Is getting information only 24 hours ahead of time enough to read and understand reports, resolutions and 22 pages of details for this?? What about changes?
Asking for more time might be out of the question, but then again saying alright to spending about $200 Million dollars might justify more time and clear explanations.
Meeting Agenda - Final
Council Chambers 57 E. First Street
Mayor John Giles
Vice Mayor Dennis Kavanaugh - District 3
Councilmember Dave Richins - District 1
Councilmember Alex Finter - District 2
Councilmember Chris Glover - District 4
Councilmember David Luna - District 5
Councilmember Kevin Thompson - District 6
16-0621 Approving and authorizing the City Manager to enter into an Intergovernmental Agreement with the Arizona Board of Regents for, and on behalf of, Arizona State University for the development, operation, and maintenance of educational facilities in Mesa. (Citywide)
HERE'S THE RESOLUTION -- 4 PAGES
City Council Report
Date: May 26, 2016
To: City Council Through: Chris Brady, City Manager
From: Jeff McVay, Manager of Downtown Transformation
Citywide Strategic Initiatives
PURPOSE AND RECOMMENDATION
This report transmits an Intergovernmental Agreement (IGA) with Arizona State University (ASU) for the development, operation, and maintenance of higher education facilities on City owned land located at the northeast corner of Center and Main Streets and referred to as City Center. The IGA establishes the commitments of ASU and the City for a three phase development of an ASU presence in City Center. In the first phase, the City is responsible for the development of approximately 185,000 SF of ASU facilities and an approximately five acre public open space. ASU is responsible for bringing programs and activities associated with Digital and Sensory Technology, Performing and Media Arts, Early Childhood Education, and Entrepreneurial Support including a minimum 1,500 students and 100 faculty and staff within five years and 2,000 students and 125 faculty and staff within 10 years. The second and third phase would be developed at the City’s discretion. In the second phase, the City is responsible for the development of approximately 60,000 SF of ASU facilities. ASU is responsible for expanding existing and bringing new programs and activities including an additional 750 students and 50 faculty and staff. In the third phase, the City is responsible for the adaptive reuse of approximately 18,000 SF building for ASU use. ASU is responsible for expanding existing and bringing new programs and activities including an additional 250 students and 25 faculty and staff.
Council is being asked to consider a resolution directing and authorizing the City Manager to enter into the IGA. Staff is recommending approval of the four resolutions.
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BACKGROUND
Performance by both the City and ASU under this IGA is subject to several milestones. This IGA may be terminated if: 1) the City does not call an election for financing by July 9, 2016; 2) voters fail to approve financing for Phase I in the November, 2016 election; parties fail to agree on City Center Master Plan and budget, Public Infrastructure Plan and budget, Design Guidelines, and overall project budget; 3) or City does not obtain permanent financing in amount sufficient to complete Phase I. Parties may choose to continue efforts to achieve goals of the IGA should a milestone not be achieved.
The following is a summary of the primary deal points included in the IGA.
1. Property Ownership: City retains ownership of the land and all improvements. 2. Financing: City agrees to seek voter approval to finance the agreed upon infrastructure, site, and building improvements in the November 2016 election. 3. City Center Master Plan and Design Guidelines: Cooperative development of a City Center Master Plan and budget for Phase I and II, which includes: o Programming of ASU Facilities. o Conceptual plan for public civic space, streetscapes, parking, pedestrian connections, etc. o Design guidelines and standards. o City has responsibility for procurement of designer and all costs associated with development of City Center Master Plan. 4. Public Infrastructure and City Center Plaza: Cooperative development of a Public Infrastructure Plan and initial budget for infrastructure improvements. Infrastructure design and construction costs are City responsibility, subject to the initial budget. 5. Building Development: An initial budget for the design and construction of ASU Facilities will be established prior to the design of Phase I. Costs associated with design, construction, and procurement of associated services are the responsibility of the City, subject to the initial budget. 6. Initial Project Budget: Parties must agree to an initial overall project budget prior to design of the Public Infrastructure or ASU Facilities. Once initial project budget is established, City is not obligated to expend an amount greater than approved in initial project budget. 7. Leasing of the ASU Facilities: City and ASU will enter into a 99 year lease. ASU shall make rent payments in the amount of $100,000/year and reimbursement for the salary of a City Facilities Manager. In addition to other terms, lease will include: o Schedule for completion of Phase I. o ASU’s sole responsibility for cost of furniture, fixtures, and equipment in the ASU Facilities. o ASU’s sole responsibility for upgraded tenant improvements, such as smart building technologies. o ASU will create a Renewal and Replacement Account ($2/SF annually) that will fund capital expenditures.
