WHEN RECORDED, RETURN TO:
City of Tempe
THIS DEVELOPMENT AGREEMENT (“Agreement”) is entered into by and between the City of Tempe, an Arizona municipal corporation, (“City”) and VIRTUA BROADWAY TEMPE, LLC, a Delaware limited liability company (“Developer”). Developer and City may be referred to in this Agreement collectively as the “Parties” and each, individually, as a “Party.”
A. Developer is the owner of certain real property more particularly described on Exhibit A, which is attached hereto (the “Property”), which Developer has redeveloped as a multifamily project (the “Project”).
B. A Zoning Map Amendment was approved by the City Council on August 9, 2018 (the “Rezoning”). In conjunction with the Rezoning, Developer voluntarily agreed to devote for a period of time more fully described in the Restrictive Covenant (the “Workforce Housing Rate Period”) at least ten percent (10%) of the total units to be constructed in the Project (the “Workforce Units”) for occupancy by qualified tenants who earns between eighty-one percent (81%) and one-hundred twenty percent (120%) of adjusted median income, as such income standards are adjusted from time to time by the City pursuant to annual changes (the “Qualified Tenants”). Qualified Tenants are to pay rent at rates set in accordance with the City’s Workforce Housing rental rates (the “Workforce Housing Rental Rates”) set forth in the City’s Workforce Housing Maximum Rent Schedule in effect on the date of the Rezoning, as such Workforce Housing Rental Rates reasonably may be adjusted from time-to-time by the City pursuant to annual changes.
C. To secure the Developer’s obligation to make the Workforce Units available for the Workforce Housing Rate Period Developer agreed to enter into a restrictive covenant against the Property and cause it to be recorded against the Property (the “Restrictive Covenant”). The Developer has caused the execution of the Restrictive Covenant and the City has caused it to be recorded against the Property at Instrument No. 2020-0696589, in the records of the Maricopa County Recorder. In
exchange for completing and causing the recording of the Restrictive Covenant against the Property, the City has agreed, among other things, to allow Developer better to incorporate signage into the Project that meets the architectural style and artistic themes for the Project and Property. Accordingly, the City has agreed to modify the sign package that otherwise would be required for the Property, as more fully set forth in this Agreement.
D. In conjunction with the City’s approving the modified sign package, Developer has agreed to provide a further credit to the City to support the supply of additional Workforce Units at the Workforce Housing Rental Rates, as more fully set forth in this Agreement. To facilitate the provision of the additional Workforce Units, the City and Developer have agreed to correct the recording of the original Restrictive Covenant, as set forth in this Agreement (the “Corrected Restrictive Covenant”).
E. The Parties acknowledge that this Agreement constitutes a “Development Agreement” within the meaning of Arizona Revised Statutes (“A.R.S.”) §9-500.05 and that, in accordance therewith, this Agreement shall, if certain conditions are met and as provided in this Agreement, be recorded in the Office of the Maricopa County Recorder. Such recording will thereby establish the Parties’ intent that the burdens and benefits contained in this Agreement be binding on the Property and inure to the benefit of the Parties and all their successors and assigns.
F. This Agreement has been authorized by the Tempe City Council by Resolution No. 0000.XXX.
In consideration of the above premises, the promises contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which the Parties acknowledge, the Parties agree as follows:
1. Recitals. The Recitals set forth above are acknowledged by the Parties to be true and correct in all material respects and are incorporated herein by this reference.
2. Mutual Benefits. City and Developer agree that, in making the promises contained in this Agreement, certain benefits and advantages will accrue to both Parties as a result of the performance of this Agreement, and that therefore this Agreement is being entered into in reliance upon the mutual benefits afforded each of the Parties.
3. Term. The term of this Agreement shall commence on the date on which this Agreement has been fully executed by the Parties and approved by the Tempe City Council (the “Effective Date”). The term of the Agreement shall continue until the date
that is ten (10) years from the Effective Date or such earlier time as the City and Developer record a termination of the Restrictive Covenant, as set forth below.
