HomeMy WebLinkAboutRES 07-49RESOLUTION NO. 07-49
A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY
OF APACHE JUNCTION, PINAL COUNTY, ARIZONA, ADOPTING A
NOTICE OF INTENT TO ENTER INTO A RETAIL DEVELOPMENT
TAX INCENTIVE AGREEMENT WITH US 60 AND IDAHO,L.L.C.
FOR APACHE JUNCTION GATEWAY DEVELOPMENT PROJECT
WHEREAS, US 60 and Idaho, L.L.C.("Landowner") owns
approximately eighty (80) acres of real property located at the
southeast corner of US 60 and Idaho Road (the "Property"); and
WHEREAS, the City of Apache Junction City ("City") and
Landowner have negotiated a development agreement to develop the
Property as a retail and commercial center, including but not
limited to shopping areas, specialty retail, restaurants,
recreation areas, theatres, and related uses; and
WHEREAS, development of the Property is beneficial to the
City and such development will generate transaction privilege
tax and other revenues for the City; and
WHEREAS, development of the Property will generate
substantial non -monetary benefits for the City, including,
without limitation, the creation of new jobs and facilitate the
establishment of the City as a retail shopping destination for
City residents, for shoppers and travelers from other areas, and
for tourists who are visiting the scenic treasures of the area;
and
WHEREAS, the proposed development agreement includes a
retail development tax incentive component as defined under
A.R.S. § 9-500.11(M); and
WHEREAS, A.R.S. § 9-500.11(K) requires a city or town which
desires to enter into a retail development tax incentive
agreement to adopt a Notice of Intent to Enter into such
agreement a minimum of fourteen (14)calendar days before
adoption of the agreement.
RESOLUTION NO. 07-49
PAGE 1 OF 3
NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL
OF THE CITY OF APACHE JUNCTION, ARIZONA AS FOLLOWS:
That the Mayor and City Council hereby adopt this Notice of
Intent to Enter into a Retail Development Tax Incentive
Agreement with US 60 and Idaho, L.L.C. for the Apache
Junction Gateway development project, which notice is fully
set forth in Exhibit A.
PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF
APACHE JUNCTION, ARIZONA, THIS 4TH DAY OF DECEMBER , 2007.
SIGNED AND ATTESTED TO THIS 4TH DAY OF DFCFMRFR ,2007.
ATTEST:
KATHLEEN CONNELLY
City Clerk
APPROVED AS TO FORM:
dePtr—i2.4.07
RICHARD J. STERN
City Attorney
RESOLUTION NO. 07-49
PAGE 2 OF 3
EXHIBIT A
Notice of Intent to Enter into a Retail Development Tax
Incentive Agreement
Notice is hereby given,pursuant to Arizona Revised
Statutes §9-500.11,as amended,that the City of Apache
Junction,Arizona,an Arizona municipal corporation ("City"),
intends to enter into a retail development tax incentive
agreement for Apache Junction Gateway Development Project
(entitled "Development Agreement" and in a form substantially
similar to the form attached hereto) with US 60 and Idaho, LLC,
an Arizona limited liability company,on a date which is at
least fourteen calendar days after the adoption of this notice
by the City.A copy of the proposed agreement is on file with
the City Clerk's Office at 300 E.Superstition Blvd.,Apache
Junction, AZ, phone number(480)982-8002.
RESOLUTION NO. 07-49
PAGE 3 OF 3
-CITY'S REVISED DRAFT-
11 -16-07
When recorded return to:
Richard Joel Stern, Esq.
Apache Junction City Attorney
300 East Superstition Blvd.
Apache Junction, AZ 85219
DEVELOPMENT AGREEMENT FOR APACHE JUNCTION GATEWAY
THIS DEVELOPMENT AGREEMENT (the "Agreement") is made as of the
day of 2007, by and between the CITY OF APACHE
JUNCTION, ARIZONA, an Arizona municipal corporation (the "City"); and US 60
AND IDAHO, LLC, an Arizona limited liability company ("Developer"). The City
and Developer are sometimes referred to herein collectively as the "Parties," or
individually as a "Party."
RECITALS
WHEREAS,Developer owns certain unimproved real property located
within the city limits of the City, such real property consisting of approximately
eighty (80) acres, located at the southeast corner of US 60 and Idaho Road, the
legal description of which is attached as Exhibit A hereto (the "Property").
Developer shall develop the Property as a retail and commercial center,
including but not limited to shopping areas,specialty retail,restaurants,
recreation areas and theatres,and uses related,appurtenant or ancillary
thereto, and thereafter (subject to common area and other ownership interests
to be retained by Developer) may lease or sell all or portions of the Property to
others on the terms and conditions provided herein; and
WHEREAS,Developer has submitted,or will submit,a development
review application package for the Property (which includes, but is not limited
to,applications for approval of grading and drainage,traffic,elevations,
landscaping, signage, etc.) fqr review and re -zoning approval by the City in
accordance with the City's customary and ordinary plan and development
review process (the "Master Plan"), consistent with the terms of this Agreement.
The proposed (but not approved) Master Plan for the Property is attached hereto
as Exhibit B.The City recognizes that the nature,size,location and
configuration of the improvement to be constructed and shown on the proposed
Master Plan may change provided that in each instance such changes are in
accordance with City's customary and ordinary plan and development review
process; and
WHEREAS, the City acknowledges that the development of the Property is
beneficial to the City and that such development will generate transaction
privilege tax and similar revenues for the City.The City also believes that the
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development of the Property will generate substantial non -monetary benefits for
the City, including, without limitation, the creation of new jobs and facilitate the
establishment of the City as a retail shopping destination for City residents, for
shoppers and travelers from the metropolitan areas of nearby Phoenix and
Tucson, and for tourists who are visiting the scenic treasures of the City; and
WHEREAS,the Parties intend that the uses contemplated by this
Agreement are consistent with the City's existing General Plan (the "General
Plan") and the proposed C-3PD zoning of the Property (the "Zoning") ; and
WHEREAS, the City wishes to facilitate and encourage the development of
the Property by Developer by,among other things,providing the City
undertakings described in this Agreement, subject to the terms and conditions
of this Agreement; and
WHEREAS, as a condition of, and concurrent with, development of the
Property, and subject to the other terms and conditions of this Agreement,
Developer shall construct certain Public Improvements in and around the
Property as generally described on Exhibit C, including without limitation the
construction of and widening and improvement of certain public roadways; and
Developer further shall dedicate to the City the additional rights of way required
for such Public Improvements (the Public Improvements and dedicated rights of
way being referred to herein collectively as,the "Public Improvements").
Developer has agreed, in reliance on the City's commitments as described in
this Agreement, and subject to Developer's timely compliance with all other
terms and conditions of this Agreement, to advance or otherwise cause to be
provided all funds required for, and otherwise to finance the construction and
completion of, the Public Improvements, subject to and in accordance with the
terms of this Agreement; and
WHEREAS,the City also has determined that the development of the
Property 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 by Developer of the Public Improvements; (ii)
providing for planned and orderly development of the Property consistent with
the City's General Plan and the Zoning; (iii) increasing tax revenues to the City
arising from or relating to the improvements to be constructed on the Property;
(iv) creating a substantial number of new jobs and otherwise enhancing the
economic welfare of the residents of the City;(v)providing a vibrant,new
shopping area to benefit the City's residents; and (vi) providing for the additional
municipal benefits, tangible and intangible, provided for in this Agreement, and
particularly in Section 6 hereof; and
WHEREAS, 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, and that the terms of this Agreement shall
constitute covenants running with the Property as more fully described in this
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Agreement; and
WHEREAS,the Parties also understand and acknowledge that this
Agreement is authorized by and entered into accordance with the terms of
A.R.S. § 9-500.11.The actions taken by the City pursuant to this Agreement are
for economic development activities as that term is used in A.R.S. § 9-500.11,
will assist in the creation and retention of jobs, and in other ways will improve
and enhance the economic welfare of the residents of the City. Also, pursuant to
A.R.S. § 9-500.11, the City on December 4, 2007, adopted a notice of intent to
enter into this Agreement as required by A.R.S. § 9-500.11(K) and made the
findings required by A.R.S. § 9-500.11(D), such findings having been verified by
an independent third party before the City entered into this Agreement, and
such findings by this reference are incorporated into this Agreement as though
set forth in their entirety herein; and
WHEREAS, the City is entering into this Agreement as an administrative
act to implement and to facilitate development of the Property consistent with
the policies of the City reflected in the previously adopted General Plan and the
Zoning.
AGREEMENT
NOW,THEREFORE,in consideration of the foregoing recitals and
representations and the mutual promises contained in this Agreement,the
Parties agree as follows:
1.DEFINITIONS.
In this Agreement, unless a different meaning clearly appears from
the context:
(a)"Additional Municipal Benefits"means those undertakings
not required by law which Developer has committed to perform pursuant to the
express terms of this Agreement, which the City agrees will provide direct and
indirect, tangible and intangible benefits to the City, and which are described, in
part, in Section 6 of this Agreement.
(b)"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,
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joint ventures associations,limited liability companies,limited liability
partnerships, trusts, land trusts, business trusts or other organizations, whether
or not legal entities.
(c)"Agreement"means this Agreement,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. The Recitals set forth above are incorporated herein
by reference and form a part of this Agreement but are not intended to expand
the scope, number or nature of Developer's obligations beyond those expressly
set forth in the numbered sections of this Agreement.
(d)"Anchor Store" or "Anchor Stores" means a retail store or
stores or theatre multi-plex containing not fewer than sixty thousand (60,000)
square feet of gross building area each, but which, for the purposes of the
Minimum Improvements (as defined in this Agreement) shall mean at least two
(2) retail (or similar) stores, one of which contains not less than one hundred
thousand (100,000) square feet of gross building area, and the second of which
contains not less then eighty thousand (80,000) square feet of gross building
area.For the purposes of illustration only, and not by way of limitation, the
Anchor Stores may consist of such stores as Costco,Home Depot,Kohl's,
Lowe's, Macy's, Nordstrom, Sam's Club, Sears, Target.A cinema (including a
multi-plex cinema) shall not be deemed an Anchor Store for the purposes of
satisfying the Minimum Improvements.
(e)"Ancillary Activities"means the Public Improvements as
defined in Exhibit C.
(f)"Applicable Laws" means as defined in Section 3.2(a).
(g)"A.R.S."means the Arizona Revised Statutes as now or
hereafter enacted or amended.
(h)"City" means the Party designated as City on the first page of
this Agreement.
(i)"City Code" means the Code of the City of Apache Junction,
Arizona, as amended from time to time.
(j)"City Council" means the City Council of the City.
(k)"City Development Fee" or "City Development Fees" means as
defined in Section 3.3.
(I)"City Representative" means as defined in Section 13.1.
(m)"Commencement of Construction"means both:(i)the
obtaining of a building, excavation, grading or similar permit by Developer for
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the construction of the Minimum Improvements and/or Public Improvements;
and (ii) the actual commencement of physical construction operations on the
Property or right-of-way adjacent thereto in a manner necessary to achieve
Completion of Construction of the Minimum Improvements and/or Public
Improvements, provided however, that if the initial construction is in such right-
of-way, it shall proceed regularly and diligently, and without interruption and in
the ordinary course onto the Property.
(n)"Completion of Construction" means the date on which: (i) as
to the Minimum Improvements, one or more temporary or final certificates of
occupancy (or comparable instruments) have been issued by the City for the
Minimum Improvements, and that such Minimum Improvements are open for
business to the public; and (ii) for the Public Improvements, acceptance by the
City Council or appropriate administrative staff member of the City of the
completed Public Improvements for maintenance in accordance with the
policies, standards and specifications contained in applicable City ordinances,
which acceptance shall not be unreasonably withheld, conditioned or delayed.
Unless otherwise expressly stated, "Completion of Construction" of the Minimum
Improvements means Completion of Construction of both the Minimum
Improvements and the Public Improvements.
(0)
(a)
(q)
(r)
"Control" means as defined in Section 14.2.
"Control Group" means as defined in Section 14.2.
"Denial" means as defined in Section 12.6.
"Designated Lenders" means as set forth in Section 14.21.
(s)"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.
(t)"Developer Control Group" means as defined in Section 14.2.
(u)"Developer Representative"means as defined in Section
13.1.
(v)"Economic Incentive Period"means as defined in Section
8.3(b)(iii).
(w)"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 Pinal County, Arizona.
(x)"Enforced Delay" means as defined in Section 12.6.
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(y)"Failure" means as defined in Section 12.6.
(z)"General Plan" means as defined in the fourth "WHEREAS"
clause.
(aa)"Grand Opening" means the grand opening of one (1) Anchor
Store of at least one hundred thousand (100,000) square feet of Gross Building
Area for retail business to the public,with such portion of the Property
thereafter remaining fully and continuously open for retail business to the
public.
(bb)"Gross Building Area" means the total floor area of all floors
(including basements) within a given building measured from the outside of one
exterior wall to the outside of the opposite exterior wall, and shall include
mezzanines, common areas, elevator shafts, garden centers and other areas
that benefit the users or operators thereof.For purposes of this definition, all
"garden centers" and associated structures shall meet the following limitations:
1) be immediately adjacent and appurtenant to an enclosed retail store and shall
be enclosed on all four sides and secured by block exterior walls or with
decorative wrought iron features;2)the four-sided enclosure shall be
permanent, decorative and aesthetically pleasing without the use of aluminum
siding and/or chain link fencing; and 3) the roof on such structures shall not be
metal but shall match the roof associated with the main retail structure.