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o ASU’s sole responsibility for operation and maintenance of ASU Facilities, including related capital expenditures, regardless of sufficiency of Renewal and Replacement Account. o Lease term may be extended should ASU make a significant capital investment with a useful life greater than the remaining term of the initial lease term. o ASU will work in good faith to provide scholarship opportunities for Mesa residents. o ASU will make unused space preferentially available to non-profit educational institutions located in Mesa. 8. Parking on City-Owned Land: City and ASU will collaborate on provision of parking to serve ASU-generated demand and replacement of existing City parking. Except accessible and limited parking otherwise agreed, no student or faculty parking will be provided on City Center. 9. Other Revenues and Fund Sources: ASU and City will jointly pursue fund raising for the ASU Facilities to support academic programs and capital costs. Parties will agree separately on how revenues from fund raising for capital costs (other than FF&E) and entire building naming rights will be split between the Parties. 10. IGA Term: The y hIGA will expire on the earlier of two years or the date Parties enter into a lease for Phase I.
DISCUSSION
Alternatives
1. APPROVAL OF THE INTERGOVERNMENTAL AGREEMENT, AS ATTACHED. (Preferred alternative)
2. SPECIFY CHANGES TO THE AGREEMENTS Council could direct staff to make changes to the IGA prior to final approval.
3. DENY APPROVAL OF THE INTERGOVERNMENTAL AGREEMENT
Fiscal Impact
Subject to approval of the qualified voters of Mesa on a financing mechanism, among other milestones, the proposed would result in the commitment of the City to develop Phase I, which includes approximately 180,000 SF of ASU facilities, a public open space, and parking facilities. Initial estimates of the development costs associated with Phase I are as follows: ASU Buildings $68.2 to 78.9 million Civic Plaza $20 to $25 million Parking $10 to $12 million Off Site Improvements $4 million Total $102.2 to $119.9 million
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At the City’s discretion, future development of Phases II and III would the commitment of the City to develop an additional approximately 78,000 SF of ASU facilities. Initial estimates of the development costs associated with Phases II and III are $32 million.
Revenues to the City with development of Phase I of the agreement would include: $100,000/year lease payment, Prorated salary of City Facilities Manager, Net revenue from commercial leases within ASU facilities, and Net revenue from the operation of City developed parking facilities.
Coordinated With
Negotiation of the Intergovernmental Agreement has been coordinated by the Offices of the City Manager and City Attorney.
2 Convene an Executive Session.
ES-004-16 Discussion or consultation for legal advice with the City Attorney. (A.R.S. §38-431.03A (3)) Discussion or consultation with designated representatives of the City in order to consider the City’s position and instruct the City’s representatives regarding negotiations for the purchase, sale, or lease of real property. (A.R.S. §38-431.03A (7)) Discussion or consultation with the City Attorney in order to consider the City’s position and instruct the City Attorney regarding the City’s position regarding contracts that are the subject of negotiations, in pending or contemplated litigation or in settlement discussions conducted in order to avoid or resolve litigation. (A.R.S. §38-431.03A(4))
1. Intergovernmental Agreement with Arizona State University for a campus on city owned property.
This report transmits an Intergovernmental Agreement (IGA) with Arizona State University (ASU) for the development, operation, and maintenance of higher education facilities on City owned land located at the northeast corner of Center and Main Streets and referred to as City Center. The IGA establishes the commitments of ASU and the City for a three phase development of an ASU presence in City Center. In the first phase, the City is responsible for the development of approximately 185,000 SF of ASU facilities and an approximately five acre public open space. ASU is responsible for bringing programs and activities associated with Digital and Sensory Technology, Performing and Media Arts, Early Childhood Education, and Entrepreneurial Support including a minimum 1,500 students and 100 faculty and staff within five years and 2,000 students and 125 faculty and staff within 10 years. The second and third phase would be developed at the City’s discretion. In the second phase, the City is responsible for the development of approximately 60,000 SF of ASU facilities. ASU is responsible for expanding existing and bringing new programs and activities including an additional 750 students and 50 faculty and staff. In the third phase, the City is responsible for the adaptive reuse of approximately 18,000 SF building for ASU use. ASU is responsible for expanding existing and bringing new programs and activities including an additional 250 students and 25 faculty and staff.
Council is being asked to consider a resolution directing and authorizing the City Manager to enter into the IGA. Staff is recommending approval of the four resolutions.
