The proposed fourth amendment to the development agreement will include an increased commitment to the number of Affordable Units from 100 to 160 in blocks 1, 2, 9 or 13. (See Section 5.2 Original DA)  The developer proposes to be able to fulfill their obligation by way of rental, deed restriction, or Community Land Trust (CLT) units. 
o            100% AMI for Deed Restriction or CLT
o            60% AMI for Rental Units
 
In addition, the developer would like to request three other changes:

• Density Transfer – The density will be calculated by reviewing the overall Timber Sky project.  The density of the Timber Sky development can be transferred between development parcels regardless of zoning category.  No individual parcel can exceed maximum density for that zoning of that parcel and the overall density of the project cannot exceed the approved density for the Timber Sky development. (See section 5.1.3 – Original DA)
• Deletion of $1.6 Million Repayment Requirement for Failure to Provide Affordable Units in Phases 1-3 - Elimination of penalty for not developing affordable units before the 4th phase.  City will not review and/or approve final plat for final High Density development block (9 or 13) until 125 affordable units are constructed and occupied. (See Second Amendment to the Timber sky DA for repayment obligation) 
• Deletion of Advance Payment of Water Fees - 8.4.1./8.4.1.1/8.4.1.2 – Advance payment of water fees are no longer necessary. 

No materials were provided to support this discussion item.  A request from Vintage Partenrs will be required prior to consideration of the amendment. 

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.

The original development agreement included City obligations to reimburse the developer for upsizing and extending water and sewer infrastructure adjacent to and extending beyond the boundaries of the Subject Property.  Owner obligations included 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.

First Amendment: In the original development agreement the Owner agreed 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 first amendment had the Owner agreeing to replace this section of sewer with a combination of an 18", 21" and 24" diameter pipe as well as the extension of the 24" line in the Clay Avenue Wash.  These improvements were a planned City project and as a result, the City agreed to reimburse the Owner for the cost of the project.  The original development agreement also required all off-site sewer improvements completed prior to the issuance of the first building permit.  The City agreed that there is capacity in the current sewer system for 125 single-family dwelling units and the City agreed to issue permits for those units in advance of the completion of the above referenced sewer improvement.  Additional units may be permitted depending upon the completion of the sewer improvement plans.

Second Amendment: In August 2017, representatives from Vintage approached the City Manager with the concern that the increase in Engineering Fees would derail the Timber Sky project. Vintage estimated that the new Engineering Fees would add $1.6 million in costs to the project, which the developer could not sustain. Over the next few months, Staff worked with Vintage on a proposed Second Amendment to the Timber Sky Development Agreement that would waive or forgive the estimated $1.6 million in increased Engineering Fees. After a series of back-and-forth negotiations with Vintage, a proposed Second Amendment was finalized for Council consideration. An overview of the Second Amendment is provided below.

• Locked-in Fees: Engineering Fees and cost recovery schedule that were in place when Development Agreement was adopted by City Council will apply to the project for the term of the Development Agreement as an incentive for Vintage delivering one hundred (100) affordable housing units within the development.
• 75% Target for Affordable Units: Amendment establishes 75% target for sale of affordable housing units prior to plat recordation within Phase 4. If 75% of the affordable units have not been sold and transferred to the City’s Community Land Trust (CLT) prior to developer requesting plat approval for Phase 4, the City will withhold plat recordation within Phase 4 until the target is met, or until Vintage pays $16K for each undelivered affordable unit.
• Flexibility to go to 125% AMI: If the affordable units are not selling at 100% of area median income (AMI), the amendment allows for the Affordability Plan to be amended to adjust the AMI for qualified buyers to 125% of the AMI affordability level.
• Affordable Unit Delivery Requirements Unchanged: The Development Agreement still requires delivery of 100 affordable housing units.

Third Amendment: 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 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 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.