Title
(CONTINUED FROM JUNE 1, 2022) - Amend Redevelopment and Purchase Agreement with Metrowest Development, LLC (Ordinance S-48700)
Description
Request to authorize the City Manager, or his designee, to amend the Redevelopment and Purchase Agreement, City Contract 145544-0 (Agreement) with Metrowest Development, LLC (Developer) to modify performance benchmarks as needed to allow for completion of three city-owned parcels located between 2nd and 3rd avenues, on the north side of McKinley Street in downtown Phoenix. There is no expense impact as a result of this action.
Report
Summary
In June 2015, the Community and Economic Development Department issued a Request for Proposals (RFP) for the disposition and redevelopment of three Neighborhood Services Department-owned parcels located between 2nd and 3rd avenues, on the north side of McKinley Street (Site). On July 1, 2016, the City Council authorized the City Manager to enter into the Agreement for the sale and redevelopment of the Site through Ordinance S-42761 (Ordinance) and in August 2017 the Developer opened escrow for the transfer of the two parcels. In May 2017, the City Council authorized modifications to the Agreement to allow additional time to complete negotiations, and further granted an extension in October 2018 to modify the performance benchmarks of the Agreement.
Developer was the successful proposer and was awarded the contract. The Developer chose to develop the site in two phases: the West Phase with approximately 94 market-rate units in a five-story podium apartment building with below grade parking, and the East Parcel with six for sale three-story attached single-family homes. Staff finalized the disposition of the West Phase of the project in November 2018 through conveyance of the Special Warranty Deed and the Developer completed construction in late 2020.
On August 25, 2021, the City Council authorized modifications to the Agreement to allow additional time to commence construction on the East Phase property due to significant delays and interruptions from the COVID-19 pandemic, as well as extensive utility work related to the West Phase that prevented construction of the six single-family attached homes. This amendment extended the commencement of construction date to Feb. 25, 2022. With utility work underway and the approval of the first building permits, construction has now commenced on the project.
The Developer's Escrow Officer has since moved to a new company and transfer of the escrow money for this project to the new title agency is required. The new title agency also requires updates to the insurance terms for the project. To allow additional time to complete the escrow transfer and the necessary insurance updates, the Developer has requested an extension to complete the purchase of the site, and for the completion of construction for the East Phase. This amendment will extend the deadline for completion of site purchase to six months after City Council Action, and an additional two years from the transfer of the property action to complete construction. Metrowest is an established local developer with approved building permits for the attached single-family homes and is ready to continue with construction upon the modification of the performance benchmarks.
Financial Impact
There is no expense impact as a result of this action.
Concurrence/Previous City Council Action
The City Council approved Ordinance S-42761 on July 1, 2016.
Location
808 N. 2nd Ave. and 801 N. 3rd Ave.
Council District: 7
Department
Responsible Department
This item is submitted by Deputy City Managers Ginger Spencer and Alan Stephenson and the Community and Economic Development and Neighborhood Services departments.