(cc)"Hazardous Substances" means shall mean any substance:
(A) that now or in the future is regulated or governed by, requires investigation
or remediation under, or is defined as a hazardous waste, hazardous substance,
pollutant or contaminant under any governmental statute,code,ordinance,
regulation,rule or order, and any amendment thereto, including (by way of
illustration and not of limitation) the Comprehensive Environmental Response
Compensation and Liability Act,42 U.S.C.§9601 et seq.;the Resource
Conservation and Recovery Act, 42 U.S.C. § 6941 et seq.,the Toxic Substances
Control Act, 15 U.S.C. § 2601 et seq.;the Safe Drinking Water Act, 42 U.S.C. §
300(f)et seq.;the Clean Air Act, 42 U.S.C. § 7401 et seq.;the Arizona Hazardous
Waste Management Act, A.R.S. § 49-421 et seq.;the Arizona Environmental
Quality Act, A.R.S. § 49-1001 et seq.,and any other laws that deal with the
regulation or protection of the environment, including the ambient air, ground
water, surface water and land use, including sub -strata land; or (B) that is toxic,
explosive,corrosive,flammable,radioactive,carcinogenic,dangerous or
otherwise hazardous, including gasoline, diesel fuel, petroleum hydrocarbons,
polychlorinated biphenyls ("PCBs"), asbestos,radon and urea formaldehyde
form insulation; or (C) medical and biohazard wastes regulated by federal, state
or local laws or authorities which includes any solid waste which is generated in
the diagnosis, treatment or immunization of a human being or animal or in any
research relating to that diagnosis,treatment or immunization,or in the
production or testing of biologicals.
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(dd)"Improvement District" means as defined in Section 5.7.
(ee)"Improvement District Bonds" means as defined in Section
5.7.
(if)"Lender" or "Lenders" means as defined in Section 14.21.
(gg)"Master Plan" means as defined in the second "WHEREAS"
clause.
(hh)"Minimum Improvements" means not less than four hundred
fifty thousand (450,000) square feet of tax -generating leaseable area under roof
within at least five hundred thousand (500,000) square feet of gross building
area constructed on the Property (including retail and mall areas, restaurants
and movie theatres), including not fewer than two (2) Anchor Stores.The term
"tax -generating" includes business establishments where its goods and services
are subject to City transaction privilege taxes.Such term does not include
massage facilities, day care, real estate or check cashing businesses and in no
event shall such businesses be counted as "Minimum Improvements"that
trigger any City transaction privilege tax reimbursement.
(ii)"Non -Performance"or "Event of Non -Performance"means
one or more of the events described in Section 12.1 or 12.2; 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 12.
(jj)"Order" means as defined in Section 12.6.
(kk)"Pad Sites" means as defined in Section 14.22.
(II)"Party" or "Parties" means as designated on the first page of
this Agreement.
(mm) "Property" means as defined in Recital A and as described in
Exhibit A.
(nn)"Public Improvements"means as defined in the sixth
"WHEREAS" clause above and as described in Exhibit C.
(oo)"Public Improvement Costs" means all costs, expenses, fees
and charges actually incurred and paid by or on behalf of Developer to
contractors, architects, engineers, surveyors, governmental agencies and other
Third Parties for materials,labor,design,engineering,surveying,site
excavation and preparation, governmental permits, payment and performance
bonds,and all other costs and expenses appurtenant to and reasonably
necessary for the construction,installation,or provision of the Public
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Improvements, together with all costs associated with the acquisition of lands,
rights -of -way and easements either to be dedicated to the City or upon which
Public Improvements are to be constructed.Public Improvement Costs do not
include any fees or other amounts allocable to Developer's "overhead"or
"administrative" costs or "profit."
(pp)"Reimbursement Amount" means as defined in Section 8.1.
(qq)"Reimbursement Payment" means as defined in Section 8.1.
(rr)"Sales Taxes"and "Sales Tax Revenues"mean,for the
purposes of this Agreement, that portion of the City's transaction privilege taxes
which are imposed on "retail sales" (including without limitation taxes imposed
on amusements,admissions,restaurants,hotels and related hospitality
activities) and construction activities (all as described in and contemplated by
Section 8.1 of this Agreement)under the Tax Code of the City of Apache
Junction, as the same may change from time -to -time, applicable to general retail
sales,construction,admissions,amusements,exhibitions,restaurant,sales,
hotel and hospitality revenues and similar activities occurring at the Property;
provided that, for the purposes of this Agreement, the rates of such Sales Taxes
used for calculating any Sales Tax Rebate shall never be more than the Sales
Tax rates imposed and in effect as of the Effective Date, notwithstanding any
increases in the City's transaction privilege tax rate, changes in the unallocated
portion of the City's transaction privilege taxes,or for any other reason
whatsoever; and provided, further, that in no event does the term "Sales Taxes"
include present or future dedicated or special taxes allocated to a specific
purpose only (e.g.,mountain preserve acquisition, transportation, recreation
debt, sewer debt, or special public safety expenditure).
(ss)"Special Fund" means as defined in Section 8.1(a).
(tt)"Term" means the period commencing on the Effective Date
and terminating on the date on which the Parties have performed all of their
obligations hereunder; provided, however, that, except as provided in Section
12.6, if applicable, in no event shall the Term of this Agreement extend beyond
the twenty-fifth (25th) anniversary of the Effective Date.
(uu)"Third Party" means any person (as defined in Section 1(b)
above) other than a Party, or an Affiliate of any Party.
(vv)"Total Incentive Amount" means as defined in Section 8.2.
(ww)"Transfer" means as defined in Section 14.2.
(xx)"Transfer Notice Requirement" means as defined in Section
14.2.
(yy)"Zoning" means as defined in the fourth "WHEREAS" clause.
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2.PARTIES AND PURPOSE OF THIS AGREEMENT.
2.1 Parties to the Agreement.The Parties to this Agreement are
the City and the Developer.
(a)The City.The City is a municipal corporation and a
political subdivision of the State of Arizona, duly organized and validly existing
under the laws of the State of Arizona, exercising its governmental functions and
powers.
(b)The Developer.The Developer is US 60 and Idaho, LLC,
an Arizona limited liability company, together with its successors in interest and
assigns.The City recognizes that Developer will likely undertake development
of the Property, in whole or in part, through its Affiliates.
2.2 Purpose.One purpose of this Agreement is to provide for the
implementation of the Zoning and the Master Plan for the development of the
Property (following approval by the City of the Master Plan) and to provide for
infrastructure and other improvements to be designed and constructed by
Developer or at Developer's direction.The purposes of this Agreement are
more fully described in the Recitals hereto.
3.SCOPE AND REGULATION OF DEVELOPMENT.
3.1 Development Plans.Development of the Property shall be
consistent with the Zoning and the approved Master Plan and shall be governed
by the provisions, requirements and restrictions contained in this Agreement
and by Applicable Laws.
3.1.1 Submissions by Developer.Developer shall submit
complete applications with respect to all aspects of its development of the
Property, including all information required by the City to review and process
Developer's applications.Developer's submissions for the Master Plan shall
include, at the appropriate time required under the City's review process, the
information set forth in Exhibit E.
3.1.2 Amendments.The City and Developer acknowledge
that amendments to the Master Plan may be necessary from time to time, and all
such amendments shall be subject to,and processed in accordance with
Applicable Laws.
3.2 Development Regulation.
3.2.1 Applicable Laws.For the purposes of this Agreement,
the term "Applicable Laws" means the federal, state, county and local laws
(statutory and common law)ordinances,rules,regulations,permit
requirements, and other requirements and official policies of the City which
apply to the development of the Property from time to time.
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3.3 City Development Fees.Developer shall pay all then -current
City impact, development, and resource fees or exactions, 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").
4.PRIVATE IMPROVEMENTS.
4.1 Minimum Improvements.Subject to the terms and conditions
of this Agreement, the Minimum Improvements shall be developed within the
Property as an enclosed mall, a partially enclosed mall, a village center, a
lifestyle center,a "big box"retail center,or any other configuration (or
combination thereof) deemed by Developer to be best suited for the commercial
opportunities presented by the Property at the time of planning such Minimum
Improvements.The Parties agree that Developer shall have no obligation to
develop any more of the Property than the Minimum Improvements.
4.2 Commencement of Construction.Developer agrees that
Commencement of Construction of the Minimum Improvements shall occur,
subject to Enforced Delay, on or before December 31, 2008.
4.3 Grand Opening; Completion of Construction.There shall be a
Grand Opening on or before December 31,2009.Developer agrees that
Completion of Construction of the balance of the Minimum Improvements and all
Public Improvements shall occur no later than the earlier of:(i)the third
anniversary of the Grand Opening;or (ii)December 31,2012,subject to
Enforced Delay.The City and Developer shall confirm in writing to the City the
date of the Completion of Construction when the same becomes known.
4.4 Conditions to Reimbursement.The construction of any
portion of the Minimum Improvements and the Public Improvements by
Developer as described in this Agreement is not a covenant of Developer or a
contractual obligation of Developer, but rather is a condition precedent to the
obligations of the City to reimburse Developer as provided in this Agreement.
5.PUBLIC IMPROVEMENTS.Pursuant to A.R.S.§ 34-201(L),as a
condition of development of the Property 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 governmental authority, the
Public Improvements subject to the terms and conditions of this Agreement.
5.1 Construction and Phasing.The Public Improvements shall be
constructed and may be phased in accordance with the Master Plan.In the
absence of a schedule, Developer shall cause the Public Improvements to be
constructed in conjunction with Developer's construction of the Minimum
Improvements, as Developer and the City mutually agree is appropriate.
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5.2 Design.Bidding.Construction and Dedication.The Public
Improvements shall be designed, bid, constructed and dedicated in accordance
with Applicable Laws,including without limitation all Applicable Laws
concerning City procurement and public bidding procedures.
5.3 City Review and Approval of Plans.Developer recognizes
that, except as expressly provided herein, its development and construction of
the 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.Without limiting the provisions of Section 7 regarding
expedited review, the City will use reasonable efforts to expedite its regulatory
processes (subject to the payment by Developer of any special fees for
expedited processing), including but not limited to use permit, variance, design
review and building permit processes, subject to the terms of Section 7 of this
Agreement.
5.4 Payment of Public Improvement Costs.Developer shall pay
all Public Improvement Costs as the same become due,subject to the
reimbursement provisions of this Agreement, including but not limited to Section
8,et seq.
5.5 Dedication.Acceptance and Maintenance of Public
Improvements.When the Public Improvements or a discrete portion thereof are
completed (e.g.,all of the paving for a particular street within any designated
section or phase of the Property), then upon written request of the City or
Developer,Developer shall dedicate and the City shall accept such Public
Improvements in accordance with the Applicable Laws and upon such
reasonable and customary conditions as the City may impose, including without
limitation a two (2) year workmanship and materials contractor's warranty.
Upon acceptance by the City, the Public Improvements shall become public
facilities and property of the City, and the City shall be solely responsible for all
subsequent maintenance, replacement or repairs.With respect to any claims
arising prior to acceptance of the Public Improvements by the City, Developer
shall bear all risk of, and shall indemnify, defend, pay and hold harmless the City
and its officials, employees and City Council members, for, from and against any
claim arising prior to the City's acceptance of the 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 Public
Improvements, except to the extent caused by the grossly negligent or willful
acts or omissions of the City and its officials,employees and City Council
members.
5.6 Improvement District.Subject to City Council approval and
Applicable Laws,and after the minimum requisite portion of the plans and
specifications for the Public Improvements have been prepared by Developer
and approved by the City,the City and Developer may agree to form an
improvement district (the "Improvement District") for the issuance and sale of
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bonds (the "Improvement District Bonds") to finance the Public Improvement
Costs.The formation of the Improvement District is contingent upon the City
and Developer entering into an Amendment to this Agreement which will include
renegotiated and mutually agreed upon provisions concerning the construction
of the Public Improvements and the financing of the Public Improvement Costs,
the financial assurance for the Developer's share thereof, the Property to be
included in the Improvement District, the assessments (and, as portions of the
Property are sold to Third Parties and released from the Improvement District,
re -assessments) payable by Developer for payments due on the Improvement
District Bonds, and the economic incentives payable by the City to Developer.
5.7 Conditions to Reimbursement.The construction of any
portion of the Public Improvements by Developer as described in this
Agreement is not a covenant of Developer or a contractual obligation of
Developer, but rather is a condition precedent to the obligations of the City to
reimburse Developer as provided in this Agreement.
6.ADDITIONAL MUNICIPAL BENEFITS.In addition to the Public
Improvements and the direct, pecuniary, indirect and intangible benefits which
the City acknowledges it will realize as a consequence of the development of the
Property as contemplated by this Agreement,Developer agrees to perform,
supply or comply with the Additional Municipal Benefits set forth in this Section
6, the covenants, terms and provisions of which shall survive the expiration of
the Term of this Agreement.The City agrees and acknowledges that these
Additional Municipal Benefits are of value to the City and are in addition to those
matters that can be compelled or exacted by the City; are being performed,
supplied or complied with voluntarily by Developer;and confer significant
economic and non -economic benefits upon the City in excess of the economic
and non -economic benefits conferred by Developer's construction of the Public
Improvements.
6.1 Prohibited Uses.In addition to any uses prohibited by
Applicable Laws, Developer shall prohibit the property uses listed on Exhibit G
on the Property, unless hereafter specifically approved by the City Council.
6.2 Name.For the greater of: (a) the Term of this Agreement; or
(b)so long as the Property is owned by Developer or Developer Affiliate,
Developer shall include the name of "Apache Junction"in the name of the
Property for signage and publicity purposes so that the Property will be clearly
and expressly associated with the City, and businesses and patrons will identify
shopping opportunities with the City,with the goal of attracting other
businesses to, and generating additional transaction privilege tax revenue for,
the City.
