Development_Agreement_-_KC_Interchange_Development_for_RFQ.docx
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- Solicitation number
- 2026-RFQ-019
- Issued by
- Mohave County, Arizona
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Development Agreement Summary
This is a Development Agreement between the City of Kingman, Arizona, and a qualified master developer for the Kingman Crossing project, a large-scale mixed-use development initiative. The project encompasses approximately 128 acres of City-owned land located south of Interstate Highway 40 at its intersection with Kingman Crossing Road alignment. The developer is responsible for constructing a traffic interchange on I-40, designing and constructing Kingman Crossing Boulevard as a major arterial roadway from its southern terminus to Southern Boulevard, and developing the adjacent City property for retail, commercial, multifamily residential, hotel, medical facilities, and ancillary uses. The minimum retail improvements required include at least 75,000 square feet of enclosed gross leasable floor area within a retail area, with completion of the retail component (Retail Completion Date) required by a specified deadline subject to enforced delays. The project will be developed in multiple phases, each requiring approval of a Phase Development Plan consistent with the Preliminary Development Plan, the City's General Plan, Zoning Ordinance, and the Kingman Crossing Planned Development Zone. The Traffic Interchange must achieve commencement of construction by a specified date and be open to the public (TI Opening Date) by another specified deadline. The Agreement is effective upon City Council adoption, execution by authorized representatives, and recordation in Mohave County. The term extends for 25 years from the Effective Date or until the developer receives full reimbursement of the Total Reimbursement Amount, whichever occurs earlier (the Economic Reimbursement Period).
The City provides contributions including obtaining required rights-of-way for Kingman Crossing Boulevard, dedicating necessary City-owned land to the Arizona Department of Transportation (ADOT) for the traffic interchange, and providing final improvement plans. The developer receives reimbursement for Developer Public Improvements Costs through multiple mechanisms: 50 percent of Net New Taxes (transaction privilege taxes) collected from taxable activities on the City Land as Retail Sales Tax Rebates, payable quarterly beginning 90 days after the end of the first full quarter following the TI Opening Date; Lease Value Offsets representing the leasehold value applied toward reimbursement if the developer exercises an option to lease portions of the City Land; and Lump Sum Payments equal to 50 percent of net proceeds from any City sale of parcels, limited to 50 percent of Traffic Interchange Costs and subject to reduction if non-retail uses exceed 40 acres. Additionally, a 0.25 percent surcharge on all transaction privilege taxes generated within the Project is collected and applied to reimburse Developer Public Improvements Costs. Reimbursement obligations terminate upon full payment of the Total Reimbursement Amount or expiration of the Economic Reimbursement Period. Interest accrues at 2.5 percent annually on unreimbursed portions. The developer must dedicate all required rights-of-way at no cost and must provide standard title insurance and environmental site assessments for dedicated property. Developer is responsible for all design, bidding, construction, and dedication of public improvements in compliance with applicable laws and City standards, with the City retaining maintenance responsibility following acceptance.
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WHEN RECORDED RETURN TO:
City of Kingman Attn: Tim Walsh, City Manager 310 N. Fourth Street Kingman, Arizona 86401
DEVELOPMENT AGREEMENT
CITY OF KINGMAN, ARIZONA,
an Arizona municipal corporation
AND
| [ | ] |
| an [ | ] |
[ ], 2026
8010958.4
AJM:ajm 3278656.3 7/31/2018 8010958.4
| 1. | Definitions | 4 |
| 2. | Scope and Regulation of Development | 8 |
| 3. | Developer Private Improvements | 11 |
| 4. | Developer Public Improvements | 11 |
| 5. | City CONTRIBUTIONS | 14 |
| 6. | Rebates for Developer Public Improvements | 14 |
| 7. | Indemnity; Risk of Loss | 16 |
| 8. | City Representations | 17 |
| 9. | Developer Representations | 17 |
| 10. | Events of Default; Remedies | 18 |
| 11. | Conveyance of DEDICATED Property | 21 |
| 12. | Cooperation and Alternative Dispute Resolution | 23 |
| 13. | Miscellaneous Provisions | 24 |
TABLE OF CONTENTS
Page
TABLE OF CONTENTS
(continued) Page
8010958.4 i AJM:ajm 3278656.3 7/31/2018 ii 8010958.4
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT is made as of [ ], 2026 (this “Agreement”), by and between the CITY OF KINGMAN, ARIZONA, an Arizona municipal corporation (the “City”), and [ ], an [ ] (the “Developer”). The City and the Developer are sometimes referred to herein collectively as the “Parties,” or individually as a “Party.”
