SILF Development Agreement

City of Glendale — Regular Meeting (2022-08-09)

Extracted text (via pymupdf) 28196 characters

When recorded return to:
City Attorney
City of Glendale
5850 W. Glendale Avenue
Suite 450
Glendale, Arizona 85301
DEVELOPMENT AGREEMENT
STREETS IN-LIEU FEE: INDUSTRIAL
WEST GLENDALE SERVICE AREA
Ryan at Woolf Logistics Center Building 1 and 2
This Development Agreement (the “Agreement”) is made and entered into as of this
_______ day of ________________ 2022, by and between the City of Glendale, an Arizona
municipal corporation (the “City”), and Ryan Companies US, Inc., a Minnesota corporation
(“Developer”). Developer and the City are sometimes referred to collectively in the Agreement
as the “Parties” or individually as a “Party”.
RECITALS
WHEREAS, Developer is a private developer that owns property generally located at
15101 & 15151 W Hatcher Road within Glendale’s boundaries and specifically in the West
Glendale Service Area as related to Street Facilities, which property is legally described on Exhibit
“D”; and illustrated on site plan Exhibit “E” (the “Property”) and
WHEREAS, Arizona Revised Statutes (A.R.S.) § 9-463.05 provides a framework for cities
to assess, collect and administer development fees; and
WHEREAS, as required by law, the City retained the services of an outside consultant to
complete an update of the City’s development impact fees for compliance with the requirements of
A.R.S. § 9-463.05; and
WHEREAS, the report prepared by the outside firm of TischlerBise entitled Land Use
Assumptions, Infrastructure Improvements Plan and Development Fee Report, September 2019, did
not calculate a streets-related development impact fee for what the study called the West Glendale
Service Area due to the unknown nature of development and the associated transportation
infrastructure; and

WHEREAS, the report recommends the City may want to enter into development agreements
with developers to collect payments to help cover the costs of street infrastructure improvements on
a case-by-case basis; and
WHEREAS, the City has determined that due to the extensive growth and rapid rate of
development applications in the West Glendale Service Area, it is necessary and appropriate to collect
an in-lieu fee, formally called the Streets In-Lieu Fee (“SILF”) to ensure this new growth pays its
proportionate share of street infrastructure improvements; and
WHEREAS, the City has determined that the $634 per 1,000 square feet of industrial building
fee currently utilized in the area known as the East Glendale Service Area in the TischlerBise study
is appropriate for the West Glendale Service Area, and that the resulting projected fee revenue and
expenditures would be similar; and
WHEREAS, Developer will construct street improvements as depicted in Exhibit “A” and
more generally understood and agreed as the construction the full width of Hatcher Road between
151st Avenue and the Bullard Avenue Alignment (the “Street Improvements”) that will serve
Developer’s property as well as other properties in the West Glendale Service Area; and
WHEREAS, in consideration of the public infrastructure to be built by Developer, the City
will credit the cost of 50% of the cost of the Street Improvements against the in-lieu fee owed by
Developer; and
WHEREAS, no in-lieu fee credit will be given to Developer for street improvements that
are necessary and customarily required for Developer’s project to function in a safe and
satisfactory manner in regards to traffic; and
WHEREAS, in order to accomplish all these goals, the Parties wish to enter into this
Agreement.
NOW, THEREFORE, in consideration of the following mutual covenants and conditions,
the City and Developer agree as follows:
AGREEMENT
1.
Incorporation of Recitals. The recitals above are incorporated and made a part of
this Agreement.
2.
Street Improvements. The Developer will manage the construction of the Streets as
follows:
(a)
Scope of Work.
Developer will design, construct, or cause to be constructed,
(and will dedicate to the City) the street improvements and associated right-of-way) described in
Exhibit A to this Agreement, subject to the terms and conditions of this Agreement. Specifically,
Developer or its agent must begin construction of the Street Improvements no later than twelve (12)
months after the date the last party signs this agreement, and Developer or its agent must complete
construction of the Street Improvements no later than twelve (12) months after the date construction

