Title
Authorization to Amend City Contract 147086, the West Fillmore Redevelopment and Purchase Agreement with High Street Fillmore, LLC. and High Street Fillmore Phase 2, LLC, to Modify the Performance Timeline (Ordinance S-52760) - District 7
Description
Request to authorize the City Manager, or his designee, to amend City Contract 147086, the West Fillmore Redevelopment and Purchase Agreement (Agreement) with High Street Fillmore, LLC and High Street Fillmore Phase 2, LLC (Developer), to modify the performance timeline for Phase 2 of the High Street Fillmore project.
Report
Summary
On March 20, 2018, the City entered into the Agreement with High Street Fillmore, LLC and High Street Fillmore Phase 2, LLC for the sale of multiple City-owned parcels in downtown Phoenix for a mixed-use project to be developed in multiple phases. Phase 1 was completed in 2022 with 330 residential units, approximately 10,000 square feet (SF) of retail, and completion of the Taylor Street Paseo (4th Avenue to 6th Avenue). Three future phases, known as Lot 4, Lot 5 East, and Lot 5 West, are currently in the design and permitting phases. Phase 2, the subject of this request, will include 330 residential units and an additional approximately 10,000 SF of additional retail. The Agreement currently requires the Developer to commence construction of Phase 2 by February 7, 2026. Due to the current state of the financial markets, the Developer has asked for an additional two years to commence construction on Phase 2. If approved, this will extend the Phase 2 construction commencement date deadline to February 7, 2028.
The financial return to the City will not be altered by this request. The City will continue to receive the Developer's annual carry payment of 2.5 percent of the Phase 2 purchase price for the length of the contract term. Upon the sale of the Phase 2 Site, 2.8 acres will return to private ownership, which will generate net new property tax revenues. The total project is estimated to generate approximately $1.3 million in construction taxes. All other terms of the Agreement will remain unchanged.
Contract Term
Amendment is for a two-year extension retroactively beginning on February 7, 2026, and ending on February 7, 2028.
Financial Impact
The financial terms will remain unchanged with this proposed amendment.
Concurrence/Previous Council Action
City Council authorized this agreement through Ordinance S-43802 on July 6, 2017.
Location
Two parcels located between 5th and 6th Avenues, south of Fillmore Street Parcel Numbers: 111-41-184 and 111-41-185
Council District: 7
Department
Responsible Department
This item is submitted by Assistant City Manager Ginger Spencer and the Community and Economic Development Department.