6.3 Use of Property Name by Developer.Signage constructed or
installed by Developer referring to the Property shall use the name of the
Property set forth in Section 6.2.
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6.4 Use of Property Name by the City.Developer shall permit the
City to use the name of the Property in radio, television,Internet and print
advertisements, utility bill inserts and City publications.Developer agrees to
use of such name, subject to Developer's prior review and approval (not to be
unreasonably withheld or delayed)of all advertisements,inserts and
publications.
6.5 Character,Theme,Design and Architectural Features.
Developer shall cause the Property to incorporate the character, theme, design
and architectural features and improvements described in the Master Plan and
the City's General Plan.
6.6 Construction Trailer.If requested by the City, Developer shall
provide without charge to the City an on -site construction trailer complete with
bathroom facilities, electrical power, water, and HVAC at no cost, for use by the
City and those involved during the development of the Property with the
development review and construction inspection process for the Property, such
trailer to be located near the other construction trailer(s)occupied by
Developer's construction supervisors for the Property.
6.7 Access.Developer shall permit access to the Property 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
assure compliance with all Applicable Laws and with the terms of this
Agreement.
6.8 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.
6.9 Sight -Line Easements.Developer shall discuss with the City
the possibility of imposing a "sight -line" or similar easement upon a portion of
the Property for conservation purposes and in order to preserve the view or
visibility from the Property of the scenic features surrounding the Property. The
location, term and form of any such easement shall be within the sole and
absolute discretion of Developer, which shall nevertheless give consideration to
the desires of the City and the compatibility of those desires with business
considerations of Developer.
6.10 Public Access.Developer will grant to the City recorded
emergency vehicle access and use easements over and through the main
entrance to the Property and other private roadways as may exist from time to
time within the Property.
7.DEVELOPER ASSISTANCE.Developer, by notice to the City, may
request to have the City implement an expedited review and/or inspection
process;and if the City consents,Developer shall engage at its cost such
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private independent consultants and advisors as are approved by and
necessary to assist the City in the review and/or inspection process; provided,
that such consultants and advisors shall take instruction from, be controlled by,
and be responsible to the City rather than Developer and provided further, that
to the extent the City elects to use its own personnel and overtime and similar
charges are incurred by the City, Developer shall be responsible for incremental
overtime costs incurred above the City's ordinary operation expenses for such
personnel.
8.PAYMENTS TO DEVELOPER.
8.1 Reimbursement Amount.The City agrees to pay to Developer
in accordance with the reimbursement provisions of this Agreement (a
"Reimbursement Payment" as estimated in Exhibit D, attached hereto) the sum
of all Public Improvement Costs,but in no event more than Six Million Six
Hundred Forty Thousand Three Hundred Seventy Four Dollars and Sixty Cents
($6,640,374.60), but only to the extent that Sales Tax Revenues are available for
such reimbursement as further set forth in this Section 8 of this Agreement (the
"Reimbursement Amount").
8.2 Allocation and Deposit of Revenues.
(a)Allocated Revenues.Subject to the limitations set forth
in this Agreement, fifty percent (50%) of Sales Tax Revenues as defined in
Section 1 of this Agreement shall be deposited by the City in a segregated
bookkeeping account within the City's General Fund ("Special Fund") for the
purpose of payment hereunder (the "Allocated Revenues").The first deposit
into the Special Account shall be made within forty-five (45) calendar days
following the end of the first calendar quarter following the Effective Date in
which Sales Tax Revenues are collected (and received by the City) from any
development or construction activity on, from or related to the Property, or any
sales or similar taxable activity occurs on or at the Property, and shall thereafter
be made within forty-five (45) calendar days of the end of every subsequent
quarter, until the Reimbursement Amount has been paid to the Developer, or
until the expiration of the Term of this Agreement, whichever occurs first.The
City recognizes that Sales Taxes shall, in any event, be collected and deposited
in the Special Fund (i) from and after the commencement of any construction
activity with respect to construction sales and use taxes, and (ii) from and after
Grand Opening with respect to all Sales Taxes.
(b)Special Fund.The Special Fund shall be segregated
from other City funds and City shall pay into the Special Fund, within forty-five
(45) calendar days of the end of each month, the Allocated Revenues.The
Quarterly Reimbursement Payments designated in this Section 8 shall be paid
by the City to Developer from the Special Fund.
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private independent consultants and advisors as are approved by and
necessary to assist the City in the review and/or inspection process; provided,
that such consultants and advisors shall take instruction from, be controlled by,
and be responsible to the City rather than Developer and provided further, that
to the extent the City elects to use its own personnel and overtime and similar
charges are incurred by the City, Developer shall be responsible for incremental
overtime costs incurred above the City's ordinary operation expenses for such
personnel.
8.PAYMENTS TO DEVELOPER.
8.1 Reimbursement Amount.The City agrees to pay to Developer
in accordance with the reimbursement provisions of this Agreement (a
"Reimbursement Payment" as estimated in Exhibit D, attached hereto) the sum
of all Public Improvement Costs,but in no event more than Six Million Six
Hundred Forty Thousand Three Hundred Seventy Four Dollars and Sixty Cents
($6,640,374.60), but only to the extent that Sales Tax Revenues are available for
such reimbursement as further set forth in this Section 8 of this Agreement (the
"Reimbursement Amount").
8.2 Allocation and Deposit of Revenues.
(a)Allocated Revenues.Subject to the limitations set forth
in this Agreement, fifty percent (50%) of Sales Tax Revenues as defined in
Section 1 of this Agreement shall be deposited by the City in a segregated
bookkeeping account within the City's General Fund ("Special Fund") for the
purpose of payment hereunder (the "Allocated Revenues").The first deposit
into the Special Account shall be made within forty-five (45) calendar days
following the end of the first calendar quarter following the Effective Date in
which Sales Tax Revenues are collected (and received by the City) from any
development or construction activity on, from or related to the Property, or any
sales or similar taxable activity occurs on or at the Property, and shall thereafter
be made within forty-five (45) calendar days of the end of every subsequent
quarter, until the Reimbursement Amount has been paid to the Developer, or
until the expiration of the Term of this Agreement, whichever occurs first.The
City recognizes that Sales Taxes shall, in any event, be collected and deposited
in the Special Fund (i) from and after the commencement of any construction
activity with respect to construction sales and use taxes, and (ii) from and after
Grand Opening with respect to all Sales Taxes.
(b)Special Fund.The Special Fund shall be segregated
from other City funds and City shall pay into the Special Fund, within forty-five
(45) calendar days of the end of each month, the Allocated Revenues.The
Quarterly Reimbursement Payments designated in this Section 8 shall be paid
by the City to Developer from the Special Fund.
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(c)Allocated Revenue Reduction.In order to compensate
for initially reduced Sales Taxes resulting from a Relocated Business or a
Second Location Business, the City shall retain, and not include in the Sales Tax
Revenues for purposes of calculating Allocated Revenues, a sum (the "Sales Tax
Base") equal to one-third (1/3) of the Sales Taxes paid or payable by each
Relocated Business and each Second Location Business to the City for a single
location for Taxable Activities during the three (3) years immediately preceding
first day of the month during which any Relocated Business or any Second
Location Business opens for business to the public in the Property (the
"Relocation Date").The Sales Tax Revenues shall be reduced for each of the
first three (3) years after the applicable Relocation Date for each Relocated
Business and each Second Location Business (the "Sales Tax Base Reduction
Period");provided that:on the first (1st)anniversary of the applicable
Relocation Date the Sales Tax Base shall be reduced to two-thirds (2/3) of the
original Sales Tax Base;on the second (2nd)anniversary of the applicable
Relocation Date the Sales Tax Base shall be reduced to one-third (1/3) of the
original Sales Tax Base; and on the third (3rd) anniversary of the applicable
Relocation Date and thereafter, the Sales Tax Base shall be zero. The Sales Tax
Base and the Sales Tax Reduction Period shall be separately calculated and
determined for each Relocated Business and each Second Location Business.
For purposes of this Section 8.2(c),the term "Relocated
Business" shall mean each business in the City which:
(i) closes an existing retail store in the City and relocates to,
and opens a retail store comprised of not less than ten thousand (10,000) square
feet of leaseable or usable space for business to the public in, the Property prior
to the third (3rd) anniversary of the Completion of Construction; and
(ii) has two (2) or fewer business locations in the City, outside
the Property, prior to such relocation or each business in the City.
For purposes of this Section 8.2(c),the term "Second
Location Business" shall mean each business in the City which:
(i) opens a new retail store comprised of not less than ten
thousand (10,000) square feet of leaseable or usable space for business to the
public in the Property prior to the third (31 anniversary of the Completion of
Construction; and
(ii)has one business location in the City,outside the
Property, prior to new store opening.
For purposes of this Section 8.2(c),the term "Taxable
Activities" shall mean retail sales (which shall include, but not be limited to,
automobile and motor vehicle sales and resales, service and repair, leasing and
15
other related activities), admissions, exhibitions, amusements, restaurant, bar
and hotel activities.
8.3 Payment Procedures.
(a)Conditions Precedent to Reimbursement.
Notwithstanding the accumulation of funds in the Special Account and the
allocation of revenues to Developer under this Agreement, no payment shall be
made to Developer from the Special Account (and Developer shall have no
ownership or interest in the Special Account)until the Completion of
Construction of the Minimum Improvements and the Public Improvements;
provided, however, that prior to Completion of Construction of the Minimum
Improvements and the Public Improvements,Sales Tax Revenues shall
accumulate in the Special Account for the benefit of,and for subsequent
disbursement to, Developer.Further, the City shall have no obligation to make
any payment to Developer from the Special Account until Developer shall have
delivered to the City evidence satisfactory to the City in its commercial
discretion to support the claim by Developer for reimbursement for such Public
Improvement Costs.
(b)Quarterly Reimbursement Payments.
(i)Reimbursement Payments shall be made to
Developer no less frequently than quarterly.The first quarterly Reimbursement
Payment (which shall include all accumulated Allocated Revenues held in the
Special Account) shall be made by City to Developer within,forty-five (45)
calendar days following the last day of the calendar quarter in which Completion
of Construction of the Minimum Improvements occurs.
(ii)Reimbursement Payments will continue to be
made forty-five (45) calendar days after the last day of every quarter thereafter
in which Sales Tax Revenues are collected from the Property,until the
Reimbursement Amount has been paid in full, or until eight (8) years from the
Grand Opening, whichever first occurs.Any accrued but not yet disbursed
Reimbursement Payments existing upon expiration of the Term of this
Agreement shall be paid to Developer notwithstanding the fact that such
disbursement occurs after the expiration of the Term.
(c)Limitations on Payments to Developer.The City shall in
no event be required to pay to the Developer, with respect to any period, any
greater amount than the Allocated Revenues actually received by the City in or
prior to such period and credited (or which properly should have been credited)
to the Special Account.
8.4 Determination of Amount of Allocated Revenues Received by
the City.The City's Director of Finance (or corresponding officer if there is no
Director of Finance)shall determine,from sales tax returns and other
16
appropriate financial records of the City, the amount of Sales Tax Revenues for
each quarter (or partial quarter if appropriate), with respect to the Parcels.
Absent manifest error, any such determination shall be final and binding on
Developer.
8.5 Computation of Sales Tax Revenues.Within forty-five (45)
calendar days following the end of each City fiscal year, the City will deliver to
Developer a statistical report of all Sales Tax Revenues (classified,if
appropriate, to prevent the identification of a particular return or report).In
addition to the foregoing, upon written request of the Developer, the City will
deliver to Developer an accounting of all sales tax receipts.Such report shall
specifically identify any offsets, credits, exclusions or other deductions from the
gross sales tax revenues generated by or attributable to the Property which
have been utilized by the City in computing the Sales Tax Revenues for purposes
of this Agreement.
8.6 City's Prepayment Right.The City shall have the right to
prepay the Reimbursement Amount, in whole or in part at any time, without
premium or penalty.
8.7 Multiple Business, Contractor and Subcontractor Locations.
Since some businesses with multiple locations in the City (a "Multiple Location
Taxpayer")report their Sales Taxes on the basis of revenues for all their
locations in the City, rather than separately for each location, Developer shall
request each such Multiple Location Taxpayer located in the Property to
separately report its Sales Taxes to or furnish the City with a certified break-out
worksheet showing its Sales Taxes for that location within the Property, along
with the Multiple Location Taxpayer's name and City privilege tax identification
number.To the extent such separate reporting is not received by the City for a
Multiple Location Taxpayer,and if no other reliable information regarding
revenues at the Property is available to City and Developer, the Sales Taxes for
a location within the Property shall be equal to the total Sales Taxes reported for
all of its locations in the City multiplied by a fraction, the numerator of which
shall be one (1) and the denominator of which shall be the total number of
locations of that Multiple Location Taxpayer in the City.Similarly, since some
contractors and subcontractors with multiple projects or jobs in the City (also, a
"Multiple Location Taxpayer") report their Sales Taxes on the basis of revenues
for all their projects or jobs in the City, rather than separately for each project or
job Developer shall request each contractor and subcontractor having Taxable
Activities in constructing the Property to separately report its Sales Taxes or
furnish the City with a certified break out worksheet showing its Sales Taxes for
those Taxable Activities within the Property,along with the contractor's or
subcontractor's name and City transaction privilege tax identification number. If
such separate reporting or break out worksheet is not received by the City for a
contractor or subcontractor having multiple projects or jobs in the City,
Developer shall provide the City with Developer's certified statement of the
contracting revenues paid to any such contractor or subcontractor with respect
17
to the Property, and that data shall be utilized by the City to compute the Sales
Taxes paid and the Sales Tax Rebate.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 sale, lease, sublease, contracting or other Taxable Activities involving any
property located within the Property.