4. Project Modified Sign Package. Under the City’s applicable codes, the Project would be entitled to cause the erection of signage within monuments on the Property (the “Standard Sign Package”). In exchange for Developer entering and causing the recording against the Property of the Corrected Restrictive Covenant, the City agrees that Developer may install building signage as set forth in Exhibit B (the “Building Sign Package”) and consistent with the terms of this Section.
a. Restrictions on Signage. Developer agrees that, in exchange for the City allowing Developer to install the Building Sign Package, Developer agrees that it must forego installing any of the signage that otherwise would be allowed under the Standard Sign Package unless and until Developer removes the Building Sign Package, in which event Developer must proceed through the otherwise applicable City design and permitting processes with respect to the installation of any Standard Sign Package signage (the “Use”). The Use and the rights and obligations of Developer with respect to the Use shall survive the termination of this Agreement and the Restrictive Covenant.
b. Additional Workforce Unit Credits. In exchange for the City’s approval of the Building Sign Package, Developer shall supply to City a credit for its application to provide Qualified Tenants with additional Workforce Units. Accordingly, in addition to the Workforce Units supplied under the Corrected Restrictive Covenant, to supply additional Workforce Units, Developer shall provide rent reductions in the amount of $17,500 in the aggregate during the Workforce Housing Rate Period (the “Additional Workforce Credit Amount”), as set forth in the Corrected Restrictive Covenant. Developer shall provide Qualified Tenants with Workforce Units under the terms of the Corrected Restrictive Covenant until the amount of the City’s support established by the Corrected Restrictive Covenant has been exhausted and, thereafter, Developer shall supply additional Workforce Units for the Additional Workforce Credit Amount, as set forth in the Restrictive Covenant. Further, the Parties agree that the City and Developer shall record a termination of the Restrictive Covenant and this Agreement once Developer has supplied the Workforce Units for the Workforce Housing Rate Period as defined in the Restrictive Covenant as supplemented by the Additional Workforce Credit Amount as set forth in this Agreement.
5. Representations and Warranties. The Parties provide to each other the following assurances concerning, as applicable, the Property, the Developer and this Agreement, all of which shall survive the Closing and all conveyances pursuant to this Agreement:
a. City's Warranties and Representations. City warrants and represents to Developer as follows (the "City Warranties"):
i. Authority. City has full municipal power and authority to enter into, execute, deliver and consummate this Agreement.
ii. Conflicts. City's execution, delivery and performance of this Agreement is not prohibited by and does not conflict with any other agreements, instruments, or judgments to which City is a party or is otherwise subject, the violation of which will have a material adverse effect on City's ability to perform its obligations under this Agreement.
b. Developer's Warranties and Representations. Developer warrants and represents to City as follows (the "Developer Warranties"):
i. Organization. Developer is duly organized and validly existing under the laws of the State of Delaware. Developer has all requisite power and authority to enter into and consummate this Agreement.
ii. Authority. The person executing this document on behalf of Developer warrants his or her authority to do so and that all persons necessary to bind Developer have joined in this document.
iii. Other Agreements. Developer's execution, delivery, and performance of this Agreement and any related documents have been duly authorized by all necessary boards, managers, members, officers and directors (and by all actions required of its officers and directors) and will not violate its articles of organization or operating agreement (or similar applicable documents) or result in the breach of or constitute a default thereunder.
iv. No Violation of Laws. Developer is not in default with respect to any judgment, order, injunction or decree of any court, administrative agency or other governmental authority that materially would interfere with Developer’s obligations under this Agreement.
v. No Payments. Except in the normal course of business to third parties not employed by City, Developer has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement.
vi. Attachment and Bankruptcy. There are no attachments, executions, assignments for the benefit of creditors, receiverships, conservatorships, or voluntary or involuntary proceedings in bankruptcy or pursuant to any other laws for relief of debtors current contemplated, filed, pending against, or involving Developer or its members.
c. Survival of Representations and Warranties. Each warranty and representation is true and accurate in all material respects as of the date of this Agreement and constitutes a material part of the consideration for this Agreement.