RECITALS
| A. | The City owns certain real property within the corporate limits of the City, such real property consisting of approximately 128 acres, located south of Interstate Highway 40 (“I-40”) at its point of intersection with the Kingman Crossing Road alignment, the legal description of which is attached as Exhibit A hereto (the “City Land”) (the “net” area of the City Land will be reduced upon the dedication to and acceptance by the City of the additional public rights of way necessary for the development of the City Land as contemplated herein). The City intends to grant to Developer the option to lease, by instrument more fully described herein (the “Option to Lease”), certain portions of the City Land shown as [Parcels XXXX] on Exhibit B attached hereto (the “Leased Property”). Developer intends to develop a portion of the Leased Property (i) in accordance with the City of Kingman General Plan Update 2030 (the “General Plan”), the City of Kingman Zoning Ordinance (the “Zoning Ordinance”), the City of Kingman Subdivision Ordinance (the “Subdivision Ordinance”) and any development and engineering standards and regulations adopted by the City (the “Regulations”) (the General Plan, Zoning Ordinance, Subdivision Ordinance and Regulations are collectively referred to herein as the “Requirements”) and (ii) the Kingman Crossing Planned Development Zone (KC-PDZ-1806)(the “Existing Zoning”), under Section 3-80.040 of the Zoning Ordinance, as more particularly set forth in Ordinance No. 1902 of the City, adopted July 7, 2020, by the Mayor and City Council of the City (the “City Council”), which may include a retail and commercial center, including, but not limited to, shopping areas, restaurants, hotels, theatres, hospitals and medical care facilities, multifamily residential, and any uses related, appurtenant, or ancillary thereto (the “Project”). The City recognizes that the nature, size, location, and configuration of the improvements to be constructed on the City Land may change, at any time, and from time to time, due to economic and other factors, so long as no portion of the City Land is used for industrial or single family residential purposes. | |
| B. | As a condition of the City’s willingness to enter into this Agreement and the Option to Lease, the Developer will be responsible to: (i) ensure construction, within the time periods described herein, of (a) the traffic interchange on Interstate Highway 40 (“I-40”) at its point of intersection with the Kingman Crossing road alignment generally shown in the Final Design Concept Report dated June 2010 under City of Kingman Project ENG07-007 (the “DCR”)as reflected in the Construction Plans defined below (the “Traffic Interchange”), and (b) storm water facilities as shown in the Kingman Crossing Traffic Interchange Drainage Report dated June 2010 (collectively, the “Traffic Interchange Improvements”) in connection with the Arizona Department of Transportation (“ADOT”); and (ii) design and construct Kingman Crossing Boulevard as a Major Arterial road, as defined in the City of Kingman Streets and Sidewalks Development Rules and Regulations, from its existing southern terminus to Southern Boulevard (the “Kingman Crossing Improvements”). | |
| C. | Developer acknowledges that the development of the City Land, Traffic Interchange Improvements and Kingman Crossing Improvement as a unified project may generate substantial economic benefits for Developer, and that the Project is a project of such significance that the City requires certain assurances concerning the time schedule for the completion of certain improvements, the design and development of the Project and other improvements in a consistent manner and with certain common architectural, aesthetic, and thematic features, and other assurances. In furtherance of these goals, the City and the Developer agree that the site plan attached hereto as Exhibit C shall be the basis of the preliminary development plan required to be adopted in conjunction with the current zoning (the “Preliminary Development Plan”). Developer may develop the Project in multiple phases, each of which will either have its own site plan or be according to a master site plan approved by the City Council. Accordingly, the City and the Developer anticipate that the Developer may meet the requirement under the Zoning Ordinance for developer to submit a final development plan for the Project by submitting such a final development plan for each phase (individually, a “Phase Development Plan” and collectively the Phase Development Plans representing the entire Leased Property will be referred to as the “Final Development Plan”). The Parties intend that the time limitations set forth in Section 3-80.050 of the Zoning Ordinance shall apply for each Phase Development Plan from the date of approval of that plan, and that such approval shall not trigger the time limitations with respect to any other portion of the Leased Property not included within the applicable Phase Development Plan. | |
| D. | The City acknowledges that the development of the City Land, Traffic Interchange Improvements and Kingman Crossing Improvements as a unified project is appropriate, and that such development has the potential to generate substantial transaction privilege tax revenues for the City, which revenues would not be generated without such development, or which revenues will exceed those that would be generated by alternative uses of the City Land. The City also believes that the development of the City Land in conformity with the Final Development Plan will (i) generate other substantial benefits for the City, including, without limitation, the creation of new jobs, and (ii) facilitate the establishment of the City as a retail shopping, restaurant, entertainment, hospitality, multifamily residential, and office destination for City residents, other residents of Mohave County, for shoppers and travelers from within and without the State of Arizona, and for tourists who are visiting the City from elsewhere in the country, as well as from other countries. | |
| E. | The City also acknowledges its intention and ability to provide the undertakings described herein, as well as the City’s willingness to approve the development of the City Land in accordance with the Existing Zoning and the Final Development Plan, which Developer contemplates for development principally as a retail and commercial center, including but not limited to shopping areas, restaurants, and theatres (the “Retail Area”), but may also include: (i) hospital and related medical facilities; (ii) offices; (iii) multifamily residential; and (iv) hotels. The City acknowledges that the Preliminary Development Plan may require modification change from time-to-time in conjunction with approval of a Phase Development Plan (but always in a manner that is consistent with the Requirements and the minimum retail and construction requirements set forth herein). Therefore, the City wishes to facilitate and encourage the development of the City Land by Developer by, among other things, providing the City undertakings described in this Agreement, subject to the terms and conditions of this Agreement. | |
