| AGENDA ITEM #: 10. DATE: 03/01/2021 CAR #: {ud_fi4} |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | DEVELOPMENT AGREEMENT FOR AT-RISK PERMITS FOR DEVELOPMENT OF CIVIC SQUARE |
| STAFF PRESENTER(S): | Sumeet Mohan, Director of Engineering |
OTHER PRESENTER(S):
Rich Montague, Construction Manager, Ryan Companies
SUMMARY:
The Development Agreement for At-Risk Permits for Development of Civic Square provides for the issuance of at-risk building foundation permits for a limited period of time for the construction of certain structures within the development known as Civic Square, which is located between McDowell Road and Monte Vista Drive and between 150th Drive and Bullard Wash.
Recommendation:
ADOPT RESOLUTION NO. 2021-2142 APPROVING THE DEVELOPMENT AGREEMENT FOR AT-RISK PERMITS FOR DEVELOPMENT OF CIVIC SQUARE; PROVIDING AUTHORIZATION AND DIRECTION TO TAKE ACTIONS AND EXECUTE DOCUMENTS NECESSARY TO CARRY OUT THE INTENT OF THE RESOLUTION AND DEVELOPMENT AGREEMENT AND PROVIDING FOR AN EFFECTIVE DATE . (Sumeet Mohan, Director of Engineering)
FISCAL IMPACT:
The only fiscal impact associated with this development agreement is the costs of the at-risk permits, which the city is responsible for under an existing development agreement.
BACKGROUND AND PREVIOUS ACTIONS:
On or about August 19, 2019, the city entered into a development agreement with Globe Land Investors LLC and Globe Corporation for the development known as Civic Square, which was recorded in the official records of Maricopa County at instrument 2019 0652583. The development agreement addressed the construction of a New City Hall, an Office Building, a Parking Garage, a Public Square, and utility infrastructure needed to serve the development, and included a construction schedule with commencement and completion deadlines.
STAFF ANALYSIS
Because of delays in obtaining required approvals from Maricopa County and from the company that will provide water and wastewater services to the property, the grading and drainage plans and building plans submitted to the city have not been approved. The city engineering department issued an at-risk grading permit allowing for the grading of the site based on the unapproved plans. The property owner and developer have asked that the city issue at-risk permits for the construction of foundations for the structures to be constructed under the existing development agreement.
Other than issuing at-risk grading permits, the city does not issue permits for work on a property until all required engineering plans and building plans have been approved and a final plat has been recorded. The reason for this is the risks and costs associated with having to re-do work that was done under an at-risk permit to comply with subsequently approved plans. It is one thing to have to re-grade a site that was graded under an at-risk grading permit, but quite another if a foundation had to be removed so that the site could be re-graded to comply with the final grading and drainage plans. Globe Land Investments and Globe Corporation understand these risks and believe they are far enough along that the risk of having to undertake substantial modifications when the final plans are approved is minimal.
Although Globe Land Investments and Globe Corporation are willing to take this risk, staff was not supportive of the request because under the existing development agreement, the city is responsible for the costs of constructing the New City Hall and Public Square. Staff was unwilling to create a situation that could increase the city’s costs for the New City Hall and Public Square. The proposed development agreement is intended to allow Globe Land Investments and Globe Corporation to obtain at-risk permits for the construction of building foundations while eliminating the risk of the city incurring additional costs for any corrective work that is required.
Under the terms of the development agreement, the city will issue at-risk building foundation permits for the New City Hall, the Public Square, the Garage and the Office Building for a period of 90 days after the effective date of the agreement. Globe Land Investments and Globe Corporation will be responsible, at their sole cost and expense, for completing any corrective action required so that the completed work complies with the approved grading and drainage plans and the approved building plans. In addition, Globe Land Investment and Globe Corporation are waiving all claims for reimbursements from the City under the existing development agreement for the cost of any corrective work that is required and are defending and holding the city harmless for all claims arising from or related to the issuance of the at-risk permits and indemnifying the city for all losses and damages resulting from such claims.
The only costs to the city related to the issuance of the at-risk permits are the costs of the permits, which the city is responsible for under the existing development agreement.
Because the proposed development agreement mitigates the risks and costs to the city associated with the issuance of at-risk building foundation permits, staff recommends the adoption of Resolution 2021-2142 approving and adopting the Development Agreement for At-Risk Permits for Development of Civic Square.
Other than issuing at-risk grading permits, the city does not issue permits for work on a property until all required engineering plans and building plans have been approved and a final plat has been recorded. The reason for this is the risks and costs associated with having to re-do work that was done under an at-risk permit to comply with subsequently approved plans. It is one thing to have to re-grade a site that was graded under an at-risk grading permit, but quite another if a foundation had to be removed so that the site could be re-graded to comply with the final grading and drainage plans. Globe Land Investments and Globe Corporation understand these risks and believe they are far enough along that the risk of having to undertake substantial modifications when the final plans are approved is minimal.
Although Globe Land Investments and Globe Corporation are willing to take this risk, staff was not supportive of the request because under the existing development agreement, the city is responsible for the costs of constructing the New City Hall and Public Square. Staff was unwilling to create a situation that could increase the city’s costs for the New City Hall and Public Square. The proposed development agreement is intended to allow Globe Land Investments and Globe Corporation to obtain at-risk permits for the construction of building foundations while eliminating the risk of the city incurring additional costs for any corrective work that is required.
Under the terms of the development agreement, the city will issue at-risk building foundation permits for the New City Hall, the Public Square, the Garage and the Office Building for a period of 90 days after the effective date of the agreement. Globe Land Investments and Globe Corporation will be responsible, at their sole cost and expense, for completing any corrective action required so that the completed work complies with the approved grading and drainage plans and the approved building plans. In addition, Globe Land Investment and Globe Corporation are waiving all claims for reimbursements from the City under the existing development agreement for the cost of any corrective work that is required and are defending and holding the city harmless for all claims arising from or related to the issuance of the at-risk permits and indemnifying the city for all losses and damages resulting from such claims.
The only costs to the city related to the issuance of the at-risk permits are the costs of the permits, which the city is responsible for under the existing development agreement.
Because the proposed development agreement mitigates the risks and costs to the city associated with the issuance of at-risk building foundation permits, staff recommends the adoption of Resolution 2021-2142 approving and adopting the Development Agreement for At-Risk Permits for Development of Civic Square.