9.INDEMNITY; RISK OF LOSS.
9.1 Indemnity by Developer.Developer shall pay,defend,
indemnify and hold harmless the City and its City Council members, officers and
employees from and against all claims,demands,fines,penalties,costs,
expenses,damages,losses,obligations,judgments,liabilities,and suits
(including attorneys fees, experts' fees and court costs associated) which arise
from or relate in any way to any act or omission by Developer, or its employees,
contractors,subcontractors,agents or representatives,undertaken in
fulfillment of Developer's obligations under this Agreement.The provisions of
this Section 9.1, however, shall not apply to loss or damage or claims therefore
which are attributable to acts or omissions of the City, its agents, employees,
contractors,subcontractors or representatives.Developer shall have no
defense obligation in any instance in which a claim is asserted based, in whole
or in part, upon an act or omissions of the City, its employees, contractors,
subcontractors, agents or representatives. The foregoing indemnity obligations
of Developer shall survive the expiration or termination of this Agreement for a
period equal to the applicable statute of limitations period.
9.2 Indemnity by the City.The City shall pay, defend, indemnify
and hold harmless Developer and its Affiliates and their respective partners,
shareholders, officers, managers, members, agents and representatives (and
their respective partners, shareholders, officers, managers, members, agents
or representatives) from and against all claims,demands,fines,penalties,
costs, expenses, damages, losses, obligations, judgments, liabilities and suits
(including attorneys' and experts' fees and court costs associated) which arise
from or which relate in any way to any act or omission on the part of the City, its
employees, contractors, subcontractors, agents or representatives, undertaken
in fulfillment of the City's obligations under this Agreement The provisions of
this Section 9.2, however, shall not apply to loss or damage or claims therefore
which are attributable to acts or omissions of Developer and/or its Affiliates, or
the respective agents,employees,contractors,subcontractors or
representatives.The City shall have no defense obligation in any instance in
which a claim is asserted based, in whole or in part, upon an act or omissions of
Developer,its employees,contractors,subcontractors,agents or
representatives.The foregoing indemnity obligations of the City shall survive
the expiration or termination of this Agreement for a period equal to the
applicable statute of limitations period.
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9.3 Risk of Loss.Developer assumes the risk of any and all loss,
damage or claims to any portion of the Public Improvements unless and until title
to the Public Improvements is transferred to the City.At the time title to the
Public Improvements is transferred to the City by dedication deed,plat
recordation, or otherwise, Developer will, to the extent allowed by law, assign to
the City any unexpired warranties relating to the design, construction and/or
composition of such Public Improvements.Acceptance of the Public
Improvements shall be conditioned on the City's receipt of a two (2)year
warranty of workmanship,materials and equipment,in form and content
reasonably acceptable to the City,provided however that such warranty or
warranties may be provided by Developer's contractor or contractors directly to
the City and are not required from Developer, and that any such warranties shall
extend from the date of completion of any Public Improvement, any component
thereof, or the work of any specific trade or contractor, as applicable.
9.4 Insurance.During the period of any construction involving
the Public Improvements, and with respect to any construction activities relating
to the Public Improvements, Developer will obtain and provide the City with
proof of payment of premiums and certificates of insurance showing that
Developer is carrying,or causing its contractor(s)to carry,builder's risk
insurance,comprehensive general liability and worker!s',,,. compensation
insurance policies in amounts and coverages set forth on Exhibit J.Such
policies of insurance shall be placed with financially sound and reputable
insurers, require the insurer to give at least thirty (30) calendar days' advance
written notice of cancellation to the City, and will name the City as an additional
insured on such policies.
10.CITY REPRESENTATIONS.The City represents and warrants to
Developer that:
10.1 The City has the full right, power and authorization to enter
into and perform this Agreement and each of City's obligations and undertakings
under this Agreement, and the City's execution, delivery and performance of this
Agreement have been duly authorized and agreed to in compliance with the
requirements of the City Code.
10.2 All consents and approvals necessary to the execution,
delivery and performance of this Agreement have been obtained, and no further
action needs to be taken in connection with such execution,delivery and
performance.
10.3 The City will execute and acknowledge when appropriate all
documents and instruments and take all actions necessary to implement,
evidence and enforce this Agreement.
10.4 The City knows of no litigation,proceeding,initiative,
referendum, investigation or threat of any of the same contesting the powers of
19
the City or its officials with respect to this Agreement that has not been
disclosed in writing to Developer.
10.5 This Agreement (and each undertaking of the City contained
herein),constitutes a valid,binding and enforceable obligation of the City,
enforceable according to its terms, except to the extent limited by bankruptcy,
insolvency and other laws of general application affecting creditors' rights and
by equitable principles, whether considered at law or in equity.The City will
defend the validity and enforceability of this Agreement in the event of any
proceeding or litigation arising from its terms that names the City as a party or
which challenges the authority of the City to enter into or perform any of its
obligations hereunder and will cooperate with Developer in connection with any
other action by a Third Party in which Developer is a party and the benefits of
this Agreement to Developer are challenged.The severability and reformation
provisions of Section 14.3 shall apply in the event of any successful challenge to
this Agreement or to any provision hereof.
10.6 The execution, delivery and performance of this Agreement
by the City is not prohibited by,and does not conflict with,any other
agreements, instruments or judgments or decrees to which the City is a party or
is otherwise subject.
10.7 The City has been assisted by counsel of its own choosing in
connection with the preparation and execution of this Agreement.
11.DEVELOPER REPRESENTATIONS.Developer represents and
warrants to the City that:
11.1 Developer has the full right, power and authorization to enter
into and perform this Agreement and of the obligations and undertakings of
Developer under this Agreement, and the execution, delivery and performance
of this Agreement by Developer has been duly authorized and agreed to in
compliance with the organizational documents of Developer.
11.2 All consents and approvals necessary to the execution,
delivery and performance of this Agreement have been obtained, and no further
action needs to be taken in connection with such execution,delivery and
performance.
11.3 Developer will execute and acknowledge when appropriate
all documents and instruments and take all actions necessary to implement,
evidence and enforce this Agreement.
11.4 As of the date of this Agreement,Developer knows of no
•litigation, proceeding or investigation pending or threatened against or affecting
Developer,which could have a material adverse affect on Developer's
20
performance under this Agreement that has not been disclosed in writing to the
City.
11.5 This Agreement (and each undertaking of Developer
contained herein)constitutes a valid,binding and enforceable obligation of
Developer, enforceable according to its terms, except to the extent limited by
bankruptcy, insolvency and other laws of general application affecting creditors'
rights and by equitable principles,whether considered at law or in equity.
Developer will defend the validity and enforceability of this Agreement in the
event of any proceeding or litigation arising from its terms that names Developer
as a party or which challenges the authority of Developer to enter into or
perform any of its obligations hereunder and will cooperate with the City in
connection with any other action by a Third Party in which the City is a party and
the benefits of this Agreement to the City are challenged.The severability and
reformation provisions of Section 14.3 shall apply in the event of any successful
challenge to this Agreement.
11.6 The execution, delivery and performance of this Agreement
by Developer is not prohibited by,and does not conflict with,any other
agreements, instruments, judgments or decrees to which Developer is a party or
to which Developer is otherwise subject.
11.7 Developer has not paid or given, and will not pay or give, any
third party any money or other consideration for obtaining this Agreement other
than normal costs of conducting business and costs of professional services
such as the services of architects, engineers and attorneys.
11.8 Developer has been assisted by counsel of its own choosing
in connection with the preparation and execution of this Agreement.
12.EVENTS OF NON-PERFORMANCE; REMEDIES.
12.1 Events of Non -Performance by Developer."Non-
Performance"or an "Event of Non -Performance"by Developer under this
Agreement shall mean one or more of the following:
(a)Any representation or warranty made in this Agreement
by Developer was materially inaccurate when made or shall prove to be
materially inaccurate during the Term;
(b)Developer fails to comply with the dates established in
this Agreement for the Commencement of Construction or the Completion of
Construction, for any reason other than an Enforced Delay;
(c)Foreclosure (or deed in lieu of foreclosure) upon any
mechanic's, materialmen's or other lien on the Property prior to Completion of
Construction or upon any improvements on such Property,excluding liens
21
imposed in connection with Developer's financing or refinancing by Lenders
which have entered into nondisturbance agreements with the City in
substantially the same form as Exhibit K, but such lien shall not constitute a Non-
Performance if Developer deposits in escrow sufficient funds to discharge the
lien or otherwise bonds over such liens in a customary fashion;
(d)Developer transfers or attempts to transfer or assign
this Agreement in violation of Section 14.2; or
(e)Developer fails to observe or perform any other
material covenant, obligation or agreement required of it under this Agreement.
12.2 Events of Non -Performance by the City.Non -Performance or
an Event of Non -Performance by the City under this Agreement shall mean one
or more of the following:
(a)Any representation or warranty made in this Agreement
by the City was materially inaccurate when made or shall prove to be materially
inaccurate during the Term;
(b)Subject to the terms of Section 8 of this Agreement, the
City fails to make Economic Incentive Payments to Developer as provided in this
Agreement; or
(c)The City fails to observe or perform any other material
covenant, obligation or agreement required of it under this Agreement.
12.3 Grace Periods; Notice and Cure.Upon the occurrence of an
Event of Non -Performance by any Party, such Party shall, upon written notice
from the other Party,proceed immediately to cure or remedy such Non-
Performance and, in any event, such Non -Performance shall be cured within
thirty (30)calendar days (or twenty (20)calendar days in the event of a
monetary Non -Performance) after receipt of such notice.
12.4 Remedies for Non -Performance.Whenever any Event of Non-
Performance occurs and is not cured (or cure undertaken)by the non-
performing Party in accordance with Section 12.3 of this Agreement, the other
Party may take any of one or more of the following actions:
(a)Remedies of the City.The City's exclusive remedies for
an Event of Non -Performance by Developer shall consist of, and shall be limited
to the following:
(i)If an Event of Non -Performance by Developer
occurs prior to Completion of Construction and with respect to Developer's
failure to construct or develop the Minimum Improvements and/or the Public
Improvements in accordance with the terms of this Agreement, the City may
suspend any of its obligations under this Agreement, other than the deposit of
22
the Sales Tax Rebates into the Special Fund pursuant to Section 8.2(a), during
the period of the Non -Performance.
(ii)If the Event of Non -Performance under Section
12.4(a)(i) is not cured within ninety (90) calendar days after written notice by
the City to Developer of such Non -Performance, the City may terminate this
Agreement by written notice thereof to Developer, in which event the Special
Fund also shall terminate and all Sales Tax Rebates plus interest earned
thereon shall be returned to the City free of any claims by Developer.
(iii)At any time, the City may seek special action or
other similar relief (whether characterized as mandamus,injunction or
otherwise), requiring Developer to undertake and to fully and timely address a
public safety concern or to enjoin any construction or activity undertaken by
Developer that is not in accordance with the terms of this Agreement.
(b)Remedies of Developer.Developer's exclusive
remedies for an Event of Non -Performance by the City shall consist of and shall
be limited to the following:
(i)Recovery of damages for unpaid amounts due
in accordance with the provisions of this Agreement, particularly Section 8.
Such damages shall consist of Developer's actual damages as of the time of
entry of judgment (meaning the right to receive payments from the Special
Fund to be applied to the Reimbursement Amount in accordance with and
limited by this Agreement). Developer waives any right to seek consequential,
punitive, multiple, exemplary or any other damages.
(ii)If an Event of Non -Performance by the City
occurs at any time, whether prior to or after Completion of Construction,
Developer may seek special action or other similar relief (whether
characterized as mandamus, injunction or otherwise), requiring the City to
undertake and to fully and timely perform its obligations under this
Agreement, including, but not limited to, the collection, deposit, allocation,
and disbursement of Sales Tax Rebates to Developer in accordance with the
terms of this Agreement.
12.5 Delays; Waivers.Except as otherwise expressly provided in
this Agreement, any delay by any Party in asserting any right or remedy under
this Agreement shall not operate as a waiver of any such rights or limit such
rights in any way; and any waiver in fact made by such Party with respect to any
Non -Performance by the other Party shall not be considered as a waiver of
rights with respect to any other Non -Performance by the performing Party or
with respect to the particular Non -Performance except to the extent specifically
waived in writing.It is the intent of the Parties that this provision will enable
each Party to avoid the risk of being limited in the exercise of any right or
remedy provided in this Agreement by waiver, laches or otherwise at a time
23
when it may still hope to resolve the problems created by the Non -Performance
involved.