| F. | The City will make certain dedications, obtain certain rights-of-way, and make certain financial contributions to the public improvements described in this Agreement, as more particularly set forth in Section 5 hereof (the “City Contributions”), subject to the terms and conditions of this Agreement. | |
| G. | As a condition of, and concurrent with, the development of the City Land, and subject to other terms and conditions of this Agreement, Developer shall construct certain public improvements in and around the City Land as set forth in Section 4 hereof (the “Developer Public Improvements”). Of such required improvements, the Developer and the City have agreed the Developer will be reimbursed for the “Traffic Interchange Costs” (as defined below) and for the construction of Kingman Crossing Boulevard between the Traffic Interchange and Southern Avenue (the Traffic Interchange Costs and the cost for that portion of the Kingman Crossing Boulevard improvements are collectively referred to herein as the “Developer Public Improvements Costs”). If Developer at any time possesses any of the real property necessary for the Developer Public Improvements, it shall dedicate such real property to the City at no cost and with no reimbursement under this Agreement. Developer has agreed, in reliance on the City’s commitments as described in this Agreement, to advance or otherwise cause to be provided all funds required for the Developer Public Improvements and otherwise to finance the construction and completion of the Developer Public Improvements, subject to and in accordance with the terms of this Agreement. | |
| H. | The City also has determined that the development of the City Land pursuant to this Agreement will result in significant planning, economic, and other public benefits to the City and its residents by, among other things: (i) providing for the construction of various public improvements; (ii) providing for planned and orderly development of the City Land consistent with the General Plan and the Zoning Ordinance; (iii) increasing tax revenues to the City arising from or relating to the improvements to be constructed on the City Land; (iv) creating a substantial number of new jobs and otherwise enhancing the economic welfare of the inhabitants of the City; and (iv) subsidizing the cost of public projects as provided herein. | |
| I. | The Parties understand and acknowledge that this Agreement is a “Development Agreement” within the meaning of, and entered into pursuant to the terms of, A.R.S. § 9-500.05. | |
| J. | On [ | ], 2026, the City Council adopted that certain document entitled “Notice of Intent to Enter Into a Development Tax Incentive Agreement and Findings of Fact” (the “Notice of Intent”), attached hereto as a portion of Exhibit D and incorporated herein by reference. Included within the Notice of Intent were findings showing: (i) that the Project is anticipated to raise more revenue than the amount of the incentives set forth below within the duration of this Agreement; and (ii) that, in the absence of the tax incentives proposed in this Agreement, the Project would not locate within the corporate boundaries of the City at the same time or place (collectively, the “Findings”). Clause (i) above, as included in the Findings, was independently verified on [ ], 20[ ], by an outside consultant, Applied Economics (the “Verification”), which Verification is attached to the Notice of Intent in Exhibit D. Developer hereby agrees and affirms that it: (x) did not finance, or cause to be financed, the Verification; (y) did not have input into the selection of Applied Economics for the purposes of such Verification; and (z) would not have located the Project in Kingman in the same manner in the absence of the tax incentives set forth in this Agreement. |
K. The City Council accepted the Findings on [ ], 2026.
L. The City Council is empowered, pursuant to A.R.S. § 9-500.11, to appropriate public funds to further employment opportunities and economic enhancement of the City. Accordingly, the City Council has determined that it is in the best interests of the citizens of Kingman to: (i) use the value of a lease for the Leased Property to offset a portion of the costs to construct the Traffic Interchange; and (ii) rebate a portion of the Transaction Privilege Taxes collected from taxable activities on the City Land to reimburse Developer for the Developer Public Improvements associated with public infrastructure necessary for development of the Project and other uses in the area, to provide opportunities for enhanced economic welfare and new job creation in Kingman.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing introduction and recitals, which are incorporated herein by reference, the following mutual covenants and conditions, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the Developer hereby agree as follows:
1. Definitions. In this Agreement, unless a different meaning clearly appears from the context:
“AAA” means the American Arbitration Association.
“Administrative Amendments” means as defined in Section 2.4 hereof.
“ADOT” means as defined in Recital B hereof.
“Affiliate,” as applied to any person, means any person directly or indirectly controlling, controlled by, or under common control with, that person or a blood relative or spouse of such person, if such person is a natural person. For the purposes of this definition: (i) “control” (including with correlative meaning, the terms “controlling,” “controlled by” and “under common control”), as applied to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person, whether through the ownership of voting securities, by contract or otherwise; and (ii) “person” means and includes natural persons, corporations, limited partnerships, general partnerships, joint stock companies, joint ventures associations, limited liability companies, limited liability partnerships, trusts, land trusts, business trusts or other organizations, whether or not legal entities.
“Agreement” means this Development Agreement, as described in the introductory paragraph on page one of this Agreement, and as amended and restated or supplemented in writing from time to time, and includes all exhibits and schedules hereto. References to Sections or Exhibits are to this Agreement unless otherwise qualified.
“A.R.S.” means the Arizona Revised Statutes as now or hereafter enacted or amended.
“Applicable Interest” means simple interest at an annual rate of 2.5%.
“City” means as defined in the introductory paragraph of this Agreement.
“City Code” means the Code of the City of Kingman, Arizona, as amended from time to time.
“City Contributions” means as defined in Recital F hereof.
“City Council” means as defined in Recital A hereof.
“City Development Fee” or “City Development Fees” means as defined in Section 2.6 hereof.
“City Land” means as defined in Recital A hereof.
“City Representative” means as defined in Section 12.1 hereof.
“Conditions Precedent to Reimbursement” means the requirements as set forth in Sections 3.4, 6.1 and 6.2, which must be completed prior to the City making any reimbursement payments or the City allowing the exercise of the Option to Lease.
“Commencement of Construction” means both: (i) the obtaining of any building, excavation, grading, or similar permit by Developer for the construction of any improvement; and (ii) the actual commencement of any physical construction operation pursuant to the permit.