begins on the Street Improvements. In the event Developer fails to fully perform any of the
obligations in this paragraph, Developer will receive a pro-rated credit against the SILF based on the
work actually completed by Developer.
(b)
Design, Bidding, Construction and Dedication. The Street Improvements will be
designed, bid and constructed and will be dedicated in accordance with applicable laws, including
without limitation all laws, rules, ordinances and standards of the City, as well as state and federal
laws.
(c)
Street Improvement Construction Documents and Permits. Construction drawings
for the Street Improvements shall be funded by the Developer and shall be prepared under the
direction of Developer and approved by the City, such approval not to be unreasonably withheld,
conditioned or delayed. The construction drawings shall be consistent with all applicable
ordinances, resolutions, regulations, guidelines and standards adopted by the City that are in effect
when the permits for the Street Improvements are issued.
3.
Streets In-Lieu Fee Credit; True-up. Developer understands and acknowledges
that the Street Improvements are not currently included in any existing capital improvement
plans (“CIP”) and the City has no plans and no financial means to undertake the actions
necessary to complete the Street Improvements. Therefore, for and in consideration of the
completion of the Street Improvements (the north half of Hatcher Road) and recognition of the
benefits received by the City from the Street Improvements, the City will credit 50% of the cost
to design, bid and construct the Street Improvements by and through a credit toward the SILF that
would be charged and assessed upon the industrial development project built by Developer. The
SILF is calculated on the form attached as Exhibit “B”. The City will apply such credit to the
SILF that would be charged and assessed upon the industrial development at the time Developer
pulls permits to construct the associated building(s). The credit is calculated at fifty percent (50%)
of the cost of the Street Improvements as shown on Exhibit “C”. With respect to a “true-up” for
actual costs, the parties acknowledge that the actual cost to design, bid and construct the Street
Improvements is not yet known, and the actual cost of the same will be determined at the
completion of the Street Improvements based on Developer’s documentation of such actual cost.
Final SILF credit (or reimbursement by Developer if necessary) will be paid (or reimbursed by
Developer if necessary based on such actual cost).
4.
Adjustment of Unit Fees and Prices. The City may evaluate the Unit Fee on the
SILF Calculation Form and the Unit Price on the SILF Credit Form and make adjustments as the
market dictates. Any adjustments causing the Unit Fee or Unit Price to deviate more that twenty
percent (20%) from the original numbers shall cause this Agreement to be presented to City
Council for approval. Given that the SILF Credit is a major inducement to Developer undertaking
the work anticipated by this Agreement, under no circumstances shall the SILF Credit be decreased
from what is anticipated to be under this Agreement, provided that Developer completes the work
anticipated hereby.
5.
Development Impact Fees. This Agreement is only for the purpose of establishing

and calculating an in-lieu fee related to streets. In addition to the SILF, Developer will pay all
development impact fees according to the Glendale City Council-approved Development Impact
Fee Schedule in existence at the time structures are permitted.
6.
Incorporation of Exhibits. All exhibits attached and referred to in this Agreement
are incorporated and made a part of this Agreement.
7.
Amendment of the Agreement. This Agreement may be amended or canceled, in
whole or in part, only by a written agreement or amendment fully executed by the Parties.
8.
No Third-Party Beneficiaries. This Agreement is made and entered into for the
sole protection and benefit of the Parties. Nothing contained in this Agreement shall be construed
to make any non-party to this Agreement a third-party beneficiary of this Agreement.
9.
Assignment. Developer may not assign its rights and/or obligations under this
Agreement (jointly or severally) without the prior written consent of the City, which consent shall
not be unreasonably withheld, conditioned or delayed. Notwithstanding this provision, Developer
has the right to assign and/or transfer their rights and obligations under this Agreement to (a) any
business entity, company or affiliate that is directly or indirectly owned or controlled by
Developer; or (b) any third-party purchaser acquiring all or any part of the Property. In the event
Developer sells any of the Property associated with the Street Improvements covered under this
Agreement to a third party, the selling Party will ensure that the obligations of this Agreement
are fulfilled, either by the selling Party or the third-party purchaser, if necessary.
10.
Notices. Any notices required or permitted to be given pursuant to this Agreement
may be delivered in person or mailed, certified mail, return receipt requested or via a nationally
recognized overnight courier to the following addresses:
To City:
City of Glendale
Attention: City Manager
5850 West Glendale Avenue
Glendale, Arizona 85301
With copy to:
City of Glendale
Attention: City Attorney
5850 West Glendale Avenue
Glendale, Arizona 85301

