Discussion on possible directions to staff on any and all matters regarding a proposed Development Agreement between the City of San Luis, Arizona, Von Verde Partners LLC, Somerton School District No. 11, and Yuma Union High School District No. 70 for the development of property located between Avenue E and Avenue D and between County 24th Street and County 24 1/2 Street.  (Jose A. Guzman, Director of Development Services)

This is a request by Vega & Vega Engineering, PLC, on behalf of Von Verde Partners LLC, Somerton School District No. 11, and Yuma Union High School No. 70 for the development of the north portion of the Preliminary Plat approved for the development known as Orchidea Park. On June 20, 2023, the Planning and Zoning Commission approved Subdivision Case No. 2023-0194P, a preliminary plat for Orchidea Park Subdivision, covering land between Avenue E and Avenue D, and between County 24th Street and County 24 ¾ Street.

At the time, staff recommended a condition requiring a development agreement to establish phasing and the timing of required improvements for the development. The developer's attorney has been collaborating with the city attorney and staff to finalize this agreement. The current proposed agreement applies only to the north portion of the approved preliminary plat, covering land north of County 24 ½ Street. A separate development agreement will be required for the remaining portion in the future.

The developer has since applied for final plats for Orchidea Park Townhomes Phase 1 and Orchidea Park Phase 1 Subdivisions. The Planning and Zoning Commission recommended approval of these final plats with the condition that they not be presented to City Council until a development agreement is approved. This agreement must outline the phasing of the development, including, but not limited to, right-of-way dedication, traffic studies, traffic light contributions, and a schedule of improvements. The final plats, referenced as Parcel 1 and Parcel 2 in the agreement, will be presented to Council upon the approval of the development agreement.

PROPERTY HISTORY AND NONCOMPLIANCE:
This property was annexed into the City in 2011 as part of Annexation Case No. 2010-01. After annexation, several parcels were created through deeds without City approval, resulting in noncompliance with City regulations. The proposed development agreement seeks to address these violations and bring the properties into compliance, either through the subdivision process or via lot splits with deferred improvements.

UNAUTHORIZED LOT SPLITS:
The most recent unauthorized lot split occurred in 2020, creating a 40-acre parcel at the southwest corner of County 24th Street and Avenue D ½ Street. This parcel was donated to Somerton School District for an elementary school. However, the current school site is noncompliant with City regulations, as it is located along an arterial road. Consequently, the school must be relocated.

The land division was performed by deed without notifying the City or adhering to the lot split provisions outlined in the City’s Subdivision Regulations. Section 7.1 of these regulations states that any division of land into three or fewer parts may be processed as a lot split, subject to approval by the City Planning Director and Public Works Director.

The property owner has expressed a willingness to bring the split into compliance and relocate the school parcel. However, right-of-way dedications, utility extensions, and off-site improvements are necessary, requiring a subdivision process. The owner proposes deferring right-of-way dedication and these improvements until a building permit is issued.

Another deed-created parcel, an 80-acre lot located north of County 24 ½ Street between Avenue E and Avenue D ½ Street, was sold to Yuma Union High School District. Both school districts are therefore integral to the development agreement.

PREVIOUS UNAUTHORIZED LOT SPLITS:
Other unauthorized lot splits in the area have occurred without City approval. The City’s practice has been to collaborate with property owners to bring unauthorized lot splits into compliance, avoiding legal actions when possible. In one case, after notification, the property owner submitted a lot split application and successfully brought the violation into compliance. In another instance, an owner refused to comply, and the City pursued an eminent domain action to acquire necessary right-of-way that would have otherwise been dedicated through the lot split or subdivision process.

DEFERRAL OF IMPROVEMENTS IN PREVIOUS CASES:
The City has historically addressed similar issues by including language on plats or agreements that restricts building permits until necessary improvements, such as utility extensions and off-site improvements, are completed. While this approach has been development-friendly, allowing projects to move forward while deferring improvements, challenges arise when land is sold after approval. New owners are often unaware of or unwilling to meet the required improvements, complicating compliance.

PROPOSED DEVELOPMENT AGREEMENT:
The current proposal includes a development agreement for the entire Orchidea Park development, covering land owned by the Yuma Union High School District and Somerton School District (the Von Verde Development Agreement). This agreement is proposed to outline phased development for the area between County 24th and County 25th Streets and Avenues D and C. It also seeks to legalize property lines created by previous deeds through phased compliance.

The latest draft of the development agreement, along with comments from the Assistant City Attorney dated November 13, 2024, is attached. Staff is awaiting the developer’s attorney’s response to these comments. While staff’s position remains focused on protecting the City and ensuring consistency, Council may choose to impose additional conditions or amend the terms of the agreement.

STAFF RECOMMENDATION:
To maintain consistency with prior agreements, staff recommends including conditions similar to those imposed on previous developments. The owner, however, has raised concerns about language granting the City authority to impose additional requirements. The owner prefers specific, fixed requirements. Discussions between the developer’s attorney and the City Attorney’s office are ongoing.

This item is presented to Council to provide an opportunity for discussion between staff and the applicant.