Vintage Partners has approached the City with a proposal to amend the Timber Sky Annexation and Development Agreement in regard to Densities, Workforce Housing, and Water Fees.

Timber Sky is a master planned development including a mixture of high-density, medium-density, and single-family residential units combined with commercial service and open space on 197.58 acres.  The site is situated north and south between Route 66 and Interstate-40 and east and west between Woody Mountain Road and Flagstaff Ranch Road.  An Annexation and a Zoning Map Amendment were approved for this project in 2016.  A preliminary block plat was also included with these applications that will divide the total acreage into 15 separate blocks with an internal minor collector roadway in four phases.  Each block is then subdivided further (except those designated as open space or community center) into individual lots that will be sold to homeowners.  A final block plat has been approved and recorded for the first three phases of the Timber Sky development.  However, only three blocks within the first phase have been subdivided into a total of 159 units.

A complete history of the Timber Sky Development Agreement was provided in the April 12th City Council Work Session staff report.

Vintage Partners has provided staff with a draft amendment to the Development Agreement, which is attached.  Staff is attempting to negotiate revised terms and discussions are underway to address some issues identified by staff.  Council will be updated during the work session if agreement is reached.  The main points of amendment and concerns staff has identified are set forth below.  

Amendment Request
The main points of the amendment are as follows:

• Section 5.1.3 Densities: This new addition allows the density of the project to be averaged across the project regardless of zoning category. This provision will not increase the overall maximum density for the project, nor will it permit the density of any individual development parcel to exceed the maximum density for that parcel.
• Section 5.2 Workforce Housing: This section of the original Development Agreement–requiring 100 residential ownership units–will be replaced with the following provisions:
  • Affordable Rental Units: First, Block One will be sold to Roers Flagstaff Apartment Owners, LLC for the development of affordable rentals. Block One will be deed restricted, requiring the development of at least two hundred (200) affordable residential units that will be rented to lessees with an average household income of 60% or less of the Area Median Income (AMI) for a period of no less than 30 years. Site Plan application must be approved with twelve (12) months.  The Vintage obligation is met once Roers (or other developer) is under construction.
  •  Affordable Ownership Units: Vintage will donate no less than three (3) acres to Habitat for Humanity to develop no less than 40 homes for permanent affordability through the City Community Land Trust program.  The specific land and proposed layout will be attached to the proposed Development Agreement Amendment.  The units will be part of the Timber Sky Homeowners Association and therefore subject to the same design standards in order to maintain consistency in the community.  The property will revert to the City of Flagstaff if development is not complete within five (5) years of Agreement.  The City and Habitat shall enter into an agreement regarding the specifics of the housing development. 
  • Timber Sky Phase 4 will not record a final plat unless the Roers project is under construction and the land described above has been transferred to Habitat.
• Sections 8.4.1.1 and 8.4.1.2 Water Fees: This amendment was recommended by staff as a cleanup measure.  All required capacity fees will be paid in the ordinary course.

Staff Concerns with Amendment as Proposed

Section 5.2 Workforce Housing: 

• Staff recommends the amendment include the following commitments in regard to the Affordable Ownership Units: 
  • Vintage Partners will stub infrastructure to the Habitat parcel, including road and utilities.
  • At the time of the new subdivision plat for Block 2, Vintage Partners will grant to the Habitat parcel the rights for cross parcel detention and utility access.  (Without this, the Habitat parcel cannot develop as proposed.) 
  • The 40 units on the Habitat parcel will be starter homes in alignment with Habitat's existing starter home program, roughly 400 square feet in total size, and able to house up to a family size of three.   

Additional Concerns

• The provision stating that less than 200 rental units will satisfy the agreement if City Code requirements do not allow for 200 rental units is confusing.  City Code requirements will never prohibit 200 units on the parcel identified, but they could increase the cost of development or alter the design.  
• Grading is an insufficient trigger to ensure development of the Roers parcel.
• The draft incorrectly states that Block 2 will need a replat.  The City does not have a replat process.  In actuality, Vintage Partners will need a new subdivision plat. 
• Although the agreement largely revolves around the obligations of Roers and Habitat, neither entity is a party to the agreement.  Staff recommends that Roers and Habitat be included as signatories on the Development Agreement.