12.6 Enforced Delay in Performance for Causes Beyond Control of
Party.Whether stated or not, all periods of time in this Agreement are subject to
this Section 12.6.Neither the City nor Developer, as the case may be, shall be
considered not to have performed its obligations under this Agreement in the
event of enforced delay (an "Enforced Delay") due to: (1) causes beyond its
control and without its fault, negligence or failure to comply with Applicable
Laws, including, but not restricted to, acts of God, acts of public enemy, acts of
the Federal, state or local government, acts of the other Party, acts of a Third
Party, litigation concerning the validity and enforceability of this Agreement or
relating to transactions contemplated hereby (including the effect of petitions
for initiative or referendum), fires, floods, epidemics, pandemics, quarantine,
restrictions, strikes, embargoes, labor disputes, and unusually severe weather
or the delays of subcontractors or materialmen due to such causes, act of a
public enemy, war, terrorism or act of terror (including but not limited to bio-
terrorism or eco-terrorism), nuclear radiation, blockade, insurrection, riot, labor
strike or interruption, extortion, sabotage, or similar occurrence or any exercise
of the power of eminent domain, condemnation, or other taking by the action of
any governmental body on behalf of any public, quasi -public, or private entity, or
declaration of moratorium or similar hiatus directly affecting the Property
(whether permanent or temporary) by any public, quasi -public or private entity;
(2) the discovery of Hazardous Substances on, at or affecting the Property not
disclosed by any applicable environmental assessment assessment or
otherwise known by or disclosed to the Party or Parties affected thereby; the
discovery of funerary objects or archaeological resources or artifacts on, at or
affecting the Property requiring repatriation, study,removal or further acts
mandated by federal or state law; or the discovery of Endangered Species on, at
or affecting the Property; (3) the order, judgment, action, or determination of
any court, administrative agency, governmental authority or other governmental
body other than the City or the Council or one of its departments, divisions,
agencies, commissions or boards (collectively, an "Order") which delays the
completion of the work or other obligation of the Party claiming the delay; or the
suspension, termination, interruption, denial, or failure of renewal (collectively,
a "Failure")of issuance of any permit,license,consent,authorization,or
approval necessary to Developer's undertakings pursuant to this Agreement,
unless it is shown that such Order or Failure is the result of the fault, negligence
or failure to comply with Applicable Laws by the Party claiming the delay;
provided, however, that the contesting in good faith of any such Order or Failure
shall not constitute or be construed or deemed as a waiver by a Party of
Enforced Delay; (4) the denial of an application, failure to issue, or suspension,
termination, delay or interruption other than by or from the City or the Council or
one of its departments, divisions, agencies, commissions or boards (collectively,
a "Denial")in the issuance or renewal of any permit,approval or consent
required or necessary in connection with Developer's undertakings pursuant to
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this Agreement, if such Denial is not also the result of fault, negligence or failure
to comply with Applicable Laws by the Party claiming the delay; provided that
the contesting in good faith or the failure in good faith to contest any such Denial
shall not constitute or be construed or deemed as a waiver by a Party of
Enforced Delay; and (5) the failure of any contractor, subcontractor or supplier
to furnish services,materials or equipment in connection with Developer's
undertakings pursuant to this Agreement, if such failure is caused by Enforced
Delay as defined herein, if and to the extent, and only so long as the Party
claiming the delay is not reasonably able,after using its commercially
reasonable efforts,to obtain substitute services,materials or equipment of
comparable quality and cost.In no event will Enforced Delay include any delay
resulting from general economic or market conditions,unavailability for any
reason of particular tenants or purchasers of portions of the Property, nor from
the unavailability for any reason of particular contractors,subcontractors,
vendors,investors or lenders desired by Developer in connection with the
Property, it being agreed that Developer will bear all risks of delay which are not
Enforced Delay.In the event of the occurrence of any such Enforced Delay, the
time or times for performance of the obligations of the Party claiming delay shall
be extended for a period of the Enforced Delay; provided that the Party seeking
the benefit of the provisions of this Section 12.6 shall, within thirty (30) calendar
days after such Party knows of any such Enforced Delay, first notify the other
Party of the specific delay in writing and claim the right to an extension for the
period of the Enforced Delay; provided, however, that either Party's failure to
notify the other of an event constituting an Enforced Delay shall not alter,
detract from or negate its character as an Enforced Delay if such event of
Enforced Delay were not known or reasonably discoverable by such Party.
12.7 Rights and Remedies Cumulative.The rights and remedies of
the Parties are cumulative, and the exercise by either Party of any one or more
of such rights shall not preclude the exercise by it, at the same or different
times, of any other right or remedy for any other Non -Performance by the other
Party.
13.COOPERATION AND ALTERNATIVE DISPUTE RESOLUTION.
13.1 Representatives.To further the cooperation of the Parties in
implementing this Agreement, the City and Developer each shall designate and
appoint a representative to act as a liaison between the City and its various
departments and Developer.The initial representative for the City shall be the
City Manager (the "City Representative")and the initial representative for
Developer shall be its Project Manager, as identified by Developer from time to
time (the "Developer Representative").The City's and Developer's
Representatives shall be available at all reasonable times to discuss and review
the performance of the Parties to this Agreement and the development of the
Property.
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13.2 Impasse.The City acknowledges and agrees that it is
desirable for Developer to proceed rapidly with the implementation of this
Agreement and the development of the Property. Accordingly, the Parties agree
that if at any time Developer believes an impasse has been reached with the City
staff on any issue affecting the Property which is not an Event of Non-
Performance, Developer shall have the right to immediately appeal to the City
Representative for an expedited decision pursuant to this Section.If the issue
on which an impasse is reached is an issue where a final decision can be
reached by the City staff, the City Representative shall give Developer a final
administrative decision within seven (7) calendar days after Developer's request
for an expedited decision.If the issue on which an impasse has been reached is
one where a final decision requires action by the City Council,the City
Representative shall request a City Council hearing on the issue to take place
within thirty (30)calendar days after Developer's request for an expedited
decision; provided, however, that if the issue is appropriate for review by the
City's Planning and Zoning Commission, the matter shall be submitted to the
Planning and Zoning Commission within thirty (30) calendar days, and then to
the City Council at its first meeting following the Planning and Zoning
Commission hearing and the applicable public notice period.Both the City and
Developer agree to continue to use reasonable good faith efforts to resolve any
impasse pending such expedited decision.
13.3 Mediation.If there is a dispute hereunder which is not an
Event of Non -Performance and which the Parties cannot resolve between
themselves in the time frame set forth in Section 13.2, the Parties agree that
there shall be a ninety (90) calendar day moratorium on litigation during which
time the Parties agree to attempt to settle the dispute by non -binding mediation
before commencement of litigation.The mediation shall be held under the
Commercial Mediation Rules of the American Arbitration Association but shall
not be under the administration of the AAA unless agreed to by the Parties in
writing, in which case all administrative fees shall be divided evenly between the
City and Developer.The matter in dispute shall be submitted to a mediator
mutually selected by Developer and the City.If the Parties cannot agree upon
the selection of a mediator within ten (10) calendar days, then within five (5)
calendar days thereafter, the City and Developer shall request that the Presiding
Judge of the Superior Court in and for the County of Pinal, State of Arizona,
appoint the mediator.The mediator selected shall have at least ten (10) years
experience in mediating or arbitrating disputes relating to commercial property.
The cost of any such mediation shall be divided equally between the City and
Developer.The results of the mediation shall be nonbinding with any Party free
to initiate litigation upon the conclusion of the latter of the mediation or of the
ninety (90)calendar day moratorium on litigation.The mediation shall be
completed in one day (or less) and shall be confidential, private, and otherwise
governed by the provisions of A.R.S. § 12-2238.
14.MISCELLANEOUS PROVISIONS.
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14.1 Governing Law; Choice of Forum.This Agreement shall be
deemed to be made under, shall be construed in accordance with, and shall be
governed by the internal, substantive laws of the State of Arizona (without
reference to conflict of law principles).Any action brought to interpret, enforce
or construe any provision of this Agreement shall be commenced and
maintained in the Superior Court of the State of Arizona in and for the County of
Pinal (or, as may be appropriate, in the Justice Courts of Pinal County, Arizona,
or in the United States District Court for the District of Arizona, if, but only if, the
Superior Court lacks or declines jurisdiction over such action).The Parties
irrevocably consent to jurisdiction and venue in such courts for such purposes
and agree not to seek transfer or removal of any action commenced in
accordance with the terms of this Section 14.1.
14.2 Restrictions on Assignment and Transfer.
14.2.1 Definitions.For purposes of Section 14.2 of this
Agreement,the following terms shall have the meanings ascribed to them
below:
(a)"Affiliate"shall have the meaning ascribed to
such term in Section 1(c) of this Agreement;
(b)"Developer" shall have the meaning ascribed to
such term in Section 1(y) of this Agreement;
(c)"Developer Principals" means any one or more of
Tim J. Do',ander, Walter L. Brown, Jr., or Christopher P. Hinkson;
(d)"Developer Affiliate"means Developer,
Diversified Partners Development Company, LLC, CTW Retail Partners,
LLC or an Affiliate of any of the foregoing;
(e)"Developer Control Group"means any one or
more of Developer, Developer Affiliate or Developer Principals;
(f)"Transfer" means a transfer or assignment of all
or part of the rights or obligations of any Party under this Agreement;
(g)"Control"means the power to control the
management and policies of a person, as a result of stock or membership
interest ownership,operating agreement provisions,management
agreement or otherwise;
(h)"Transfer Notice" means a prior written notice to
be delivered to City not fewer than fifteen (15) calendar days in advance of
certain Transfers, describing the rights, obligations and/or interests to be
transferred or assigned and providing the name and address of the
transferee; and
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(i)"Person"shall have the meaning ascribed to
such term in Section 1(b)(ii) of this Agreement.
14.2.2 Restriction on Transfers.Except as provided in
this Section 14.2, prior to Completion of Construction, no Transfer shall occur
without the prior written consent of City,which consent may be given or
withheld in the City's sole and unfettered discretion. The restrictions set forth in
Section 14.2 of this Agreement shall terminate automatically,and without
further notice or action, upon Completion of Construction.No voluntary or
involuntary successor in interest to Developer shall acquire any rights or
powers under this Agreement, except as expressly set forth herein.
14.2.3 Exclusions/Permitted Transfers.The restriction
on Transfer set forth in Section 14.2.2 of this Agreement shall not apply to the
following:
(a)any Transfer,where after completion of the
Transfer, Control of Developer and ownership of not less than fifty-one
percent (51%) of the total ownership interests in Developer remains in the
Developer Control Group;
(b)the exercise of remedies by any Lender referred
to in Section 14.21 of this Agreement, which Lender has entered into a
non -disturbance agreement with the City;
(c)a pledge, collateral assignment, encumbrance or
similar financing or refinancing transaction (including, without limitation,
assignment of any right to receive any payment or reimbursement from
the City under this Agreement) to any Lender which provides acquisition,
construction, permanent, working capital, tenant improvement or other
financing, directly or indirectly, to Developer for all or any part of the
Property; and
(d)a Transfer to a successor in interest to Developer
with respect to all or part of the Property,if Developer remains
responsible for the performance of its obligations under this Agreement
(i.e., if the Transfer does not result in a novation).
14.2.4 Notice of Transfer.Developer shall provide a
Transfer Notice to City with respect to:
(a)any sale or assignment of any interest in
Developer which results in ownership of less than fifty-one percent (51%)
of the total ownership interests in Developer being held by the Developer
Control Group.
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(b)any Transfer referred to in Section 14.2.3(c) or
(d) of this Agreement.
14.2.5 Transfers by City.The City's rights and
obligations under this Agreement shall be non -assignable and non -transferable,
without the prior express written consent of Developer, which consent may be
given or withheld in Developer's sole and unfettered description.
14.3 Limited Severability.The City and Developer each believes
that the execution,delivery and performance of this Agreement are in
compliance with all Applicable Laws.However, in the unlikely event that any
provision of this Agreement is declared void or unenforceable (or is construed
as requiring the City to do any act in violation of any Applicable Laws,
constitutional provision,law,regulation,City code or City charter),such
provision shall be deemed severed from this Agreement and this Agreement
shall otherwise remain in full force and effect; provided that this Agreement
shall retroactively be deemed reformed to the extent reasonably possible in
such a manner so that the reformed agreement (and any related agreements
effective as of the same date) provide essentially the same rights and benefits
(economic and otherwise) to the Parties as if such severance and reformation
were not required.The Parties further agree, in such circumstances, to do all
acts and to execute all amendments, instruments and consents necessary to
accomplish and to give effect to the purposes of this Agreement, as reformed.
14.4 Construction.The terms and provisions of this Agreement
represent the results of negotiations between the Parties, each of which has
been or has had the opportunity to be represented by counsel of its own
choosing,and none of which has acted under any duress or compulsion,
whether legal, economic or otherwise.Consequently, the terms and provisions
of this Agreement shall be interpreted and construed in accordance with their
usual and customary meanings,and the Parties each hereby waive the
application of any rule of law which would otherwise be applicable in connection
with the interpretation and construction of this Agreement that ambiguous or
conflicting terms or provisions contained in this Agreement shall be interpreted
or construed against the Party who prepared or whose attorney prepared the
executed Agreement or any earlier draft of the same.
14.5 Notices.
(a)Addresses.Except as otherwise required by law, any
notice required or permitted under this Agreement shall be in writing and shall
be given by personal delivery, or by deposit in the United States mail, certified
or registered,return receipt requested,postage prepaid,addressed to the
Parties at their respective addresses set forth below, or at such other address
as a Party may designate in writing pursuant to the terms of this Section, or by
telecopy or telefacsimile machine, or by any nationally recognized express or
overnight delivery service (e.g.Federal Express or UPS),delivery charges
prepaid:
29
If to the City:City of Apache Junction
Attn: City Manager
300 East Superstition Blvd.
Apache Junction, Arizona 85219-2899
Telephone: (480) 474-5066
Facsimile: (480) 474-5110
With a required copy to:City of Apache Junction
Attn: City Attorney
300 East Superstition Blvd.
Apache Junction, Arizona 85219-2899
Telephone: (480) 474-2604
Facsimile: (480) 982-5883
If to Developer:US 60 and Idaho, LLC
c/o Diversified Partners Development Company, LLC
5635 North Scottsdale Road, Suite 150
Scottsdale, Arizona 85250
Attn: Tim J. Dollander
Telephone: (480) 383-8180
Facsimile: (480) 947-8830
With a required copy to:US 60 and Idaho, LLC
c/o Diversified Partners Development Company, LLC
5635 North Scottsdale Road, Suite 150
Scottsdale, Arizona 85250
Attn: Gary S. Elbogen
Telephone: (480) 383-8162
Facsimile: (480) 947-8830
(b)Effective Date of Notices.Any notice sent by United
States Postal Service certified or registered mail shall be deemed to be effective
the earlier of the actual delivery, or three (3) business days after deposit in a
post office operated by the United States Postal Service.Any notice sent by a
recognized national overnight delivery service shall be deemed effective one (1)
business day after deposit with such service. Any notice personally delivered or
delivered through a same -day delivery/courier service shall be deemed effective
upon its receipt (or refusal to accept receipt) by the addressee. Any notice sent
by telecopy or telefacsimile machine shall be deemed effective only upon
confirmation of the successful transmission by the sender's telecopy or
telefacsimile machine, followed by deposit of a "hard copy" for next business-
day delivery by a recognized national overnight delivery service.
