Consideration and Adoption of Resolution No. 2025-05:  A resolution of the Flagstaff City Council, authorizing the execution of the Second Amendment to the Mill Town Development Agreement between Vintage Partners, LLC and the City of Flagstaff related to the development of approximately 13 acres of real property generally located at 1801 S Milton Road.
 

1. Read Resolution No. 2025-05 by title only
2. City Clerk reads Resolution No. 2025-05 by title only (if approved above)
3. Adopt Resolution No. 2025-05

State law allows the City to enter into development agreements by resolution of the City Council.  The Second Amendment to the Mill Town Development Agreement will be between Vintage Partners, LLC and the City of Flagstaff.  The development agreement amendment governs the terms and conditions of the entitlements and clarifies which version of the Zoning Code [Title 10 of the Flagstaff City Code] will be used for future development on the site if it is not developed in accordance with the current approved site plan.  If approved, staff will apply the version of the Zoning Code in effect on May 5, 2017 to all new development applications submitted through December 13, 2027, however current standards for outdoor lighting will apply. The proposed Mill Town project consists of a total of 13 acres at 1801 South Milton Road.

There are no financial impacts associated with this amendment to the Mill Town Development Agreement. 

There are no policy impacts affiliated with this amendment to the Development Agreement. 

The City Council approved a Zoning Map Amendment, Preliminary Plat and Development Agreement for the Mill Town project, as part of a public-private-partnership (P3), on April 17, 2018.  The P3 project was formalized through a Pre-Development Agreement between Vintage, the City, and the Arizona Department of Transportation in March 2015.  The First Amendment to the Development Agreement was approved on October 19, 2021 and recorded on October 22, 2021. 

1. Approve the Second Amendment of the Mill Town Development Agreement as presented.
2. Approve the Second  Amendment of the Mill Town Development Agreement with additional, modified, or deleted terms.
3. Remand the Second Amendment of the Mill Town Development Agreement back to staff for additional negotiations with Vintage Partners.
4. Deny the Second Amendment of the Mill Town Development Agreement.

On April 17, 2018, the Flagstaff City Council approved the rezoning of approximately 18 acres of land owned by Vintage Partners, LLC (“Vintage”) generally located at 1801 S. Milton Road and commonly referred to as the Mill Town property. The rezoning was part of a public private partnership (P3) between the City, Vintage, and the Arizona Department of Transportation (ADOT) that relocated the Harkins theater to the east side of Flagstaff, relocated the local ADOT offices to the old Harkins site, combined the delivery of City transportation improvements to Beulah and University with improvements required for Vintage's project mitigation (including the Milton pedestrian underpass), and opened the Mill Town property for residential and commercial development by Vintage. The rezoning ordinance contains multiple conditions, one of which is that the Mill Town property must be developed in accordance with the approved site plan (PZ-16-00239-01) that was presented to Council at the time the rezoning was approved. This site plan contained 3 commercial pads and a multi-family building that contained 340 units and 1,221 bedrooms, as well as an associated parking garage.  
 
As part of the rezoning of the Mill Town property, the City and Vintage entered into a development agreement on June 4, 2018, to facilitate development of the Mill Town property and related transportation improvements. Understanding the complexity of the P3 project and the amount of time to develop a project like Mill Town, the City agreed that the development rights granted by the rezoning ordinance would be vested for five years, and that development of Vintage’s approved site plan would be governed by the Zoning Code in existence as of the effective date of the development agreement. Such provisions allowing a developer to rely on a specific version of the Zoning Code for a period of time until the property is ultimately developed are not uncommon in development agreements, as they provide certainty for the developer and recognize the development process can take years.
 
Unfortunately, development of the Mill Town property stalled after the ADOT facility was moved. With development of the Mill Town property on hold, the transportation improvements that Vintage was required to deliver pursuant to the development agreement were also on hold.
 
On October 22, 2021, the City and Vintage entered into the first amendment to the Mill Town development agreement to, among other things, (1) allow the City to assume responsibility for administering design and construction of both the City and Vintage transportation improvements, (2) describe how Vintage will reimburse the City for the cost of its required transportation improvements (including the pedestrian underpass), and (3) extend Vintage’s right to develop the Mill Town property in accordance with the rezoning ordinance and approved site plan for an additional two years (now seven total).
 
