Consideration and Approval of Resolution No. 2018-26:  A resolution of the City Council of the City of Flagstaff, Arizona authorizing the execution of the third amendment to the 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 and establishing an effective date. (Third Amendment to the Timber Sky Development Agreement)

Staff recommends approval for this item. If Council decides to authorize execution of the proposed Third Amendment, it will need to take the following procedural steps.
 

VP 66 & Woody Mountain LLC, which is managed by Vintage Partners, LLC, is the developer of the Timber Sky project generally located at 3425 West Route 66. In late 2016, the City and VP 66 & Woody Mountain, LLC entered into a development agreement pertaining to the Timber Sky project which required the developer to construct certain off-site sewer improvements.  These off-site sewer infrastructure improvements were part of a larger "Westside Sewer Improvement Phase 1 and Phase 2," contained in the City's five year CIP plan.

Following the approval of the Development Agreement, the parties agreed to have Vintage construct the entire Westside Sewer Improvement.  The First Amendment to the Development Agreement dated September 18, 2017 designated Vintage Partners, LLC to construct both phases of the downstream sewer improvements and outlined a schedule for the City to provide reimbursement. Since that time, Vintage Partners' construction schedule has been delayed and the City has elected to proceed with construction of Phase 1 of the Westside Sewer Improvements along Clay Avenue Wash ahead of Vintage's schedule, as reflected in the proposed Third Amendment to the DA. Vintage will still construct Phase 2 of this work prior to FY 2020.

The parties are still finalizing the language on the Third Amendment to the DA and anticipate attaching the proposed amendment in Agenda Quick prior to the final agenda.

This amendment with the City delivering the Westside Sewer Improvement Phase 1 has a neutral financial impact.

None

Yes, the City Council approved the Development Agreement for the Timber Sky project on November 15, 2016, and approved the First Amendment to the Development Agreement on September 18, 2017. On January 16, 2018, the Second Amendment to the Development Agreement was approved which adjusted Engineering Fees. The Development Agreement, First and Second Amendments are attached to this staff summary for ease of reference.

1. Authorize execution of the proposed Third Amendment.
2. Do not authorize execution of the proposed Third Amendment.
3. Do not authorize execution of the proposed Third Amendment and direct staff to negotiate amendments to the proposed Third Amendment.

VP 66 & Woody Mountain, LLC, which is managed by Vintage Partners, LLC, is the owner of approximately 197.58 acres of land generally located at 3425 W. Route 66 (the "Property").  On November 15, 2016, the City annexed a portion of the Property and approved a rezoning of the Property to allow Vintage's proposed development of a multi-phased housing community called Timber Sky.  The City and VP 66 & Woody Mountain, LLC also entered into a development agreement, approved on November 15, 2016, to facilitate the development of Timber Sky.

The original Development Agreement pertaining to the Timber Sky project required the developer to construct certain off-site sewer improvements. These off-site sewer infrastructure improvements were part of a larger "Westside Sewer Improvement Phase 1 and Phase 2," contained in the City's five year CIP plan. The First Amendment to the Development Agreement dated September 18, 2017 designated Vintage Partners, LLC to construct both phases of the downstream sewer improvements and outlined a schedule for the City to provide reimbursement. 

Since that time Vintage Partners' construction schedule has been delayed and the City has elected to proceed with construction of Phase 1 of the Westside Sewer Improvements along Clay Avenue Wash ahead of Vintage's schedule, as reflected in the proposed Third Amendment to the DA. Vintage will still construct Phase 2 of this work prior to FY 2020.

Overview of Proposed Third Amendment to the Timber Sky Development Agreement:

• The City will complete Phase I construction of the Westside Sewer Interceptor.
• Vintage agrees to publicly procure and construct Phase II of the Westside Sewer Interceptor.
• The City agrees to reimburse Vintage for all costs associated with the construction of West Side Sewer Interceptor, Phase II (Thompson-Kaibab portion), including permit fees and reasonable project management expenses to be approved by the City.

Water Services has Phase 2 of the Westside Sewer Improvements budgeted and scheduled for construction in FY2021.

Vintage Partners must adhere to the public procurement process in selection and award of the construction contract for Westside Sewer Improvements-Phase 2 in order to be eligible for reimbursement.

Financial reimbursement by the City will be based on actual public bid documents and completed cost invoices from installing contractor.

The Westside Sewer Interceptor Phase 2 portion along Thompson and Kaibab streets has an engineers estimated cost of  $1,380,000. Water Services has funding for this project scheduled and budgeted for FY2021. The City would be able to reimburse the Vintage Partners, LLC, as soon as August 2020 should they proceed to complete construction of Phase 2 in advance of the City constructing the project.

Allows infill and development to occur on the Westside of Flagstaff.