“Completion of Construction” means: (i) for the Minimum Retail Improvements, that final inspection approvals have been issued by the City for the Minimum Retail Improvements; and (ii) for the Developer Public Improvements, acceptance by the City Council or appropriate administrative staff member of the City, or the State of Arizona where appropriate, of the completed Developer Public Improvements for maintenance in accordance with the policies, standards and specifications contained in applicable City ordinances or Arizona law, which acceptance shall not be unreasonably withheld, conditioned or delayed.
“Construction Documents” means, collectively, the construction documents completed by [Firm], entitled [Plan titles], date stamped [Dates] related to the Traffic Interchange Improvements in accordance with the DCR, and the Kingman Crossing Improvements.
“Cure Period” means as defined in Section 10.3 hereof.
“DCR” means as defined in Recital B hereof.
“Dedicated Property” means as defined in Section 5.2 hereof.
“Default” or “Event of Default” means one or more of the events described in Sections 10.1 and 10.2; provided, however, that such events shall not give rise to any remedy until effect has been given to all grace periods, cure periods and/or periods of Enforced Delay provided for in this Agreement and that in any event the available remedies shall be limited to those set forth in Section 10 hereof.
“Denial” means as defined in Section 10.5 hereof.
“Designated Lenders” means as set forth in Section 13.22 hereof.
“Developer” means the Party designated as Developer on the first page of this Agreement, and its successors and assigns that conform with the requirements of this Agreement.
“Developer Public Improvements” means as defined in Recital G hereof.
“Developer Representative” means as defined in Section 12.1 hereof.
“Easements” means as defined in Section 11 hereof.
“Economic Reimbursement Period” means the period of time commencing on the Completion of Construction of the Developer Public Improvements and ending on the date that is 25 years after the Effective Date.
“Effective Date” means the date on which all of the following has occurred: this Agreement has been adopted and approved by the City Council, executed by duly authorized representatives of the City and Developer, and recorded in the office of the Recorder of Mohave County, Arizona.
“Enforced Delay” means as defined in Section 10.5 hereof.
“Environmental Laws” means as defined in Section 11.2(a) hereof.
“Existing Zoning” means as defined in Recital A hereof.
“Failure” means as defined in Section 10.5 hereof.
“Final Development Plan” means as defined in Recital C hereof “Findings” means as defined in Recital J hereof.
“General Plan” means as defined in Recital A hereof.
“Hazardous Materials” means as defined in Section 11.2(b) hereof.
“JPA” means as defined in Section 4.1(a) hereof.
“Lease Value Offsets” means as defined in Section 6 hereof.
“Lender” or “Lenders” means as defined in Section 13.22 hereof.
“Lump Sum Payment” means as defined in Section 6.3(a) hereof.
“Minimum Retail Improvements” means not less than 75,000 square feet of enclosed gross leasable floor area of improvements including garden centers in the Retail Area (including retail and mall areas, restaurants and movie theatres).
“Multiple Location Taxpayer” means as defined in Section 6.1(c) hereof.
“Net New Taxes” means:
| (i) | 100% of the Retail Sales Taxes collected from each business within the City Land or on any of the City Land which did not operate at any location within the corporate limits of the City immediately prior to commencing business within the City Land; and |
| (ii) | With respect to a business operating at one or more locations within the corporate limits of the City (the “Existing Location(s)”) immediately prior to commencing business within the City Land (the “New Location”), the combined amount of the Retail Sales Taxes collected from the New Location and Existing Location(s) each year, minus the amount of Retail Sales Taxes collected from all Existing Locations of such business during the 12 months preceding the opening of the New Location, but in no event less than zero. If an Existing Location is closed at one location within the corporate limits of the City and reopened at another location within the corporate limits of the City other than the City Land, such reopened location shall take the place of the Existing Location it replaces for the purposes of the calculation above. |
“Notice of Intent” means as defined in Recital J hereof.
“Order” means as defined in Section 10.5 hereof.
“Parcel Sale” means as defined in Section 6.3(a) hereof.
“Party” or “Parties” means as defined in the introductory paragraph on page one of this Agreement.
“Phase Development Plan” means as defined in Recital C hereof.
“Preliminary Development Plan” means as defined in Recital C hereof.
“Project” means as defined in Recital A hereof.
“Property Occupants” means as defined in Section 6.1(d) hereof.
“Regulations” means as defined in Recital A hereof.
“Requirements” means as defined in Recital A hereof.
“Retail Area” means as defined in Recital E hereof.
“Retail Sales Taxes” means all transaction privilege taxes which are imposed on any Taxable Activities under the Tax Code of the City, as the same may change from time-to-time.
“Retail Sales Tax Rebates” means as defined in Section 6.1(a) hereof.
“Retail Completion Date” means as defined in Section 3.2 hereof.
“Subdivision Ordinance” means as defined in Recital A hereof.
“Taxable Activities” means all retail, restaurant, hotel, and commercial leasing activities as described in Article IV of the Tax Code of the City of Kingman, as amended from time to time.
“Term” means the period commencing on the Effective Date and terminating on the date that is the earlier to occur of: (i) Developer being fully repaid the Total Reimbursement Amount; or (ii) the date that is 25 years after the Effective Date.
“TI Opening Date” means as defined in Section 6.1(b) hereof.
“Total Reimbursement Amount” means the sum of: (i) the Developer Public Improvements Costs; and (ii) the marginal costs associated with upsizing or oversizing any improvements for the benefit of other public or private property.
“Traffic Interchange” means as defined in Recital B hereof.