6. City Manager’s Power to Consent. The Tempe City Council authorizes and empowers the City Manager to consent to any and all requests of the Developer requiring the consent of the City hereunder without further action of the City Council (except for any actions requiring City Council approval as a matter of law), including
without limitation, any amendment or modification of this Agreement that is within the initial authority for this Project granted by the City Council.
7. Events of Default. It shall be considered a material breach and default by a Party to this Agreement (an “Event of Default”) if a Party fails in the performance of or compliance with any of the covenants, agreements, terms, limitations, performance deadlines or conditions of this Agreement, and such Event of Default continues for a period of sixty (60) days after written notice thereof from the non-defaulting Party to the defaulting Party. However, if the defaulting Party proceeds with due diligence during such sixty (60) day period substantially to cure such Event of Default and is unable by reason of the nature of the work involved to cure the same within the required sixty (60) days, the defaulting Party's time to do so shall be extended by the time reasonably necessary to cure the same as reasonably determined by the non-defaulting Party.
a. Upon the occurrence of an Event of Default by Developer hereunder, the City shall have the right to terminate this Agreement.
b. Upon the occurrence of an Event of Default by City hereunder, the Developer shall have the right to pursue all remedies available at law or in equity.
9. Notices, Demands, and Communications Between Parties. All notices, demands, or other writings in this Agreement provided to be given, made, or sent by any Party hereto to another Party will be deemed to have been fully given, made, or sent when made in writing and personally delivered (which shall include delivering by recognized courier service, such as FedEx, United Parcel Service, and the like) or deposited in the United States mail postpaid, registered or certified, and addressed as follows:
To the City: City Manager City of Tempe
00 Xxxx Xxxxx Xxxxxx Xxxxx, Xxxxxxx 00000
With a copy to: City Attorney City of Tempe
00 Xxxx Xxxxx Xxxxxx Xxxxx 000
Xxxxx, Xxxxxxx 00000
To Developer: Virtua Broadway Tempe, LLC
C/O Quyp Development Services, LLC 00000 X. Xxxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
With a copy to: Xxxxx Xxxxxxx Xxxxx Xxxxxxx LLC
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000 Email: email@example.com
The address to which any notice, demand, or other writing may be given, made or sent to any party may be changed by written notice as above provided.
10. Institution of Legal Actions. Any legal actions regarding this Agreement shall be instituted in the Superior Court of the County of Maricopa, State of Arizona, or in the Federal District Court in the District of Arizona sitting in Maricopa County. Each Party agrees to the exclusive jurisdiction of such courts except where Arbitration is required under this Agreement.
11. Costs & Attorney Fees. Each Party shall bear its costs, attorneys and witness fees and other Arbitration or litigation costs of defending or prosecuting, any claim, action or suit challenging the validity or enforceability of any provision of this Agreement, in instances in which City and Developer are not adverse to one another, including when Developer and the City are represented by separate counsel of its own choosing. Further, if any other action or suit or proceeding is brought by any Party to enforce compliance with this Agreement or for failure to observe any of the covenants of this Agreement or to vindicate or exercise any rights or remedies hereunder, the prevailing Party in such proceeding (as determined by the court or Arbitrator (and not a jury), as applicable, in such proceeding) shall be entitled to recover from the other such prevailing Party’s reasonable attorneys’ fees and other reasonable litigation costs, provided, however, that (a) Developer shall, as a condition of such proceeding provide evidence to City of the rate of payment of the Developer’s attorneys’ fees to its counsel and (b) City shall be entitled to recover payment for attorneys employed by City (including attorneys who are regular employees of City) on such proceeding at the same rate of payment if City is the prevailing party.
12. Acceptance of Legal Process. If any legal action is commenced by Developer against City, service of process on City will be made by personal service upon City Clerk of City of Tempe, 00 Xxxx Xxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000, or in such other manner as may be provided by law. If any legal action is commenced by City against Developer, service of process will be made by personal service upon the address provided in Section 9 below, or in such other manner as may be provided by law.
13. Applicable Law. The laws of the State of Arizona will govern the interpretation and enforcement of this Agreement.
14. Conflict of Interests. No member, official, or employee of City may have any direct or indirect interest in this Agreement, nor participate in any decision relating
to the Agreement that is prohibited by law. All Parties hereto acknowledge that this Agreement is subject to cancellation pursuant to the provisions of A.R.S. § 38-511.