To Developer
Ryan Companies Us, Inc.
Attn: Josh Tracy
3900 E Camelback Road, Suite 100
Phoenix, AZ 85018
Email: Josh.Tracy@ryancompanies.com
With copy to:
Ryan Companies Us, Inc.
Attn: Sarah Edstrom Smith
533 South Third Street, Suite 100
Minneapolis, MN 55415
Email: sarah.edstromsmith@ryancompanies.com
11.
Governing Law. This Agreement is governed by the laws of the State of Arizona.
12.
Venue. Any action arising from this Agreement, which includes by way of
example, but not limitation, any action to enforce or interpret any provision of this Agreement,
shall be commenced and maintained in a court of competent jurisdiction located within Maricopa
County, Arizona, and the Parties irrevocably waive any right to object to such venue.
13.
Conflicts. Developer acknowledges this Agreement is subject to A.R.S. § 38-511,
which allows for cancellation of this Agreement in the event any person who is significantly
involved in initiating, negotiating, securing, drafting or creating the Agreement on the City’s
behalf is also an employee, agent or consultant of any other Party to this Agreement.
14.
Cooperation and Alternative Dispute Resolution.
(a)
Representatives. To further the cooperation of the Parties in implementing
this Agreement, each Party will designate and appoint a representative to act as a liaison
between the City and its various departments and the other Parties. The representatives of
each Party will be available at all reasonable times to discuss and review the performance
of the Parties to this Agreement and the development of the Property.
(b)
Impasse. The City acknowledges and agrees that it is desirable for the
Parties to proceed rapidly with the implementation of this Agreement and the development
of the Property. Accordingly, the Parties agree that if at any time any Party believes an
impasse has been reached with the City staff on any issue, that Party has the right to
immediately appeal to the City’s 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 the appealing Party a final
administrative decision within seven (7) days after the Party’s request for an expedited
decision.

(c)
Mediation. If there is a dispute hereunder which the Parties cannot resolve
themselves, the Parties agree that there shall be a ninety (90) 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 (“AAA”) 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 the
involved Parties. The matter in dispute shall be submitted to a mediator mutually selected
by the involved Party/Parties and the City. If the Party/Parties cannot agree upon the
selection of a mediator within ten (10) days, then within five (5) days thereafter, the Parties
shall request that the Presiding Judge of the Superior Court in and for the County of
Maricopa, 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 real
property. The cost of any such mediation shall be divided equally between the City and
the involved Parties. The results of the mediation shall be nonbinding with any Party free
to initiate litigation upon the conclusion of the latter of (i) the mediation or (ii) of the ninety
(90) day moratorium on litigation. The mediation shall be completed in one day (or less)
and shall be confidential, private, and otherwise governed by the applicable provisions of
A.R.S. § 12-2238.
15.
Miscellaneous. This Agreement shall be interpreted, applied, and enforced
according to the fair meaning of its terms and shall not be construed strictly in favor of or against
either Party, as both Parties have been involved in the drafting of its provisions. This Agreement
constitutes the entire agreement of the Parties concerning the matters contained herein and
supersedes all prior negotiations, understandings, and agreements concerning such matters. No
provision of this Agreement may be waived or modifies except by an amendment signed by the
Party against whom such modification or waiver is sought.
16.
Severability. In the event that any phrases, clause, sentence, paragraph, section,
article or other portion of this Agreement shall become illegal, null or void or against public policy,
for any reason, or shall be held by any court of competent jurisdiction to be illegal, null, void or
against public policy, the remaining portions of this Agreement shall not be affected thereby and
shall remain in full force and effect to the fullest extent permissible by law.
17.
Cooperation and Further Acts. The Parties shall act reasonably with respect to any
and all matters which require either party to review, consent or approve any act or matter herein.
18.
Counterparts. This Agreement may be executed in counterparts, and all
counterparts will together comprise one instrument.
19.
Term. The term of this Agreement shall commence upon the date the last Party
signs this Agreement and shall end at the earlier of (a) three (3) years from the Effective Date; or
(b) the date the Agreement is terminated in a writing signed by the Parties and recorded in the
official records of Maricopa County, Arizona, or by an order of a court of competent jurisdiction.
If the term of this Agreement expires according to its terms, either Party shall be entitled to record
a unilateral termination of the Agreement in the official records of Maricopa County, Arizona.

