Title
Request to Enter into a Development Agreement with a Developer to Provide Funds in Exchange of Up Sizing a Water Main (Ordinance S-51212)
Description
Request authorization for the City Manager, or his designee, to enter into a Development Agreement with PHX MC PROPERTIES, LLC, a Delaware limited liability company, to allow the Developer to provide funds in exchange for the design and construction of a water main in downtown Phoenix. Further request to authorize the City Treasurer to accept and the City Controller to distribute the necessary funds related to this item.
Report
Summary
The Developer is planning to construct a new hotel at the southeast corner of Central Avenue and Adams Street in downtown Phoenix, Arizona (referred to herein as the "Development"). Per City Code 37-33 and the City of Phoenix Design Standard Manual for Water and Wastewater Systems Section IV.B.2, the Development was stipulated to up size approximately 230 feet of six-inch water main to 12-inch along Adams Street.
The Development Agreement (DA) allows the Developer to provide a $250,000 one-time cash contribution to the City. The City will accept the $250,000 and add the funds into the City’s Water Main Replacement Program. The City will add the 230 feet of six-inch water main along Adams Street into the City’s Water Main Replacement Program and up size it to 12-inch within 10 years.
Contract Term
The contract term will not exceed a 10-year period, starting from the effective date of the DA.
Financial Impact
The $250,000 contribution by the Development is deemed reasonable based on current market condition and the City's past work experiences in downtown Phoenix. The City will add the $250,000 funds into the existing Water Main Replacement Program to perform the water main up sizing. Funding for this project will be available in the Water Services Department Capital Improvement Program budget once the funds are received.
Location
Council District: 7
Department
Responsible Department
This item is submitted by Deputy City Manager Ginger Spencer and the Water Services Department.