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City Council Report Date: October 26, 2026 To: City Council Through: Scott Butler, City Manager Marc Heirshberg, Assistant City Manager From: Nana Appiah, Development Services Director Ashley Scott, Management Assistant II Subject: DA26-02395 MGC Pure Chemicals Pecos Rd Development Agreement Council District 6 Purpose and Recommendation The purpose of this report is to discuss and consider approving a Resolution to authorize the City Manager to enter into a Development Agreement (“DA”) with MGC Pure Chemicals America, Inc., an Arizona corporation (“Owner”). The Owner’s property consists of twenty-six (26) acres located at the northwest corner of East Pecos Road and South Mountain Road. The proposed Development Agreement temporarily defers the Owner’s obligations to design, install, and construct certain required roadway improvements, including curbs, gutters, sidewalks, and streetlights, along East Pecos Road associated with the expansion of the Owner’s existing manufacturing facility. Staff recommends that the City Council approve the Development Agreement. Background MGC Pure Chemicals America, Inc. is proposing an expansion of its existing manufacturing facility on the Property. In connection with the Project, Mesa City Code Title 9, Chapter 8 requires the Owner to design and construct certain public off- site improvements in accordance with City standards. A proposed rail spur is also planned to serve the Property and connect to the proposed Union Pacific Railroad Company track. The rail spur would cross East Pecos Road within the same area where the Owner is required to construct the Pecos Road improvements. Because the rail spur and roadway improvements affect the same area, coordination of their design and construction is necessary. Discussion The Development Agreement temporarily defers the Owner’s obligation to design, install, and construct the required Pecos Road improvements so that the roadway improvements can be coordinated with the proposed Rail Spur. The deferral applies only to the Pecos Road improvements; all other required public infrastructure improvements (e.g., water, wastewater, and drainage improvements) remain the responsibility of the Owner and are not deferred or waived. The key elements of the Development Agreement include: Deferral Period: The deferral will terminate upon the earliest of issuance of the first City permit required for construction of the Rail Spur, five years after the Effective Date of the Development Agreement, or written notice from the City Manager terminating the deferral after consultation with the Transportation Department Director. Completion of Improvements: Once the deferral period ends, the Owner must obtain the necessary permit and complete the Pecos Road improvements within one year. If the deferral ends because the first Rail Spur permit is issued, the roadway improvements must be constructed simultaneously with the Rail Spur. Lieu Payment: The City Manager may require an in-lieu payment instead of construction of the improvements on Pecos Road in accordance with the Development Agreement. The deferral allows the Rail Spur and Pecos Road improvements to be coordinated before construction, reducing the potential for construction conflicts or future reconstruction while preserving the Owner’s obligation to ultimately complete the required roadway improvements. Alternatives The following alternatives are presented for consideration: Not to Approve the Resolution: If Council chooses not to approve the Resolution, the City Manager will not be authorized to enter into the Development Agreement, and the temporary deferral would not take effect. The Owner would remain responsible for completing the Pecos Road improvements under Mesa City Code. Because the proposed Rail Spur will cross the same area, constructing the roadway improvements before the Rail Spur is finalized could create construction conflicts and may require some of the improvements to be modified or reconstructed later. Staff recommends the City Council approve the Resolution authorizing the Development Agreement so that construction of the Pecos Road improvements and the Rail Spur are coordinated. Fiscal Impact The Development Agreement does not require any additional investment or fiscal impact from the City. Coordinated With The Development Agreement was coordinated with the Development Services Department, Department of Transportation, and the City Attorney’s Office.