Notwithstanding the foregoing, no payment shall be deemed to be made until
actually received in good and available funds by the intended payee.Any Party
may designate a different person or entity or change the place to which any
notice shall be given as herein provided.
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(c)Payments.Payments shall be made and delivered in
the same manner as Notices;provided,however,that payments shall be
deemed made only upon actual receipt, in good and available funds, by the
intended recipient.
14.6 Time of Essence.Time is of the essence of this Agreement
and each provision hereof.
14.7 Section Headings.The Section headings contained in this
Agreement are for convenience in reference only and are not intended to define
or limit the scope of any provision of this Agreement.
14.8 Attorneys' Fees and Costs.In the event of a breach by any
Party and commencement of a subsequent legal action in an appropriate forum,
the prevailing Party in any such dispute shall be entitled to reimbursement of its
reasonable attorney's fees and court costs, including, but not limited to, its
costs of expert witnesses, transportation, lodging and meal costs of the parties
and witnesses,costs of transcript preparation and other reasonable and
necessary direct and incidental costs of such dispute.
14.9 Waiver.Without limiting the provisions of Section 12.5 of this
Agreement, the Parties agree that neither the failure nor the delay of any Party
to exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver of such right, remedy, power or privilege, nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right, remedy,
power or privilege with respect to any other occurrence.No waiver shall be
effective unless it is in writing and is signed by the Party asserted to have
granted such waiver.
14.10 Third Party Beneficiaries.No person or entity shall be a third
party beneficiary to this Agreement,except for permitted transferees,
assignees, or lenders under Section 14.2 to the extent that they assume or
succeed to the rights and/or obligations of Developer under this Agreement, and
except that the indemnified Parties referred to in the indemnification provisions
of Sections 9.1 and 9.2 (or elsewhere in this Agreement) shall be third party
beneficiaries of such indemnification provisions. Notwithstanding the foregoing,
no Event of Non -Performance by Developer shall preclude, delay, impair or
restrict the right of Developer or any third party (by way of illustration, and not of
limitation, a tenant of premises within the Property or a purchaser of a Pad Site)
to obtain approvals, consents, reviews, permits, certificates of occupancy and
the like from the City with respect to construction on or related to the Property
or the property or property rights of such third party.
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14.11 Exhibits.Without limiting the provisions of Section 1 of this
Agreement, the Parties agree that all references to this Agreement include all
Exhibits designated in and attached to this Agreement, such Exhibits being
incorporated into and made an integral part of this Agreement for all purposes.
14.12 Integration.Except as expressly provided herein,this
Agreement constitutes the entire agreement between the Parties with respect to
the subject matters hereof and supersedes any prior agreement, understanding,
negotiation or representation regarding the subject matters covered by this
Agreement.
14.13 Further Assurances.Each Party agrees to perform such
other and further acts and to execute and deliver such additional agreements,
documents, affidavits, certifications, acknowledgments and instruments as any
other Party may reasonably require to consummate, evidence, confirm or carry
out the matters contemplated by this Agreement or confirm the status of: (a) this
Agreement as in full force and effect; and (b) the performance of the obligations
hereunder at any time during its Term.
14.14 Business Days.If the last day of any time period stated in this
Agreement or the date on which any obligation to be performed under this
Agreement shall fall on a Saturday, Sunday or legal holiday, then the duration of
such time period or the date of performance, as applicable, shall be extended so
that it shall end on the next succeeding day which is not a Saturday, Sunday or
legal holiday.
14.15 Consents and Approvals.Wherever this Agreement requires
or permits the consent or approval of a Party to any act, document, use or other
matter, such consent or approval shall be given or denied by such Party in its
reasonable discretion, unless this Agreement expressly provides otherwise.
14.16 Covenants Running With Land; Inurement.The covenants,
conditions,terms and provisions of this Agreement relating to use of the
Property shall run with the Property and shall be binding upon, and shall inure to
the benefit of the Parties and their respective permitted successors and assigns
with respect to such Property;provided,however,that no construction or
similar performance obligation shall be imposed upon a purchaser of a "pad" or
other parcel within the Property.Wherever the term "Party" or the name of any
particular Party is used in this Agreement such term shall include any such
Party's permitted successors and assigns.
14.17 Recordation.Within ten (10)calendar days after this
Agreement has been approved by the City and executed by the Parties (together
with the execution of the Landowners' Consents hereto), the City shall cause
this Agreement to be recorded in the Official Records of Pinal County, Arizona.
32
14.18 Amendment.No change or addition is to be made to this
Agreement except by written amendment executed by the City and Developer.
Within ten (10) calendar days after any amendment to this Agreement, such
amendment shall be recorded in the Official Records of Pinal County, Arizona.
Upon amendment of this Agreement as established herein,references to
"Agreement"or "Development Agreement"shall mean the Agreement as
amended by any subsequent, duly processed minor or major amendment, as
defined in Subsection 3.1(d).The effective date of any duly processed minor or
major amendment shall be the date on which the last representative for the
Parties executes the Agreement.If,after the effective date of any
amendment(s), the parties find it necessary to refer to this Agreement in its
original, unamended form, they shall refer to it as the "Original Development
Agreement."When the Parties mean to refer to any specific amendment to the
Agreement which amendment is unmodified by any subsequent amendments,
the Parties shall refer to it by the number of the amendment as well as its
effective date.
14.19 Good Faith of Parties.Except where any matter is expressly
stated to be in the sole discretion of a Party, in performance of this Agreement
or in considering any requested extension of time, the Parties agree that each
will act in good faith and will not act unreasonably, arbitrarily or capriciously
and will not unreasonably withhold, delay or condition any requested approval,
acknowledgment or consent.
14.20 Survival.All indemnifications contained in Sections 9.1 and
9.2 of this Agreement shall survive the execution and delivery of this Agreement,
the closing of any transaction contemplated herein,and the rescission,
cancellation, expiration or termination of this Agreement upon the terms and for
the period set forth in each respective Section.
14.21 Rights of Lenders.The City is aware that Developer may
obtain financing or refinancing for acquisition, development and/or construction
of the real property and/or improvements to be constructed on the Property, in
whole or in part, from time to time, by one or more Third Parties (individually a
"Lender", and collectively the "Lenders").In the event of an Event of Non-
Performance by Developer, the City shall provide notice of such Event of Non-
Performance, at the same time notice is provided to Developer, to not more than
two (2) of such Lenders as previously designated by Developer to receive such
notice (the "Designated Lenders") whose names and addresses were provided
by written notice to the City in accordance with Section 14.5. The City shall give
Developer copies of any such notice provided to such Designated Lenders and,
unless Developer notifies the City that the Designated Lenders names or
addresses are incorrect (and provides the City with the correct information)
within three (3) business days after Developer receives its copies of such notice
from the City,the City will be deemed to have given such notice to the
Designated Lenders even if their names or addresses are incorrect.Developer
may provide notices to other Lenders.If a Lender is permitted, under the terms
33
of its nondisturbance agreement with the City to cure the Event of Non-
Performance and/or to assume Developer's position with respect to this
Agreement, the City agrees to recognize such rights of the Lender and to
otherwise permit the Lender to assume all of the rights and obligations of
Developer under this Agreement.The City shall, at any time upon reasonable
request by Developer, provide to any Lender an estoppel certificate or other
document evidencing that this Agreement is in full force and effect and that no
Event of Non -Performance by Developer exists hereunder (or, if appropriate,
specifying the nature and duration of any existing Event of Non -Performance).
Upon request by a Lender, the City will enter into a separate nondisturbance
agreement with such Lender,consistent with the provisions of this Section
14.21.
14.22 Pad Sites and Adjacent Properties.If at any time during the
Economic Incentive Period, any pads, lots or other portions of the Property are
transferred or conveyed by Developer (the "Pad Sites"), the Sales Taxes from
Taxable Activities on those Pad Sites shall be included in the computation of
Sales Taxes for purposes of this Agreement, and the development of such Pad
Sites shall be subject to the Applicable Laws which apply to the remainder of the
Property owned by Developer.The foregoing provisions of this Section are not
intended to impose the Applicable Laws upon any properties other than the
Property and Pad Sites, but such foregoing provisions of this Section shall not
prevent the City from imposing the same or similar Applicable Laws to any
properties adjacent to the Property or elsewhere in the City.
14.23 Nonliability of City Officials, Etc., and of Employees, Members
and Partners,Etc.of Developer.No City Council member,official,
representative, agent, attorney or employee of the City shall be personally liable
to any of the other Parties hereto, or to any successor in interest to any of the
other Parties, in the event of any Non -Performance or breach by the City or for
any amount which may become due to any of the other Parties or their
successors, or with respect to any obligation of the City under the terms of this
Agreement.Notwithstanding anything contained in this Agreement to the
contrary, the liability of Developer under this Agreement shall be limited solely
to the assets of Developer and shall not extend to or be enforceable against: (i)
the individual assets of any of the individuals or entities who are shareholders,
members, managers constituent partners, officers or directors of the general
partners or members of Developer; (ii) the shareholders, members or managers
or constituent partners of Developer; or (iii) officers of Developer.
14.24 Conflict of Interest Statute.This Agreement is subject to, and
may be terminated by the City in accordance with, the provisions of A.R.S. § 38-
511.
14.25 Waiver of Claims Pursuant to A.R.S. § 12-1134 et seq.The
Developer agrees, understands and acknowledges that the City is entering into
this Agreement in good faith and at the specific request of Developer, and
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further with the understanding that, if the City acts consistently with the terms
and conditions herein, it will not be subject to a claim for diminished value of the
Property from the Developer.The Developer, on behalf of it and its successors
and assigns, intends to encumber the Property with the following agreements
and waivers.Developer agrees and consents to all the conditions imposed by
this Agreement, the Zoning, the General Plan, Applicable Laws and all permits
and approvals issued or granted by the City in furtherance thereof, and by
signing this Agreement waives any and all claims,suits,damages,
compensation and causes of action the Developer may have now or in the future
under the provisions of A.R.S. Sections 12-1134 through and including 12-1136
(but specifically excluding any provisions included therein relating to eminent
domain) and resulting from the development of the Property consistent with this
Agreement, the Zoning, the General Plan, Applicable Laws and all permits and
approvals issued or granted by the City in furtherance thereof or from any "land
use law"(as such term is defined in the aforementioned statute sections)
permitted by this Agreement to be enacted, adopted or applied by the City now
or hereafter.Developer acknowledges and agrees the terms and conditions set
forth in this Agreement, the Zoning, the General Plan, Applicable Laws and all
permits and approvals issued or granted by the City in furtherance thereof
cause the fair market value of the Property to equal or exceed the fair market
value of the Property in the absence of this Agreement, the Zoning, the General
Plan, Applicable Laws and all permits and approvals issued or granted by the
City in furtherance thereof, and such "land use laws."
14.26 Development Agreement Negotiation and Drafting Fees.
Upon and after execution of this Agreement by the Parties, Developer, promptly
and following written demand by City, shall reimburse City for fees (and related
costs and expenses) paid and/or incurred by City to its outside legal counsel in
connection with the negotiation and drafting of this Agreement (including
exhibits and related matters),with the total of such reimbursements not to
exceed Sixty Five Thousand Dollars ($65,000.00).At the time of each such
reimbursement, the amount of such reimbursement shall be included within
Developer's reimbursable Public Improvement Costs, subject to all other terms
and conditions of this Agreement, including but not limited to Section 8.1.
[SIGNATURES APPEAR ON NEXT PAGE]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
City Attorney
US 60 AND IDAHO, LLC, an Arizona limited
liability company
By:
Its:
By:
Its:
CITY OF APACHE JUNCTION, ARIZONA,
an Arizona municipal corporation
By:
Its:
36
STATE OF ARIZONA
County of
)
) ss.
)
The foregoing was acknowledged before me this day of
, 200_, by and , the
Managers of US 60 and Idaho, LLC, an Arizona limited liability company, on
behalf of the limited liability company.
Notary Public
My Commission Expires:
(seal)
STATE OF ARIZONA )
) ss.
COUNTY OF )
The foregoing was acknowledged before me this day of
,200_,by ,
the of the City of Apache Junction, Arizona, an Arizona
municipal corporation,who acknowledged that he/she signed the foregoing
instrument on behalf of the City.
My Commission Expires:
(seal)
Notary Public
37
Parcel #2
PCAP# 102-20-047D9
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Parcel #1
PCAP# 102-20-033B9
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
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PARCEL NO. 1:
The Southwest quarter of the Southwest quarter of Section 33, Township 1
North, Range 8 East of the Gila and Salt River Base and Meridian, Pinal County,
Arizona.
