This Amendment restructures the financial incentives and reimbursements from the original 2006 Development Agreement. Under the terms of this Amendment, the City will reimburse the Developer for the costs of certain public infrastructure improvements to support the development of the GSQ Regional Center. It is estimated the City will directly reimburse up to $15 million of infrastructure costs, and an additional $15 million of infrastructure costs, plus certain interest payments of up to $5 million through sales tax reimbursements. Additionally, should the Developer attract a preferred upscale retailer, entertainment user, or special grocer to the site, $1.7 million in permit and development fees the previous developer had prepaid toward the project, will be reinstated for use in the development of the GSQ Regional Center. |
The City of Goodyear and Westcor/Goodyear LLC (the “Developer”), first entered into the Development Agreement effective September 1, 2006, to provide for the planning and development of certain regional commercial and mixed-use development generally located northwest of McDowell Road and Bullard Avenue. The Developer and the City formed the McDowell Road Corridor Improvement District and the Developer then constructed approximately $43 million in roadway, infrastructure, and park improvements to Bullard Wash Park, to support the regional center and surrounding commercial development. The Developer then constructed the Market at Estrella Falls power center generally located at the intersection of McDowell Road and Pebble Creek Parkway. The Great Recession delayed the construction of the planned regional mall and on December 14, 2009, the City and Macerich/Westcor entered into the First Amendment to the Development Agreement to extend the time frames to meet certain milestones in the project development due to ongoing economic conditions. The Second Amendment to the Development Agreement was entered into by the parties on November 17, 2014, to redefine project milestones and provide for Phase I and Phase II Improvements for the project. The developer subsequently constructed the existing Harkins Theatre and developed a restaurant pad site for Cheddar’s Restaurant. The Second Amendment required that the Phase II improvements be completed no later than December 31, 2021, in order for certain incentives to remain in place. In 2021, Globe Land Investors, LLC (“Globe”), purchased the approximately 150-acre regional center site from Macerich and assumed all rights and obligations under the original Development Agreement and its Amendments. The Third Amendment was entered into in December 2021 and extended the time frame for the completion of certain improvements on the property until December 31, 2022, for both Globe and the City to engage in a comprehensive planning process to re-evaluate the development of the site. The parties are currently finalizing the amended planned area development re-zoning of the property and a major amendment to the development agreement for the site, but although close to finalizing both, will not complete the PAD or development agreement amendment by December 31, 2022. The Fourth Amendment was entered into on December 12, 2022 and extended the deadline for the completion of the Phase II Improvement until February 28, 2023. This Fifth Amendment recognizes that due to changes in the retail marketplace since the time the original 2006 Agreement was entered, the original agreements as to public participation and investment in this regional retail and mixed-use development no longer best utilize incentive tools toward the development of the project. This Fifth Amendment shifts the dated development model of the original 2006 Agreement to a new partnership that utilized public investment into the necessary public infrastructure needed to support a regional project of this nature. Under the terms of the proposed Fifth Amendment, the City will directly reimburse RG Land Partners LLC for the first $15 million of public infrastructure (including roadways, utilities, drainage, right-of-way at its appraised value, and landscaping), constructed to support the Regional Center. While there is flexibility in the phasing of infrastructure in the Agreement generally, the developer is required to begin construction of Goodyear Way no later than April 1, 2024, which will be the first significant construction project on the site. Following the construction expenditure of the first $15 million, the developer will receive an additional $15 million toward the cost of infrastructure reimbursed from 50% of sales taxes generated on the project at the conclusion of the current sales tax reimbursements from the original Agreement. The reimbursement will fund the cost of the public infrastructure constructed through the McDowell Road Improvement District which generally consisted of the Bullard Wash improvements, and street and traffic signal improvements to McDowell Road, Pebble Creek Parkway and Bullard Avenue. Additionally, 50% of construction sales taxes generated on the project from non-residential construction (residential construction integrated with commercial shall be eligible for reimbursement) shall also be applied to the infrastructure reimbursement to RG Land Partners. The Fifth Amendment further contains a waiver of 50% of the permit and plan review fees through December 31, 2027 as further incentive for early development of the regional center. Additionally, should the Developer attract a preferred upscale retailer, entertainment user, or specialty grocer of at least 30,000 square feet to the site, $1.7 million in permit and development fees that the previous developer had prepaid toward the project will be reinstated for use in the development of the GSQ Regional Center. While the Amendment still has an expiration date of December 31, 2055, which is consistent with the original expiration date of the Development Agreement, the Amendment stipulates that all sales tax and other reimbursements as outlined in the Amendment will expire 25 years after the effective date of the Amendment. |