2
BACKGROUND
Performance by both the City and ASU under this IGA is subject to several milestones. This IGA may be terminated if: 1) the City does not call an election for financing by July 9, 2016; 2) voters fail to approve financing for Phase I in the November, 2016 election; parties fail to agree on City Center Master Plan and budget, Public Infrastructure Plan and budget, Design Guidelines, and overall project budget; 3) or City does not obtain permanent financing in amount sufficient to complete Phase I. Parties may choose to continue efforts to achieve goals of the IGA should a milestone not be achieved.
The following is a summary of the primary deal points included in the IGA.
1. Property Ownership: City retains ownership of the land and all improvements. 2. Financing: City agrees to seek voter approval to finance the agreed upon infrastructure, site, and building improvements in the November 2016 election. 3. City Center Master Plan and Design Guidelines: Cooperative development of a City Center Master Plan and budget for Phase I and II, which includes: o Programming of ASU Facilities. o Conceptual plan for public civic space, streetscapes, parking, pedestrian connections, etc. o Design guidelines and standards. o City has responsibility for procurement of designer and all costs associated with development of City Center Master Plan. 4. Public Infrastructure and City Center Plaza: Cooperative development of a Public Infrastructure Plan and initial budget for infrastructure improvements. Infrastructure design and construction costs are City responsibility, subject to the initial budget. 5. Building Development: An initial budget for the design and construction of ASU Facilities will be established prior to the design of Phase I. Costs associated with design, construction, and procurement of associated services are the responsibility of the City, subject to the initial budget. 6. Initial Project Budget: Parties must agree to an initial overall project budget prior to design of the Public Infrastructure or ASU Facilities. Once initial project budget is established, City is not obligated to expend an amount greater than approved in initial project budget. 7. Leasing of the ASU Facilities: City and ASU will enter into a 99 year lease. ASU shall make rent payments in the amount of $100,000/year and reimbursement for the salary of a City Facilities Manager. In addition to other terms, lease will include: o Schedule for completion of Phase I. o ASU’s sole responsibility for cost of furniture, fixtures, and equipment in the ASU Facilities. o ASU’s sole responsibility for upgraded tenant improvements, such as smart building technologies. o ASU will create a Renewal and Replacement Account ($2/SF annually) that will fund capital expenditures.
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o ASU’s sole responsibility for operation and maintenance of ASU Facilities, including related capital expenditures, regardless of sufficiency of Renewal and Replacement Account. o Lease term may be extended should ASU make a significant capital investment with a useful life greater than the remaining term of the initial lease term. o ASU will work in good faith to provide scholarship opportunities for Mesa residents. o ASU will make unused space preferentially available to non-profit educational institutions located in Mesa. 8. Parking on City-Owned Land: City and ASU will collaborate on provision of parking to serve ASU-generated demand and replacement of existing City parking. Except accessible and limited parking otherwise agreed, no student or faculty parking will be provided on City Center. 9. Other Revenues and Fund Sources: ASU and City will jointly pursue fund raising for the ASU Facilities to support academic programs and capital costs. Parties will agree separately on how revenues from fund raising for capital costs (other than FF&E) and entire building naming rights will be split between the Parties. 10. IGA Term: The y hIGA will expire on the earlier of two years or the date Parties enter into a lease for Phase I.
DISCUSSION
Alternatives
1. APPROVAL OF THE INTERGOVERNMENTAL AGREEMENT, AS ATTACHED. (Preferred alternative)
2. SPECIFY CHANGES TO THE AGREEMENTS Council could direct staff to make changes to the IGA prior to final approval.
3. DENY APPROVAL OF THE INTERGOVERNMENTAL AGREEMENT
Fiscal Impact
Subject to approval of the qualified voters of Mesa on a financing mechanism, among other milestones, the proposed would result in the commitment of the City to develop Phase I, which includes approximately 180,000 SF of ASU facilities, a public open space, and parking facilities. Initial estimates of the development costs associated with Phase I are as follows: ASU Buildings $68.2 to 78.9 million Civic Plaza $20 to $25 million Parking $10 to $12 million Off Site Improvements $4 million Total $102.2 to $119.9 million
4
At the City’s discretion, future development of Phases II and III would the commitment of the City to develop an additional approximately 78,000 SF of ASU facilities. Initial estimates of the development costs associated with Phases II and III are $32 million.
Revenues to the City with development of Phase I of the agreement would include: $100,000/year lease payment, Prorated salary of City Facilities Manager, Net revenue from commercial leases within ASU facilities, and Net revenue from the operation of City developed parking facilities.
Coordinated With
Negotiation of the Intergovernmental Agreement has been coordinated by the Offices of the City Manager and City Attorney.
