Title
Vestar Laveen Manager, LLC Development Agreement for Public Infrastructure Improvements
Description
This report requests the Economic Development and Equity Subcommittee’s recommendation for City Council approval to negotiate and enter into a Development Agreement, and any other agreements as necessary, with Vestar Laveen Manager, LLC, or its City-approved designee, for the installation of public infrastructure improvements to include Dobbins Road from the Arizona Department of Transportation (ADOT) improvements to 59th Avenue, and 59th Avenue from Dobbins Road to the southern boundary of the Vestar Laveen Manager, LLC’s proposed development.
THIS ITEM IS FOR CONSENT.
Report
Summary
Vestar Laveen Manager, LLC (Developer) is the owner of approximately 90 acres at the southwest corner of 59th Avenue and Dobbins Road (Site). As part of the first phase of development of the Site, the Developer proposes to construct a 375,000 square foot highly desirable vibrant town center on approximately 40 acres, which is designated as the Laveen Towne Center (Project). The Project will consist of a national major anchor tenant, smaller anchor retail tenants, an entertainment user, a community gathering space, and accompanying pads and shops for lease, as well as restoration and preservation of the Historic Hudson Farmhouse.
This area of Phoenix continues to be a high demand and high growth area for both new residential and employment uses. Although the area continues to expand, retail amenities continue to be in short supply and more options are needed to meet demand. This amenity-rich Project will not only serve residents and employees living and working in and around the South Mountain Technology Corridor and the community at large; but will also assist to alleviate the sales tax leakage Phoenix experiences as a result of the lack of retail amenities in the area. The Project is expected to add several hundred new jobs to the area over the next five years. To accommodate this growth, increased traffic, and the creation of the Project, additional public infrastructure improvements are required. Through a development agreement (DA), the Developer will construct the required public infrastructure improvements and the City will reimburse the Developer a maximum of $15 million (Reimbursement Cap) upon completion of construction, the City's acceptance of the improvements and the dedication of the public improvements to the City. The public infrastructure improvements (Improvements) are as follows:
- A permanent, full width street, as mandated by the standards of the Street Transportation and the Planning and Development Departments, to complete eastbound Dobbins Road from the ADOT improvements to 59th Avenue., to include but not limited to: curb, gutter, sidewalk, surveying, engineering and design, excavation, site work, completion of all travel lanes and center turn lane, street lighting, traffic controls, utility work and other related improvements (including hardscape and landscape) as required by the City.
- A permanent, full width street, as mandated by the standards of the Street Transportation and the Planning and Development Departments, to complete southbound 59th Avenue from Dobbins Road to the southern boundary of the Project. To include but not limited to: curb, gutter, sidewalk, surveying, engineering and design, excavation, site work, completion of all travel lanes and center median, street lighting, traffic controls, utility work and other related improvements (including hardscape and landscape) as required by the City.
- Restoration and preservation of the Historic Hudson Farmstead house.
- Developer will privately finance and construct the Improvements.
Developer must comply with Title 34 of the Arizona Revised Statutes in constructing the Improvements to qualify for reimbursement, and the specifics and cost of the Improvements must be pre-approved by the City in order to qualify for reimbursement.
Reimbursement terms are as follows:
- Reimbursement shall be paid on an annual basis, in arrears, from the following sources: Years 1 through 25: 100% of the City’s General Fund portion of the Transaction Privilege Taxes (TPT) collected and received by the City, as verified by the City, from the following categories: construction sales tax, retail sales tax, speculative builder tax and multi-family rental sales tax.
- The maximum reimbursement amount for the public infrastructure improvements, as they relate to the Project, will not exceed $15 million.
- Developer is required to restore the Historic Hudson Farmhouse, as mandated by Phoenix Historic Preservation Office as well as State of Arizona Historic Preservation Office requirements. In restoring and preserving the Historic Hudson Farmhouse located on the Site, the DA will not preclude Developer from seeking additional grants from the Phoenix Historic Preservation Commission or the State of Arizona Historic Preservation Commission.
- Reimbursement shall not exceed actual verifiable costs for the approved Improvements.
- The term shall begin upon commencement of construction of the first phase of the Improvements, as made evident by the issuance of required permits (Construction Commencement Date), and continue for a period of 25 years or upon the date Developer has received reimbursements totaling the Reimbursement Cap.
- Reimbursement will not begin until after the Developer completes the Improvements, and the City has accepted the Improvements.
- The development agreement and any other agreements as necessary will include other terms and conditions as deemed necessary by the City.
The Project is an important economic development opportunity for the Laveen area that will create several hundred new jobs over time and will provide much needed retail amenities for the community, while yielding significant financial and public benefits for the City of Phoenix.
Contract Term
If approved, the term will be for 25 years from the Construction Commencement Date of the Improvements or when reimbursements have reached the Reimbursement Cap.
Financial Impact
The maximum reimbursement amount will be $15 million. This does not include any historic preservation grant as reviewed and approved the Historic Preservation Commission and Historic Preservation section of the Planning and Development Department.
Location
Southwest corner, 59th Avenue and Dobbins Road
Council District: 7
Department
Responsible Department
This item is submitted by Deputy City Manager Ginger Spencer and the Community and Economic Development Department.