20.
Lender Consent. No Party shall encumber or take any action to cause its respective
property to be encumbered with a lien or encumbrance superior or prior to the terms, covenants
and provisions of this Agreement. If, at the present, or at any other time or times, all or any part
of the respective properties of the Parties is or becomes encumbered by a lien or encumbrance
superior or prior to the terms, covenants and provisions of this Agreement, then such Party, its
successors or assigns, shall either obtain an appropriate consent and subordination from the
lienholder or take such action as may be necessary to remove and discharge such prior lien or
encumbrance. Without limiting the generality of the foregoing, each Party shall timely pay any
and all real property taxes and assessments levied against or allocable to its respective property.
[SIGNATURES ON FOLLOWING PAGE]

IN WITNESS HEREOF, the Parties have caused this Agreement to be duly executed as
follows:
CITY OF GLENDALE, ARIZONA,
an Arizona municipal corporation,
Kevin Phelps
City Manager
ATTEST:
Julie Bower, City Clerk (SEAL)
APPROVED AS TO FORM:
Michael Bailey, City Attorney

EXHIBIT A
Street Improvements
This exhibit is intended to illustrate the extent of street improvements, the actual streets
improvements constructed will be based on the final construction documents approved by the
City of Glendale. Calculations on Exhibits B and C may be adjusted to reflect the City approved
construction documents and permits.

P: 602.490.0535 / F: 602.368.2436
www.hilgartwilson.com
2141 E. HIGHLAND AVE., STE. 250
PHOENIX, AZ 85016
P: 602.490.0535 / F: 602.368.2436
www.hilgartwilson.com
2141 E. HIGHLAND AVE., STE. 250
PHOENIX, AZ 85016
P: 602.490.0535 / F: 602.368.2436
www.hilgartwilson.com
2141 E. HIGHLAND AVE., STE. 250
PHOENIX, AZ 85016
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Contact Arizona 811 at least two full
working days before you begin excavation
CALL 811 or click Arizona811.COM
EXHIBIT A STREET IMPROVEMENTS

Contact Arizona 811 at least two full
working days before you begin excavation
CALL 811 or click Arizona811.COM
EXHIBIT A STREET IMPROVEMENTS

Contact Arizona 811 at least two full
working days before you begin excavation
CALL 811 or click Arizona811.COM
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P: 602.490.0535 / F: 602.368.2436
www.hilgartwilson.com
2141 E. HIGHLAND AVE., STE. 250
PHOENIX, AZ 85016
P: 602.490.0535 / F: 602.368.2436
www.hilgartwilson.com
2141 E. HIGHLAND AVE., STE. 250
PHOENIX, AZ 85016
P: 602.490.0535 / F: 602.368.2436
www.hilgartwilson.com
2141 E. HIGHLAND AVE., STE. 250
PHOENIX, AZ 85016
EXHIBIT A STREET IMPROVEMENTS

P: 602.490.0535 / F: 602.368.2436
www.hilgartwilson.com
2141 E. HIGHLAND AVE., STE. 250
PHOENIX, AZ 85016
P: 602.490.0535 / F: 602.368.2436
www.hilgartwilson.com
2141 E. HIGHLAND AVE., STE. 250
PHOENIX, AZ 85016
P: 602.490.0535 / F: 602.368.2436
www.hilgartwilson.com
2141 E. HIGHLAND AVE., STE. 250
PHOENIX, AZ 85016
Contact Arizona 811 at least two full
working days before you begin excavation
CALL 811 or click Arizona811.COM
EXHIBIT A STREET IMPROVEMENTS

