass project: 1) Design phase, which will provide a budget and payment process for the road project and the underpass project, and 2) Construction phase, which will provide a budget and payment process for the road and underpass construction contracts.
• The City’s budget for the road project will include a scope and projected amount, recognizing that overages in relation to the City’s transportation improvements will be the responsibility of the City.
• Vintage’s budget for the underpass will include a scope and projected amount, recognizing that overages will be the responsibility of Vintage, minus the City’s $400,000 contribution toward this improvement.  Vintage will also provide funds for twenty years of operation and maintenance of the pedestrian underpass.
• Acknowledge the City sewer line project as a part of the road improvements but separate City cost, estimated at $300,000.
• Establish performance obligation and timeframes for the construction of the road and underpass projects by Vintage, and permit the City to take over the road project if it has not been completed within 2 years following the recordation of the final plat.
• Acknowledge Vintage’s responsibility to complete the Milton turn lane into the Mill Town development parcel and frontage improvements along Milton as separate from the City’s road project to be improved with the onsite improvements.
• Vintage has committed to providing each residential lessee within the Project a NAIPTA Eco-Pass till such time that NAIPTA implements a higher education bulk rate pass program (U-Pass), which will provide students of both NAU and CCC with fare-free access to the entire Mountain Line network.
• Vintage commits to include the Mill Town project in the Crime Free Multi-Housing program and provide a Safety Plan prior to occupancy of the site.

Community benefits and considerations related to this request are addressed in more detail in the Planning & Zoning Commission Direct to Ordinance Zoning Map Amendment Staff Report dated February 5, 2018.

Neighborhood meetings were held in conjunction with the Zoning Map Amendment request as required by the Zoning Code.  There have been no specific public meetings on the Mill Town Development Agreement.