“Traffic Interchange Costs” means all costs, expenses, fees, contributions, and charges actually incurred and paid by, or on behalf of, Developer to contractors, architects, engineers, surveyors, attorneys, governmental agencies (including the City and the State of Arizona, by and through ADOT), and other third parties for materials, labor, design, engineering, surveying, site excavation and preparation, governmental permits, payment and performance bonds, and additional real property costs (which are limited to costs to acquire land required by ADOT for the Traffic Interchange outside of the land described on Exhibit A attached hereto), contribution obligations hereunder (including the contribution obligation under Section 4.1), and other required expenditures. “Traffic Interchange Costs” shall not include any profit to, or mark-up by, Developer or any Affiliate of Developer, any losses to the extent covered by insurance proceeds, expenses resulting from Developer’s failure to perform any of its obligations under this Agreement, any design costs incurred by the City, or any other costs or expenses not reasonably necessary for the construction, installation, or provision of the Traffic Interchange.
“Verification” means as defined in Recital J hereof.
“Zoning Ordinance” means as defined in Recital A hereof.
| 2. | Scope and Regulation of Development. |
| 2.1 | Phase Development Plans. Prior to the Commencement of Construction of any improvements on the Leased Property, Developer shall: (a) have caused Commencement of Construction to occur for the Traffic Interchange; and (b) submit for approval a Phase Development Plan relating to the area of the Project covered by that Phase Development Plan. Each Phase Development Plan shall set forth the design elements, including without limitation, building materials, colors, architectural plans, landscaping, enhanced paving plans, irrigation, lighting, pedestrian linkages, signage, and the character of that portion of the Project. Any subsequent substantial and material alterations or changes to the exterior of any building or to the site development shall be reviewed and approved in accordance with the Zoning Ordinance then in effect. The City and Developer acknowledge that amendments to a Phase Development Plan may be necessary from time to time to reflect changes in market conditions and/or to satisfy new requirements of one or more users of any part of the Leased Property, and the City shall cooperate in good faith to present any such amendments to the applicable Phase Development Plan to the City Council for its review and approval, in its sole discretion, pursuant to the Zoning Ordinance. |
| 2.2 | Consistency with Preliminary Development Plan. Phase Development Plans for the Leased Property shall be consistent with the approved Preliminary Development Plan, as may be amended from time-to-time upon request by the Developer and approval by the City Council in its sole discretion. Review and approval of any site plans in conjunction with a Phase Development Plan shall be undertaken by the City in accordance with its regular and customary procedures. So long as requested approvals are consistent with the applicable Phase Development Plan, the City and Developer will cooperate reasonably in processing the approval or issuance of any permits, plans, specifications, plats or other development approvals requested by Developer in connection with development of the Project. |
| 2.3 | Cooperation in the Implementation of the Plans. Developer and the City shall work together using reasonable best efforts throughout the pre-development and development stages to resolve any City comments regarding implementation of the Preliminary Development Plan and any approved Phase Development Plan. If Developer reaches an impasse regarding development approval with the City’s staff, the dispute shall be resolved as provided in Section 12 below. |
| 2.4 | Administrative Amendments. The City and Developer acknowledge that amendments to a Phased Development Plan may be necessary from time to time to reflect changes in market conditions and development financing and/or to meet the new requirements of one or more of the potential users of any part of the Leased Property. In order to facilitate development on the Leased Property, the City Manager is hereby delegated limited authority to approve “Administrative Amendments” (defined below) to a Phased Development Plan. Once approved, an Administrative Amendment shall be attached to the approved Phase Development Plan as an addendum and become part thereof, and which may be further changed and amended from time to time as necessary, with the approval of the City and Developer. Unless otherwise required by law, no such Administrative Amendment shall require notice or hearing. All changes or amendments that are not permitted as limited Administrative Amendments described in this Section shall be subject to review and approval by the City Council, in its sole, legislative discretion. For the purposes of this Agreement, “Administrative Amendments” are limited to relief of up to 10% of any development standard in an approved Phase Development Plan. Notwithstanding the foregoing, the City Manager shall not grant relief: (a) for any increase or reduction in allowable numbers of stories in a building; (b) for any increase or reduction in permitted or prohibited uses; or (c) for any modifications to uses that are subject to a conditional use permit or other conditions of development. Any relief authorized will be documented with findings consistent with all the requirements below and filed with the approved Phase Development Plan: |
| (a) | An application by the Developer was submitted on a form prescribed by the City Manager or authorized representative, and any applicable fees were paid. |
| (b) | Notice, by first-class mail, postmarked at least five days prior to the determination, was given to adjacent property owners determined by the City Manager or authorized designee as potentially affected by the request. |
| (c) | The proposed improvement requiring relief will not be detrimental to the property requesting relief, any adjacent property or the City as a whole. |
| (d) | The relief granted is the minimum required to meet the needs of the proposed improvement. |
| (e) | The relief shall not be contrary to the purpose and intent of this Agreement or the Preliminary Development Plan and the applicable Phase Development Plan. |