15. Warranty Against Payment of Consideration for Agreement. Developer warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement, other than normal costs of conducting business and costs of professional services such as architects, consultants, engineers, and attorneys.
16. No Waiver. Except as otherwise expressly provided in this Agreement, any failure or delay by any Party in asserting any of its rights or remedies as to any default, will not operate as a waiver of any default, or of any such rights or remedies, or deprive any such Party of its right to institute and maintain any actions or proceedings that it may deem necessary to protect, assert, or enforce any such rights or remedies, including but not limited to rights and remedies existing at common law.
17. Severability. If any provision of this Agreement is found invalid or unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement will not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law, provided that the fundamental purposes of this Agreement are not defeated by such severability.
18. Captions. The captions contained in this Agreement are merely a reference and are not to be used to construe or limit the text.
19. Entire Agreement, Waivers, and Amendments. This Agreement may be executed in duplicate originals, each of which is deemed to be an original. This Agreement, including the below-listed exhibits, which are incorporated herein by this reference, constitutes the entire understanding and agreement of the Parties.
20. Incorporation. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of City or Developer, and all amendments hereto must be in writing and signed by the appropriate authorities of the Parties hereto.
21. No Agency Created. Nothing contained in this Agreement creates any partnership, joint venture, or agency relationship between City and Developer. Except when specifically stated to the contrary, no term or provision of this Agreement is intended to be for the benefit of any person, firm, organization, or corporation not a party hereto, and no other person, firm, organization, or corporation may have any right or cause of action hereunder.
22. Additional Documents. City and Developer each agree to execute and deliver all documents and take all actions reasonably necessary to implement and enforce this Agreement.
23. Governing Statutes. References are made in this Agreement to specific sections of the Arizona Revised Statutes. Any such references mean the statute in effect on the date of the execution of this Agreement and any subsequent renumbering or reordering of those provisions.
Dated this day of August, 2020.
CITY OF TEMPE, a municipal corporation
ATTEST: Xxxxx X. Xxxxx, Mayor
Xxxxx X. Xxxxx, City Clerk APPROVED AS TO FORM:
Xxxxxx X. Xxxxxxx, City Attorney
By, Xxxxx X. Xxxxx, Deputy City Attorney
STATE OF ARIZONA )
County of Maricopa )
The foregoing instrument was acknowledged before me this day of
, 2020 by Xxxxx X. Xxxxx, the Mayor of the City of Tempe on behalf of the City.
My commission expires:
_ Notary Public
VIRTUA BROADWAY TEMPE, LLC
a Delaware limited liability company
STATE OF ARIZONA )
County of Maricopa )
The foregoing instrument was acknowledged before me this day of
, 2020 by , Manager of Virtua Broadway Tempe, LLC, a Delaware limited liability company, on behalf of the company.
My commission expires:
_ Notary Public
ACCEPTED AND AGREED TO:
LEGAL DESCRIPTION OF THE PROPERTY
PARCEL NO. 1:
THAT PORTION OF THE SOUTHWEST QUARTER OF SECTION 24, TOWNSHIP 1 NORTH, RANGE 4 EAST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTH QUARTER CORNER OF SAID SECTION 24;
THENCE NORTH 0 DEGREES 19 MINUTES 00 SECONDS WEST ALONG THE EAST LINE OF THE SAID SOUTHWEST QUARTER, A DISTANCE OF 640.00 FEET;
THENCE SOUTH 89 DEGREES 41 MINUTES 00 SECONDS WEST, A DISTANCE OF
151.00 FEET TO THE APPROXIMATE CENTER LINE OF A 6 FOOT CONCRETE LINED IRRIGATION DITCH;
THENCE SOUTH 36 DEGREES 54 MINUTES 46 SECONDS WEST, ALONG THE APPROXIMATE CENTER LINE OF SAID CONCRETE LINED IRRIGATION DITCH, A DISTANCE OF 305.88 FEET;
THENCE SOUTH 1 DEGREE 36 MINUTES 00 SECONDS WEST, A DISTANCE OF
297.12 FEET; THENCE NORTH 89 DEGREES 36 MINUTES 00 SECONDS EAST, A DISTANCE OF 48.00 FEET;
THENCE SOUTH 0 DEGREES 19 MINUTES 00 SECONDS EAST, A DISTANCE OF
100.00 FEET TO THE SOUTH LINE OF SAID SOUTHWEST QUARTER;
THENCE NORTH 89 DEGREES 36 MINUTES 00 SECONDS EAST, ALONG THE SOUTH LINE OF SAID SOUTHWEST QUARTER, A DISTANCE OF 298.00 FEET TO THE POINT OF BEGINNING;
EXCEPT THAT PART LYING WITHIN THE IRRIGATION DITCH LOCATED ALONG THE NORTHWESTERLY BOUNDARY LINE.
