New federal guidelines from The Treasury Department and Internal Revenue Service for capital gains-tax deferred investments in Opportunity Zones were issued and in effect at the end of December 2019. That apparently flushed out a new developer - un-named in a report to the Mesa City Council up for consideration at next Monday's meeting - to secure financing for the $59M GRID PROJECT that has struggled to get funding after the City of Mesa fast-tracked a Developer Agreement with 3W Management in November 2017, months before OZones were nominated and qualified in April 2018. The proposed site, as well as confirming financing, has an extensive roller-coaster complicated history for more than two years.
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To provide some context here's an extract from a post on this in March 2019
14 March 2019
But that's what just what staff writer Jim Walsh said in the corporate-owned The Times Media Group's East Valley Tribune in one more Spoon-Fed Story
"Ready-to-Roll"________________________________________________________________________________________
phrase of ready/informal
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Tony Wall has been working on THE GRID project for more than two years. Is the problem about municipal tax-incentives/finance from the City of Mesa that involve development on a city-owned property or lack of interest from private sources for the $60-million project he can't get from private investors willing and able to assume the risk? Even after two or more rounds of financing, Tony Wall still can't get the financing - and he's lost what was called "the anchor" for THE GRID proposal [CO+HOOTS]. What about those highly-touted and highly-promoted PUBLIC PRIVATE PARTNERSHIPS? . . .
In May of last year, Tony Wall [with legs crossed] appeared at a press conference announcing the massive 9.8-acre Mormon Temple Area Makeover of Downtown Mesa at the intersection of Main Street/Mesa Drive. Sitting next to him is former Mesa City Mike Hutchinson, VP of the East Valley Partnership. Standing at the podium is the owner of City Creek Reserve LLC, a for-profit affiliate of The Church of Jesus Christ of The Latter-Day Saints. It's the only new major project that has broken ground and is under construction now.
KARRIN TAYOR ROBSON alone should have been able to attract the financing. Here she is back on May 14, 2018 with a big blow-up of THE GRID
350 Claim Spots at AZBEX Private Development Summit
By Roland Murphy for Arizona Builder’s Exchange
(of a person, vehicle, or thing)
fully prepared to start functioning or moving.
For example:
"the next morning, the plan was ready to roll"
QUESTION:
Appearing in this staged photo opp as the featured opening image for Walsh's report with his "new best friend", will the company he keeps do the trick to get the financing?
Appearing in this staged photo opp as the featured opening image for Walsh's report with his "new best friend", will the company he keeps do the trick to get the financing?
Karrin Taylor Robson and developer Tony Wall stand in front of the city garage
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Tony Wall has been working on THE GRID project for more than two years. Is the problem about municipal tax-incentives/finance from the City of Mesa that involve development on a city-owned property or lack of interest from private sources for the $60-million project he can't get from private investors willing and able to assume the risk? Even after two or more rounds of financing, Tony Wall still can't get the financing - and he's lost what was called "the anchor" for THE GRID proposal [CO+HOOTS]. What about those highly-touted and highly-promoted PUBLIC PRIVATE PARTNERSHIPS? . . . 
In May of last year, Tony Wall [with legs crossed] appeared at a press conference announcing the massive 9.8-acre Mormon Temple Area Makeover of Downtown Mesa at the intersection of Main Street/Mesa Drive. Sitting next to him is former Mesa City Mike Hutchinson, VP of the East Valley Partnership. Standing at the podium is the owner of City Creek Reserve LLC, a for-profit affiliate of The Church of Jesus Christ of The Latter-Day Saints. It's the only new major project that has broken ground and is under construction now.
No financial details for the Temple Area transformation were ever disclosed to the public. Reports in the media say that it's a smaller scale version of the $2-Billion invested to develop the 23-acre City Creek in Salt Lake City that will feature "Mesa-authentic" architecture
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The GRID is being developed by Palladium Enterprises whose principals Tony Wall, Karrin Taylor Robson and Trevor Barger have long and successful tenures in Arizona real estate development.