LIMIT
SPEED
25
NO
OUTLET
LIMIT
SPEED
25
R
R
ALL WAY
ALL WAY
ALL WAY
RIGHT LANE
ALL WAY
LIMIT
SPEED
25
Contact Arizona 811 at least two full
working days before you begin excavation
CALL 811 or click Arizona811.COM
EXHIBIT A STREET IMPROVEMENTS

P: 602.490.0535 / F: 602.368.2436
www.hilgartwilson.com
2141 E. HIGHLAND AVE., STE. 250
PHOENIX, AZ 85016
Contact Arizona 811 at least two full
working days before you begin excavation
CALL 811 or click Arizona811.COM
EXHIBIT A STREET IMPROVEMENTS

Contact Arizona 811 at least two full
working days before you begin excavation
CALL 811 or click Arizona811.COM
EXHIBIT A STREET IMPROVEMENTS

ELECTRICAL ENGINEERING AND DESIGN
165 EAST CHILTON DRIVE ● CHANDLER, ARIZONA 85225
PHONE 480.497.5829 ● FAX 480.497.5807
www.wrightengineering.us
engineering corporation
Dial 8-1-1 or 1-800-STAKE-IT (782-5348)
in Maricopa County: (602) 263-1100
Call at least two full working days
before you begin excavation.
Arizona Blue Stake, Inc.
ELECTRICAL ENGINEERING AND DESIGN
165 EAST CHILTON DRIVE ● CHANDLER, ARIZONA 85225
PHONE 480.497.5829 ● FAX 480.497.5807
www.wrightengineering.us
engineering corporation
ELECTRICAL ENGINEERING AND DESIGN
165 EAST CHILTON DRIVE ● CHANDLER, ARIZONA 85225
PHONE 480.497.5829 ● FAX 480.497.5807
www.wrightengineering.us
engineering corporation
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EXHIBIT A STREET IMPROVEMENTS

Trade Description
Subcontractor
Cost
Comments
Landscape & Irrigation
Westar
$30,740
SWPPP
Desert Services
$0
Site Concrete
Keystone
$159,679
Construction Layout - Surveyor
Benchmark
$5,840
Site Utility Services
Levake
$0
paid by others
Paving
Sunland
$540,970
Dry Utilities / Street Lights
Beecroft
$67,620
$804,848
General Conditions
Ryan
$27,682
Design Fee
A/E
$27,515
Plan Check / Permit
Ryan
$21,529
Insurance
Ryan
$24,226
Construction Contingency
Ryan
$135,870
Tax
Ryan
$62,292
Fee
Ryan
$44,158
$1,148,120
HATCHER RD EXTENSION (DELTA B)
TOTAL
Subtotal

EXHIBIT B
Street In-Lieu Fee Calculation Form
(Industrial)

Project Name:
Owner’s Name:
APN#:
Address:
Development Services Project #:
Building Square Footage1:
Unit Fee
$634/1000 square feet of industrial building
Amount of SILF Credit if applicable
Carryover Credit from Previous
Phase2
(please note date and contract # of
credit)
Total SILF Credit
(add 2 lines above)
1Square footage should only apply to buildings currently being permitted. Buildings in future phases will require a new
agreement and SILF calculation.
2If more than 36 months has passed since Effective Date of Agreement authorizing credit, then Carryover Credit is no
longer valid.
SILF Calculation
X
$634/1000 SF
=

Industrial Building Square
Footage
SILF
SILF to be paid by applicant:

-
=
SILF
Total SILF Credit
SILF Owed
SILF CALCULATION FORM
STREETS IN LIEU FEE (SILF)
CALCULATION FOR INDUSTRIAL DEVELOPMENTS
WEST GLENDALE SERVICE AREA
501-42-002K
Ryan At Woolf Building 1 & 2
15101 & 15151 W Hatcher Road
906,125 Total SF (Bldg 1 386,958 SF, Bldg 2 519,167 SF)
212734 & 212735
906,125
$574,483.25
$574,483.25
$574,483.25
$0.00
$574,483.25
$574,483.25
$0.00
Ryan Companies US, INC., a Minnesota Corporation
EXHIBIT B - STREET IN-LIEU CALCULATION FORM