| 2.5 | Moratorium and Growth Limitation Prohibited. The Parties acknowledge and agree that the anticipated development of the City Land, if any, beyond the Minimum Retail Improvements will likely occur over a period of years. Until the 10th anniversary of the Effective Date with respect to any area of the City Land, no City moratorium (as the term is defined in A.R.S. § 9-463.06), or future ordinance, resolution or other land-use rule or regulation imposing a limitation to the rate, timing or sequencing of the development of the City Land and affecting the City Land or any portion thereof shall apply to or govern the development of the City Land, whether such ordinance, rule or regulation affects subdivision plats, building permits, occupancy permits, or other entitlements to use the City Land issued or granted by the City. Notwithstanding the foregoing, the City shall not be prohibited from adhering to or implementing a moratorium in compliance with an order of the State of Arizona or any other jurisdiction having authority to compel the City to comply with its orders. |
| 2.6 | City Development Fees. Some of the public improvements that the Developer has agreed to install or otherwise provide pursuant to this Agreement are or may be included within the City’s adopted Infrastructure Improvements Plan to be funded by City development impact fees currently in effect or as may be adopted in the future (referred to individually as a “City Development Fee” or collectively as “City Development Fees”). The City expressly agrees that the Developer is entitled to receive a credit against such City Development Fees for the cost of acquisition and construction of such public improvements that are components of any particular City Development Fee payable by Developer for or in connection with development on the City Land for public improvements included in the adopted Infrastructure Improvements Plan. The Developer may receive a credit for the purchase price of any real property necessary for the location of the public improvements (but only if such value is included as a component of that particular City Development Fee). In no event may the credits in each category of City Development Fees exceed the actual City Development Fees paid or to be paid by Developer for or in connection with development on the City Land. Developer may direct the City to apply any City Development Fee credits to such building permits of its choice for buildings to be constructed at the Project. |
| 3. | Developer Private Improvements. |
| 3.1 | Minimum Retail Improvements. The Minimum Retail Improvements shall be developed within the Retail Area as a shopping center, or any other configuration (or combination thereof) deemed by Developer to be best suited for the commercial opportunities presented by the Retail Area at the time of planning such Minimum Retail Improvements. Developer will keep the City advised of Developer’s specific development plans and provide the City with opportunities for the City’s input; provided, however, that the City’s participation in such planning efforts shall not be a substitute for the approval process for the Phase Development Plans described above. |
| 3.2 | Completion of Construction. Completion of Construction of the Minimum Retail Improvements (the “Retail Completion Date”) shall be deemed to occur at the time of issuance of a certificate of occupancy for building on the City Land causing the Project to reach the threshold of the Minimum Retail Improvements. The City and Developer shall mutually confirm in writing the Retail Completion Date when the same becomes known. Subject only to Enforced Delay, the Retail Completion Date shall occur on or before [XXXX]. |
| 3.3 | Changes in Plans. Any site plans or similar land-use plans for improvements other than the Minimum Retail Improvements prepared by or on behalf of Developer are aspirational and based upon Developer’s current plans, themes and programs, any or all of which may change or be varied depending upon the circumstances and the plans and methods used by Developer to develop commercial centers. The City acknowledges that those plans, themes and programs may change at any time, and from time to time, and that, in order to receive the benefits of this Agreement and to comply with the provisions hereof, Developer is obligated only for the Completion of Construction of the Minimum Retail Improvements on the City Land by the Retail Completion Date and Completion of Construction of the Developer Public Improvements by the dates established in each Phase Development Plan (subject to the deadlines for construction of the Traffic Interchange and Kingman Crossing Boulevard by the dates set forth in Section 4.2 below), all in accordance with the Preliminary Development Plan, the Requirements and the other requirements imposed by this Agreement. |
| 3.4 | Conditions Precedent to Reimbursement. Completion of the Traffic Interchange Improvements as described in this Agreement is a Condition Precedent to Reimbursement to the City’s obligation to commence reimbursements to the Developer as provided in Section 6.1 hereof, and thereafter Completion of Construction of the Minimum Retail Improvements by Developer as described in this Agreement is a condition precedent to the continuing obligation of the City to reimburse Developer as provided in this Agreement. |
| 4. | Developer Public Improvements. Pursuant to A.R.S. § 34-201(L), as a condition of development of the City Land imposed by the City and as authorized by A.R.S. § 9-463.01, Developer at its sole cost shall design, construct or cause to be constructed and dedicate to the applicable government authority the Developer Public Improvements subject to the terms and conditions of this Agreement. Developer shall dedicate, at no cost to the City, and which shall not be subject to reimbursement, all rights-of-way for the Traffic Interchange and Kingman Crossing Boulevard necessary from Developer-owned property, if any. |
| 4.1 | Included Improvements. The Developer Public Improvements include the following: |
| (a) | Traffic Interchange. The Developer shall be responsible for the cost of design (except for those portions of the design included in the City’s contract ENG16-0025) and construction, according to the Construction Documents of the (i) Kingman Crossing Traffic Interchange as generally shown in the Final Design Concept Report dated June 2010 under City of Kingman Project ENG07-007, and (ii) storm water facilities as shown in the Kingman Crossing Traffic Interchange Drainage Report dated June 2010, each as conceptually depicted on the map attached hereto as Exhibit E. The Developer shall be responsible for all costs to ADOT for design reviews, contract procurement, construction management, inspections and other costs as may be identified in the ADOT Joint Project Agreement related to the Traffic Interchange (the “JPA”). |
| (b) | Kingman Crossing Boulevard. The developer shall be responsible for design and construction of Kingman Crossing Boulevard as a Major Arterial road, as defined in the City of Kingman Streets and Sidewalks Development Rules and Regulations, from its existing southern terminus to Southern Boulevard, as conceptually depicted on the map attached hereto as part of Exhibit E. |