350 Claim Spots at AZBEX Private Development Summit
By Roland Murphy for Arizona Builder’s Exchange
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Action Item *6-d File 20-0071
Authorizing the City Manager to enter into a Fifth Amendment to the Development Agreement, an Amended and Restated Lease, and an Amended and Restated License Agreement for the development commonly known as The GRID, which is on City-owned property, generally located at the southwest corner of Main Street and South Pomeroy and 34 South Pomeroy. (District 4)
*6-d
MEETING DETAILS: Links to the attachments
| File #: | 20-0071 |
| Type: | Resolution | Status: | Agenda Ready |
| In control: | City Council |
| On agenda: | 1/13/2020 |
| Title: | Authorizing the City Manager to enter into a Fifth Amendment to the Development Agreement, an Amended and Restated Lease, and an Amended and Restated License Agreement for the development commonly known as The GRID, which is on City-owned property, generally located at the southwest corner of Main Street and South Pomeroy and 34 South Pomeroy. (District 4) |
| Attachments: | 1. Council Report, 2. Resolution, 3. Fifth Amemdment to the Development Agreement, 4. Amended and Restated Lease Agreement, 5. Amended and Restated License Agreement |
This is the Council Report
Date: January 13, 2020
To: City Council
Date: January 13, 2020
To: City Council
Through: Christopher J. Brady, City Manager
From: Jeffrey McVay, Manager of Downtown Transformation
Subject: Consider
From: Jeffrey McVay, Manager of Downtown Transformation
Subject: Consider
1 - a proposed Fifth Amendment to the Development Agreement,
2 - an Amended and Restated Lease Agreement, and
3 - an Amended and Restated the License Agreement
to modify compliance dates and facilitate development of The GRID on City-owned property located on the southwest corner of Main and Pomeroy and above the Pomeroy parking garage. District 4
Purpose and Recommendation
Consider the proposed Fifth Amendment to the Development Agreement, an Amended and Restated Lease Agreement, and an Amended and Restated License Agreement between the City of Mesa and the developer. Staff recommends approval.
Background
> City Council approved the original Development Agreement (DA) and License Agreement with 3W Management, LLC in November 2017.
> Since that original approval, the DA has been amended four times, the Lease Agreement has been amended once, and the License Agreement has been amended twice.
> The DA, as amended, includes several milestones for permitting and developing the project, which the developer must meet to remain in compliance with the terms of the Development Agreement.
> While the developer has continued to move forward with final design and permitting, project funding was not secured until December 2019.
> Consequently, the project is not in compliance with several of the DA Compliance Dates.
> The DA, as amended, includes several milestones for permitting and developing the project, which the developer must meet to remain in compliance with the terms of the Development Agreement.
> While the developer has continued to move forward with final design and permitting, project funding was not secured until December 2019.
> Consequently, the project is not in compliance with several of the DA Compliance Dates.
With project funding secured and confirmed by City staff, the modified Compliance Dates included in the proposed Fifth Amendment to the DA align with an updated permit and construction schedule.
In addition, the Fifth Amendment to the DA, as well as the Amended and Restated Lease and License Agreements facilitates assignment of the developer responsibilities included in the agreements to The GRID at Mesa, LLC, a new entity consisting of the original developers (Palladium Grid, LLC) and the major investor.
No business terms are modified by the proposed Fifth Amendment to the DA or the Amended and Restated Lease and License Agreements.
No business terms are modified by the proposed Fifth Amendment to the DA or the Amended and Restated Lease and License Agreements.
2
Discussion
The following table summarizes the proposed modification to the DA compliance dates. Overall, the modified compliance dates represent a delay in project completion of up to one year.
The proposed amendment retains the provision that allows the City Manager, in his sole discretion, to extend any compliance date by 45 days, a maximum of three times.
The developer has continued to move the project forward while securing funding and has already begun site preparation and utility relocations.
Given the progress already made on permit submittals, the modified compliance dates have also been simplified to focus on construction commencement and completion.
The developer has continued to move the project forward while securing funding and has already begun site preparation and utility relocations.
Given the progress already made on permit submittals, the modified compliance dates have also been simplified to focus on construction commencement and completion.
Developer Milestones Current Compliance Date
Proposed Compliance Date
Submit 1st Permit Package July 10, 2018 Eliminated (has been met)
Provide Financial Capacity March 4, 2019 February 1, 2020 (has been met)
Commence Construction (1st Phase) June 3, 2019 March 15, 2020
Provide Financial Capacity March 4, 2019 February 1, 2020 (has been met)
Commence Construction (1st Phase) June 3, 2019 March 15, 2020
Commence Construction (2nd Phase) January 6, 2020 September 15, 2020
Complete Construction (1st Phase) June 15, 2020 December 31, 2020
Complete Construction (all Phases) December 31, 2020 December 31, 2021
Alternatives
- Modify terms to the proposed Fifth Amendment to the Development Agreement and/or the Amended and Restated Lease and License Agreements.
Fiscal Impact
None – No material business terms are modified with the proposed Fifth Amendment to the Development Agreement or the Amended and Restated Lease and License Agreements.
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