Consideration and Adoption of Resolution No. 2019-36:  A resolution authorizing the execution of a Development Agreement between McGrath Real Estate Partners, LLC and the City of Flagstaff related to the development of approximately 14.51 acres of real property  (APNs 104-13-002B and 104-03-005B) generally located at 825 and 829 E. Butler Avenue. (McGrath Development Agreement)

State law allows the City to enter into development agreements by resolution of the City Council. The McGrath Development Agreement will be between McGrath Real Estate Partners, LLC, and the City of Flagstaff. The proposed agreement governs the terms and conditions of the entitlements, on and off-site improvements, construction of a FUTS trail extension, transportation improvements, Affordable Housing, a Safety Plan, and phasing of residential and commercial portions of the project, which is located at 825 and 829 E. Butler Avenue. A Powerpoint presentation will be provided prior to the final agenda.

No financial impacts are associated with the development agreement.

There are no policy impacts affiliated with this development agreement.

Council Goals
Economic Development - Grow and strengthen a more equitable and resilient economy.
Affordable Housing - Support development and increase the inventory of public and private affordable housing for renters and home owners.

Team Flagstaff Goals
Strategic Priority #3: Foster a resilient and economically prosperous city.

Regional Plan
A complete analysis of the Regional Plan goals and policies can be found in the Planning & Zoning Commission Direct to Ordinance Zoning Map Amendment staff report dated May 28, 2019.

No, not on the development agreement.

1. Approve the McGrath Development Agreement as presented.
2. Approve the McGrath Development Agreement with additional, modified, or deleted terms.
3. Remand the McGrath Development Agreement back to staff for additional negotiations with McGrath Real Estate Partners.
4. Deny the McGrath Development Agreement.

McGrath Real Estate Partners, LLC, is requesting a zoning map amendment to rezone 14.51 acres of property from Light Industrial (LI) and Heavy Industrial (HI) to High Density Residential (HR) and Highway Commercial (HC) to facilitate the development of a multi-family residential and commercial project described in the Zoning Map Amendment staff summary. The Development Agreement helps to ensure that the development of the property complies with City standards for development and engineering improvements, Regional Plan goals and policies, and City Council goals. The City believes that development of the property pursuant to this agreement will result in planning, safety, and other benefits to the City and its residents.

The developer of this proposed project will be contributing to affordable housing by setting aside 10% of the units for income-qualified individuals and providing $500,000 to the Affordable Housing trust in order to help provide affordable housing through other projects. For all development agreement points, refer to the attached Development Agreement and the summary of deal points under Key Considerations in this report.

On May 10, 2019, the Inter-Division Staff (IDS) approved a revised site plan, a copy of which is attached to the Direct to Ordinance Zoning Map Amendment staff summary, for the proposed development subject to successfully obtaining a Direct to Ordinance Zoning Map Amendment. Should the Zoning Map Amendment be denied, the site plan submitted will no longer be approved.

Summary of McGrath Development Agreement Points:

• Establishes a maximum number of residential units and bedrooms and a minimum square foot area of commercial space.
• Stipulates site plan design requirements for the conceptual commercial site plan to ensure compliance with the Urban Activity Center as defined in the Regional Plan.
• Establishes developer obligations for on-site and off-site right-of-way and other infrastructure improvements to be constructed in connection with the Project. This includes a requirement for the developer to contribute $200,000 to the City for the cost of improvements to the Lone Tree Road Corridor.
• Developer agrees to construct a Flagstaff Urban Trail System connection.
• Developer agrees to provide 10% of the overall units count (34 out of 333 units) for income-restricted rental units, comply with an Affordability Plan, and contribute $500,000 to the City of Flagstaff's Housing Section.
• Developer agrees to participate in the City of Flagstaff Crime-Free Multi-Housing Program and will contribute $25,000 to the Flagstaff Police Department to offset some of the additional costs of providing service to the project.
• Developer agrees to contribute $10,000 to the Fire Department.
• Requires that two undisturbed open space areas on the site shall remain undeveloped and that existing Ponderosa pine trees within those areas be preserved.
• Developer agrees to work with the City's Sustainability Section to utilize best practices in diverting debris produced in the construction of the development and to facilitate recycling by the tenants.
• Provides a Phasing section to outline all improvement required to be completed prior to a Certificate of Occupancy being issued for a residential building or a commercial building.

Community benefits and considerations related to this request are addressed in more detail in the Planning & Zoning Commission Direct to Ordinance Zoning Map Amendment staff report dated May 28, 2019.

The developer conducted a neighborhood meeting on May 16, 2019, at the Aquaplex to discuss the revised proposed Zoning Map Amendment site plan with the surrounding community, as required by the Flagstaff Zoning Code. There have been no specific public meetings on the McGrath Development Agreement.