Consideration and Approval of Contract:  Reinstatement of, and First Amendment to, P3 Pre-development Agreement between the City of Flagstaff, Arizona Department of Transportation and Vintage Partners, LLC.  (Initial Agreement for the extension of Beulah Blvd., realignment of University Ave., and relocation of ADOT facilities).

P3 is a public/private partnership between the City of Flagstaff, Arizona Department of Transportation and Vintage Partners, LLC. The resulting project will relocate the existing ADOT facilities on Milton Road to the existing Harkins Theater site on Woodlands Village Boulevard, enable the completion of Beulah Boulevard to University Avenue and the realignment of University Avenue, and will include the redevelopment of the existing ADOT property. 

The pre-development agreement provides an overview of the various transactions, authorizes Vintage Partners to prepare and submit required materials for a Site Plan and Rezoning application for ADOT and City property located between Milton Parkway and Beulah Avenue, provides an anticipated schedule, requires an implementation agreement between ADOT and Vintage Partners, provides the term of the agreement, provides remedies for disputes and includes miscellaneous provisions required for an ADOT P3 project.

On December 2, 2014 the City Council approved the P3 Pre-development Agreement between the City of Flagstaff, Arizona Department of Transportation and Vintage Partners, LLC, which is included with this staff summary. (Initial Agreement for the extension of Beulah Blvd., realignment of University Ave., and relocation of ADOT facilities). 

While ADOT and Vintage Partners continued to work through details related to subsequent agreement referenced in the Pre-Development Agreement, the Pre-Development Agreement expired on July 31, 2016.  Aside from timelines for the processing of site plan review and zoning applications the Pre-Development Agreement is the same.  Those timelines have been updated in the Reinstatement of, and First Amendment to the Pre-Development Agreement.  ADOT and Vintage have executed the Reinstatement of, and First Amendment to the Pre-Development Agreement.

The City purchased the 9.23 acre Fresquez property in 2005 and will complete the University/Beulah roadway improvements using voter approved Transportation bond funds. No additional funding is anticipated at this time.

The City purchased the 9.23 acre Fresquez property in 2005 for the purpose of completing the University and Beulah roadway improvements.

On December 2, 2014 the City Council approved the P3 Pre-development Agreement between the City of Flagstaff, Arizona Department of Transportation and Vintage Partners, LLC, which is included with this staff summary. (Initial Agreement for the extension of Beulah Blvd., realignment of University Ave., and relocation of ADOT facilities). 

Staff recommends City Council approve the Reinstatement of, and First Amendment to the Pre-Development Agreement which is included with this staff summary.

1. Approve the Reinstatement of, and First Amendment to, P3 Pre-Development Agreement.
2. Work independently with ADOT to acquire the necessary right-of-way and relocate their facilities.

In 2005 the City purchased 9.23 acres located west of the existing ADOT facility at 1801 S. Milton Road with the intention of completing Beulah Boulevard to University Avenue and to realign the west leg of University Avenue to connect at the existing traffic signal of Milton Road and east University.  City staff completed a preliminary realignment plan which is attached to this report and programmed $7.4 million in the FY2015-2019 Capital Improvement Plan for design and construction.  Both the acquisition and new roadways are funded by the Transportation Tax.  The State of Arizona allows the Arizona Department of Transportation to participate in public/private partnerships (P3) that provide a benefit to the ADOT operations and the public interest.  From this the P3 idea for this location was formed and ADOT issued a Request for Proposals for the redevelopment of the site to include the proposed roadway improvements.  The successful proposal needed to include a new location ready for occupancy for the ADOT facility.

The selection committee included representatives from the City and ADOT and the RFP resulted in 4 proposals.  The successful proposal was prepared by Vintage Partners, LLC.  The proposal is to relocate ADOT to the existing Harkins Theater on Woodlands Village Boulevard and redevelop the existing site with a mixed use project that will dedicate the right-of-way required to construct the University/Beulah improvements.  Multiple transactions are required to accomplish the project.  The City will deed the 9.23 acre Fresquez parcel to ADOT in exchange for the ADOT land needed to complete the University realignment.  ADOT will deed their 6.74 acres and the 9.23 acre Fresquez parcel (less the ROW needed for University and Beulah) to Vintage Partners in exchange for their new facility on Woodlands Village Boulevard.  Vintage Partners will complete the necessary remodel and other site improvements required for ADOT to relocate.  Although it is not included in the pre-development agreement, Vintage Partners has an agreement with Harkins Theater relating to the construction of a new theater on the east side of town between the Flagstaff Mall and Marketplace, which must be completed and occupied before the current Harkins site is available to begin the remodel.               

Staff supports moving forward with the P3 project.  While the capital funding for the roadway improvement has been programmed, obtaining the land needed for ROW and relocating ADOT would be significant expense to the project.

The Beulah Boulevard extension and University Avenue realignment have been and continue to be programmed in the current FY 2015-2019 Capital Transportation Plan. 

Although the primary benefit of the P3 project for the City is the completion of the University/Beulah roadway improvements, the redevelopment of the ADOT site with a mixed use project and a new larger theater on the east side of town with have an economic benefit to the community.  The University/Beulah roadway improvement has been identified as an important project to incrementally address the existing congestion problem on Milton Road. 

Inform - While the public has not had a formal role in the proposed P3 projects, the redevelopment of the ADOT site will require a rezoning application which will include the required public notifications, neighborhood meeting and public hearings.
Involve - Public participation is included in the rezoning process.  
Collaborate - P3 is certainly a collaboration between the State, City and a private company.  As the process continues there will be opportunity for the public to provide direct input on the proposed redevelopment of the ADOT site.
Empower - the voters of Flagstaff approved the 2000 Transportation Tax which funded the Fresquez acquisition and the $7.4 million programmed in the Capital program for the University/Beulah roadway improvement.

The primary reason for City participation in P3 is to see the University/Beulah roadway improvements completed. Acquisition of ADOT property is necessary to realign University Avenue. Staff believes the P3 is the best option to complete the roadway improvement. The alternative is to work directly with ADOT to acquire the necessary land for public right-of-way. However, the roadway improvements cannot be completed without relocating the ADOT facilities which is why staff believes the P3 is the best way to accomplish the transportation improvement.