| 4.2 | Construction and Phasing. The Developer Public Improvements shall be constructed and may be phased in accordance with the Preliminary Development Plan; provided, however, that: (a) Commencement of Construction of the Traffic Interchange Improvements shall occur not later than [XXXX]; (b) the TI Opening Date shall occur not later than [XXXX]; and (c) Completion of Construction of the Kingman Crossing Improvements shall occur by [XXXX]. In light of such phasing, the City acknowledges that the Developer Public Improvements Costs may increase as additional Developer Public Improvements are completed for additional approved phases of the Project. The City shall not be obligated to reimburse the Developer for Developer Public Improvements until the Traffic Interchange is substantially completed; provided that any reimbursement is paid only as allowed in this Agreement. |
| 4.3 | Design, Bidding, Construction and Dedication. The Developer Public Improvements shall be designed, bid, constructed and dedicated in accordance with applicable laws, regulations, and standards, including, without limitation all applicable laws concerning City procurement and public bidding procedures. |
| 4.4 | City Review and Approval of Plans. Developer recognizes that its development and construction of the Developer Public Improvements pursuant to this Agreement are subject to the City’s normal plan submittal, review and approval processes, and day-to-day inspection services. The City will use its best efforts to expedite its regulatory processes, including but not limited to use permit, variance, design review and building permit processes, but it is not obligated to do so. Any disputes over delay in the review and approval processes will be resolved as provided in Section 12. |
| 4.5 | Payment of Developer Public Improvements Costs. Subject to the reimbursement provisions of this Agreement, Developer shall pay all Developer Public Improvements Costs as the same become due, including any reimbursement to the City (net 30 days) for costs and expenses the City may be required to pay to ADOT pursuant to the JPA. |
| 4.6 | Dedication, Acceptance and Maintenance of Developer Public Improvements. When the Developer Public Improvements or discrete portions thereof are completed (e.g., all of the paving, curbs and gutters for a particular street on the Leased Property or designated section or phase of the Leased Property), then upon written request of the City or Developer, Developer shall dedicate and the City shall accept such Developer Public Improvements in accordance with the applicable laws and upon such reasonable and customary conditions as the City may impose, including without limitation a one-year workmanship and materials contractor’s warranty. Upon acceptance by the City, the Developer Public Improvements shall become public facilities and property of the City; the City shall be solely responsible for all subsequent maintenance, replacement or repairs. With respect to any claims arising prior to acceptance of the Developer Public Improvements by the City, Developer shall bear all risk of, and shall indemnify the City and its officials, employees and City Council members, against any claim arising prior to the City’s acceptance of the Developer Public Improvements from any injury (personal, economic or other) or property damage to any person, party or utility, arising from the condition, loss, damage to or failure of any of the Developer Public Improvements, except to the extent caused by the negligence acts or omissions, or intentional misconduct of the City and its officials, employees and City Council members, agents or representatives. |
| 4.7 | Access. Developer shall permit access to the Project by the City, its officials, personnel and designees, at reasonable times, subject to reasonable safety requirements as Developer may impose from time to time, to ensure compliance with all applicable laws and with the terms of this Agreement. |
| 4.8 | Radio Coverage. Developer shall cause all improvements to be constructed in such a manner that reasonably facilitates adequate radio coverage for City emergency service workers. |
| 4.9 | Public Access. Developer will grant to the City emergency vehicle access and use easements over and through the main entrance to the Project and other private roadways as may exist from time to time within the Project, including without limitation those (if any) shown on each Phase Development Plan (the Parties are anticipating, however, that the streets serving the Project will all be public streets). |
| 4.10 | Clean Fill Material. If Developer’s activities in constructing any public or private improvements relating to the Project cause Developer to export clean fill material from the Project area, Developer shall provide the City with the option to receive such fill material at no cost; provided, however, the City shall have the right to reject any or all of such material. If accepted by the City, Developer shall deposit such fill material on the portion of the City Land as designated by the City. |
| 5. | City Contributions. |
| 5.1 | City Infrastructure Obligations. The City shall, as part of the City Contributions: (a) obtain required rights-of-way for Kingman Crossing Boulevard South to Southern Avenue to open concurrently with the Traffic Interchange and not cause the delay in the construction or opening thereof; (b) contribute to the State of Arizona, by and through ADOT, City-owned land as is necessary for the timely construction and completion of the Traffic Interchange as provided herein; and (c) provide Developer with the final improvement plans for City of Kingman Project ENG16-0025, as conceptually depicted on the map attached hereto as Exhibit F. |
| 5.2 | City Acquisition of Necessary Property. The City, to the extent then permissible under applicable laws, and to the extent required in the judgment of the City, after consultation with Developer, may purchase or use its power of eminent domain to acquire any necessary right-of-way and other property or property rights required for construction or maintenance of the related City improvements at the City’s expense (including without limitation the cost of the land and the City’s costs related to the acquisition) or at the Developer’s expense only if Developer gives consent thereto. Upon not less than 90 days advance request by the City, or upon completion of any portion, segment, or phase of the Developer Public Improvements offered for dedication by Developer and accepted by the City, Developer will dedicate and grant to the City, according to the process set forth in Section 11 below, any real property or real property interests owned by Developer that: (a) are reasonably necessary for right-of-way purposes or otherwise required for the maintenance or operation of the City improvements; and (b) do not materially interfere with the development of the Project as planned (the “Dedicated Property”). Developer shall make such dedications without the payment of any additional consideration provided by City. |