2 Convene an Executive Session.
ES-004-16 Discussion or consultation for legal advice with the City Attorney. (A.R.S. §38-431.03A (3)) Discussion or consultation with designated representatives of the City in order to consider the City’s position and instruct the City’s representatives regarding negotiations for the purchase, sale, or lease of real property. (A.R.S. §38-431.03A (7)) Discussion or consultation with the City Attorney in order to consider the City’s position and instruct the City Attorney regarding the City’s position regarding contracts that are the subject of negotiations, in pending or contemplated litigation or in settlement discussions conducted in order to avoid or resolve litigation. (A.R.S. §38-431.03A(4))
1. Intergovernmental Agreement with Arizona State University for a campus on city owned property.
RESOLUTION NO. __________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MESA, MARICOPA COUNTY, ARIZONA, AUTHORIZING THE CITY MANAGER TO ENTER INTO AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE ARIZONA BOARD OF REGENTS FOR AND ON BEHALF OF ARIZONA STATE UNIVERSITY (“ASU”) AND THE CITY OF MESA FOR THE DEVELOPMENT, OPERATION, AND MAINTENANCE OF EDUCATIONAL FACILITIES IN MESA
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MESA, MARICOPA COUNTY, ARIZONA, AUTHORIZING THE CITY MANAGER TO ENTER INTO AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE ARIZONA BOARD OF REGENTS FOR AND ON BEHALF OF ARIZONA STATE UNIVERSITY (“ASU”) AND THE CITY OF MESA FOR THE DEVELOPMENT, OPERATION, AND MAINTENANCE OF EDUCATIONAL FACILITIES IN MESA
WHEREAS, the City has invested and committed to increasing post-secondary educational opportunities for its citizens; and
WHEREAS, ASU desires to operate and maintain post-secondary educational facilities in Mesa as part of its regional expansion; and
WHEREAS, the City Council hereby determines it is in the best interests of the City and its residents to enter into this Intergovernmental Agreement with ASU for the development of post-secondary education facilities in Mesa; and
WHEREAS, the City Council further finds and determines that this Intergovernmental Agreement with ASU is for the economic development of the City and will assist in the creation and retention of jobs and will improve and enhance the economic welfare of the City’s citizens and promote greater economic activity in the City.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MESA, MARICOPA COUNTY, AS FOLLOWS:
Section 1: Approving the Intergovernmental Agreement between ASU and the City of Mesa for the development, operation, and maintenance of certain post-secondary education facilities in Mesa. Section 2: That the City Manager, Christopher J. Brady, or his designated representative, is authorized and directed to enter into the Intergovernmental Agreement, and any related amendments or supplements thereto, on behalf of the City of Mesa, and the City Clerk is authorized and directed to attest to the signature of the City Manager or his authorized designated representative thereon. The City Manager may make minor modifications to the terms set forth in the Intergovernmental Agreement so long as such modifications do not materially alter the overall agreement, as presented to the City Council.
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{00200917.1}
Section 3: That the various City officers and employees be and hereby are authorized and directed to perform all acts necessary to give effect to this Resolution.
PASSED AND ADOPTED by the City Council of the City of Mesa, Maricopa County, Arizona, this 26th day of May, 2016.
APPROVED:
__________________________ Mayor ATTEST:
__________________________ City
WHEREAS, ASU desires to operate and maintain post-secondary educational facilities in Mesa as part of its regional expansion; and
WHEREAS, the City Council hereby determines it is in the best interests of the City and its residents to enter into this Intergovernmental Agreement with ASU for the development of post-secondary education facilities in Mesa; and
WHEREAS, the City Council further finds and determines that this Intergovernmental Agreement with ASU is for the economic development of the City and will assist in the creation and retention of jobs and will improve and enhance the economic welfare of the City’s citizens and promote greater economic activity in the City.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MESA, MARICOPA COUNTY, AS FOLLOWS:
Section 1: Approving the Intergovernmental Agreement between ASU and the City of Mesa for the development, operation, and maintenance of certain post-secondary education facilities in Mesa. Section 2: That the City Manager, Christopher J. Brady, or his designated representative, is authorized and directed to enter into the Intergovernmental Agreement, and any related amendments or supplements thereto, on behalf of the City of Mesa, and the City Clerk is authorized and directed to attest to the signature of the City Manager or his authorized designated representative thereon. The City Manager may make minor modifications to the terms set forth in the Intergovernmental Agreement so long as such modifications do not materially alter the overall agreement, as presented to the City Council.
2
{00200917.1}
Section 3: That the various City officers and employees be and hereby are authorized and directed to perform all acts necessary to give effect to this Resolution.
PASSED AND ADOPTED by the City Council of the City of Mesa, Maricopa County, Arizona, this 26th day of May, 2016.
APPROVED:
__________________________ Mayor ATTEST:
__________________________ City
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