PARCEL NO. 2:
The Northwest quarter of the Southwest quarter of Section 33, Township 1
North, Range 8 East of the Gila and Salt River Base and Meridian, Pinal County,
Arizona;
EXCEPTING THEREFROM any portion which lies northerly and westerly of the
following described line:
BEGINNING at a point on the West line of said Section 33, which point bears
South 00 degrees 06 minutes 34 seconds East, 450.00 feet from the West
quarter corner of said Section 33;
Thence North 89 degrees 53 minutes 26 seconds East, 55.00 feet;
Thence North 07 degrees 01 minutes 02 seconds East, 362.72 feet;
Thence North 85 degrees 15 minutes 33 seconds East, 1103.60 feet to the point
of ending on the North line of said Northwest quarter of the Southwest quarter of
Section 33.
2
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EXHIBIT B
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PROPOSED MASTER PLAN
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EXHIBIT C
PUBLIC IMPROVEMENTS
1.In addition to any Public Improvements specified in the Agreement,
the Public Improvements additionally shall include:
Half streets and such other related improvements, including but not
limited to all road, curb, gutter, sidewalk, streetlight, water, sewer, and other
public utilities as may be specified by the City, for South Idaho Road, East
Baseline Avenue and South Winchester Road, all of which surrounds the
Developer's Property.
1
EXHIBIT D
REIMBURSABLE AMOUNT
The attached "Engineer's Opinion of Probable Costs" is what is anticipated as
the "Reimbursable Amount" as noted in Section 8.1 of this Agreement. Both
parties agree that the twenty percent (20%) Contingencies and fifteen percent
(15%) Escalation Contingencies line items are only considered "Reimbursable
Amounts" to the extent they are actual incurred expenditures approved by City
staff in accordance with this Agreement.
1
ENGINEER'S OPINION OF PROBABLE COSTS
KIMLEY-HORN AND ASSOCIATES, INC.
1255W. Baseline Road, Suite 200
Mesa, Arizona 65202
TEL: (460)7554444 FAX: (480)755-4445
PROJECT: APACHE JUNCTION TOWNE CENTER
APACHE JUNCTION, ARIZONA
CLIENT: DIVERSIFIED PARTNERS
PROJECT NUMBER:
FILE:
DATE:
191235002
235002_0ffsiteOPC.als
10/15/2007
OFFSITE QUANTITIES
,
_ Excavation 13,990 CY $8.50
,
S118,915.00
Traffic Control 1 LS $50,000.00 $50,000.00
Mobilization 1
_
LS 515,000.00 $15,000.00
_IDAHO OFFSITE QUANTITIES
, Subgrade Preperation (Pavement)23.111 SY $5.00 $ I 15,555.00
Asphaltic Concrete, 51/2 AC/I2ABC 11,000 SY $31.50 5535.500.00
4' Concrete Sidewalk (10 wide)22,970 SF 1.4.00 591,880.00
ADA Ramps 10 EA $2,500.00 $25,000.00
6" Curb & Gutter per MAG Std Oct 220-A 2,630 LF $1 7.01 $44,710.00
6" Curb per MAG Std Oct 222 4,690 LF $12.00 $56,280.00
Concrete Valley Gutter 940 SF $10.00 $9,400.00
Striping 20,300 LF
,
$1.25 $25,375.00
Traffic Signals 2 EA $300,000.00 S600,000.00
Street Sign 16 EA $100.00 $1,600.00
Sign Pole/Sign Foundation 16 EA $400.00 S6,400.00
Street Lights 9 EA $5,000.00 $45,000.00
Catch Basin 8 EA $4,000.00 $32,000.00
36" RGRCP Class Ill Pipe 2,300 LF $90.00 $207,000.00
48" Manhole 8 EA $3,200.00 $25,600.00
Concrete Driveway 4 EA $5,000.00 520,000.00
Landscaping 11,900 SY $31 .50 $374,850.00
Pavement Removal 2,635 SY $6.00 $15,810.00
Concrete Drainage Structure/Remove/Replace CM?I EA $20,000.00 $20,000.00
,BASELINE OFFSITE QUANTITIES
Subgrade Preperation (Pavement)7,045 SY 55.00 535,225.00
Asphaltic Concrete, 5AC/I2ABC 7,045 SY $31.50 $221,917.50
4" Concrete Sidewalk (6' wide)10,200 SF $4.00 $40,800.00
ADA Ramps 5 EA $2,500.00 $12,500.00
6" Curb & Gutter per MAG Std Det 220-A 1,375 LF $17.00 $23,375.00
Concrete Valley Gutter 670 SF 510.00 S6,700.00
Striping 15,000 LF $1.25 $18,750.00
Street Sign 6 EA 5I00.00 5600.00
Sign Pole/Sign Foundation 6 EA $400.00 $2,400.00
Street Lights 6 EA $3,500.00 $21,000.00
Catch Basin 4 EA $4,000.00 $16,000.00
Concrete Driveway 2 EA $5,000.00 $1 0,000.00
Landscaping 1,222 SY -53I.50 $38,493.00
Pavement Removal 550 SY $6.00 53,300.00
-
...
WINCHESTER OFFSITE QUANTITIES
Subgrade Preparation (Pavement)6,355 SY 55.00 $31,775.00„.1.
Asphaltic Concrete, 5AC/8ABC .6,355 SY $31.50 S200,182.50
4" Concrete Sidewalk (4' wide)10,802 SF $4.00 $43,208.00
ADA Ramps 4 EA $2,500.00 $10,000.00
6"Curb & Gutter per MAG Std Dm 220-A 2,950 LF $17.00 $50,150.00
Concrete Valley Gutter 840 SF $10.00 $8,400.00
Street Sign 8 EA 5100.00 5800.00
Sign Pole/Sign Foundation 8 EA $400.00 $3,200.00
StreetLights 8
EA -
$3,500.00 $28,000.00
CatchBasin 6 EA $4,000.00 $24,000.00
, Concrete Driveway 2 EA $5,000.00 $10,000.00
Landscaping 2,044 SY $31.50 $64,386.00
Pavement Removal •510 SY -$6.00
-
S3,060.00
Concrete drainage strucnare/Hdwall/Remove/Replace CMP 1 EA $20,000.00 $20,000.00
, Striping 4,600 LF $1.25 $5,750.00
OFFSITE
-UTILITY QUANTITIES
12"DI Waterline 6,500 LF $85.00 $552,500.00
8"DI Waterline 300 LF $70.00 $21,000.00
6"DI Waterline 360 LF $55.00 519,800.00.-
Boringunder HWY 60 1 LS $400,000.00 $400,000.00 -1
Asphalt Sawcut/Replacement 2,133 SY $133.00 $283,689.00
TappingSleeve and Valve 4 EA $5,000.00 $20,000.00
Fire Hydrant Assembly 13 EA 53.200.00 541,600.00
Valves 10 EA 51,000.00 $10,000.00
Stub and Plug 50 EA $2,000.00 $100,000.00
8"SDK'S PVC Sewerline 45 LF $68.00 $3,060.00
5'Manhole
...
1 EA $8,000.00 $8,000.00
Landscapingreplacement 2,200 SY $31.50 $69,300.00
Subtotal
Contingencies 20%
Escalation Contingency: 15%
TOTAL
$4,918,796.00
$983,759.20
$737,819.40
$6,640,374.60
10/16/2007 Kimley-Hom and Associates, Inc.
EXHIBIT E
DEVELOPMENT SUBMISSIONS
Site Plan
1.Square foot and dimensions of all buildings
2.Conceptual and dimensioned elevations for all 4 sides of all buildings with
roof plans and floor plans, and color and material board(s)
3.A parking study - delineate total parking required by code for each type of
proposed use and proposed parking for each use
4.Parking space dimensions
5.Drive aisle dimensions
6.Length of parking aisles
7.Specify special paving treatment types at internal intersections
8.Location and design of trash enclosures
9.Loading dock(s) detail (number and dimensions)
10.Generally delineate delivery areas
11.Concept screen wall design
12.Identify drive thru stacking on site plan(three cars from reader board)
13.Building pad heights and curb heights
14.Define any proposed minor and major development deviation; for example
administratively allow a five percent (5%) change in any numerical
standard
15.Provide general construction note that no roof top mechanical and/or
restaurant equipment will be visible from street level
Conceptual Landscape Plan
16.Concept landscaping plan including proposed plant pallet, sizing,
retention basin slopes and preliminary grades for retention and mounding
17.Concept designs and specific locations for plazas and courtyards
18.Pedestrian walkways/sidewalks
19.Provide exhibit identifying the ten percent (10%) landscaping of total
parking lot to be screened on Idaho
20.Parking lot lighting treatment and building mounted lighting
21.Identify all dimensions for all landscape planters including the median
island
Exterior Lighting Plan
22.Parking lot lighting treatment to comply with lighting ordinance
23.Parking lot light pole cut sheet and lighting, lamp, and shielding fixtures
Sign Program
24.Monument sign concept designs and locations
25.Master sign plan for building mounted signs
26.Freeway oriented signs
1
Traffic analysis
27.Required to provide a Traffic Impact Analysis per the Small Area
Transportation Study and MCDOT standards
28.Street Cross Sections for all adjacent boundary streets; Right-of-way
needs for roadway improvements including proposed traffic signal
installations and all customer access and service access driveways
Preliminary grading plan
29.Identifying existing and proposed pad elevations, landscape mounding
elevations, drainage pattern, dry wells, retention areas, etc.
Phasing plan
30.Indicating proposed phased public improvements especially streets and
driveway access, proposed phased building and parking lot construction
plans, and phased utilities.
2
EXHIBIT F
SCHEDULE OF BUILDING PERMIT FEES
The schedule of building permit fees as set forth in Apache Junction City Code,
Volume I, Chapter 4 Fees,Article 4-4,Development Services Department Fees,
is hereby incorporated to this Agreement by reference.
1
EXHIBIT G
PROHIBITED USES
Notwithstanding the provisions of the City Zoning Code and other City codes and
statutes, the following uses, regardless of whether defined in the City of Apache
Junction Code, are prohibited within the Property:
•Adult -Oriented Business(es)
•Billboard Sign(s)
•Long Term or Permanent Cargo Container(s)
•Industrial Use(s)
•Overnight Recreational Vehicle or "Big Rig" Parking
•Residential Use(s) , including but not limited to a homeless shelter,
transitional living quarters, or group home
•Unscreened Outdoor Storage
•Vehicular Impound, Repair, Storage, and/or Maintenance Use(s)
•Warehouse(s) (as an exclusive use)
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EXHIBIT H
CITY OF APACHE JUNCTION INSURANCE REQUIREMENTS
A.Property.During the period of any construction involving the Public
Improvements, builder's risk insurance on an all-risk, replacement cost basis for
the Public Improvements.
B.Liability.During the period of any construction involving the Public
Improvements, insurance covering the Developer and (as an additional insured)
the City against liability imposed by law or assumed in any written contract,
and/or arising from personal injury, bodily injury or property damage, with a limit
of liability of $5,000,000.00 per occurrence with a $5,000,000.00
products/completed operations limit and a $10,000,000.00 general aggregate
limit.Such policy must be primary and written to provide blanket contractual
liability,broad form property damage,premises liability and products and
completed operations.
C.Contractor.During the period of any construction involving the Public
Improvements,each of the general or other contractors with which the
Developer contracts for any such construction shall be required to carry liability
insurance of the type and providing the minimum limits set forth below:
i)Worker's Compensation insurance and Employer's Liability with
limits of $1,000,000.00 per accident,$1,000,000.00 per disease and
$1,000,000.00 policy limit disease.
ii)Commercial general liability insurance on a $5,000,000.00 per
occurrence basis providing coverage for:
Products and Completed Operations
Blanket Contractual Liability
Personal Injury Liability
Broad Form Property Damage
X.C.U.
iii)Business automobile liability including all owned, non -owned and
hired autos with a limit of liability of not less than $1,000,000.00 combined single
limit for personal injury, including bodily injury or death, and property damage.
D.Architect.In connection with any construction involving the Public
Improvements, the Developer's architect shall be required to provide architect's
or engineer's professional liability insurance with a limit of $1,000,000.00 per
claim.This policy, or other policies, shall cover claims for a period of not less
than three (3) years after the completion of construction involving the Parcels
and the Public Improvements.
1
E.Engineer.In connection with any construction involving the Public
Improvements, the Developer's soils engineer or environmental contractor shall
be required to provide engineer's professional liability insurance with a limit of
$1,000,000.00 per claim.This policy, or other policies, shall cover claims for a
period of not less than three (3) years after the completion of the construction
involving the Property and the Public Improvements.
F.CPI Adjustments.The minimum coverage limits set forth above shall be
adjusted every five (5) years by rounding each limit up to the million dollar
amount which is nearest the percentage of change in the Consumer Price Index
(the "CPI") determined in accordance with this paragraph.In determining the
percentage of change in the CPI for the adjustment of the insurance limits for
any year, the CPI for the month October in the preceding year, as shown in the
column for "All Items" in the table entitled "All Urban Consumers" under the
"United States City Averages" as published by the Bureau of Labor Statistics of
the United States Department of Labor,shall be compared with the
corresponding index number for the month of October one (1) year earlier.
G.Primary Coverage.Developer's insurance coverage shall be primary
insurance with respect to the City, its officers, officials, agents, and employees.
Any insurance or self-insurance maintained by the City,its officers, officials,
agents,and employees shall be in excess of the coverage provided by
Developer and shall not contribute to it.
H.Indemnities.Coverage provided by the Developer shall not be limited to
the liability assumed under the indemnification provisions of the Agreement.
I.Waiver of Subrogation.The policies shall contain a waiver of subrogation
against the City, its officers, officials, agents, and employees Property.
J.Notice of Cancellation:Each insurance policy shall include provisions to
the effect that it shall not be suspended, voided, cancelled, reduced in coverage
of in limits except after thirty (30) calendar days' prior written notice has been
given to the City.Such notice shall be sent directly to City Manager, 300 East
Superstition Blvd., Apache Junction, AZ 85219, and shall be sent by certified
mail, return receipt requested.