In 2024, Vintage informed City planning staff that it had found a partner to develop the residential component of the Mill Town property (apartment complex), but the new partner wanted to amend the approved site plan beyond what would be covered under a Minor Modification to Site Plan Approval which would allow for changes up to approximately 10% from what was initially approved. However, because the rezoning was conditioned on development in accordance with the original site plan, Vintage was informed that it would need to request an amendment to the rezoning ordinance and a second amendment to the development agreement. In addition, the two-year extension of the right to develop effectuated by the first amendment to the development agreement was specific to the approved site plan, which was now going to be amended. Accordingly, City staff, working with Vintage, drafted the proposed second amendment to the Mill Town development agreement to clarify and confirm that Vintage could develop an amended site plan—that must be approved by Council—under the same Zoning Code that was initially utilized for the project.     
 
The Zoning Code that the original site plan was developed under did not contain code regulations for High Occupancy Housing (HOH). After the initial approval, the City adopted the HOH Specific Plan and subsequent Zoning Code updates. There are a few differences between the pre- and post-HOH zoning code. The HOH Specific to Use section (10-40.60.170) identifies general requirements for HOH projects. A few key items are that a minimum of 20 percent of the bedrooms shall be contained in studio and/or one-bedroom dwelling units and that a maximum of 30% of bedrooms are contained in dwelling units with four bedrooms or more. Additionally, there is a requirement that the maximum building footprint of the development shall be equal to, or less than, 22,000 square feet. 
 
With the HOH Zoning Code updates, there was also a new parking calculation provided for HOH projects. Previously, a project like this would utilize the multi-family parking calculations. That would require the following parking requirements:

                              i. Studio requires 1.25 spaces per unit
                              ii. 1 bedroom requires 1.5 spaces per unit
                              iii. 2+ bedroom requires 2 spaces per unit
                              iv. Guest parking is .25 spaces for each 2+ bedroom unit

The parking requirements for an HOH development are as follows:

                              i. 1-75 bedrooms is 1 space per bedroom
                              ii. 76-325 bedrooms is .90 space per bedroom
                              iii. 326-650 is .80 space per bedroom
                              iv. 650+ is .70 space per bedroom
 
It is important to note that there are no guest parking space requirements for HOH projects.
 
Additionally, although Vintage is requesting to develop using a prior version of the Zoning Code, it has committed to following the current zoning regulations for outdoor lighting to be up to date on current Dark Sky lighting regulations. Eventually, Vintage will need to submit for an Outdoor Lighting Permit which will be reviewed against the current code regulations at the time of submittal.
 
By approving this Development Agreement amendment, Council will only be allowing current and future submittals to be reviewed against the requested Zoning Code. Since this project was approved as a Direct to Ordinance Zoning Map Amendment, the new site plan will need to go through another rezoning process and be approved by Council.  Before the site plan comes back to Council for review, it will be reviewed by staff to determine compliance with City Codes and Regional Plan Conformance.  The site plan will need to be approved by all relevant departments during the Interdepartmental Staff review meetings. Once the site plan has been administratively approved, it will then go through the neighborhood meeting and public hearing process requirements that are required for all Zoning Map Amendments.  The project will then return to Council for its review and approval or denial.

 

Livable Community - Achieve a well-maintained community through comprehensive and equitable code compliance, and development that is compatible with community values. 
Environmental Stewardship - Implement sustainable building practices, enhance waste diversion programs, alternative energy programs and multi-modal transportation options. 
Environmental Stewardship - Strengthen Flagtaff's resilience to climate change impacts on built, natural, economic, health, and social systems. 

Goal E&C.5. Preserve dark skies as an unspoiled natural resource, basis for an important economic sector, and core element of community character. 
Policy CC.4.3. Employ design solutions that balance the interface of the natural and built environments, with the most urbanized core activity areas being the most built, and the most rural areas being the most natural. 
Policy L.U.1.6 Establish greater flexibility in development standards and processes to assist developers in overcoming challenges posed by redevelopment and infill sites. 
Policy LU.3.1.Within the urban, suburban, and rural context, use neighborhoods, activity centers, corridors, public spaces, and connectivity as the structural framework for development.

DD - 1: Encourage vibrancy, appropriate density, and attainability in existing neighborhoods, so that more residents are within walking distance of their daily needs. 
DD - 2: Create inclusive networks for walking and biking that are continuous, attractive, safe, comprehensive, and convenient for people of all ages. 

Create 4.8 - Explore allowing additional flexibility for homeowners and landlords to increase density.