Title
Authorization to Amend Development Agreement with PV Land SPE, LLC (Ordinance S-52031) - District 3
Description
Authorize the City Manager, or his designee, to amend City Contract 154095 with PV Land SPE, LLC (Developer), or its City-approved designee, to increase the proportion of Transaction Privilege Taxes (TPT) available to reimburse Developer for public improvements constructed as part of the project, and to provide dedicated wastewater capacity for the project. Further recommend approval for the City Treasurer to accept and the City Controller to disburse funds related to this request.
Report
Summary
The City and Developer entered into a development agreement (Agreement) in 2021 in order to facilitate the demolition and redevelopment of the former Paradise Valley Mall into a mixed-use development (Project). The Agreement allowed for reimbursement by the City of public improvements constructed by the Developer utilizing eligible Project-generated TPT.
Following the completion of demolition and commencement of construction in 2022, a new state law, Senate Bill 1131, was passed in 2023 prohibiting municipalities from collecting a residential rental tax, effective January 1, 2025. Reimbursement of the residential rental tax was forecasted over a period of 25 years under the Agreement and was part of the Developer’s financial assumptions as part of constructing the Project.
In 2024, Council authorized an amendment to allow the use of the restricted Non-General Fund share of TPT generated on-site to reimburse for public infrastructure constructed on the site. In 2025, Council authorized a second amendment to extend the term of the Agreement from 25 years to 30 years. The parties would like to increase the percentage of eligible TPT available to reimburse to Developer from 50 percent to 100 percent for the duration of the term of the Agreement.
As an added term to the Agreement, the City will reserve an additional average daily flow of 45,000 gallons per day of wastewater capacity to provide for the full build-out of the Project, which is equivalent to an additional 250 multifamily dwelling units. Should additional wastewater capacity be needed in the future, City and Developer will work together to identify the capacity needed.
All other terms and conditions of the Agreements will remain in full force and effect.
Financial Impact
Project-generated TPT is only available for actual public infrastructure and amenities completed by the Developer and accepted by the City during the 30-year term.
Concurrence/Previous Council Action
On February 17, 2021, City Council approved Contract 154095 (Ordinance S-47323).
On June 26, 2024, City Council approved an amendment authorizing additional Non-General Fund TPT as reimbursable (Ordinance S-51125).
On March 5, 2025, City Council approved an amendment authorizing extending the term of the Agreement to 30-years (Ordinance S-51714).
Location
4500 - 4610 E. Cactus Road
Council District: 3
Department
Responsible Department
This item is submitted by Deputy City Manager John Chan and the Community and Economic Development Department.