K.Acceptability of Insurers:Insurance is to be placed with insurers duly
licensed of approved unlicensed companies in the State of Arizona and with an
"A.M. Best" rating of not less than A- VII.The City in no way warrants that the
above -required minimum insurer rating is sufficient to protect Developer from
potential insurer insolvency.
L.Verification of Coverage:Developer shall furnish the City with original
certificates of insurance (ACCORD form or equivalent approved by the City) as
required herein.The certificates for each insurance policy are to be signed by a
person authorized by that insurer to bind coverage on its behalf.Any policy
2
endorsements that restrict of limit coverage shall be clearly noted on the
certificate of insurance.
All certificates are to be received and approved by the City before the
Commencement of Construction.Each insurance policy must be in effect at or
prior to the Commencement of Construction and must remain in effect for the
duration of the Agreement.Failure to maintain the insurance policies as
required by this Agreement or to provide timely evidence of renewal will be
considered a material breach of the Agreement.
All certificates required by this Agreement shall be sent directly to City of
Apache Junction,Attn:City Manager,300 East Superstition Blvd., Apache
Junction,Arizona 85219.The City reserves the right to require complete,
certified copies of all insurance policies and endorsements required by this
Insurance Exhibit at any time.
M.Approval:Any modification or variation from the insurance requirements
in Insurance Exhibit must have prior approval from the City Manager's Office
whose decision shall be final.Such action will not require formal contract
amendment, but may be made by administrative action.
N.Miscellaneous.References to Developer herein shall mean Developer
and/or its general contractor(s).References herein to the Agreement shall
mean the Development Agreement of which this Exhibit is a part.Capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Agreement.The City in no way warrants that the minimum limits contained
herein are sufficient to protect Developer from liabilities that might arise and
Developer may purchase such additional insurance as Developer determines
necessary.
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EXHIBIT I
When recorded, return to:
NON -DISTURBANCE AND RECOGNITION AGREEMENT
THIS NON -DISTURBANCE AND RECOGNITION AGREEMENT (this
"NDRA") is made as of the day of , 20__, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
by and among: (a) US 60 and Idaho, LLC, an Arizona limited liability company
("Developer"); (b)("Lender"); and (c) City of Apache Junction,
Arizona, an Arizona municipal corporation ("City").
1.Recitals.
1.1 Developer is the present developer under a Development Agreement
entered into with the City, dated , 2007, and recorded in the
Official Records of Pinal County, Arizona, at (the "Agreement"),
which Agreement sets forth certain rights and responsibilities of Developer with
respect to the development of that certain real property referred to in the
Agreement (and herein) as the "Property," and more particularly described in
Exhibit "A" attached hereto.
1.2 Developer's obligations arising under the Agreement include but are not
limited to the acquisition and/or development of the Property,and/or the
construction of improvements upon the Property,and the construction of
certain "Public Improvements" as defined in the Agreement in and around the
Property (collectively, the "Obligations").
1.3 Lender has agreed to lend money to Developer,and Developer will
execute certain loan documents (the "Loan Documents")including but not
limited to a Deed of Trust,Assignment of Rents,Security Agreement and
Financing Statement for the use and benefit of Lender (the "Deed of Trust") and
a Collateral Assignment of Rights under Development Agreement (the
"Assignment") to secure the loan from Lender to Developer (the "Loan").The
Deed of Trust and the Assignment will be recorded in the Official Records of
Pinal County, Arizona, and will encumber the Property.
1.4 Lender has certain rights under the Loan Documents in the event of a
Non -Performance by Developer of its obligations either under the Loan
Documents or the Agreement, including but not limited to the right of Lender to
be substituted for Developer under the Agreement and to assume Developer's
1
position with respect to the Agreement; and the Agreement states in Section
14.21 thereof that a Lender may be allowed to assume Developer's rights and
obligations (collectively, "Developer's Position") with respect to the Agreement.
1.5 Accordingly the parties have executed this NDRA to be effective as of the
date set forth above.
2.Subordination.Subject only to the specific provisions of: (i) Section 3
hereof regarding the right of Lender to assume Developer's Position with
respect to the Agreement; and (ii) Section 4 hereof regarding non -disturbance
and recognition, all rights of Developer and Lender under the Deed of Trust are
and shall continue to be junior,inferior,subject and subordinate to the
Agreement, as it may hereafter be modified, amended, restated or replaced.
3.Notice of Developer Non -Performance.
3.1 If Lender is a "Designated Lender" as defined in Section 14.21 of the
Agreement, City shall give Lender written notice of any claimed Event of Non-
Performance by Developer (the "Notice") under the Agreement and thirty (30)
calendar days following the expiration of Developer's cure period under the
Agreement to cure such claimed Event of Non -Performance (as the Agreement
exists as of the date of this NORA),prior to terminating the Agreement or
invoking such other remedies as may be available to City under the Agreement.
3.2 Lender shall have the option, following Lender's receipt of the Notice, and
within the time period set forth herein for curing an Event of Non -Performance of
Developer,in its sole election either:(a)to cure the Non -Performance of
Developer, in which event Developer shall retain its position with respect to the
Agreement; or (b) in addition to any other remedies available to Lender under
law, equity or contract (including but not limited to the Deed of Trust and the
Assignment) to assume Developer's Position with respect to the Agreement (to
"Assume" or an "Assumption").Lender shall give written notice to City of its
intention to Assume on or before the expiration of any applicable cure period
available to Lender.
3.3 If Lender agrees to Assume Developer's Position with respect to the
Agreement, Lender and City shall execute an amendment to the Agreement (an
"Amendment") and shall cause the Amendment to be recorded in the Official
Records of Pinal County, Arizona.The Amendment shall state that Lender has
fully assumed Developer's Position with respect to the Agreement, and that
Lender is thereafter substituted for Developer with respect to all Obligations,
payment and performance rights and responsibilities arising under or in
connection with the Agreement.The execution or approval by Developer of the
Amendment shall not be necessary or required,and upon execution and
recordation of the Amendment, City shall: (i) look to Lender and/or Developer for
performance of the Obligations under the Agreement; and (ii) make to Lender all
2
payments, and render all performance required to be made by the City, required
to be made to Developer under the Agreement.
3.4 In connection with: (i) any foreclosure by Lender (whether by notice or
judicially)of the Deed of Trust,or any other acquisition by Lender of the
Property in lieu of such foreclosure (collectively, a "Foreclosure"); and (ii) the
transfer of the Property to a third -party purchaser or purchasers (by way of
illustration and not in limitation, a purchaser or purchasers at a trustee's sale
conducted pursuant to A.R.S. § 33-810) concurrently with such Foreclosure or
thereafter (a "Purchaser"), the Developer's Position under the Agreement shall
accompany and be deemed covenants running with the Property,and the
Purchaser shall be deemed to have assumed Developer's Position with respect
to the Agreement.Upon the acquisition of the Property by a Purchaser, City
shall: (i) look to Purchaser and/or Developer for performance of the Obligations
under the Agreement; and (ii) make to Purchaser all payments, and render all
performance required to be made by the City, required to be made to Developer
under the Agreement.
3.5 Until an Assumption as defined herein,nothing in this NDRA shall
constitute an assumption by Lender of any Obligation.Developer shall continue
to be liable for all of the Obligations thereunder and shall perform all such
Obligations,shall comply with all terms and conditions of the Agreement
applicable to Developer, and shall take such steps as may be necessary or
appropriate to secure performance by the City under the Agreement.
3.6 Whether before or after an Assumption as defined herein, nothing in this
NDRA shall constitute a release of Developer of any Obligation.
4.Nondisturbance and Recognition.
4.1 In the event that City institutes any proceedings to enforce the
Agreement, City agrees that, so long as Lender is not in default (beyond any
applicable cure period provided to Lender under this NDRA)under the
Agreement:
4.1.1 City shall not interfere with or disturb Lender's rights under
the Agreement and this NDRA; and
4.1.2 Lender shall not be made a party to any proceeding
commenced pursuant to the Agreement, unless Lender is determined to
be a necessary party for purposes of maintaining the action or securing
other necessary relief not involving the termination of Lender's interest
under the Deed of Trust or the Assignment, provided that nothing herein
shall prevent City from giving any required notice to Lender.
4.2 Upon and following an Assumption,Lender shall recognize the City's
rights under the Agreement for the balance of the Term thereof. The recognition
3
described in this Section 4.2 shall automatically become effective upon an
Assumption by Lender.
5.Estoppel
5.1 City and Developer hereby confirm to Lender that as of the date of this
NDRA and to the best of their respective actual knowledge:
a)Neither City nor Developer has acted or failed to act in
a manner giving rise to an Event of Non -Performance
under the Agreement;
b)The Agreement has not been assigned,modified or
amended in any way except as set forth in Recital 1.1;
c)The Agreement is in full force and effect; and
d)[IF APPROPRIATE]"Completion of Construction",as
defined in the Agreement occurred on
6.Miscellaneous.
6.1 This NDRA shall be binding upon and inure to the benefit of City,
Developer and Lender and their respective successors and assigns, including,
without limitation, any successful bidder at any judicial foreclosure or trustee's
sale.
6.2 Except as otherwise required by law, any notice required or permitted
under this NDRA shall be in writing and shall be given by personal delivery, or by
deposit in the United States mail,certified or registered,return receipt
requested,postage prepaid,addressed to the parties at their respective
addresses set forth below,or at such other address as such party may
designate in writing pursuant to the terms of this Section, or by any nationally
recognized express or overnight delivery service (e.g., Federal Express or UPS),
delivery charges prepaid:
If to City:City of Apache Junction
Attn: City Clerk
300 East Superstition Boulevard
Apache Junction, Arizona 85219
With required copy to:City of Apache Junction
Attn: City Attorney
300 East Superstition Boulevard
Apache Junction, Arizona 85219
If to Developer:US 60 and Idaho, LLC
4
If to Lender:
c/o Diversified Partners Development Co., LLC
5635 North Scottsdale Road, Suite 150
Scottsdale, Arizona 85250
Attn: Tim J. Dol!ander
Telephone: (480) 383-8180
Facsimile: (480) 947-8830
With required copy to:
Any notice sent by United States Postal Service certified or registered mail shall
be deemed to be effective the earlier of the actual delivery, or three (3) business
days after deposit in a post office operated by the United States Postal Service.
Any notice sent by a recognized national overnight delivery service shall be
deemed effective one (1) business day after deposit with such service.Any
notice personally delivered or delivered through a same -day delivery/courier
service shall be deemed effective upon its receipt or refusal to accept receipt by
the addressee.Any party may designate a different person or entity or change
the place to which any notice shall be given as herein provided, by giving notice
to the other parties as provided in this Section 6.2.
6.3 This NDRA is delivered in and relates to property located in Pinal County,
Arizona,and the rights and obligations of the parties hereunder shall be
governed by and construed in accordance with the substantive laws and judicial
decisions of the State of Arizona (regardless of Arizona conflict of laws
principles or the residence, location, domicile or place of business of the parties
and their constituent principals)and applicable federal laws,rules and
regulations, subject to Section 14.1 of the Agreement.
6.4 This NDRA integrates all of the terms and conditions of the parties'
agreement regarding the subordination of the Deed of Trust and Lender's
interest thereunder to the Agreement, and supersedes all prior oral or written
agreements with respect to such subordination (only to the extent, however, as
would affect the priority between the Agreement and the Deed of Trust).This
NDRA may not be modified or amended except by a written agreement signed by
the parties or their respective successors in interest.
6.5 This NDRA may be executed and acknowledged in one or more
counterparts, each of which may be executed by one or more of the signatory
parties.Signature and notary pages may be detached from the counterparts
5
and attached to a single copy of this NDRA physically to form one legally
effective document.
6.6 This NDRA is subject to, and may be terminated by the City in accordance
with, the provisions of A.R.S. § 38-511.
6.7 Each party to this NDRA represents and warrants to the others that all
necessary company, corporate and/or governmental approvals, consents and
authorizations have been obtained prior to the execution of this NRDA by such
party, and that the person executing this NRDA on behalf of such party is duly
authorized to do so to bind such party.
6.8 Capitalized terms not defined herein shall have the definitions set forth in
the Agreement.
6
IN WITNESS WHEREOF, the parties hereto have each caused this NDRA
to be executed on or as of the day and year first above written.
"CITY"CITY OF APACHE JUNCTION, an
Arizona municipal corporation
By:
Its:
"DEVELOPER"US 60 AND IDAHO, LLC, an Arizona
limited liability company
"LENDER"
By:
Name:
Its:
By:
Name:
Its:
a(n) Arizona
By:
Name:
Its:
7
Acknowledgment by City
STATE OF ARIZONA
County of Pinal
)
) ss.
)
The foregoing was acknowledged before me this day of
200_,by ,the City of the City of
Apache Junction, Arizona, on behalf of the City.
My Commission Expires:
Notary Public
Acknowledgment by Developer
STATE OF ARIZONA
County of
) ss.
)
)
The foregoing was acknowledged before me this day of
200_, by and , the Managers of US 60 and
Idaho, LLC, an Arizona limited liability company, on behalf of the limited liability
company.
My Commission Expires:
Notary Public
Acknowledgment by Lender
STATE OF ARIZONA
County of
)
) ss.
)
The foregoing was acknowledged before me this day of ,
200_, by , the of , a , on behalf of
the .
My Commission Expires:
Notary Public
8
==
EXHIBIT A
TO
NON -DISTURBANCE AND RECOGNITION AGREEMENT
(LEGAL DESCRIPTION OF THE PROPERTY)
1111•1,=••
9