| AGENDA ITEM #: 12. DATE: 05/24/2021 AI #:275 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | APPROVE THE FIRST AMENDMENT TO THE 2020 DEVELOPMENT AGREEMENT FOR PHX 70 |
| STAFF PRESENTER(S): | Roric Massey, City Attorney |
SUMMARY
Council to consider approval of the First Amendment to the 2020 Development Agreement for PHX 70 with Microsoft Corporation which provides for building permits to be obtained for the second building on the property before certain recordings, dedications and off-site public infrastructure has been completed. Under the terms of this Amendment, Microsoft would be allowed to pull a permit for the second building of the project upon the recording of the final plat and the actual commencement of construction for roadway construction for Indian School Road adjacent to the property.
Recommendation
ADOPT RESOLUTION NO. 2021-2159 APPROVING THE FIRST AMENDMENT TO THE 2020 DEVELOPMENT AGREEMENT FOR PHX 70; DIRECTING THE CITY MANAGER TO EXECUTE THE FIRST AMENDMENT DOCUMENT; AUTHORIZING AND DIRECTING ACTIONS; AND PROVIDING FOR AN EFFECTIVE DATE. (Roric Massey, City Attorney)
FISCAL IMPACT
This First Amendment to the 2020 Development Agreement for PHX 70 does not create any new fiscal impact in terms of expenditures required of the City.
BACKGROUND AND PREVIOUS ACTIONS
Microsoft owns approximately 145 acres of real property within the City of Goodyear generally located south-east corner of Citrus Road and W Indian School Road, which Microsoft intends to develop under the name PHX 70.
In May of 2019, Microsoft and the City entered into a Development Agreement for PHX 70, the “2019 PHX 70 Development Agreement,” in which the City agreed to issue a building permit for the first building to be constructed within the Property, prior to the recordation of a final plat.
In April of 2020, a development agreement for PHX 70, referred to as the “2020 PHX 70 Development Agreement” was adopted and addressed certain requirements regarding the development of the Property, including requirements for the final plat for the Property, street right of way dedications, and infrastructure that was to be completed before any certificate of completion and/or certificate of occupancy would be issued for the first building being constructed on the Property, and before building permits would be issued for additional buildings to be constructed on the Property.
The 2020 PHX 70 Development Agreement provided that building permits would be issued for the first building before the final plat for the Property has been recorded, before the property interests needed for public infrastructure that is to be constructed pursuant to applicable Development Regulations is dedicated, before the completion of required off-site public infrastructure, and before the completion of other required on-site improvements.
In addition, the 2020 PHX 70 Development Agreement set forth limitations on building permits for additional buildings on the Property, including recordation of the final plat for the Property, dedication of require street rights of way and easements, completion of require public infrastructure and drainage facilities, payment of in lieu fees, completion of on site improvements, termination of APS easements, and satisfaction of Development Regulations for such permits.
In May of 2019, Microsoft and the City entered into a Development Agreement for PHX 70, the “2019 PHX 70 Development Agreement,” in which the City agreed to issue a building permit for the first building to be constructed within the Property, prior to the recordation of a final plat.
In April of 2020, a development agreement for PHX 70, referred to as the “2020 PHX 70 Development Agreement” was adopted and addressed certain requirements regarding the development of the Property, including requirements for the final plat for the Property, street right of way dedications, and infrastructure that was to be completed before any certificate of completion and/or certificate of occupancy would be issued for the first building being constructed on the Property, and before building permits would be issued for additional buildings to be constructed on the Property.
The 2020 PHX 70 Development Agreement provided that building permits would be issued for the first building before the final plat for the Property has been recorded, before the property interests needed for public infrastructure that is to be constructed pursuant to applicable Development Regulations is dedicated, before the completion of required off-site public infrastructure, and before the completion of other required on-site improvements.
In addition, the 2020 PHX 70 Development Agreement set forth limitations on building permits for additional buildings on the Property, including recordation of the final plat for the Property, dedication of require street rights of way and easements, completion of require public infrastructure and drainage facilities, payment of in lieu fees, completion of on site improvements, termination of APS easements, and satisfaction of Development Regulations for such permits.
STAFF ANALYSIS
Microsoft has continued to experience delays in recording a final plat and designing and constructing required infrastructure improvements because the right-of-way that is to be conveyed to the City, upon which public road improvements are to be constructed, is encumbered by the Maricopa Water District (MWD) easements that must be removed before the City can accept the dedications.
Microsoft is continuing to work with MWD to release the conflicting easements located in the areas that are to be dedicated to the City and for Microsoft to pay for the relocation of MWD’S existing facilities. Microsoft has deposited the relocation costs into an escrow account pursuant to the 2020 PHX 70 Development Agreement and the Improvements Escrow Agreement between Microsoft and the City.
Microsoft is seeking relief from the obligation in the 2020 PHX 70 Development Agreement that requires that a final plat for the Property be recorded and that all public infrastructure that is to be City owned and maintained and the dedication to the City of all required property interests needed for such public infrastructure be completed before a building permit can be issued for the second building on the Property. Under the terms of the Amendment, Microsoft would be allowed to pull permits and commence construction on the second building on the site upon the recording of the final plat and the actual commencement of construction on Indian School Road adjacent to the property.
The expedited development of the Property is in the best interests of the City, the City is willing to allow Microsoft to obtain a building permit before the final plat for the Property has been recorded, before the property interests needed for public infrastructure that is to be constructed pursuant to applicable Development Regulations is dedicated, before the completion of required off-site public infrastructure. The terms and conditions set forth in the 2020 PHX 70 Development Agreement and the proposed First Amendment to the 2020 Development Agreement for PHX 70, mitigate the risks to the City of allowing Microsoft to develop the Property pursuant to the terms and conditions outlined in these agreements.
The intent of this First Amendment is to amend the 2020 PHX 70 Development Agreement to provide for building permits to be obtained for the second building on the Property. Staff is recommending approval of this First Amendment to the 2020 Development Agreement for PHX 70.
Microsoft is continuing to work with MWD to release the conflicting easements located in the areas that are to be dedicated to the City and for Microsoft to pay for the relocation of MWD’S existing facilities. Microsoft has deposited the relocation costs into an escrow account pursuant to the 2020 PHX 70 Development Agreement and the Improvements Escrow Agreement between Microsoft and the City.
Microsoft is seeking relief from the obligation in the 2020 PHX 70 Development Agreement that requires that a final plat for the Property be recorded and that all public infrastructure that is to be City owned and maintained and the dedication to the City of all required property interests needed for such public infrastructure be completed before a building permit can be issued for the second building on the Property. Under the terms of the Amendment, Microsoft would be allowed to pull permits and commence construction on the second building on the site upon the recording of the final plat and the actual commencement of construction on Indian School Road adjacent to the property.
The expedited development of the Property is in the best interests of the City, the City is willing to allow Microsoft to obtain a building permit before the final plat for the Property has been recorded, before the property interests needed for public infrastructure that is to be constructed pursuant to applicable Development Regulations is dedicated, before the completion of required off-site public infrastructure. The terms and conditions set forth in the 2020 PHX 70 Development Agreement and the proposed First Amendment to the 2020 Development Agreement for PHX 70, mitigate the risks to the City of allowing Microsoft to develop the Property pursuant to the terms and conditions outlined in these agreements.
The intent of this First Amendment is to amend the 2020 PHX 70 Development Agreement to provide for building permits to be obtained for the second building on the Property. Staff is recommending approval of this First Amendment to the 2020 Development Agreement for PHX 70.