EXCEPT THAT PORTION CONVEYED TO THE CITY OF TEMPE IN QUIT-CLAIM DEED RECORDED IN DOCKET 9124, PAGE 289, DESCRIBED IN THE FOLLOWING THREE PARCELS:
THE EAST 30.00 FEET OF THE SOUTH 640.00 FEET OF THE SOUTHWEST QUARTER OF SECTION 24, TOWNSHIP 1 NORTH, RANGE 4 EAST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA; EXCEPT THE SOUTH 55.00 FEET.
THE NORTH 22.00 FEET OF THE SOUTH 55.00 FEET OF THE EAST 298.00 FEET OF THE SOUTHWEST QUARTER OF SECTION 24, TOWNSHIP 1 NORTH, RANGE 4 EAST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
THAT PART OF THE SOUTHWEST QUARTER OF SECTION 24, TOWNSHIP 1 NORTH, RANGE 4 EAST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA, DESCRIBED AS BEGINNING AT A POINT 55.00 FEET NORTH OF AND 30.00 FEET WEST OF THE SOUTHEAST CORNER OF THE SAID SOUTHWEST QUARTER;
THENCE WEST ALONG A LINE PARALLEL TO AND 55.00 FEET NORTH OF THE SOUTH LINE OF THE SAID SOUTHWEST QUARTER A DISTANCE OF 20.00 FEET;
THENCE NORTHEASTERLY TO A POINT IN A LINE PARALLEL TO AND 30.00 FEET WEST OF THE EAST LINE OF THE SAID SOUTHWEST QUARTER, SAID POINT BEING 20.00 FEET NORTH OF THE POINT OF BEGINNING; THENCE SOUTH TO THE POINT OF BEGINNING.
PARCEL NO. 2:
THAT PORTION ABANDONED AND DESCRIBED IN ORDINANCE NO.1099 RECORDED IN RECORDING NO. 84-452063, DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTH QUARTER CORNER OF SECTION 24, TOWNSHIP 1 NORTH, RANGE 4 EAST, OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA;
THENCE NORTH 00 DEGREES 08 MINUTES 00 SECONDS EAST ALONG THE NORTH-SOUTH MID- SECTION LINE OF SAID SECTION 24, A DISTANCE OF
515.83 FEET TO THE TRUE POINT OF BEGINNING;
THENCE CONTINUING NORTH 00 DEGREES 08 MINUTES 00 SECONDS EAST ALONG THE NORTH- SOUTH MID-SECTION LINE, A DISTANCE OF 124.17 FEET;
THENCE NORTH 89 DEGREES 52 MINUTES 00 SECONDS WEST, A DISTANCE OF
THENCE SOUTH 00 DEGREES 08 MINUTES 00 SECONDS WEST PARALLEL TO SAID NORTH-SOUTH MID-SECTION LINE, A DISTANCE OF 170.0 FEET TO A POINT OF TANGENCY WITH A CURVE CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 50.00 FEET;
THENCE NORTHEASTERLY ALONG SAID CURVE, A DISTANCE OF 57.96 FEET TO AN INTERSECTION WITH SAID NORTH-SOUTH MIDSECTION LINE AND THE POINT OF BEGINNING.
BUILDING SIGN PACKAGE DEPICTION