Consideration and Approval of Second Amendment of Purchase and Sale Agreement:  Between the City of Flagstaff  and Evergreen - TRAX, LLC ("Evergreen"), for the sale of approximately 33.6 acres of property consisting of three parcels located at the southeast and southwest corners of the intersection of Fourth Street and Route 66, and the northwest corner of Fourth Street and Huntington drive adjacent to the Fourth Street Overpass (the "Property").

Approve the Second Amendment to the Purchase and Sale Agreement between the City of Flagstaff and Evergreen for the development of the Property, and authorize the Mayor to sign the agreement.

The City of Flagstaff Charter requires the City Council to review and approve agreements that "provide for acquisition, sale or exchange of public real property." 

The Second Amendment to the Purchase and Sale Agreement amends the Purchase Price as follows:

1.  Amended purchase price (Section 2.1) - Buyer agrees to purchase the Property for Three Million Forty One Thousand Dollars ($3,041,000.00).

Evergreen has agreed to the amended purchase price of Three Million Forty One Thousand Dollars ($3,041,000).

 1.  Retain, expand, and diversify economic base
 2.  Effective governance.

• June 5, 2012, the City Council approved Ordinance No. 2012-10, authorizing the transfer of title to Evergreen Devco, Inc. 
• June 12, 2013, the City of Flagstaff and Evergreen Devco, Inc. entered into a Real Estate Purchase and Sale Agreement
• May 20, 2014, the City of Flagstaff and Evergreen Devco, Inc. entered into the First Amendment of the Purchase and Sale Agreement

1.  Approve the Agreement as amended and recommended by City Staff which will allow the City to finalize the Purchase and Sale Agreement with Evergreen Devco, Inc. and close escrow on this property.  
2.  Modify the conditions and/or include additional conditions. 
3.  Deny the Amended Agreement which will not allow for the redevelopment of the property at Fourth Street and Route 66.

In approximately 2007, the City awarded the Property for development. However, due to economic conditions the developer was not able to meet its obligations and returned the property to the City.  In October 2010, staff solicited Requests for Proposals (RFP) for the purchase and development of the Property.  Revenue generated from this sale was to assist with the repayment of debt incurred by the City in the construction of the Fourth Street Overpass.  Only one proposal was received for only two of the three parcels.  In addition, the proposal was significantly below the minimum price requested and the development plan did not meet the expectations that were set forth in the RFP.  The Council rejected this proposal as it was determined to not be in the best interest of the City.  Council directed staff to reissue the RFP.  A new RFP was issued that no longer had a minimum price requirement and provided for a greater emphasis on the type and timing of development that would occur.  The RFP closed on August 3, 2011.  One response was received with an initial offer from Evergreen Devco, Inc. for all three parcels. 

This amendment will result from the City's decision to fund the Fourth Street Bridge widening. An amendment document will be provided at the meeting.

The City desires to promote economic development in a number of modalities.  Approving the Second Amendment to the Purchase and Sale Agreement for the Property will encourage retail development along the Fourth Street Corridor in a more structured manner. 

Evergreen  has agreed to the amended purchase price of $3,041,000.  Previously, Evergreen deposited with the City $212,899.50 as Earnest Money.  Of that,  $50,000 was transferred to the Seller at the conclusion of the initial Due Diligence Period and a second $50,000 transferred to the City at the conclusion of the Review Period.

Community benefits include providing greater commercial and retail opportunities, providing for a larger retail tax base, and providing new job opportunities, particularly along the Fourth Street Corridor.  Due to the economic downturn, in addition to the delay in the development of the property, City staff projected that the Fourth Street portion of the transportation tax would not adequately meet the need to fund the Fourth Street Overpass debt service by the time this tax expires in 2020.  Staff employed a two prong strategy to mitigate that risk.  First, staff reissued the debt realizing an approximate $1.4 million dollar savings in interest expense.  Second, the staff continue to work toward the timely sale and development of the property so that the financial obligation will be met.  The City will realize a greater and more certain benefit by receiving incremental growth in both sales and property tax revenues.

Collaborate - Evergreen previously held a forum in February for public participation, and other public hearings and various Council actions have already occurred, as will others in the near future based on the above mentioned three actions following approval of this First Amendment.

1.  Approve the Second Amendment to the Purchase and Sale Agreement. 
2.  Modify the conditions and/or include additional conditions. 
3.  Deny the Second Amendment.