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AGENDA RECOMMENDATION |
Consent Calendar 6.F.
City Council Regular Meeting
- Meeting Date:
- 07/27/2026
Agenda Item:
Resolution authorizing City Manager to execute First Amendment to Development Agreement (Axis).
Recommendation/Action(s):
Adoption of the attached resolution.
Summary:
At the July 24, 2023, City Council meeting, a resolution establishing Development District No. 47 and Tax Increment District No. 47-1 was approved, which also authorized the City Manager to enter into a Development Agreement with the Developer for the Axis project. The Development Agreement provided for the demolition of a structurally substandard building and development of a mixed-use building including 72 apartments, 75 storage units and 9,650 sq. ft. of commercial space.
Construction of the building as originally planned has been completed, but due to changes in the market conditions, the Developer has been unable to lease the commercial space on the ground floor.
At the March 9, 2026, City Council meeting, a resolution was approved granting a Conditional Use Permit to allow for converting the planned commercial spaces on the ground floor into thirteen residential apartment units.
Attached is a First Amendment to the Development Agreement that authorizes the conversion of the commercial space to additional residential apartment units. The Amendment also delays the dates for payment of the TIF Note by one year and allows the City to retain all the increment it receives in 2026 to reimburse itself for the City Project costs for the construction of Hiniker Parkway. The Developer cannot receive increment until after the TIF Note is issued. The TIF Note can be issued after the conversion of the commercial space to additional residential apartments is completed. Splitting the Tax Increment between the City and the Developer would start in 2027. Additionally, since all the improvements will now be residential, the project qualifies for an exemption from business subsidy requirements. The Amendment was prepared by the City attorney, who recommended delaying the dates for the payment of the TIF Note and having the City retain the increment in 2026.
Construction of the building as originally planned has been completed, but due to changes in the market conditions, the Developer has been unable to lease the commercial space on the ground floor.
At the March 9, 2026, City Council meeting, a resolution was approved granting a Conditional Use Permit to allow for converting the planned commercial spaces on the ground floor into thirteen residential apartment units.
Attached is a First Amendment to the Development Agreement that authorizes the conversion of the commercial space to additional residential apartment units. The Amendment also delays the dates for payment of the TIF Note by one year and allows the City to retain all the increment it receives in 2026 to reimburse itself for the City Project costs for the construction of Hiniker Parkway. The Developer cannot receive increment until after the TIF Note is issued. The TIF Note can be issued after the conversion of the commercial space to additional residential apartments is completed. Splitting the Tax Increment between the City and the Developer would start in 2027. Additionally, since all the improvements will now be residential, the project qualifies for an exemption from business subsidy requirements. The Amendment was prepared by the City attorney, who recommended delaying the dates for the payment of the TIF Note and having the City retain the increment in 2026.