|
Title:
|
Authorization to Enter into Development Agreement with PV RE Devco LLC for Installation of Public Infrastructure and Public Space Improvements (Ordinance S-47323)
|
Title
Authorization to Enter into Development Agreement with PV RE Devco LLC for Installation of Public Infrastructure and Public Space Improvements (Ordinance S-47323)
Description
Request to authorize the City Manager, or his designee, to negotiate and enter into a development agreement and any other agreements as necessary (Agreements), with PV RE Devco LLC, or its City-approved designee (Developer), for the installation of public infrastructure and outdoor public space improvements, and the dedication of public right-of-way or easements. Further request authorization for the City Controller to disburse funds under the terms of the Agreements.
Report
Summary
The City has been informed that the Developer has secured the rights to purchase from the existing owners, portions of the nearly 100-acre Paradise Valley Mall property generally located from 4500-4610 E. Cactus Road (Site) and intends to redevelop the Site, into a mixed-use, amenity rich destination (Project). To facilitate this redevelopment, the Developer will make several public infrastructure improvements, creating new public access through the Site, and facilitating pedestrian connectivity and activity.
Subject to City Council approval, the following major business terms have been negotiated with the Developer and would be implemented through the Agreements:
Developer will privately finance and construct the enhanced public infrastructure improvements.
Developer will install and construct a public east-west street (including landscaping and appurtenant amenities) for public access through the Project at approximately the location of East Larkspur Drive and convey such access to the City in a mechanism approved by the City.
As the Project plans develop, and at Developer’s discretion, the Developer may install and construct an additional public east-west street (including landscaping and appurtenant amenities) for public access through the Project at a location selected by Developer, and convey such access to the City in a mechanism approved by the City.
As the Project plans develop and at Developer’s discretion, Developer may install and construct one or more public north-south streets (including landscaping and appurtenant amenities) for public access through the Project at locations selected by Developer, and convey such access to the City in a mechanism approved by the City.
Developer will design and construct a public park/trail/bike path component through the Project including new landscaping, enhanced shading, decorative paving, new community gathering spaces and water features, which exceed what is required by City Code.
Developer will install additional enhanced landscaping, enhanced pedestrian improvements, decorative construction features, site furnishings, shade structures and other enhanced improvements which are beyond what may be required by any City codes, plans or ordinances, and as agreed upon by the City and Developer.
The Agreements may include other such public infrastructure and related components (and costs thereof) as approved by the City of Phoenix Community and Economic Development Director.
These improvements shall be in conformance with the zoning for the Site.
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 public infrastructure improvements must be pre-approved by the City in order to qualify for reimbursement.
The City will reimburse the Developer for public infrastructure improvements as listed above in the following manner:
Years 1-7: 100 percent of the City of Phoenix portion of the eligible transaction privilege tax (TPT) revenue generated from new development activity at the Site, including construction sales tax.
Years 8-25: (1) 50 percent of the City of Phoenix portion of eligible TPT revenue generated from new development activity at the Site, and (2) 50 percent of the increase in the City of Phoenix portion of eligible TPT revenue generated at the Site from existing tenants as of the construction commencement date for the first phase of the public infrastructure improvements, based on the TPT revenue levels at the Site from operations as of Dec. 31, 2019.
Reimbursement shall not exceed actual verifiable costs for the approved public infrastructure improvements.
Reimbursement would not begin until after the Developer completed the first phase of public infrastructure improvements at the Site and the City accepted those improvements. Reimbursements would be made quarterly, in arrears, with additional details to be specified in the Agreements.
No other sources of funds would be used if the above resources are not adequate to meet the projected construction expense.
The Agreements will include other terms and conditions as deemed necessary by the City.
The redevelopment of Paradise Valley Mall is an important economic development opportunity that will create several thousand new jobs over time for the community, and will yield significant financial and public benefits for the City of Phoenix, above and beyond the TPT revenue generated. This property is the village core for Paradise Valley and redevelopment of it in more intense mixed-use development pattern is supported by numerous goals in the Phoenix General Plan.
Contract Term
The development agreement will be for a term of 25 years.
Financial Impact
The City’s financial impact will be the reimbursement of eligible City of Phoenix new TPT revenue generated from the Site. This includes 100 percent of the TPT revenue generated from new development activity in years 1-7; 50 percent of the new TPT revenue generated at the Site from new development activity in years 8-25; and 50 percent of the increase in TPT revenue generated at the Site from existing tenants (above and beyond levels from operations as of Dec. 31, 2019) in years 8-25. Financial terms of the Agreements will be reviewed by the Budget and Research Department to verify funding availability prior to execution.
Location
Generally located at 4500-4610 E. Cactus Road
Council District: 3
Department
Responsible Department
This item is submitted by Interim Deputy City Manager John Chan and the Community and Economic Development Department.