If SILF Owed is a negative number then the applicant DOES NOT owe SILF for this phase of
development. If the developer will construct additional buildings in a future phase, then enter the
amount below:
Carryover Credit = _________________________
Prepared by:
Building Official or designee
Date
Approved by:
Transportation Director
Date
Approved by:
City Manager or designee
Date
$0.00
EXHIBIT B - STREET IN-LIEU CALCULATION FORM

EXHIBIT C
Street In-Lieu Fee Credit Form
(Industrial)

Project Name:
Owner’s Name:
APN#:
Address:
Development Services Project #:
Street Frontage1:
1Developer must construct 100% of Hatcher Road Improvements to receive 50% SILF Credit.
SILF Credit Calculation
X
50%
=
Estimated Total Cost to
Construct Hatcher Road
SILF Credit
Prepared by:
City Traffic Engineer
Date
Approved by:
Transportation Director
Date
Approved by:
City Manager or designee
Date
SILF CREDIT FORM
STREETS IN LIEU FEE (SILF)
CREDIT FOR INDUSTRIAL DEVELOPMENTS
WEST GLENDALE SERVICE AREA
501-42-002K
Ryan At Woolf Building 1 & 2
15101 & 15151 W Hatcher Road
212734 and 212735
1,304.53 linear foot
$1,148,966.50
$574,483.25
Ryan Companies US, INC., a Minnesota Corporation
EXHIBIT C - STREET IN-LIEU CREDIT FORM

EXHIBIT D
Legal Description of Development Property

EXHIBIT D - LEGAL DESCRIPTION OF
DEVELOPMENT PROPERTY ATTACHMENT A

EXHIBIT D - LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY ATTACHMENT A

ECHO PROPERTY
RIGHT OF WAY
LEGAL DESCRIPTION

A portion of land being situated within the Southeast Quarter of Section 29, Township 3 North, Range
1 West of the Gila and Salt River Meridian, Maricopa County, Arizona, being more particularly described
as follows:

COMMENCING at a found 3 inch Maricopa County brass cap in hand hole accepted as the Southeast
corner of said Section 29 from which a found 2 inch aluminum cap accepted as the East quarter corner
thereof bears North 00°02’30” West, 2634.10 feet;

Thence North 00°02’30” West, 1357.13 feet, along the east line of said Southeast quarter to the POINT
OF BEGINNING;

Thence leaving said east line, South 89°57'30" West, 1304.53 feet;

Thence North 00°03'08" West, 95.01 feet;

Thence South 44°27'35" East, 42.86 feet;

Thence South 88°52'02" East, 95.61 feet to the beginning of a tangent curve concave southwesterly,
having a radius of 280.00 feet;

Thence southeasterly along said curve, through a central angle of 22°02'40", an arc length of 107.73
feet to the beginning of a reverse curve, concave northeasterly, having a radius of 220.00 feet;

Thence southeasterly along said curve, through a central angle of 23°13'09", an arc length of 89.15
feet to a non-tangent line;

Thence North 89°57'30" East, 987.57 feet to said east line;

Thence along said east line, South 00°02'30" East, 22.00 feet to the POINT OF BEGINNING.

The above described parcel contains a computed area of 38,314 sq. ft. (0.8796 acres) more or less
and being subject to any easements, restrictions, rights-of-way of record or otherwise.

The description shown hereon is not to be used to violate any subdivision regulation of the state, county
and/or municipality or any land division restrictions.

Prepared by: HILGARTWILSON, LLC
2141 E. Highland Avenue, Suite 250
Phoenix, AZ 85016
Project No. 1033
Date: April 2022

04/22/2022
EXHIBIT D - LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY ATTACHMENT B

©
2141 E. HIGHLAND AVE., STE. 250
PHOENIX, AZ 85016
P: 602.490.0535 / F: 602.368.2436
04/22/2022
EXHIBIT D - LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY ATTACHMENT B

EXHIBIT E
Development Site Plan

EXHIBIT E - DEVELOPMENT SITE PLAN