| 6. | Rebates and Offsets for Developer Public Improvements. The City is of the opinion that the development of the Project: (i) will substantially enhance the economic health of the City; (ii) will result in a net increase or retention of jobs in the City; (iii) will add to the tax base; (iv) will otherwise improve or enhance the economic welfare of the residents or businesses of the City; (v) would not otherwise occur in the City without the Retail Sales Tax Rebates; and (vi) demonstrates the potential to generate revenues and other benefits to the City, which outweigh or are not disproportionate to the costs associated with these Retail Sales Tax Rebates and reduced lease rates for the City Land (“Lease Value Offsets”). The City shall reimburse Developer for the Total Reimbursement Amount, plus Applicable Interest, only through Retail Sales Tax Rebates, Lump Sum Payments, Lease Value Offsets and Surcharges as set forth below. |
| 6.1 | Retail Sales Tax Rebates. |
| (a) | Retail Sales Tax Payment Amounts. In view of Developer’s construction of the Developer Public Improvements and otherwise performing its obligations under this Agreement, the City shall quarterly rebate and pay to Developer an amount equal to 50% of the Net New Taxes imposed and actually received by the City for Taxable Activities occurring within the City Land (irrespective of whether the property from which such sales are generated are controlled by Developer or others, including pad lessees) generated from businesses within the City Land (“Retail Sales Tax Rebates”). The Retail Sales Tax Rebates shall be payable as set forth below. |
| (b) | Timing of Payments; Conditions Precedent. Developer shall have no rights to payment of Retail Sales Tax Rebates until the times set forth below, which are Condition Precedent to Reimbursement. Any rights to taxes collected shall be forfeited by Developer if the date the Traffic Interchange is lawfully open to the general public (the “TI Opening Date”) has not occurred (for any reason other than those specified in Section 10.5) prior to the deadline set forth in Section 4.2 above, or if this Agreement is terminated by the City by reason of an Event of Default pursuant to Section 10. The first quarterly payment required by Section 6.1(a) above shall be paid no later than 90 days after the end of the first full quarter of the City fiscal year following the TI Opening Date; provided, however, that the Retail Sales Tax Rebates shall begin to accrue for the benefit of the Developer upon the City’s receipt of any Retail Sales Taxes generated by Taxable Activities occurring on the City Land beginning on the Effective Date for subsequent disbursement to the Developer as described in this Section 6.1(b). Subsequent quarterly payments will be made no later than 90 days after the end of each succeeding quarter of the City fiscal year. Notwithstanding the termination of the City’s obligation to make the Retail Sales Tax Rebates, the City shall remain obligated to pay, upon the next occurring payment date, any amounts due to Developer that accrued prior to such termination. Each payment will be mailed to Developer at the address set forth below, or as otherwise agreed to by Developer and the City. |
| (c) | Multiple Business Locations. Developer shall require, as a covenant to any sublease of a portion of the Leased Property, that any businesses with multiple locations in the City (each, a “Multiple Location Taxpayer”) report their Retail Sales Taxes on the basis of revenues generated within the Leased Property for each such Multiple Location Taxpayer located in the Project. To the extent such separate reporting is not received by the City for a Multiple Location Taxpayer (whether from the Developer, its successors or assigns, or from the Arizona Department of Revenue), the Retail Sales Taxes for its location within the Project shall be calculated as equal to the total Retail Sales Taxes reported for all of its locations in the City multiplied by a fraction, the numerator of which shall be one and the denominator of which shall be the total number of locations of that Multiple Location Taxpayer in the City. If the taxpayer’s name and City privilege tax identification number is not received by the City for a Multiple Location Taxpayer, the City shall request such information from Developer, which shall require such information from the Multiple Location Taxpayer in connection with any sublease or other Taxable Activities involving any property located within the Project. If any information contemplated by this section is not received by the City, the City shall calculate the Retail Sales Tax Rebates based on the information available to it. |
| (d) | Waiver of Confidentiality. Developer hereby waives, for the term of this Development Agreement, any rights it may have to keep confidential any records indicating the amount of sales generated from the business within the City Land. Developer further agrees to (i) take all steps necessary and to execute any required documents to permit the City’s authorized representative to examine any such records, and (ii) require, as part of any contract or agreement between Developer and any person, firm or entity owning or operating any portion of the business within the Leased Property (the “Property Occupants”), that such Property Occupants agree to waive, for the term of this Development Agreement, any rights it may have to keep confidential any records indicating the amount of taxable construction activity relating to the Project. |
6.2 Lease Value Offsets. The Developer shall have the right to exercise an option to lease all or a portion of the City Land (each, an “Option”) in substantially the form attached hereto as Exhibit B only upon Commencement of Construction of the Traffic Interchange by ADOT by the date set forth in Section 4.2 hereof, which is a Condition Precedent to Reimbursement. Upon exercise of the applicable Option, the City and the Developer shall enter into a lease for the portion of the City Land included in the exercised Option (each, a “Lease”) in substantially the form attached to the Option. The Lease Value Offset associated with each such Lease shall be the amount of the leasehold value determined to be the “Offset Net Rent” (the amount that would otherwise be charged as “Net Rent” if not calculated as a contribution to Total Reimbursement Amount) under the Lease. The total amount of all Lease Value Offsets for each City fiscal year shall be credited against the Total Reimbursement Amount until the earlier to occur of: (a) the end of the Economic Reimbursement Period; or (b) full payment of the entire Total Reimbursement Amount.
| 6.3 | Lump Sum Payments. |
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